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[Senate Hearing 109-55]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 109-55
 
                            WATER SYMPOSIUM

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

                               SYMPOSIUM

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON

                              WATER ISSUES

                               __________

                             APRIL 5, 2005

                       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               JON S. CORZINE, New Jersey
GORDON SMITH, Oregon                 KEN SALAZAR, Colorado
JIM BUNNING, Kentucky

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
                  Bob Simon, Democratic Staff Director
                  Sam Fowler, Democratic Chief Counsel
                        Kellie Donnelly, Counsel
                Patty Beneke, Democratic Senior Counsel
                    Mike Connor, Democratic Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Atwater, Richard, WateReuse Association, Alexandria, VA..........    44
Bell, Craig, Executive Director, Western States Water Council....    62
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     2
Birnbaum, Elizabeth, Vice President for Government Affairs, 
  American Rivers................................................    16
Buller, Galen, Director, Sangre de Cristo Water Division, City of 
  Santa Fe, NM...................................................    53
D'Antonio, John, New Mexico State Engineer.......................    65
Davis, Tom W., Manager, Carlsbad Irrigation District.............     9
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     1
DuMars, Charles T., Esq., Professor Emeritus, University of New 
  Mexico School of Law, and Resource Planning Associates, P.C., 
  Attorneys at Law...............................................    20
Echohawk, John, Executive Director, Native American Rights Fund..    73
Galloway, Gerry, American Water Resources Association............    26
George, Rick, Confederated Tribes of the Umatilla Indian 
  Reservation....................................................    55
Graff, Thomas J., California Regional Director, Environmental 
  Defense........................................................    85
Greetham, Stephen, the Nordhaus Law Firm, on behalf of the 
  Pueblos of Laguna, Santa Ana, Santo Domingo, and Taos..........    69
Karlin, Richard J., Deputy Executive Director, Awwa Research 
  Foundation.....................................................    79
Kassen, Melinda, Director, Colorado Water Project, Trout 
  Unlimited......................................................    12
Keppen, Dan, Executive Director, Family Farm Alliance............    50
Kuharich, Rod, Director, Colorado Water Conservation Board, 
  Colorado Department of Natural Resources.......................     5
Mullican, William F., III, Texas Water Development Board.........    94
Sabol, Colin, Chief Marketing Officer, General Electric..........    82
Salazar, Hon. Ken, U.S. Senator from Colorado....................    32
Semanko, Norm, on behalf of the National Water Resources 
  Association....................................................    40
Smith, Hon. Gordon, U.S. Senator from Oregon.....................     2
Thomas, Hon. Craig, U.S. Senator from Wyoming....................     2
Tracy, John C., Director, Idaho Water Resources Research 
  Institute, and the Idaho Department of Water Resources.........    23
Tyrrell, Patrick T., Wyoming State Engineer, on behalf of the 
  Western States Water Council...................................    46
Underwood, Dennis, Metropolitan Water District of Southern 
  California.....................................................     3
Witherspoon, Jean, on behalf of the New Mexico Water Conservation 
  Alliance.......................................................    89
Wunsch, David, State Geologist of New Hampshire, on behalf of the 
  National Groundwater Association...............................    86

                            WATER SYMPOSIUM

                              ----------                              

                         TUESDAY, APRIL 5, 2005

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The symposium was convened at 2:25 p.m. in room SD-366, 
Dirksen Senate Office Building, Hon. Pete V. Domenici, 
chairman, presiding.

          OPENING STATEMENT OF HON. PETE V. DOMENICI, 
                  U.S. SENATOR FROM NEW MEXICO

    The Chairman. Thank you all for coming. First of all, I 
want to thank all the groups and individuals that submitted 
proposals. Obviously, there is a genuine interest in issues 
pertaining to water--water augmentation, water purification, 
the delivery of water. We have received over 130 written ideas, 
proposals, and suggestions.
    I would like to thank the participants and all of those 
here in the audience that are interested in this discussion. 
The high level obviously reflects our shared concern for the 
resource called water in our different regions and in the 
country.
    Federal water resources management and development efforts 
in the 20th century have produced a complex web of governing 
authorities, everything from Federal and State laws, compacts, 
contractual obligations, often fragmented Federal agency rules. 
Now at the beginning of the 21st century, the 109th Congress, 
we are faced with an ever-increasing demand for water due to 
such factors as drought, aging infrastructure, limited funding, 
tribal needs, and various water rights claimed by individuals 
and groups.
    This afternoon we are going to discuss with our four panels 
water supply and resource management coordination, the future 
of the Bureau of Reclamation, Indian and Federal reserved water 
rights, conservation and technology development. It is my hope 
that today's discussion will lead to some items that can be 
considered in legislation and initiatives, legislative 
initiatives here in the Senate.
    It is of interest that we move along in some kind of a 
regular pace, so we will move on to the issues at hand.
    Senator Bingaman, I am glad that you are attending today 
and thank you for helping us with your suggestions and your 
staff suggestions. Now I would be pleased to yield to you.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much. Thank you, Mr. 
Chairman, and thanks for holding this conference on this very 
important set of issues.
    I do think that it is very timely. These are issues that 
are of vital concern, of course, to people in our State. We 
hear about them at all times. I sense a real disconnect between 
the level of concern about these issues in New Mexico and much 
of the West, I believe, and the level of concern that we have 
here in Washington. I do not think that there is near enough 
attention to these issues here.
    I have been particularly concerned that when you look at 
the budget that we have been presented with this year, whether 
you are talking about EPA's funding, or Department of 
Agriculture's funding, or Corps of Engineers funding, or U.S. 
Geological Survey, or the Bureau of Reclamation, all of those 
agencies are proposed for significant cuts in their water-
related work. I think that is very much a disconnect from what 
I think ought to be the priority.
    So I think this conference is a great chance for us to get 
the issues out and hopefully get more attention to them, and I 
look forward to working with you to see if there are 
legislative efforts we can make to pursue some of the 
suggestions we hear today.
    Thank you.
    The Chairman. Thank you very much.
    We have two other Senators. Senator Thomas or Senator 
Smith, would you like to comment? You are welcome to.

         STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR 
                          FROM WYOMING

    Senator Thomas. I think there are plenty of people here to 
comment. Thank you. There are lots of folks here to comment. I 
will wait.
    The Chairman. He has got a real bass voice today.
    Senator Smith.

         STATEMENT OF HON. GORDON SMITH, U.S. SENATOR 
                          FROM OREGON

    Senator Smith. Mr. Chairman, I am here because this is the 
current Federal water establishment. It is a picture of 
dysfunction. In a time when the West is in drought, in a time 
when we have obligations to Native tribes, we have got to 
figure out a better system than just this kind of bureaucracy 
to allocate this precious resource.
    It was Thomas Jefferson--no, not Thomas Jefferson. It was 
Benjamin Franklin who once wrote ``When the well is dry, we 
know the worth of water.'' I think our well is dry and we have 
got to find a better way to establish its allocation and its 
worth.
    The Chairman. Thank you very much, Senator.
    Now, we are going to proceed in some kind of orderly 
fashion if I can figure it out here. On this side we have some 
resource people, right? In the event we need you or somebody 
raises a question, you will be available, but otherwise you are 
not going to give us prepared statements; is that correct?
    So we can all see who they are: the U.S. Corps of 
Engineers, Fred Caver; Diane Regas from the Environmental 
Protection Agency.
    Can you help me with the next one?
    Ms. Bach. Yes, Mr. Chairman. Maryanne Bach, Bureau of 
Reclamation.
    The Chairman. I cannot see that.
    Mr. Carter: And Gary Carter, National Oceanic and 
Atmospheric Administration.
    The Chairman. Very good.
    On this side we are going to start like this and go that 
way. You know your instructions. We will start with you, Mr. 
Underwood, Metropolitan Water District of Southern California.

 STATEMENT OF DENNIS UNDERWOOD, METROPOLITAN WATER DISTRICT OF 
                      SOUTHERN CALIFORNIA

    Mr. Underwood. Thank you, Mr. Chairman. Thank you, 
Senators, for being here. I really appreciate the national 
focus that is being placed on the need for coordination. All of 
our resources, they are shared resources. That just implies 
that you need coordination, not only--if you do coordination, 
you also get added values.
    I do not think I have ever been asked to stay only 2 
minutes and I will try to do that.
    If you are looking at coordination, a lot of that now gets 
into integrated resources. The reason that you are seeing 
integrated resources is it comes to the best approach to meet 
various objectives. The objectives are in terms of water supply 
to provide for water reliability. That includes having 
flexibility in the plumbing to move water when it is available, 
and also to have storage. The adequate storage is beginning to 
play an even greater role if you look at the Colorado in the 
last 5 years.
    Water quality, diversity, the idea of desalting brackish 
water. How do you bring new waters into the system? Saline 
waters, other water supply options. Recycling, conservation can 
all play a major role and are not necessarily concerned about 
drought or shortages. They are hydrologic dependent.
    You do need in coordination, it does need a partnership 
between Federal, State, and local and regional agencies. You 
need to go on the basis of beneficiary pay because you cannot 
always rely on State and Federal funds, but there are a role 
for Federal funds. By having integrated resources, it does 
define the best approach and where those funds can be made most 
useful.
    I will give a few examples and I will close with a few 
examples of how integrated resource planning can play a major 
role. MWD has what we call an integrated resources plan. It 
took 3 years to develop. It looks at a variety of water 
supplies. You look at the CALFED, which is the Federal-State, 
23 agencies involved. If you look at the Colorado River 
management, that is an effort that has been basin States and 
local entities, water users, and the Federal Government. Then 
you look at multistate salinity coalition and more recently the 
signing yesterday of the Lower Colorado Multi-Species 
Conservation Program, where you are looking at a whole regimen 
of a river, over 400 miles to provide for 27 species.
    Those are examples of what we need to be doing, and it 
helps to provide for more effective as opposed to individuals 
trying to address these problems.
    With that I will close.
    [The prepared statement of Mr. Underwood follows:]
Prepared Statement of Dennis Underwood, Metropolitan Water District of 
                          Southern California
          1. water supply and resource management coordination
    Is there a need for improved coordination of water supply 
activities and water resources management at the local, state and/or 
national levels, and if so, what form should this coordination take and 
how should it function? What has been the experience with regional, 
River basin and watershed-based planning efforts and conflict 
resolution? What lessons can be learned from these and other models for 
water supply coordination and water resources management? What role 
should the federal government play in this area?
    Several models exist that demonstrate coordination of water supply 
activities and water resources management at the local, state and/or 
national levels.
    For example, Metropolitan's service area composes of 18 million 
people in parts of six southern California counties who rely on 
reliable, high quality water supplies for their quality of life and the 
health of over $700 billion regional economy. The region's resource 
strategy is based on the Southern California Integrated Water Resources 
Plan, an example of how regional coordination can work. The IRP has 
been tested and proven successful. The effectiveness of the IRP has 
been proven in recent years by the severe drought in the Colorado River 
watershed. Metropolitan's supply from the Colorado River Aqueduct has 
been reduced by 40% in 2003 and 2004. The region continues to enjoy 
reliable, high quality water supply because of the investments made 
under the IRP.
    First adopted in 1996 and updated in 2003, the IRP is both a 
planning framework and the blueprint for resource program 
implementation. It is formulated with input from water agencies 
throughout southern California, environmental interests and the public, 
with six objectives:

   Reliability;
   Affordability;
   Water quality;
   Diversity;
   Flexibility; and
   Recognition of environmental and institutional constraints.

    The implementation of IRP relies on partnership of federal, state, 
regional and local agencies and water suppliers, with diversification a 
hallmark: the resource plan includes water conservation, water 
recycling, groundwater production, brackish groundwater recovery, 
ground and surface storage, supplies from the State Water Project and 
Colorado River, agriculture to urban transfers, water supply options to 
provide the needed year to year water supply assurances, drought and 
surplus water management, and ocean desalination, which is the newest 
addition to the resource portfolio. Operational flexibility and storage 
are two necessary additional features to make supply diversity most 
effective.
    The benefits are myriad:

   The IRP has allowed the region to handle uncertainties, 
        including climate change, inherent in any planning process. For 
        the water industry, some of these uncertainties are the level 
        of population and economy growth, which directly drive water 
        demands; water quality regulations and new chemicals found to 
        be unhealthful; endangered species affecting sources of 
        supplies; and periodic and new changes in climate and 
        hydrology.
   The diversified water portfolio allows the region to 
        minimize uncertainties and risks associated with an individual 
        resource; provides flexibility in handling drought periods, and 
        adapts to changing regulatory and environmental conditions.
   For example, the regions' diversified storage portfolio 
        allows Metropolitan to participate in the demand shift portion 
        of a CALFED Environmental Water Account to reduce imported 
        water demands from the State Water Project when endangered and 
        threatened species are moving through the Bay-Delta water 
        system.

    The most significant state-federal collaboration on water issues is 
the CALFED Bay-Delta Program, a collaborative effort among 23 state and 
federal agencies to improve water supplies in California and the 
ecosystem health of the San Francisco Bay-Sacramento-San Joaquin River 
Delta watershed.
    The primary objectives of the Program include:

   Improve ecosystem quality of the Bay-Delta watershed;
   Reduces water supply conflict and improve benefits to uses 
        of Bay-Delta water system;
   Provide good water quality for all beneficial uses; and
   Reduce risk to vulnerability of Delta functions.

    The Program is coordinated through the California Bay-Delta 
Authority (CBDA), which is a state organization with federal 
participation. The CBDA obtains stakeholder input through a Public 
Advisory Committee.
    ``The fundamental premise of the Program is that the agencies can 
best meet their individual responsibilities by sharing information and 
cooperating with each other. The CALFED Program or the CBDA exercises 
no authority over the agencies. The program relies on the continuous 
cooperation of each participating agency, exercising its own legal 
authority.''

    The Chairman. Thank you.
    So we are going to proceed now with the State of Colorado 
Department of Natural Resources, Rod Kuharich.

      STATEMENT OF ROD KUHARICH, DIRECTOR, COLORADO WATER 
  CONSERVATION BOARD, COLORADO DEPARTMENT OF NATURAL RESOURCES

    Mr. Kuharich. Mr. Chairman, thank you very much.
    Rod Kuharich. I am the director of the Colorado Water 
Conservation Board, established in 1937, which plays a critical 
role in the development of water policy for the State of 
Colorado.
    In 2003 the legislature directed us to do a basin by basin 
study of the entire State. We looked at water demands, we 
looked at water supply, and we looked at projects and processes 
to meet those demands. We created basin roundtables, a bottom-
up approach which involved agriculturalists, municipals, water 
providers, environmentalists, recreationists, and general 
citizens to work through this process.
    Three factors drove Colorado. One is it is the third 
fastest growing State in the Nation. How we use and value water 
in Colorado has been changing. There is a greater need for 
municipal domestic water. There is a greater interest in the 
use of water for environmental and recreational purposes, and 
clearly the 2002 drought brought this to people's minds.
    We have three goals: examine all aspects of Colorado water 
use for the next 30 years, evaluate water supply and management 
alternatives, and formulate strategies to build consensus and 
alternatives to meet those water needs.
    It was the most comprehensive look Colorado has ever taken 
at its water supply picture. In 2030 Colorado is expected to 
grow by 65 percent and we will be approximately 630,000 acre-
feet of water short of where we are today.
    The providers have basically done a good job. The success 
of their plans is somewhat uncertain because of legal, 
political, regulatory issues and these have historically 
hampered Colorado's water development. We will require in the 
future multiple solutions--conservation, reuse, agricultural 
transfers, and new storage.
    Conservation and efficiencies will be a key tool. However, 
they will not meet our future water needs. New water 
development and transfers from agricultural use will all be 
part of the mix.
    There were three key findings that we came up with out of 
this study. The first is the need for funding at the State and 
Federal level. Federal funding to support water supply and 
water resource projects through grants, loans, or related 
mechanisms must continue with minimum strings attached.
    Project permitting was identified as one of the primary 
impediments to water supply projects and has the greatest 
impact on the uncertainty associated with the identified 
projects and processes. Federal permitting triggered by 
authorizations, funding, rights of way, licenses, and 
Endangered Species Act, or section 404 of the Clean Water Act 
can entangle projects for years and cost millions of dollars. 
Streamlining these permitting processes are important.
    Finally, environmental and recreational interests, as well 
as local government agencies, use these processes in order to 
create opportunities to have their voices heard. These 
regulatory processes are viewed as the only way that these 
interest groups can have meaningful input to ensure that local 
interests in environmental and recreational opportunities are 
protected.
    The development of alternative means to provide for 
environmental and recreational enhancement that benefit the 
general public without increasing the cost of water projects 
are important to develop.
    With that, Mr. Chairman, I will close and respond to 
questions. I did prepare a statement and the staff has compact 
disk copies of the entire report for the committee. Thank you.
    [The prepared statement of Mr. Kuharich follows:]
     Prepared Statement of Rod Kuharich, Director, Colorado Water 
      Conservation Board, Colorado Department of Natural Resources
      topic #1--water supply and resource management coordination
  the state of colorado's role in water supply and resource management
    Colorado has a great tradition of being a leader among the western 
states in managing and administering its limited water resources and in 
addressing and solving its water resources challenges and pursuing 
management alternatives in innovative and effective ways. The Colorado 
Water Conservation Board (CWCB) is part of the State of Colorado's 
Department of Natural Resources (DNR), which administers programs 
related to the state's water, forests, parks, wildlife, minerals, and 
energy resources.
    CWCB plays a critical role in establishing water policy in 
Colorado. The CWCB Board formulates policy with respect to water 
development programs. The Board assists in the administration of 
interstate compacts on the Arkansas and Colorado Rivers; administers 
flood plain programs, water project construction funds, and the Office 
of Water Conservation and Drought Planning; and participates in 
endangered species programs. It also acquires and manages all instream 
flow rights for the state.
              the statewide water supply initiative (swsi)
    With the approval of the 2003 Colorado General Assembly, the CWCB, 
commissioned the Statewide Water Supply Initiative (SWSI), an 18-month 
study to explore, basin by basin, existing water supplies and existing 
and projected demands through the year 2030, as well as a range of 
potential options to meet that demand. SWSI is the most far-reaching 
and comprehensive effort ever undertaken to understand Colorado's water 
supplies as well as the state's existing and future water demands. As a 
result of this study, we know more today about Colorado's current and 
future water use than we have ever known before. This information will 
help local communities and water providers as they work to plan, 
manage, and efficiently use Colorado's surface and groundwater 
resources. The SWSI report can be downloaded at http:// 

www.cwcb.state.co.us/SWSI/Table_of_Contents.htm
Ground Rules
    In order to achieve broad support and acceptance by various water 
interests and stakeholders, the SWSI process established ground rules. 
Ground rules included:

   Local authority and control: Providing water for municipal 
        and agricultural users is the purview of local water providers. 
        Consequently, it was important that SWSI not take the place of 
        local water planning.
   Bottom-up, not top-down: Providers, stakeholders, and 
        communities across Colorado were asked to identify their unique 
        concerns, needs, and issues.
   All solutions explored: All solutions, including 
        conservation, rehabilitation of existing water supply 
        facilities, enlargement, and/or more efficient use of existing 
        water supply facilities, as well as new water supply projects, 
        have been and must continue to be considered.
   Adherence to Colorado's Doctrine of Prior Appropriation: The 
        baseline requirement for any water supply or water management 
        solution is that it must be accomplished within the statutory 
        framework of Colorado's existing water rights and water 
        administration system, incorporating Colorado's Doctrine of 
        Prior Appropriation.

Stakeholder and Public Involvement
    In addition to the establishment of ground rules, a stakeholder and 
public involvement process was implemented. This process was designed 
to provide a mechanism and forum for the CWCB Board to solicit and 
exchange information, and was essential to the success of the project. 
Basin roundtables were established in each of the eight major river 
basins in the state. The Basin Roundtables, with the support of and 
input from the CWCB Board, defined the overall water management 
objectives, established performance measures to meet these objectives, 
and identified solutions for meeting future water needs. Information 
exchange occurred at the following levels:
    Basin Roundtables--where local interests met to exchange ideas, 
review and present water supply and demand data, summarize planning 
initiatives, and help guide the development of water supply and demand 
objectives and strategies for achieving the objectives. This was a 
consensus building process to address specific issues within each river 
basin. A portion of each meeting was also devoted to obtaining 
information and comment from the public.
    Roundtable participants in each basin included representatives of:

   Agricultural and ranching community
   Business, development, and civic organizations
   Environmental interests
   Federal agencies (e.g., U.S. Forest Service, U.S. Bureau of 
        Reclamation)
   Local Governments not directly providing water (municipal, 
        county, and regional)
   Municipal water providers
   Recreational interests
   Water Conservancy/Conservation Districts
   CWCB Board Member(s) for the basin
   Technical support was provided by: the State Engineer's 
        Office, Division of Wildlife, State Parks, and select federal 
        agencies

    General Public Outreach--intended to provide a forum specifically 
for presenting information to and obtaining feedback from the general 
public. The pubic was kept informed of the progress of the study, and 
invited to provide public input and feedback, through a variety of 
activities.
Major Findings of SWSI
    SWSI explored major aspects of Colorado's water use and development 
on both a statewide and an individual basin basis. Major findings are 
based on technical analyses and feedback gathered through Basin 
Roundtable input. Even though some of these findings are readily 
apparent to some, it was important that they be affirmed as part of 
building a foundation and common understanding. Other findings were 
determined and/or clarified through the SWSI process. These findings 
are summarized below.
    1. Significant increases in Colorado's population--together with 
agricultural water needs and an increased focus on recreational and 
environmental uses--will intensify competition for water.
    2. Projects and water management planning processes that local M&I 
providers are implementing or planning to implement have the ability to 
meet about 80 percent of Colorado's M&I water needs through 2030.
    3. To the extent that these identified M&I projects and processes 
are not successfully implemented, Colorado will see a significantly 
greater reduction in irrigated agricultural lands as M&I water 
providers seek additional permanent transfers of agricultural water 
rights to provide for the demands that would otherwise have been met by 
specific projects and processes.
    4. Supplies are not necessarily where demands are; localized 
shortages exist, especially in headwater areas, and compact 
entitlements in some basins are not fully utilized.
    5. Increased reliance on nonrenewable, nontributary groundwater for 
permanent water supply brings serious reliability and sustainability 
concerns in some areas, particularly along the Front Range.
    6. In-basin solutions can help resolve the remaining 20 percent gap 
between M&I supply and demand, but there will be tradeoffs and impacts 
on other uses--especially agriculture and the environment.
    7. Water conservation (beyond Level 1) will be relied upon as a 
major tool for meeting future M&I demands, but conservation alone 
cannot meet all of Colorado's future M&I needs. Significant water 
conservation has already occurred in many areas.
    8. Environmental and recreational uses of water are expected to 
increase with population growth. These uses help support Colorado's 
tourism industry, provide recreational and environmental benefits for 
our citizens, and are an important industry in many parts of the state. 
Without a mechanism to fund environmental and recreational enhancement 
beyond the project mitigation measures required by law, conflicts among 
M&I, agricultural, recreational, and environmental users could 
intensify.
    9. The ability of smaller, rural water providers and agricultural 
water users to adequately address their existing and future water needs 
is significantly affected by their financial capabilities.
    10. While SWSI evaluated water needs and solutions through 2030, 
very few M&I water providers have identified supplies beyond 2030. 
Beyond 2030, growing demands may require more aggressive solutions.
Key Recommendations
    Following from SWSI's major findings, and based primarily on 
feedback obtained from the CWCB Board, Basin Roundtables, and public 
input, the recommendations outlined below provide guidance on how 
Colorado should proceed in addressing its future water needs. 
Interested parties are encouraged to look at the Key Recommendations 
section of the Executive Summary, which expands on these key 
recommendations.

    1. Ongoing Dialogue Among all Water Interests is Needed
    2. Track and Support the Identified Projects and Processes
    3. Develop a Program to Evaluate, Quantify, and Prioritize 
Environmental and Recreational Water Enhancement Goals
    4. Work Toward Consensus Recommendations on Funding Mechanisms for 
Environmental and Recreational Enhancements
    5. Create a Common Understanding of Future Water Supplies
    6. Develop Implementation Plans Toward Meeting Future Needs
    7. Assess Potential New State Roles in Implementing Solutions
    8. Develop Requirements for Standardized Annual M&I Water Use Data 
Reporting

    The CWCB adopted two mission statements regarding meeting future 
water needs. The first mission statement addresses supporting the 
identified projects and processes that are designed to meet 80% of the 
2030 municipal and industrial water needs:

          Following the lead of local water suppliers, the state will 
        monitor long-term water needs, provide technical and financial 
        assistance to put the necessary plans, projects and programs in 
        place to meet those needs, and foster cooperation to avoid 
        being forced to make trade-offs that would otherwise harm 
        Colorado's environment, lifestyle, culture, and economy.

    The second mission statement addresses the 20% municipal and 
industrial gap and the agricultural shortages and the environmental and 
recreational needs:

          Foster cooperation among water suppliers and citizens in 
        every water basin to examine and implement options to fill the 
        gap between ongoing water planning and future water needs.

    The CWCB and the State of Colorado General Assembly have recognized 
the need for an ongoing dialogue among all interests and that the SWSI 
is a dynamic process. The General Assembly is currently evaluating 
continuing funding for the SWSI process as well as expanding the 
dialogue to discuss inter-basin issues within the major river basins in 
Colorado. The precise timing and method in which these recommendations 
can be implemented is flexible, and more discussion of ideas and 
suggestions will be discussed as the process moves forward.
     potential federal role in water supply and resource management
    The key findings and recommendations from SWSI identify critical 
needs for funding at the state and federal level. The costs to 
implement water supply and water resources projects continue to 
escalate. In light of the significant investments that must often be 
made to meet the needs of water users, numerous federal and state 
agencies have developed programs for partnering with project sponsors. 
Some agencies, such as the BOR, had their genesis in the immense need 
to support water management solutions in working with local project 
sponsors. Many of today's water resources programs include the ability 
to provide funding to support water supply and water resources 
projects, through grants, loans, or related mechanisms.
    In addition to the potential federal roles identified above there 
are two other areas where a federal role would be beneficial in meeting 
future water needs:
Streamlining of Regulatory and Permitting Processes
    Permitting was identified as one of the primary implementation 
hurdles for water supply projects, and has the greatest impact on the 
uncertainty associated with the Identified Projects and Processes. Many 
water providers and agricultural users believe that one of the most 
significant hurdles to reliable water delivery in Colorado is 
environmental permitting. Federal permitting triggered by 
authorizations, funding, rights-of-way, licenses, the Endangered 
Species Act or Section 404 of the CWA can entangle projects for years 
and cost millions in delays, consultants, and attorneys. Existing water 
projects and water rights are also subject to permitting issues.
Alternative Funding for Environmental and Recreational Enhancements
    Environmental and recreational interests and local governmental 
agencies view the federal, state, and local permit process as vital to 
protecting the environment, recreational opportunities, and the local 
economy. These regulatory processes are viewed as the only way that 
these interest groups can have meaningful input to ensure that the 
local interests and the environment and recreational opportunities are 
protected. The development of alternative means to provide for 
environmental and recreational enhancements that benefit the general 
public without increasing the costs to existing water users or 
developers of water projects are needed.

    The Chairman. When did you say that the study was ordered?
    Mr. Kuharich. The General Assembly asked us to do this 
study in 2003, right on the heels of the 2002 drought, Senator.
    The Chairman. And you finished it? How long did it take?
    Mr. Kuharich. 18 months. We finished it last November, with 
the report to the General Assembly and to the Governor.
    The Chairman. We are going to then move to our third 
participant, Tom Davis. He is from the Carlsbad Irrigation 
District in Carlsbad, New Mexico.

    STATEMENT OF TOM W. DAVIS, MANAGER, CARLSBAD IRRIGATION 
                            DISTRICT

    Mr. Davis. Thanks, Mr. Chairman.
    I too submitted a detailed comprehensive paper to address 
this topic. What I plan to do in this 2 minutes is just make 
some general statements that apply probably throughout the 
West. The detailed topics that I submitted deal specifically 
with New Mexico and particularly the Pecos River Basin, with 
which I am somewhat familiar.
    But in general I think all of us throughout the West are 
grappling some with the same problems. We need to keep in mind 
two factors when wrestling with these problems: The Earth 
contains the same amount of water today as it did when mankind 
arrived; and only a small percentage of the Earth's water is 
potable. So for thousands of years mankind has tried to deal 
with these problems of getting water in a usable form at the 
necessary location for use. In an attempt to do that, we build 
dams to store surface water, we transport water from areas of 
excess to areas where water is needed. We have learned to pump 
underground supplies. We make saline water potable. We 
conjunctively use surface and ground water. We are learning to 
resupply depleted underground aquifers.
    However, there are a number of inherent problems associated 
with many of these practices. We must consistently try to 
mitigate ways to deal with these inherent problems. But let me 
suggest that we have enjoyed some good success, because never 
before in the history of mankind have we had more of an 
economical, dependable, safe supply of food and water than we 
enjoy today in these United States. We are living healthier and 
we are living longer.
    In the Western States, agriculture has accounted for about 
80 percent of the permitted use in the last century. Due to a 
growing population and drought and certain Federal laws and 
interstate river compacts, these items have fueled a demand to 
change the permitted use from ag use to other uses. I believe 
it would be--we would be foolish to sacrifice all of our 
western ag water use and our western ag production by 
transferring this use to municipal and environmental purposes.
    But we must strive to reach some solution to these 
problems. I believe that, at least in my experience, lengthy 
and expensive court battles often result in court decisions 
that are unworkable and create more problems than they solve. I 
do not think courts are the best answer. It is my belief that 
problem-solving is made possible by open, positive discussion, 
having a thorough understanding of the problems, and setting 
reasonable targets. Sound policymaking must be based on sound 
science.
    The solutions to our water supply problems will be found 
through application of technology, sound economic principles, 
sincere collaborative effort, must involve Federal and State 
entities, national labs, university research centers, both 
ground water and surface water managing entities, private 
industry, local governments, recreational and environmental 
interests. The rights of existing permitted senior water right 
holders must be protected through this process.
    Such efforts take time. Conferences----
    The Chairman. Mr. Davis, your time is up.
    Mr. Davis. Okay. Thank you.
    The Chairman. Do you want to finish with a sentence?
    Mr. Davis. I say conferences such as this are only the 
beginning steps to dealing with our problems.
    Thank you.
    [The prepared statement of Mr. Davis follows:]
   Prepared Statement of Tom W. Davis, Manager, Carlsbad Irrigation 
                                District
       topic 1--water supply and resource management coordination
    This topic lends itself more toward the storage and management of 
surface water supplies. However, in most river basins in the west there 
is a hydrological connection between groundwater and surface water. 
Federal entities rarely have involvement in administering ground water. 
However, most surface water supplies are stored in federal dams. The 
permitted right to use this stored water is administered by the states 
and local or private entities respectively. This relationship results 
in the need for coordination among local, state and federal entities.
    Because most surface water supplies are stored and released from 
federal facilities, that action becomes subject to the federal 
Endangered Species Act (ESA). The ESA has had a very disruptive and 
expensive impact on the traditional water operations in the past two 
decades. However, in most instances those expensive operational 
modifications, both in water and money, have resulted in very few 
quantifiable positive results for targeted endangered species or their 
habitat. Improved coordination among federal, state and local entities 
has been one of the results of the impacts of the ESA.
    Drought and increasing water demand by a growing population are two 
factors that have and will continue to require improved coordination in 
managing water supplies. In my opinion, state and local entities have 
the primary responsibility of planning future water use and recognizing 
and resolving conflicts. It is obvious federal interest must be 
included in this endeavor.
    In New Mexico the legislature has authorized the Interstate Stream 
Commission to administer the drafting and implementation of regional 
water plans. The state is divided into ten regional water planning 
regions. In most instances, planning units are defined by a section of 
major river watersheds or, in some regions, closed basins. The ISC has 
developed a template that the plans must adhere to. The planning group 
includes county and municipal entities, irrigation and conservancy 
districts, industry representatives, such as mining, power generation, 
commercial dairies, the Bureau of Reclamation and tribal interests. The 
plan attempts to quantify the water supply and demand for a forty-year 
water planning cycle. The plan investigates increasing water yield, 
water conservation, implementing more effective conjunctive use of 
ground and surface water supplies and many other practices that could 
result in effectively using a limited water supply to meet a changing 
and growing demand.
    In the lower Pecos basin, we have taken regional water planning a 
step farther. In July 2001 a task force was established under the 
guidance of the New Mexico Interstate Stream Commission. The task force 
was comprised of the major water users in the lower Pecos River basin. 
It included representatives of municipal and county governments, the 
Carlsbad Irrigation District, Fort Sumner Irrigation District, the 
Pecos Valley Artesian Conservancy District, the New Mexico Dairy 
Association and the Bureau of Reclamation. The charge of this group was 
to develop and implement a permanent solution for conflicts threatening 
the stable water supply in the basin. These primary conflicts are the 
adjudication of the rights of the Carlsbad Irrigation District, the 
State of New Mexico's order by the U.S. Supreme Court to comply with 
the Pecos River Compact to deliver the annual requirement of water to 
the State of Texas and to meet the water needs of the listed threatened 
Pecos Blunt Nose Shiner. The overriding threat is the water diversions 
in New Mexico could be stopped in order to make up an under-delivery to 
Texas by the enforcement of a Priority Call ordered by the Special 
Master appointed by the U.S. Supreme Court. This task force effort 
resulted in a Settlement Agreement signed by all parties and sanctioned 
and funded by the New Mexico Legislature.
    Implementation of this agreement protects the economy in the lower 
Pecos Basin by avoiding a priority call that would shut down diversions 
in New Mexico and also providing a more dependable water supply to the 
Carlsbad Irrigation District, thus a more stable supply for the Pecos 
River Compact deliveries. The hydrological underpinnings of this 
agreement is based on a model developed by the ISC and private 
contractors.
    To my knowledge, this is the first settlement of this type 
developed to solve a complex and contentious river basin problem 
involving an inter-state compact, state adjudication and conjunctive 
use of ground water and surface water.
    I believe this approach will become the preferred method to 
resolving such conflicts throughout the west rather than a lengthy and 
expensive legal battle resulting in a court decision that might not be 
functional.

    The Chairman. Thank you very much.
    Now we have Trout Unlimited, Melinda Kassen. Thank you for 
coming, Melinda.

STATEMENT OF MELINDA KASSEN, DIRECTOR, COLORADO WATER PROJECT, 
                        TROUT UNLIMITED

    Ms. Kassen. Thank you, Mr. Chairman, members. I am the 
director of Trout Unlimited's Colorado Water Project. We have 
six State offices working to solve water scarcity problems 
while also protecting trout and salmon in the West. With over 
70 percent of native fishes endangered, threatened, or simply 
not there any more, watershed level cooperative efforts focused 
on increasing water supply for municipal and other uses must 
also help restore rivers.
    TU believes that the Federal Government has a unique role 
to play in Western water management. Most water users focus on 
securing their own water supplies. Because of our National 
environmental protection laws, Federal land holdings, and the 
network of Federal water infrastructure projects, this 
government's presence in and financing for cooperative efforts 
is necessary to protect our Nation's fisheries.
    Re-operation of Federal facilities can restore or at least 
conserve important Native and recreational fisheries. Allowing 
the use of Federal facilities to facilitate temporary water 
transfers as well as conjunctive use of ground and surface 
water can expand the water available to new uses without 
further environmental degradation.
    Water 2025 grants should go to projects that increase 
traditional users' efficiency but also conserve and restore 
healthy rivers and fisheries.
    Congress should also maintain the Fish and Wildlife 
Service's Partners for Fish and Wildlife Program, which 
provides critical funding for collaborative restoration 
efforts. It was this program that TU was involved with on the 
Blackfoot and it played a critical role in the restoration of 
that fishery.
    Maintaining Federal authorities to require water for in-
stream protections consistent with Federal land management 
requirements is also important. The Federal Government should 
support voluntary measures and State programs for accomplishing 
these same goals, but without the backstop of Federal authority 
voluntary measures are less likely to achieve results.
    The Federal Government provides critical funding for data 
collection, research, and technology development. We all need 
the data from the Geologic Survey's National Stream Flow 
Information Program, the gauges. Please not only restore 
funding but increase funding for this program. And the Federal 
Government can also play a role in terms of research. As I 
said, two good examples I believe are bills that you are 
involved in, S. 177, the Salt Cedar and Russian Olive Control 
Demonstration Act, as well as S. 214, the United States-Mexico 
Transboundary Aquifer Assessment Act.
    Thank you and I would be happy to answer questions.
    [The prepared statement of Ms. Kassen follows:]
Prepared Statement of Melinda Kassen, Director, Colorado Water Project, 
                            Trout Unlimited
   topic number 1--water supply and resource management coordination
    Trout Unlimited's Western Water Project seeks to solve water 
scarcity problems and enhance coordination among federal, state, and 
local interests in six separate western states for the purpose of 
protecting and restoring trout and salmon watersheds. Operating 
independently in each state, and working at the watershed level, TU's 
experience in productive collaboration in on the ground restoration, 
provides insights on how to approach coordinated water resources 
management. Overall, TU strongly believes that watershed level 
restoration efforts that include federal, state and local players are a 
very good model for coordination.
 i. coordination among local, state and federal interests is imperative
    Over-allocation is the root cause of water scarcity conflicts. In 
other words, too much water has been promised to too many people. 
Coordination among local, state, and federal interests is vital so that 
all affected interests are engaged in finding solutions that best fit a 
particular region or watershed. Existing federal laws provide an array 
of different tools that can assist such coordination including re-
operating agreements and grants that support collaborative efforts.
A. Existing Federal Laws and Programs Provide an Array of Tools to 
        Assist Coordination
    As a result of the vast network of Bureau of Reclamation 
(``Reclamation'') and Corps of Engineers water infrastructure across 
the West, the federal government has many opportunities to help 
implement solutions to western water resource challenges.
    Committee Members may be aware of some of the successes that 
coordination efforts have already achieved on the endangered species 
front. One in particular illustrates the potential for re-operating 
federal projects in part to recover species. Under the auspices of the 
Colorado River Endangered Fishes Recovery Program, which involves the 
states, Reclamation, the Western Area Power Administration, the Fish 
and Wildlife Service, and others, Reclamation is changing the pattern 
of water releases from Flaming Gorge Reservoir on Wyoming's Green 
River. Reclamation made some operational adjustments in the 1990s, but 
more will occur following an in-process NEPA evaluation. The changes, 
which reestablish a more natural flow pattern in the river below the 
dam, have already had positive impacts on the downstream fishery.
    Watershed level coordination, in and of itself, can often be the 
impetus to solving water conflicts. On the Sun River, a tributary to 
the upper Missouri River near Great Falls, Montana, two irrigation 
districts, private ranchers, Reclamation, state agencies, Trout 
Unlimited and others are working together to find ways to make 
Reclamation reservoir operations and irrigation deliveries more 
efficient in order to reduce water conflicts and put water back into 
the dewatered Sun River.
    We are aware that Reclamation is seeking solutions to water 
conflicts through its Water 2025 program. While we support the 
principles of this program, we strongly recommend Congress encourage 
Reclamation to modify Water 2025 so that it can better realize its 
potential to produce solutions to water scarcity while promoting 
watershed health. First, the Water 2025 Challenge grant program's 
eligible activities should be expanded to include design and 
feasibility work, which for river restoration usually entails assessing 
the flows needed for ecological health.
    Second, while we agree that water banks, water markets and 
temporary leasing arrangements, including fallowing, hold much promise 
for accomplishing the goals of Water 2025, these tools can be much more 
beneficial and effective if they are combined with broader strategies, 
such as re-operation of infrastructure, reductions in physical losses 
from the system, reductions in percolation losses to saline aquifers, 
on-farm efficiency improvements, and conjunctive management of 
groundwater and surface water. As such, TU recommends that Congress 
persuade Reclamation to include projects that specifically have a flow 
restoration component in its universe of projects that receive Water 
2025 grants.
    Third, while we agree that Water 2025 projects should be undertaken 
with the full agreement and participation of the irrigation districts 
serviced by Reclamation projects, we recommend that a broader array of 
entities should be eligible for receive grants. Such modification will 
ensure the most productive collaborations. In our experience, some of 
the best ideas and the initiative to implement them sometimes originate 
outside the districts themselves.
    Finally, we recommend that Congress persuade Reclamation to modify 
the Water 2025 grant program matching fund requirements. Matching funds 
are most appropriate for capital improvements, that presumably return 
ample benefits to the water district that provide such funds. 
Ecological restoration projects, such as those that have a flow 
restoration component, do not generate a revenue stream that would 
facilitate a cost-sharing requirement. Therefore, we specifically 
recommend that collaborative restoration projects be exempt from the 
matching fund requirements.
    Just as important, if Congress agrees to Reclamation's request to 
increase Water 2025 funding by $13 million, it should not do so at the 
expense of other crucial programs that fund collaborative efforts to 
seek solutions to our water challenges as the FY 2006 budget appears to 
do. For example, the budget cuts funding for water reuse projects by 
$16 million and cuts funding for desalination and water purification by 
$5 million. It also cuts funding for endangered species recovery 
activities.
    Recommendation: Congress should encourage Reclamation to modify 
Reclamation's Water 2025 program to incorporate the changes outlined 
above. In addition, if Congress agrees to increase funding for Water 
2025, it should not do so at the expense of other critical programs 
that provide federal resources for collaborative efforts.
B. The Federal Government's Duty to Protect Aquatic Resources Benefits 
        Both Local Economies and the Environment
    As the largest land manager in the West, the federal government has 
a responsibility that includes wise stewardship of its natural 
resources, including the rivers flowing across federal lands. This 
responsibility consistently appears in federal laws governing the 
Forest and Park Services, as well as the Bureau of Land Management and 
the Department of Defense. Other federal agencies, including 
Reclamation and the Corps, also have the authority, and in some cases, 
the duty to use their facilities to protect ecologic values and provide 
recreational benefits.
    Properly exercised, federal stewardship enhances both the natural 
environment and local economies. For example, farmers near the Rio 
Grande National Forest in Colorado supported the forest's efforts to 
establish its federal reserved water right because such establishment 
benefited the farmers' operations.
    Yet, TU is aware that many federal agency attempts to protect 
rivers have been controversial. This is true whether the tool the 
federal agency has used involves re-operations of federal dams, the 
designation of a wild and scenic river, imposition of bypass flows in 
federal permits, acquisition of federal reserved water rights or the 
denial of Clean Water Act permits for dams or diversions. Voluntary, 
cooperative deals which conserve, protect or restore the targeted 
resource can be an excellent alternative to the unilateral exercise of 
federal authority, but only if they result in real river protection. 
And the only way the federal government can negotiate meaningful deals 
is if it demonstrates a willingness to use its legal authorities.
    Consider the situation of the Black Canyon of the Gunnison, a 
National Park in Colorado, originally established as a monument to 
protect not only the deep, narrow and dark canyon, but also the roar of 
the river. In 2001, the Park Service filed to quantify its federal 
reserved right based on a natural flow regime that would have included 
yearly peak flows to scour out accumulated sediment and pollution. This 
filing was based on a Park Service model that was the result of a 
decade's worth of research and almost a century of data. Nonetheless, 
facing opposition from the state and some water users, in 2003, the 
Park Service signed an agreement with the state for a right to only a 
minimum year-round base flow. A federal court subsequently determined 
that it is likely that the Park Service violated its Organic Act and 
NEPA in signing this agreement. Thus, the parties remain at an impasse, 
and the river's flows continue to depend on the largesse of 
Reclamation, which owns an upstream facility, rather than on the needs 
of the National Park.
    Recommendation: TU recommends that the Committee reject any attempt 
to eliminate or weaken existing federal tools to protect rivers and 
streams. Properly exercised, federal stewardship enhances both local 
economies and the environment. In fact, as evidenced by the Blackfoot 
River partnership detailed below, federal laws often provide the 
incentive for people to work together. In addition, funding for federal 
agencies to assess, scientifically, the flows needs of rivers on 
federal lands will help to demonstrate the economic value of conserving 
these resources.
    ii. lessons learned from watershed-based planning and conflict 
                    resolution: the blackfoot river
    The Blackfoot River arises near the continental divide and runs 
west for 132 miles to its confluence with the Clark Fork River near 
Missoula, Montana. It was part of the route home for Lewis and Clark in 
1805. For much of its modern history, it was known as a scenic river 
with great fishing. But by the late 1980s, many local residents 
expressed increasing concern that the fishing in the middle and lower 
reaches of the Blackfoot had severely declined. After some 
deliberation, people decided to form a local Trout Unlimited Chapter 
that included ranchers and other landowners, as well as anglers.
    When the State Fish and Game regional fisheries manager told the 
newly formed Big Blackfoot Chapter that he had no population data, nor 
the funding to acquire such data, the Chapter raised the necessary 
funds in a manner of weeks and presented a check to Fish and Game. The 
agency's findings largely vindicated the apprehensions of the public; 
the fishery was not doing well.
    One of the Chapter's first acts was to develop a cooperative 
agreement with the U.S. Fish and Wildlife Service (FWS) through its 
Partners for Fish and Wildlife Program to work on the restoration of 
the Blackfoot fishery. Throughout the restoration of the Blackfoot, 
both agency partners, the FWS and the state Fish and Game, have been 
responsive, innovative and critical participants.
    In 1990, the TU Chapter and its partners embarked upon their first 
series of restoration projects. These projects focused on four areas-
instream habitat restoration, enhancing instream flows, addressing fish 
passage barriers, and reducing the entrainment of fish into irrigation 
ditches.
    Upon successful completion of several projects, interest in the 
restoration efforts grew, to the extent that, by 2001 (just ten years 
from the start), fish screens had been installed on diversions in 12 
streams, fish passage structures had been erected on 26 streams, 
grazing management improvements were completed on 23 streams, 
restoration of riparian vegetation had occurred on 27 streams, and 
streamflow improvements were made on 12 streams. Moreover, in the face 
of severe drought, a basin-wide drought-response plan was created and 
first implemented in 2000.
    The success of the Blackfoot River restoration rests heavily on a 
few key ingredients. First and most importantly landowners and other 
stakeholders support the projects because they have been part of the 
process from the inception. Second, the restoration effort has been 
fortunate in securing the necessary funding from a combination of 
federal, state, and private sources. Third, the projects have focused 
on key species that serve as indicator species. Fourth, government 
agencies have not attempted to direct the process, but rather to assist 
it as requested by other partners. The biggest lesson learned is that 
the restoration efforts have been successful because the work is viewed 
as building community and connection in the valley, rather than 
diminishing it.
    Recommendation: TU supports adequate funding for programs such as 
the FWS' Partners for Fish and Wildlife Program because it provides 
critical funding for collaborative restoration efforts such as those on 
the Blackfoot River. However, such funding should be in addition to, 
and not in lieu of, sufficient funding for endangered species programs 
which would be cut by $3 million in the FY 2006 budget request. TU 
encourages Congress not to view the situation as an ``either or'' 
proposition.
   iii. the federal government's research and technology development 
  activities provide critical data that informs collaborative efforts
    Another important role for the federal government in coordinating 
water management is conducting and funding research and technology 
development. The federal government already gathers and analyzes 
important water resource data. The United States Geological Survey 
(``USGS'') monitors stream flows through a network of gages, and the 
Natural Resources Conservation Service also monitors and publishes 
snowpack data from its SNOTEL sites. This information is essential to 
the collaborative, watershed restoration work that TU is involved in. 
For example, the innovative drought response plans in Montana's 
Blackfoot, Big Hole, and Jefferson River basins all depend on the USGS 
flow reporting and SNOTEL forecasting.
    Recommendation: Although the FY 2006 budget request includes a 
$300,000 increase for the USGS's National Streamflow Information 
Program, which funds the gages, TU strongly recommends Congress 
significantly increases funding for this program so that it can be 
expanded. Such expansion will help all of us better understand the 
resource we want to use and protect.
    S. 177, the Salt Cedar and Russian Olive Control Demonstration Act, 
is an important model for two reasons. First, it focuses on adaptive 
science. In other words, it requires scientists to closely monitor how 
the watershed is affected as various experimental tactics are tried to 
address control of the invasive species. Second, the bill focuses not 
just on removal of invasive species, but also restoration.
    Enactment of S. 214, the United States-Mexico Transboundary Aquifer 
Assessment Act, will provide exactly the type of information needed to 
address the long term implications of using a nonrenewable resource, 
namely, groundwater.
    Recommendation: Congress should pass S. 177 and S. 214 and consider 
using these bills as models for future legislation.
    TU's experience with innovative, watershed restoration and 
resolving conflict over water allocation issues across six western 
states has informed our comments. From effective use of federal 
authorities to protect water supply to a more expansive, inclusive 
vision for Reclamation's Water 2025 program, the genesis of TU's 
comments are on-the-ground stream restoration work. From TU's work in 
the Blackfoot River valley to the Black Canyon of the Gunnison, TU is 
engaged in the daily work of watershed health. From this perspective, 
watershed level coordination among local, state, and federal players 
has the best potential to greatly enhance water resource management 
and, ultimately, watershed health.

    The Chairman. Thank you very much.
    American Rivers, Elizabeth Birnbaum.

STATEMENT OF ELIZABETH BIRNBAUM, VICE PRESIDENT FOR GOVERNMENT 
                    AFFAIRS, AMERICAN RIVERS

    Ms. Birnbaum. Good afternoon. My name is Liz Birnbaum and 
I'm vice president for government affairs for American Rivers, 
an organization dedicated to protecting and restoring healthy 
rivers and the variety of life they sustain for the benefit of 
people, fish, and wildlife. On behalf of our 45,000 members, I 
want to thank Chairman Domenici and Senator Bingaman for 
convening this important conference and for the opportunity to 
participate.
    Given the limited time, I will just touch on a few issues: 
the need to develop cooperative strategies to address water 
supply, the need to invest more and invest more wisely in 
necessary infrastructure to maintain water quality and manage 
storm water more effectively, and the need for careful analysis 
of proposals for new water storage.
    The papers submitted for this panel underscore the need for 
cooperation and coordination. I note that three separate 
submissions gave examples of how limits placed by environmental 
regulation have led to the development of cooperative solutions 
for water supply conflicts. Our river systems are reaching the 
limits of ecosystem sustainability and environmental laws like 
the Clean Water Act and the Endangered Species Act are 
beginning to place hard limits on how much water we can divert.
    The instinctive response is to blame these laws and call 
for their amendment or repeal. But the real answer is to come 
together and work out coordinated solutions for ecosystems and 
people, preferably before impasses arise.
    At the same time that we need to work together to find 
solutions, we must invest more in infrastructure to maintain 
clean water supplies. Polluted and contaminated waters cannot 
serve our water supply needs. To meet the national shortfall in 
waste water treatment funding, we must increase investment, but 
also find ways to spend more wisely on infrastructure that 
works with natural processes. Treating storm water as a waste 
stream diminishes both ground water supplies and base stream 
flow, while finding ways to increase recharge reduces waste 
water treatment costs as well as sustaining supplies.
    Finally, on new water storage. While new storage may at 
times be necessary, it should always be based on an accurate 
analysis of needs and a complete survey of alternatives. Any 
new storage should be subject to rigorous economic analysis, 
including both societal benefits from the use of the new water 
and ecological impacts of the project. And alternatives should 
always include water conservation and reuse.
    Thank you.
    [The prepared statement of Ms. Birnbaum follows:]
     Prepared Statement of Elizabeth Birnbaum, Vice President for 
                  Government Affairs, American Rivers
    response to question #1: ``water supply and resource management 
                             coordination''
    The United States is blessed with a vast and increasingly valuable 
fresh water supply that provides an essential foundation of our 
economic and ecological wealth, and provides for our high quality of 
life and increased life expectancy. Water is necessary for direct human 
use, but also for the species and ecosystems that sustain life. 
Cooperative, watershed based planning can address the essential goals 
of both adequate water supply and river health. Throughout the nation, 
water is increasingly in demand and increasingly scarce. Federal, 
state, and local cooperation with strong stakeholder involvement is the 
key to solving what will be one of the greatest environmental 
challenges of the 21st century.
    A sustained and coordinated effort needs to develop at all levels 
of government to:

    1. Communicate and cooperate. Sustainable water management requires 
inclusive cooperative agreements which, while difficult, are both 
possible and necessary.
    2. Invest more and invest more wisely. We need to transport and 
store water more effectively, reduce actions that degrade water 
quality, and make necessary long-term investments in water treatment to 
support plentiful and clean water supplies.

Communicate and Cooperate
    Maintaining river ecosystems and supporting human needs are both 
served by a continual supply of healthy, clean water. In-stream flow 
standards successfully maintained both river health and water supply in 
many areas. Basic standards for keeping water in streams are good for 
fish and wildlife, but also for recreation, drinking water, and other 
economic purposes. The federal government has a variety of tools that 
can be used to preserve in-stream flows, including the Clean Water Act, 
federal reserved and non-reserved water rights, the Endangered Species 
Act, federal dam operation, hydropower licensing under the Federal 
Power Act, federal land management practices, and the Wild and Scenic 
Rivers Act. States also have a variety of tools and many are taking an 
active role by legislating in-stream flows, using permit programs to 
enforce flow limitations, adding state-based permit requirements, using 
Clean Water Act Sec. 401 certification and Sec. 303(d) listings as an 
opportunity, granting or transferring in-stream water rights, mandating 
conservation programs and setting conservation goals. In-stream flow 
standards are critical not only to ensure the public has access to 
sufficient clean water now and in the future, but also to ensure that 
our rivers, wetlands and lakes retain sufficient water to sustain fish, 
wildlife and all of the ecosystem services that healthy freshwater 
systems contribute to our economy.
    The Endangered Species Act has perhaps been the most controversial 
of the federal government's water management tools, but in many cases 
it has produced a positive and needed policy-making strategy for 
rivers--collaboration among stakeholders, states, and the federal 
family of agencies. The ESA has been extremely successful at preventing 
species from going extinct and disappearing forever, but its regulatory 
provisions should be used only as a last resort; at its best the ESA 
brings affected interests together to find solutions for sustainable 
river ecosystems. Increasingly, ESA-inspired efforts to convene river 
basin interests around a table to discuss how to manage rivers and the 
numerous biological and socio-economic values these rivers support 
provides a model for how we should approach river management 
nationwide, but we should begin before species near extinction.
    American Rivers is active in some of the most prominent 
collaborative efforts in the West, and these and other such efforts 
across the country access the talents and passions of a unique blend of 
agricultural interests, power producers, municipal water users, 
recreation interests, biologists, conservation groups, community 
leaders, and state and federal agency representatives. Though many of 
these ongoing efforts are the offshoot of litigation or are otherwise 
intertwined in ESA-related matters, their genesis is ultimately the 
desire of residents along prominent rivers to share in decision-making, 
help guide future water management, and more directly tie the economic 
health of their communities to the resources their rivers provide. 
Unilateral, command-and-control management of rivers, especially those 
that cross multiple state boundaries, has proven to be a divisive 
management paradigm that local interests are seeking to transform.
    For example, since 1997 the states of Nebraska, Wyoming, and 
Colorado, with their partner federal agencies and stakeholder 
interests, have been negotiating future management of the Platte River. 
This process was born out of conflicts over managing the Platte to 
improve habitat along the river in central Nebraska to support four 
ESA-listed species (whooping crane, interior least tern, piping plover, 
and pallid sturgeon). Urban water use to the west and irrigation along 
the river in Nebraska had reduced Platte River flows; the river lost 
much of its historic shallow, braided nature and no longer provided the 
habitat necessary to support key species. Maintaining the Platte even 
for further human use was in peril, so the states and the Department of 
the Interior have been meeting with key stakeholders to hammer out 
details for sharing the Platte's vital water, protecting and restoring 
important habitat for the listed species, and sharing responsibility 
for decision-making on the river in the long term. Federal and state 
funds are being pooled to meet land and water goals, and users from the 
agriculture, power, municipal, and conservation sector all have seats 
at the Governance Committee table and are intimately involved in 
deciding the Platte's future. This form of management serves as a model 
for other river basins to consider, as it allows those most affected by 
important public policy decisions over limited water resources to share 
in the decision-making process.
    Similarly, the nation's longest river, the Missouri, has been 
marked by some of the largest and most complicated water resource and 
ESA litigation in the country over the last several years. Even though 
much of that litigation is ongoing, American Rivers is working with the 
Missouri River Coalition to restore a string of natural places, reform 
dam operations to aid river wildlife and recreation, and revitalize 
riverfronts. In 2002, the National Academies of Science published a 
report on Missouri River management noting that current unilateral 
management of the river by the U.S. Army Corps of Engineers was failing 
to help the river meet the best interests of those in the basin. The 
NAS team suggested that a new form of collaborative decision-making 
process be developed among all the interests in the basin and given 
authority by Congress to determine the river's future. Today, 
conservation, agriculture, navigation, power, municipality, state, and 
federal parties are beginning that very process and preparing to 
develop a collaborative process to manage the Missouri's water and 
ensure the river is meeting the modern economic and environmental needs 
of the basin.
    Interstate water compacts like those negotiated on the Platte and 
Missouri are widely used in the West to allocate water among states, 
but are also important in the eastern U.S. where limited interstate 
water supplies are increasingly squeezed by growing cities like 
Atlanta. The hydrologic and economic characteristics of river basins 
vary greatly, so a large set of possible solutions are best solved 
locally by stakeholders and states, with federal support of any 
outcome. Interstate surface water compacts allow states to solve their 
own interstate water problems with state solutions, avoiding 
undesirable federal intervention and preemption. Cooperatively 
developed interstate river compacts can be powerful, durable, and 
adaptive tools to promote and ensure cooperative action among the 
states. Federal mandates may dictate rigid requirements; interstate 
water compacts give states to the opportunity to develop and invest in 
collaborative and dynamic solutions for shared local problems.
    We should also consider applying the lessons learned from surface 
water compacts to groundwater management. Groundwater is by far the 
largest potential source of fresh water, but withdrawals can be 
destructive to both surface and groundwater supplies. In many cases 
groundwater is critical to feeding rivers, but it is increasingly 
relied upon by agricultural and municipal users. Much of this water is 
not recharged quickly, and therefore escalating use is unsustainable 
and presents a looming future crisis. One example of the need for broad 
cooperation to manage groundwater is the Ogallala Aquifer, which sits 
under 8 states and is by far America's largest single source of fresh 
water. With few state restrictions or tracking of use, and growing 
demands, the Ogallala water level is sinking at a troubling rate and a 
cooperative solution is needed.
Invest More and Invest More Wisely
    An essential feature of maintaining adequate water supply is 
maintaining the quality of source waters. Last year, American Rivers 
named the Colorado River the #1 Most Endangered River in America. This 
designation was based not on the ongoing drought's threats to water 
quantity in the river, but on a number of policy choices necessary to 
protect water quality in this essential water supply for millions of 
Americans in the Southwest. The water quality threats to this storied 
Western river remind us that we must at every level of government 
increase the investments necessary to sustain clean water supplies for 
our communities.
    Before any level of clean water investment can protect our water 
supplies, we must address threats to water quality from the potential 
failure to enforce the Clean Water Act on small or intermittent 
intrastate streams, as suggested by a guidance document published by 
EPA and the Corps of Engineers. These small and intermittent streams 
are essential to both the quality and quantity of water supply, as 
discussed in the joint American Rivers/Sierra Club report, ``Where 
Rivers Are Born: the Scientific Imperative for Defending Small Streams 
and Wetlands.'' As indicated on the attached map, in New Mexico fully 
98% of stream miles are non-perennial--if these streams are not 
protected from pollution or even eradication by fill, New Mexico cannot 
protect its water resources. Enactment of the Clean Water Authority 
Restoration Act would underscore the Clean Water Act's application to 
all of the West's waters.
    But we also cannot ensure supplies of clean water without a major 
further investment our nation's in wastewater treatment. Since the 
specter of burning rivers led to the creation of the Clean Water Act in 
1972, decades of work and billions of dollars in federal, state, and 
local funding on drinking water and wastewater treatment projects have 
set the global standard for water quality. These investments benefit 
our economy, public health, and the environment. Unfortunately, we are 
now witnessing a major shortfall in support for these essential 
projects. The combination of aging infrastructure, recent 
underinvestment, relaxed standards and enforcement, population growth 
and sprawl has brought us to the point where the water quality gains of 
the past are being lost and water quality is now trending downward. 
Former EPA Administrator Christine Todd Whitman warned that without a 
major new commitment to upgrading America's wastewater infrastructure, 
we would soon see water quality levels as low as the 1970s.
    Where wastewater systems overflow, partially treated sewage is 
released containing viruses and bacteria that cause serious and 
potentially deadly diseases--cryptosporidium, hepatitis, dysentery, and 
others. The young, old, and sick are at greatest risk. Between 23,000 
and 75,000 sewage overflows occur nationwide every year, resulting in 
the release of 3 billion to 10 billion gallons of untreated wastewater 
directly into our rivers and streams, according to EPA estimates. In 
many areas of the country, drinking water intakes can be found 
downstream of sewer outfalls.
    One example of sewage releases harming our drinking water supply 
occurs on the Colorado River. Human waste from riverfront boomtowns in 
California and Arizona contaminates the river below Hoover Dam. 
Monitoring wells in the Lake Havasu area have recorded nitrate levels 
four times higher than the limits set by the Environmental Protection 
Agency (EPA) to protect public health. The communities relying on 
septic systems that are polluting the lower Colorado River require new 
infrastructure. In other areas, the need is replacement and retrofit, 
as many systems are using antiquated pipes that are 50-100 years old. 
The U.S. Environmental Protection Agency projects that $388 billion is 
needed to be invested in our water infrastructure from 2000 to 2019 to 
meet our clean water needs. Increasing population and urban sprawl 
stretch our previous water infrastructure investments to their limits, 
requiring miles of new pipe as well as treatment capacity.
    The federal government should find assist state and local 
governments with the future investments needed for: (1) fixing leaking 
infrastructure to reduce water outflow from delivery pipes, and to 
prevent stormwater leakage into wastewater pipes; (2) recharging 
treated wastewater into local aquifers; (3) decentralizing wastewater 
treatment; and (4) reusing and recycling gray water and wastewater. As 
we consider future investments at every level of government, we should 
encourage new construction to develop sewer systems that divide 
rainwater and runoff, human waste, and industrial waste into separate 
pipes and use different treatment systems. These practices reduce 
overflows and prevent problems with toxic sludge. Cooperative funding 
for cities and towns to improve infrastructure will prevent serious 
threats to public health, the environment and the economy.
    Sound investment must be accompanying by an adequate regulatory 
system to support clean, safe water supplies. The Save Our Waters From 
Sewage Act, H.R. 1126 was introduced in the House a few days ago. This 
bill would ensure that EPA cannot reduce existing regulation of sewage 
bypasses from wastewater treatment plants, and set up a system to 
inform the public if such releases do occur.
    Riverfront communities in Arizona and California recognize their 
wastewater treatment problems and are raising capital on their own to 
upgrade wastewater treatment capacities. They and other communities 
across the nation could use some help, but in recent years federal 
assistance to states for wastewater treatment facilities under the 
Clean Water State Revolving Loan Fund has been cut. The President's 
budget this year proposes even further cuts, with a gradual phase out 
of the program over the next few years.
    The federal government must continue to support state and local 
governments' investments in safe and clean water. We urge the 
reauthorization and expansion of the both the Clean Water and Drinking 
Water State Revolving Funds (SRF) which the federal government uses to 
help local governments invest in needed wastewater and drinking water 
treatment infrastructure. These funds should also be extended to 
support innovative `soft path' technologies for stormwater and 
wastewater management as well as more traditional projects, working 
with natural processes to reduce infrastructure costs while maintaining 
ecosystem services. We need not be limited by thinking of water 
infrastructure as the creation of concrete monuments.
    Federal projects should be guided by the same goal of working with 
natural ecological processes. Stream buffers, infiltration swales, 
disconnected impervious surfaces, and restored and constructed wetlands 
can serve federal project purposes as well as local needs. The 
investment in infrastructure that works with natural processes will 
also ensure we continue to receive the other massive economic benefits 
provided by these natural hydrologic systems: flood control, water 
filtration and surface flow regulation. All levels of government should 
work together to encourage more efficient and sustainable water use and 
to harness enterprising creativity to improve best practices.
Conclusion
    Federal, state, and local cooperation and coordination with strong 
stakeholder involvement, investing more in water management and 
investing more wisely, is the key to solving what will be one of the 
greatest environmental challenges of the 21st century.

    The Chairman. Thank you very much.
    Senator Craig is going to proceed. We are going to take 
Charles DuMars next.
    Senator Craig [presiding]. All right. Mr. DuMars.

   STATEMENT OF CHARLES T. DUMARS, ESQ., PROFESSOR EMERITUS, 
 UNIVERSITY OF NEW MEXICO SCHOOL OF LAW, AND RESOURCE PLANNING 
               ASSOCIATES, P.C., ATTORNEYS AT LAW

    Mr. DuMars. Thank you. Senators, thank you for inviting me 
to come speak to you today. I represent numerous private water 
users, over 100,000 acre-feet of water in different sectors, as 
well as Intel Corporation and other entities that use water for 
productive purposes.
    My point is a simple one. Water is a mineral. It is like 
oil and gas, but it is a mineral. We currently in our planning 
and in our treatment of the water resource behave as though it 
were not an essential part of production of food and production 
of energy resources. We need to do better at that. We need to 
focus in all our future analyses of water supply on the 
question, is there going to be sufficient strategic water 
reserve available for future generations so that we can 
continue to produce food and develop the energy production we 
have.
    I was surprised to hear Senator Bingaman suggest there was 
not a sufficient in his view in this topic. In my view there is 
a tremendous security interest in ensuring there is adequate 
water supply for energy production so we do not become 
dependent on other nations for energy as well as food 
production. Those are very, very vital parts of our future. 
Unfortunately, the function of water has been viewed most 
recently in the last 10 years as growing cities and protecting 
the environment, neither of which is sufficient. We need to 
work harder at developing plans for including those criteria, 
the development of energy production and food production, into 
our water models.
    There is no place we can go today to get a complete 
analysis of water and supply through the entire United States. 
We need to encourage all States to develop comparable plans to 
that that has occurred in Colorado and develop a national water 
atlas and a website so that people can identify where those 
are. We also need an optimization model for all decisions that 
are made by agencies.
    Finally, it is vital that institutions like the Corps of 
Engineers and others that are reevaluating and reauthorizing 
water resources do so in a way that acknowledges these needs.
    [The prepared statement of Mr. DuMars follows:]
  Prepared Statement of Charles T. DuMars, Esq., Professor Emeritus, 
     University of New Mexico School of Law, and Resource Planning 
                   Associates, P.C., Attorneys at Law
       topic 1. water supply and resource management coordination
    As we have turned the corner into this new century, there is no 
doubt that water supply issues rise to the top. This is true in part 
because of absolute shortages that manifest themselves in areas where 
shortages exist because of increasing populations. Dry areas often make 
great places to live, but have insufficient water. Interestingly, the 
water supply is fixed, known and is finite. The problem is caused not 
because of a lack of sufficient water but of an excess of persons who 
choose to live where water is scarce.
    Yet, those who have moved to the arid southwest cry drought when 
there is insufficient water to meet their newly created demands. The 
drought becomes the enemy, not the lifestyle choices that placed these 
populations where there is insufficient water supply.
    The solutions are fairly straightforward--import water from another 
location, find new sources of supply in the area, treat existing 
heretofore not useful water such as brackish water and effluent, use 
less through conservation, or take out of production current uses and 
move that water to municipal uses.
    Importation is an attractive sounding solution, but is fraught with 
institutional difficulties. While this is indeed one United States, and 
the Supreme Court has declared that embargoes on resources are not 
constitutionally permissible, any attempts to deplete the water 
resources of current users or future generations to benefit those in 
another region or state are received with stiff resistance. Utilizing 
effluent and brackish water are practical solutions, but often come at 
costs that are higher than other alternatives such as conservation and 
moving water from a so-called lower valued use, at least in economic 
terms. While conservation is the politically correct solution and is 
certainly required, the methods for actually eliminating consumption of 
water quickly reach their limits, at least with respect to domestic 
uses. This leaves movement of water from existing uses such as 
agriculture to municipal and other uses.
    One could proudly announce for example, that if one were to build a 
new town that was composed exclusively of stock brokers, telephone 
conference centers, computer information technology that moves 
information from one place to another and real estate for sales of new 
homes for those who move to the twenty first century community, very 
little water would be required. And, if there are no lawns, no parks, 
no other aesthetic uses of water the demand could be reduced 
dramatically.
    The problem, of course, is that such a community presupposes that 
somewhere else, others are utilizing water for uses that produce wealth 
through production of crops, chips, coal fired energy plants, nuclear 
energy plants, aesthetic tourism, eco-tourism, movement of goods 
through barges, and so on. It is not clear to me that in the long-term 
societies can function and thrive on the transport of information and 
wealth transfers without need for the use of water as a part of 
production. The United States has exported the production of steel, the 
processing of timber, is exporting coal to China in record amounts, has 
exported the assembly of things to developing countries and is looking 
forward to exporting the bulk of its food. We look to the importation 
of other comparable minerals such as oil and gas to sustain our 
transportation corridors. The question then becomes whether it 
necessarily follows that we should value water solely as a mechanism 
for sustaining our capital movement cities or whether there are 
independent values in water. Simply put, whether the concept of the 
public welfare value of water is capable of being captured through a 
single lens that relates water as the inevitable support systems for 
communities in arid climates or whether a broad section of uses for the 
resource should be recognized and integrated into public policy 
decisions, both in evaluating water markets and informing water 
administrators.
Conflicting Values Included in the Concept ``Public Welfare''
    Even though members of society are concerned about the ``public 
welfare'', there is never unanimity as to its meaning. Visualizing 
various values in water as located upon a continuum can help, perhaps, 
to clarify this subject. At one end of the continuum would lie values 
that are widely and strongly held. Water resources protected by law 
might be placed here. Through the Endangered Species Act, for example, 
Congress has preserved the water habitats of certain birds, fish, and 
other kinds of wildlife. Similarly, as noted above, the federal 
government has asserted water rights in national parks, Indian 
reservations, and other areas it has set aside for special purposes.
    At the other end of the continuum would lie values that are so 
abstract or impractical they are unlikely ever to command a large 
constituency. Here, then, might be placed the sentiments of people who 
cherish the image of free running streams and, regardless of the 
impact, insist that no stream be impeded in its flow to the sea. 
Between these extremes are a number of other publicly held values in 
water. Examples of these are set out below.
Environmental, Recreational, and Scenic Values
    Almost all western states have recognized public benefit in 
preserving water flow in some stretches of perennial steams and rivers. 
Protection of a certain level of streamflow is justified on several 
grounds. It maintains bacterial activity that cleanses the stream, 
dilutes municipal and industrial discharge into the stream, carries 
potentially clogging sediment downstream, ensures survival of fish and 
other aquatic life, and sustains vegetation in the bed and on the banks 
of the stream. This vegetation, in turn, serves as habitat for wildlife 
and waterfowl and acts as a filter by trapping polluting substances 
carried in return flow irrigation water and other runoff.
    Other values in retaining water in streams and rivers are shown in 
the popularity of sport fishing, swimming, boating, rafting, and other 
purely recreational activities. In addition, there is clearly some 
value held in the enjoyment of the scenic quality of rivers, and of 
watersheds generally.
Economic Values
    In addition to directly sustaining physical life, water has other 
properties that, directly and indirectly, sustain economic life. It is 
among the most fundamental of the ``means of production''. As a source 
of buoyancy and momentum, channeled water can carry heavy objects from 
place to place, and can carry away and dilute the effluent of factories 
and businesses. Quantities of captured water, converted to steam or 
hydroelectric power, can serve multiple energy needs and at great 
distances from rivers and reservoirs.
    In the end, the availability of water determines the feasibility of 
nearly all commercial enterprises. Some of these--in the West most 
notably large-scale irrigated agriculture, mining, and oil 
exploration--require large amounts of water. Other businesses that do 
not themselves use great quantities of water depend on businesses that 
do. Manufacturers of farm implements, wholesalers and retailers of seed 
and fertilizer, trucking companies, packagers, advertisers, grocers and 
their customers all rely on the products of farming. Similar dependency 
networks radiate from the logging camps, mines, quarries, and oilfields 
of resource producing western states. Thus, water underpins not only 
the tax base of towns built around highly water-consumptive industries, 
but, ultimately, the tax bases of remote, less water-consumptive, 
cities.
Historic and Cultural Values
    For many people, water has significant cultural value apart from 
its importance as an economic commodity. In New Mexico, this value is 
evident in the traditions of historic communities. Among the many New 
Mexicans descended from aboriginal Indians and 16th century Spanish 
settlers there are some who make their living by subsistence farming 
and livestock grazing in the tribal pueblos or rural villages built by 
their ancestors. In these enclaves of nearly extinct cultures, 
community values in water are manifest in physical structures--the hand 
dug ditches through which water can flow to all parts of the villages--
and in social structures--the respected practices of using and 
maintaining the ditches. Field crops are irrigated and stockponds 
filled by water diverted from nearby sources and carried through this 
network of ditches, or acequia.
    Adherents to these traditional ways of life revere water as a 
sacred substance, the lifeblood of society. Reverence for the life-
giving power of water extends to everything associated with water. The 
seasonal changes and corresponding changes in rainfall and river flow 
are observed by time-honored rituals, dances, and feasts. These events, 
along with the handicrafts, music, and other creative works the events 
inspire, are the basis of a substantial portion of New Mexico's tourist 
trade, which is one of the state's primary industries.
Conservation Values
    Where water is scarce, the tendency to prefer present over future 
uses is strong, and the duty to ensure usable water resources to future 
generations, while generally acknowledged in principle, often suffers 
in practice. Still, partly because the disastrous effects of 
improvident resource exploitation are now being felt world wide, value 
in long-term management of water and other resources is today expressed 
more earnestly than in the past.

    The Chairman [presiding]. John, thank you very much.
    Our next panelist is Idaho Department of Water Resources, 
Idaho Water Resources Research Institute, John Tracy.

  STATEMENT OF JOHN C. TRACY, DIRECTOR, IDAHO WATER RESOURCES 
RESEARCH INSTITUTE, AND THE IDAHO DEPARTMENT OF WATER RESOURCES

    Mr. Tracy. Thank you very much for inviting me to present 
at this conference.
    With the Idaho Department of Water Resources and Idaho 
Water Resources Research Institute, we were looking at 
coordination, not just an issue of physical infrastructure but 
also intellectual infrastructure. Many of the proposals that 
were selected for presentation in this session did discuss 
elements of this intellectual infrastructure: the importance of 
forums for discussion of information on water resources, 
collaborative decisionmaking models, platforms for sharing 
scientific information.
    But one thing that I have seen lacking and I think needs to 
be resolved in the future is the issue of who is setting the 
research agenda for investigating new technologies and 
approaches to solving our water resources problems. In the past 
the agency that comes to the table with the funds has pretty 
much set the objective and has entered into a monologue with 
its partners. What needs to happen in the future is this needs 
to turn into a dialog.
    Having a monologue has resulted in a variety of situations 
where approaches to solving water resources issues have been 
limited to a particular agency's or entity's vision, mission, 
and this has resulted in ineffective use of limited resources 
to create new solutions to our water problems.
    If any additional resources are made available to address 
the water resources problems of this Nation, these resources 
must come with a new commitment to collaborative 
decisionmaking, especially at setting agendas of what 
approaches we are going to look at for solving our water 
resources problems.
    This new structure must allow implementers of water policy, 
which are typically States and irrigation districts and water 
districts, to play a significant role in deciding what resource 
dollars we are going to invest into what technologies we are 
going to look at. This pretty much falls along the line of what 
the AWRA, the National Institute of Water Resources, and the 
University Council of Water Resources have proposed, and that 
is developing regional-based consortia for directing research 
and development activities for water resources. I would 
strongly encourage any activities in the future to pursue this 
path.
    Thank you very much.
    [The prepared statement of Mr. Tracy follows:]
   Prepared Statement of John Tracy, Director, Idaho Water Resources 
    Research Institute, and the Idaho Department of Water Resources
                                purpose
    This proposal was prepared in response to the upcoming conference 
hosted by Senator Domenici and the Senate Energy and Natural Resources 
Committee and addresses the Water Supply and Resource Management 
Coordination topic.
                               background
    As identified in many recent publications, the United States is 
facing severe challenges in our ability to meet the growing demand for 
water in sustaining hydropower generation, agricultural based 
economies, urban center development and our natural environment (NRC 
2004, DOI 2003). A number of these publications have also pointed to 
key factors that have led to these current challenges, which include:

    (1) A lack of investment in water research and technology 
development (NRC 2004);
    (2) Long-term climate variability and natural hazards (AWRA 2005);
    (3) A decline in our nations water supply and delivery 
infrastructure (AWRA 2005)
    (4) Loss of potable water supplies due to contamination (Lawford et 
al. 2003); and
    (5) A lack of a coherent national water resources strategy (AWRA 
2005).

    There are a number of entities across the United States that range 
in size from federal agencies down to individual persons that will have 
a role in addressing our nation's water problems. In general, the 
Department of Energy's network of Laboratories, and some University 
Research Centers, have the capability to research and develop broad 
scale technologies that can increase water supplies and water use 
efficiencies. Every state has at least one, and in many cases multiple, 
academic institutions that have the capacity to provide increased 
knowledge on effective mechanisms to manage our nation's water 
resource's supply, demand and infrastructure. Many of these 
institutions, through their state extension services, also have the 
capacity to disseminate this information and aid state agencies in the 
training of technologists that can apply this knowledge to existing and 
emerging water resource problems. In addition, all states currently 
have agencies whose missions are defined as managing and regulating the 
quality and quantity of their water resources. Finally, the 
implementation of new technologies will continue to be the domain of 
private water users, municipal utilities or cooperatively managed water 
or irrigation districts.
    The State of Idaho is currently engaged in collaborative efforts to 
resolve conflicts between senior surface water and junior ground water 
users. The potential effects if the issues are not resolved and water 
rights for the junior users are curtailed would be a tremendous impact 
on state and local economies. Early estimates ranged from $750 to $900 
million dollars annually. An initial framework for a long term 
agreement has been proposed which is designed to effectuate a net 
change of 600,000 to 900,000 acre feet of water annually. This is a 
significant amount of water that will require both demand reduction and 
supply enhancement. Many of the principles included in the framework 
include the development of water conservation and supply enhancement 
technologies. Partnerships have already been developed related to 
building ground water modeling tools to quantify alternative management 
scenarios. Now additional assistance is needed to research and develop 
technologies and tools required to increase supply, reduce demand and 
to monitor the effects of management changes on the surface and ground 
water resources.
    Any solution to our nation's water resources challenges will have 
to not only construct a mechanism to coordinate the flow of knowledge 
and information through all of these entities, but also be able to 
demonstrate the value of this knowledge once it moves beyond 
theoretical study and into practical application.
                                proposal
    To address the issue of Water Supply and Resource Management 
Coordination, it is proposed that funding for the development of 
Regional Water Resource Technology and Research Consortia be provided 
as part of the proposed legislation. These consortia should be 
developed on a watershed basis and should be an equal partnership 
between DOE laboratories; academic institutions, state water resources 
planning and management agencies, and cooperatively managed water 
systems in the development of the region's research and technology 
plans. In addition, these consortia should identify an area within 
their region that can be used as a `test bed' for newly emerging water 
resources research and technologies. Each region's `test bed' will 
serve as an experimental proving ground for new research and 
technologies that address the region's water supply, water use 
efficiencies, and water supply and demand forecasting methodologies. In 
addition, these test beds can serve as the technology transfer and 
educational platform for disseminating knew knowledge and tools that 
address each regions water resources issues.
    It is further proposed that the Idaho Department of Water Resources 
and the Idaho Water Resources Research Institute be the lead non-
federal partners in a consortium with Idaho National Laboratory (INL) 
representing the Central Regional DOE area as defined in the Proposal 
to Establish the Energy-Water Technology Program with the Department of 
Energy (Multi-Laboratory Energy-Water Nexus Committee 2005). This 
consortium would encompass the Snake River, Bear River and Spokane 
River watersheds. Within this region, it is proposed that the Eastern 
Snake River Plain become the experimental `test bed' for the region. 
The Eastern Snake River Plain is an ideal test bed in that there has 
already been a significant amount of water resources information 
collected in the area to support the East Snake Plain Aquifer 
adjudication process, it underlies the INL, significant conjunctive 
administration of surface and ground water issues have arisen in the 
East Snake Plain area are now emerging in other watersheds in the 
region, and there are a number of projects and research that are 
currently being proposed and undertaken to help resolve the issues. 
These include:

    1. Developing and predicting the impact of a weather modification 
program to increase water supplies on the Upper Snake River;
    2. Development of water supply technologies and management 
strategies for the Idaho aquaculture industry.
    3. Development and implementation of advanced evapo-transpiration 
prediction technologies for the East Snake Plain area;
    4. Development of methods to improve the forecasting of reservoir, 
runoff and groundwater contributions to East Snake Plane Water Supply.

    The consortium would immediately begin work on researching and 
developing technologies to reduce water demand and enhance supply in 
the Snake River and Eastern Snake River Plain Aquifer. As theses 
technologies and techniques are developed, they will be applied to the 
Spokane River/Rathdrum Aquifer and Bear River basins. Both of these 
areas cross state boundaries and will require expanding the 
collaboration of Washington and Utah state agencies and research 
organizations.
                                benefits
    The approach described above would provide a structure to ensure 
that new and effective water resource information and technology would 
not only address the most important regional issues, but also ensure 
that this information would move efficiently from being a theoretical 
idea, through development of applied technologies, to implementation 
and evaluation of these technologies where they are most needed. This 
approach would leverage the existing strengths of entities already 
engaged in the research, development, planning, management, regulation 
and use of water resources, and would thus ensure both a cost effective 
strategy, and a collaborative engagement of these entities, in solving 
the nation's water resources problems. The INL is well suited to 
support this effort and has a long history of involvement in water 
issues and water resource research capability. The current drought and 
controversy regarding water allocation and management in Idaho provide 
an important opportunity for collaborative research and technology 
development. The results and capabilities developed by the consortium 
can be used and expanded to other western states that are dealing with 
similar issues.

    The Chairman [presiding]. Thank you very much.
    We have American Water Resources Association, Gerry 
Galloway.

     STATEMENT OF GERRY GALLOWAY, AMERICAN WATER RESOURCES 
                          ASSOCIATION

    Mr. Galloway. Thank you, Senator. It is a distinct pleasure 
to be here, and I want to thank you at the start for being the 
keynote speaker at our AWRA National Water Policy Dialogue. I 
would like to very quickly talk about the results of this 
dialog, which was held in Tucson last month and brought 
together 250 water experts, focusing on those things to deal 
with water coordination.
    The dialog surfaced three issues of importance. First, the 
Nation's water users need to be addressed in an integrated 
manner, focusing not on a single project but on programs and on 
watershed and on basin level issues. The successful holistic 
efforts that are currently under way in evolving programs to 
restore the Everglades, manage the California Bay Delta, and to 
protect coastal Louisiana need to be replicated across the 
country.
    Second, there is great need to reconcile the myriad laws, 
executive orders, congressional guidance that have created a 
disjointed, ad hoc national water policy and to clearly define 
our 21st century national goals. Many important laws were 
passed early in the last century when national objectives, 
physical conditions, and the roles of Federal and State 
governments were far different than they are today. Many of 
these laws are in conflict, placing Federal, State, tribal and 
local agencies in tenuous and sometimes very adversarial 
positions. Reexamination of these laws would eliminate some of 
these contradictions and confusion and certainly lead to far 
more effective water policies and policy implementation.
    Third, given the fiscal realities facing the Nation today, 
there is need to more effectively coordinate the actions of 
Federal, State, tribal, and local governments, as well as with 
nongovernmental organizations in dealing with water. Directions 
for collaboration instead of competition among organizations 
will provide better and more fiscally efficient use of the 
scarce resources we are trying to husband and will assist in 
overcoming gridlock on key water programs.
    These are the challenges, but there are also opportunities, 
opportunities for such things as a national water assessment as 
some look at a national water commission.
    I want to thank you for the opportunity. I have a longer 
statement which I will submit to the staff.
    [The prepared statement of Mr. Galloway follows:]
  Prepared Statement of Gerald E. Galloway, American Water Resources 
                              Association
proposal for: discussion topic 1. water supply and resource management 
                              coordination
improved coordination of water resources management at the local, state 
and/or national levels: results of the national resources water policy 
                                dialogue
    The Second National Water Resources Policy Dialogue (WPD II), held 
in Tucson, AZ on 14-15 February 2005, provided a forum for participants 
from all levels of government, as well as public and private 
organizations to discuss critical water resources challenges facing the 
Nation and the policy choices that need to be made to effectively deal 
with these challenges. The second dialogue was a follow-up to the First 
National Water Resources Policy Dialogue held in September, 2002 in 
Washington, D.C. Like the first dialogue, WPD II was national in scope, 
but because of its location, had a greater emphasis on western water 
issues.
    Convened by the American Water Resources Association (AWRA), the 
dialogue was sponsored by nine federal agencies within the Departments 
of Agriculture, Defense, Interior, and Commerce, and the Environmental 
Protection Agency. In addition, 39 organizations representing a broad 
spectrum of water resources interests co-sponsored the dialogue. The 
dialogue was attended by over 230 persons representing a broad spectrum 
of government agencies, nongovernmental organizations, and academia.
Background: The Water Challenge
    The growth and continued prosperity of our economy, the protection 
and security of our public health, and enhancement of our quality of 
life were made possible by past infrastructure investments that now 
provide municipal, industrial and agricultural waters, navigable 
waterways and ports, hydropower production, water-based recreation, 
sustainment of our natural environment, and protection from floods and 
hurricanes. The First National Water Resources Policy Dialogue held in 
Washington, DC in 2002, reported that the Nation faced serious water 
problems and conditions have not improved. Recent droughts have 
resulted in annual losses of over $5 billion and drought mitigation 
planning is moving slowly. Conflicts among States over water use and 
allocation are growing. EPA rates our coastal ecological and water 
quality conditions as fair to poor with no improvement over the last 
two years. More than thirty years after the passage of the Clean Water 
Act, beach closings abound. The States reported in 2000 that nearly 40 
percent of out rivers and streams did not meet water quality standards 
and since then, EPA, because of a lack of State funding for monitoring, 
has questioned the reliability of even those assessments Floods losses 
continue to grow and approach annual damages of $6 billion and an 
average loss of 80 lives. The American Society of Civil Engineers 
continues to give sub-standard grades to our aging water 
infrastructure--ports, waterways, hydropower facilities, water and 
waste water treatment plants--and our efforts to protect rare and 
endangered species and restore ecosystem deficiencies seriously remain 
under-funded. Water is our most precious natural resource.
Dialogue Outcomes: Four Key Water Resources Challenges and Two Cross-
        Cutting Issues
    The participants in WPD II identified four significant--and very 
much interrelated--water resources challenges facing the nation, noting 
the close link to similar challenges identified in the first water 
policy dialogue. Additionally, two issues--financing water resources 
improvements, and public education needs--run through all the 
challenges. Each challenge and cross-cutting issue is summarized below.
The four challenges:
    1. Promoting More Integrated Approaches. There is a need to address 
the Nation's water issues in an integrated manner, dealing not with 
single isolated projects but with programs and watershed-level 
problems. The cooperative and holistic efforts evidenced in the 
programs to restore the Everglades, deal with the California Bay Delta, 
and protect Coastal Louisiana need to be replicated across the country. 
Participants generally concluded that integrated management is the key 
to effectively resolving water resources problems. Characteristics of 
integrated water resources management include using systems approaches 
and comprehensive GIS-based data to understand the connection between 
natural and man-made systems; analyzing water resources problems on 
basin or watershed scales; striving to achieve multiple goals and 
purposes using water resources in a balanced manner; and using 
collaboration across all levels of government and with all stakeholders 
to find appropriate solutions. Participants noted there are many 
obstacles to achieving integrated approaches. Those most frequently 
discussed include the following:

   The absence of a clear policy framework for making decisions 
        about water resources
   The presence of multiple, often conflicting, agency mandates 
        and priorities
   The lack of coordinating mechanisms and forums for dealing 
        with differences among agencies, and among stakeholders
   The lack of adequate scientific data to permit basic 
        understanding of complex physical and biological issues, and to 
        facilitate good decisions

    2. Harmonizing/Reconciling the Current Ad-Hoc National Water 
Policy. There is a need to reconcile the myriad laws, executive orders, 
and Congressional guidance that have created the current disjointed ad-
hoc national water policy and clearly define the 21st Century goals and 
values that should be met. Many important laws were passed early in the 
last century when objectives and physical conditions were far 
different. Many of these documents conflict with each other, placing 
executing federal departments in tenuous situations creating disharmony 
among states and localities. Participants felt too many conflicting 
goals and mandates are being pursued at the Federal level. Priorities 
are too often pursued in isolation and create needless conflict and 
gridlock. Participants called for clarification of roles and 
responsibilities among federal agencies, for establishment of a clearer 
vision for uses and priorities for the nation's water resources, and 
for the development of coordinating mechanisms to harmonize and 
reconcile policy differences before they lead to gridlock. Many 
participants believe that a national commission is needed to undertake 
the necessary recommendations for improving our current ad-hoc policy 
situation.
    3. Developing Collaborative Partnerships. The fiscal realities 
facing the nation underline the need to more effectively coordinate the 
actions of federal, state and local governments in dealing with water. 
Collaboration instead of competition will provide more effective and 
fiscally efficient use of scarce resources and assist in overcoming 
decision gridlock on key water programs. The water resources decision-
making environment is extremely fragmented and complex. It is marked by 
different laws and authorities to address different and sometimes 
conflicting purposes (water supply vs. drinking water treatment vs. 
endangered species vs. navigation, etc.), different levels of 
government with overlapping responsibilities, and a wide array of 
stakeholders with diverse values and view on water resources. In the 
absence of integrating mechanisms and problem-solving forums when 
conflict among agencies, governments, or stakeholders occur, litigation 
becomes the way of resolving differences leading to delays, lost 
resources, and limited ranges of options. Participants wanted to see 
all levels of government working in collaboration to achieve 
sustainable water resources solutions to critical issues. They noted 
that incentives need to be put in place by government to encourage 
greater cooperation among agencies. Dialogue participants strongly 
supported more partnerships and collaboration to create productive 
opportunities for resolving water resources issues:

   Integrate water quality and water quantity management--they 
        aren't separate and shouldn't be treated independently;
   Establish/invigorate forums to resolve differences in 
        federal agency policy and mission focuses and to deal with 
        multi jurisdictional coordination, interstate, and cross 
        jurisdictional water management issues;
   Cut across boundaries at all levels--encourage federal/ 

        state/local partnerships to address water resources 
        comprehensively and in an integrated manner.
   Determine how best to assign the ``lead facilitator'' or 
        ``lead integrator'' role in collaborative frameworks.

    4. Information for Sound Decision Making. The nation is blessed 
with access to a superb scientific capability and cutting-edge 
information technologies. These capabilities need to be focused on 
supporting water policy decision makers as they carry out their 
challenging responsibilities. Participants at the dialogue concluded 
that decisions on the uses of America's water resources must be based 
on good science and complete information. Science and information need 
to be available to all stakeholders and responsible authorities so that 
decisions can be made in open, collaborative ways in a trusting 
environment. Many participants believed that information on water use, 
availability, water quality, and results being achieved in pollution 
control, as well as projections on water demand and use need to be 
better coordinated and integrated at all levels so that appropriate 
information can be marshaled for integrated water management and 
problem solving.
The two cross-cutting issues:
    1. Financing Water Resources Improvements. Our nation's water 
resources infrastructure--its ports, channels, flood control works, 
irrigation systems, water works, distribution systems, and treatment 
facilities--provides a foundation for our economic prosperity and 
quality of life. Yet funding for these vital systems is not keeping 
pace with the repair, replacement, and renovation requirements. There 
is a need for innovative cost-recovery, pricing, and financing 
mechanisms to address infrastructure funding needs. Participants in the 
dialogue recognized that there are many competing national requirements 
for public funds. Many felt frustration that the water resources 
community has not done a good job of conveying the criticality of 
issues and the risks associated with continued under-funding of the 
nation's water infrastructure. Others pointed out that in the climate 
of fiscal austerity there has of necessity been greater prioritization, 
conservation, public-private partnerships, reliance on market forces, 
and other innovations in cost recovery and funding mechanisms than 
would probably have occurred if resources were plentiful. These 
innovations have been helpful; however, most agreed that additional 
funding for water infrastructure improvements must become a national 
priority. Some called for a national assessment as a means to 
comprehensively identify water resources needs and funding 
requirements.
    2. Educating the Public and Public Officials about Water Resources 
Challenges. Much of the public at large and many public officials lack 
an understanding of the water resources challenges facing the nation. 
An education program must be conducted in parallel with efforts to 
address the nation's water resources challenges. Participants 
continually stressed the need to better educate/inform the public as 
well as decision makers in local, state and federal governments about 
the conflicts and limitations associated with water availability and 
use. Topics in need of coverage include: the value of water, real cost 
of water, environmental consequences of use, trade-offs associated with 
different uses, importance of balancing needs and uses, availability of 
supplies vs. demands, risks associated with an aging infrastructure, 
importance of regional solutions to water use, long-term consequences 
of unwise use, and impacts of political/jurisdictional decisions/ 

differences.
Calls for Action
    Congress and the Administration were called upon to provide the 
leadership for achieving the needed direction suggested by the key 
challenges and cross-cutting issues. Repeatedly mentioned by 
participants in this vein were the following actions:

   Develop a national water vision: Working with all levels of 
        government and the private sector, lay out a framework for the 
        future for water resources; address competing goals and 
        objectives, and establish broad priorities for resource 
        expenditures.
   Formulate policy principles for translating the vision into 
        action: Focus on shared responsibilities at all levels of 
        government, as well as the private sector for addressing our 
        water resources challenges in an integrated, holistic, and 
        cooperative fashion.
   Insist that appropriate coordination and cooperation takes 
        place: Federal agencies must work together more 
        collaboratively, and with other levels of government about 
        water resources issues.

Main Conclusions
    On balance, WPD II had a hopeful tone. Participants and panelists 
all acknowledged that the nation is facing a wide array of daunting 
water resources challenges--making adequate water available for 
economic growth and other needs, allocating water to competing uses, 
maintaining and improving water quality, rehabilitating an aging water 
infrastructure, balancing economic needs for water with ecosystem 
requirements, etc. However, the watchwords of the first national water 
policy dialogue--integrating efforts, building partnerships, and 
addressing problems in a comprehensive manner--were much in evidence as 
participants described successful and innovative solutions to pressing 
water problems. A key conclusion, from WPD II then is that the themes 
and recommendations for responding to water challenges put forth in the 
first dialogue are working and need continued support and nurturing.
    The Second National Water Policy Dialogue was a significant event 
that can help propel the United States forward to confront serious 
water resources challenges. The first and second dialogues have made a 
good beginning, but next steps are crucial to sustaining the progress 
achieved. National groups like the AWRA can continue the dialogue, and 
agencies can improve efficiencies and inter-agency cooperation and 
collaboration, but improving, harmonizing and reconciling the troubling 
and difficult policy issues we now have will require Congressional and 
Administration action.

    The Chairman. Thank you very much.
    Now, we are on schedule. These witnesses are available if 
anybody wants to ask them or if any of you do.
    Let me yield to any Senator that might have a question. We 
have additional panels, but you are surely welcome to ask.
    Senator Smith.
    Senator Smith. Mr. Underwood, what would it take for 
desalinization to be cost effective in more coastal areas?
    Mr. Underwood. There is two areas that you look at, I 
think, in terms of desalting. One is energy and the other is 
pretreatment that determines the cost on desalting. The other 
aspect is, if you look at desalting just from saline water or 
are you looking at it from brackish water or urban water? So 
those alone--if you are looking at how to recycle more urban 
water, it allows you to do it at a reduced cost. But it is 
attaching the pretreatment, looking at the pretreatment and the 
energy, making it more practical, make it more cost effective.
    Like I said, it is applied not just to saline water bodies, 
but we should look at other water bodies that we can 
potentially include within the water supply, recover it into 
the water supply.
    Senator Smith. Is it proceeding? I mean, is this going on 
or is this being studied?
    Mr. Underwood. I think there is a lot of efforts. At 
Metropolitan Water District we encourage--a lot of times we 
will do things through incentives. We will pay so much money 
per acre-foot to help buy down the cost. But that is not the 
long run. You cannot just be buying down the cost.
    You are making those investments so that the research will 
make it more practical and more cost effective, and it is going 
on.
    Senator Smith. On another subject, is California taking a 
comprehensive look at all the environmental impacts of all of 
its water transfers?
    Mr. Underwood. Say that again?
    Senator Smith. Is California taking a comprehensive look at 
the environmental impacts of all of its water transfers?
    Mr. Underwood. If you look at where the water hubs are in 
northern California, one is the Sacramento, the Bay Delta area, 
and that is being addressed in terms of restoration. If you 
look at the Colorado, like I mentioned earlier, the lower 
Colorado, that is going under a multi-species program which was 
just signed that looks at 27 species, provides for existing and 
future operations, but most importantly it also provides for 
the conservation of the species.
    Senator Smith. Thank you.
    Tom Davis, I agree with you on the need to maintain 
agriculture in the West. Does the efficiency of water use vary 
throughout the West and how much from State to State?
    Mr. Davis. Efficiency in water use varies I think from 
every irrigation district to irrigation district. One thing we 
need to keep in mind with water efficiency or water 
conservation, particularly in the use of surface water in areas 
where conjunctive use of surface and ground water exists, 
oftentimes conservation can be carried to the extreme to where 
it might impair downstream surface diverters who might be 
senior.
    Senator Smith. In what way?
    Mr. Davis. I will give you a good example that exists on 
the Pecos River in New Mexico. The Pecos is largely supplied by 
underground discharges from aquifers that are under pressure 
and as the years went by and those aquifers were tapped for 
irrigation, it was flood irrigation. A lot of return flow 
occurred from that flood irrigation to the river and it 
supplied the diversion for downstream senior diverters, which 
once before the wells were drilled were supplied by the aquifer 
discharges. Now they are supplied by the wells being the return 
flows from the irrigation.
    As more and more efficient irrigation is applied there, 
such as the new LEPA systems, that is very good for areas like 
the Ogallala Aquifer where you are mining an aquifer, but in 
this case, where there is an intricate balance between the 
aquifer and the surface flows, as you become more efficient in 
applying your water from the underground wells there is less 
return flow. So in effect, water conservation is impairing 
downstream diverters' supplies.
    So it is not a real clean--conservation is not a real 
clean-cut situation. It has to be looked at in each individual 
case to really understand what is workable and what is not.
    But yes, all agriculture use should be applied as 
efficiently as possible without impairing downstream diverters.
    Senator Smith. So are they going back to flood irrigating 
or are they----
    Mr. Davis. We are waiting for the State engineer to sort 
that out.
    Senator Smith. Obviously, how they irrigate and how States 
use it depends on the soil, the crops and everything they are 
using. But your point is very well taken, that it is like 
squeezing a balloon. You blow it up somewhere else, I suppose.
    Can you identify for me any Federal programs or what 
Federal programs are most effective at helping farmers use 
waters efficiently?
    Mr. Davis. I think for sure traditionally in the West the 
Bureau of Reclamation has had the greatest involvement in 
developing the projects and in being a source of knowledge for 
districts to improve their use of water, to become more 
efficient in measuring water and applying water to the land. 
Obviously, a lot of irrigation districts have grown beyond that 
because of demand. We realize that if we become more efficient 
water can be used in other ways and can be used through drought 
periods.
    I think some of the farm programs have been very helpful in 
the past. In the area that I am familiar with, most of the 
benefits from those type programs have been reaped, have been 
used. I am not sure that additional benefits are out there to 
the extent they once were for individual farmers to make 
improvements, such as laser leveling or concrete lining or 
installing more efficient delivery systems. I think most of 
that has been done.
    But those projects in the past, the Great Plains Project 
and the Equip Program, have been very helpful. I am not sure 
there is a lot of good left in those.
    Senator Smith. And they are done. I mean, they are already 
accomplished.
    Mr. Davis. Most of that work has been done, and would not 
have been done without those programs.
    Senator Smith. Thank you, Mr. Chairman.
    The Chairman. Senator Bingaman.
    Senator Bingaman. Thank you very much.
    Mr. Galloway, you talked about the need to have a new look 
at all of these complex water laws and the disagreements among 
them. Back in the 1960's the Congress legislated into being a 
thing called the Public Land Law Review Commission that had the 
job of looking at all the public land-related laws and trying 
to make sense out of them and then make recommendations. Would 
you think it would make sense for us to have a Public Water Law 
Review Commission that would do the same thing with regard to 
the water laws? Do you have any thoughts on that?
    Mr. Galloway. Yes, sir. That is certainly a minefield, as 
water law is evolving. But it does point out the challenges 
that you face today. In the dialog there was clear concern over 
the variety of laws and the change of the laws that are taking 
place to meet the new challenges, the issues that have just 
been raised by Mr. Davis.
    So there is a need for somebody to come together and bring 
that together. If it could be done on a regional basis in some 
cases, that might be very useful. Clearly, the need for a look 
at how all of the national water laws fit together is something 
that the dialog found to be very important.
    The Chairman. Senator Bingaman, would you yield?
    Senator Bingaman. Sure.
    The Chairman. I think maybe we ought to ask all of you a 
similar question to what Senator Bingaman asked of you. Could 
you answer the question as to whether you think a national 
resource commission, national water commission to examine the 
water issues, should be established? I think the AWRA 
recommended that?
    Mr. Galloway. Yes, sir. Our letter to you and to the 
President, the Speaker, recommended that there be a national 
water commission to examine not only the water laws themselves 
specifically on the use of water, but the entire issue of how 
these laws fit together.
    Senator Salazar. Mr. Chairman.
    The Chairman. Senator.

          STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR 
                         FROM COLORADO

    Senator Salazar. Just as a footnote to the chairman's 
question to all of you, here is what I would ask you to focus 
on as well. I was on the National Water Commission along with 
my good friend John Echohawk, who I see in the audience, back 
in the 1990's. Frankly, I think that was a lot of time and a 
lot of expense and in the end it amounted to nothing. So 
sometimes when they see us getting together in these water 
summits or water conferences, I think that we end up launching 
off on doing studies and forums and ultimately do not get to 
any kind of result.
    So as you answer the chairman's and Senator Domenici's and 
Senator Bingaman's question, I would like you to reflect, if we 
do move forward with some kind of a national water commission 
or forum, how do you make it effective so we do not repeat the 
mistakes of the past?
    The Chairman. Very good.
    Senator Bingaman, you led off.
    Mr. Galloway. I would just comment, Senator, it needs to be 
very focused. It needs to be founded on good science. We have 
not had a national water assessment in nearly 30 years. To get 
some science behind some of the decisions that are being made, 
and it cannot be all over the place. It has got to be focused, 
and I think that is the worry, that it would go too far.
    The Chairman. We will go around the table if you have a 
comment. If you do not, you do not have to.
    Mr. Tracy. No, I do have a comment on this. I think it is a 
real good point, and I think to make it effective what we would 
have to do is avoid the top-down philosophy. That is that the 
national water commission I would not see as having a role of 
leading anything, but rather facilitating, and all of these 
would have to be done on a very regional basis and probably a 
large watershed basis. So you would have one for the Snake, one 
for the Columbia, one for the Colorado. And that they would 
focus, as I think Mr. Davis had pointed out, in a very regional 
fashion, where the expenditures of the study dollars, the 
direction that the studies would take, would be in essence the 
authority that would be held at a regional basis, which would 
actually be a collaboration between Federal, State, irrigation 
district, water district, that really had teeth in it.
    Then I think you would find it effective, where the Federal 
water commission would be nothing more than an organization to 
help facilitate those studies.
    Mr. DuMars. I concur with what John said, but I also concur 
with what Senator Salazar said, that these national commissions 
and big long reports can just gather dust. But it really would 
be useful if we could focus energies on management of water on 
the watershed or common aquifer basis, and within those 
watershed regions have the States produce their part of the 
plan. We have got the water resources research institutes at 
the universities who could be coordinating the State engineers 
to create the study.
    But I think it is important that the product be clear from 
the beginning, that it is not just an abstract discussion of 
what is out there. Rather, it ought to be focused, what would 
be some things that could be done to make things better. Those 
things would include in my view an accurate analysis of all of 
the demands for the water, and including in that demand 
analysis, as I said in my earlier remarks, include demands that 
are more than just current topical or popular demands, like 
growing cities and keeping water in streams, but long-term 
support of agriculture, long-term support of energy 
development, so that you had a set of end uses that you would 
define for the region and a set of processes, but the net 
result would be a cohesive regional description of that 
watershed and that basin which could then become part of a 
water atlas that people could access on the web. I think that 
would be very useful and the laws would naturally integrate in 
there.
    But I think most people--certainly I think I am aware of 
most of the water laws in the Western United States, but that 
does not make me an expert on the institutional problems that 
you face at the regional level. So I concur with John as to its 
content.
    Ms. Birnbaum. I am actually torn over the answer to this 
question, because, as our submission actually to this 
conference indicated, there was a terrible split, kind of 
represented by Senator Smith's chart, among the different 
jurisdictions of committees, different agencies doing different 
pieces of water policy, an artificial dichotomy between water 
quality and water quantity, which really cannot be split.
    It would be wonderful to have somebody come down and do a 
real national review, but it is an enormous, incredibly complex 
problem, and it instantly leads me to Senator Salazar's 
question: How do you focus it and how do you make it effective? 
I just do not know how you can define it in a way that will 
actually produce an effective result.
    If what you want is an assessment of demand and a fairly 
accurate projection of demand, you can do that. That is a very 
limited piece. But a very broad commission to try to look at 
everything we are doing with water policy would be an enormous 
challenge. Even the Western Water Policy Review Commission was 
only a narrow piece of the puzzle and it came out with 
recommendations that have yet to be acted on.
    The Chairman. Go ahead.
    We are not taking your time, Senator Bingaman.
    Ms. Kassen. As a Coloradan, I agree with the good Senator 
from Colorado that we do not need another national policy 
commission to set Federal water law policy, in part because, as 
all of you gentlemen know, the allocation of water is done at a 
State level. So one of the reasons that the Western Water 
Policy Review Commission, some of those recommendations have 
not been enacted, is that it would be complicated and it would 
get into areas where the States see that they have 
jurisdiction.
    That said, I do think that there is a role for the Federal 
Government and maybe, Senator Salazar, if you think about 
technology development and research and environmental values, 
one of the things that the experience that we had in Colorado 
with the SWSI showed is that local planning is pretty good, but 
there are some gaps and we do not have enough information about 
which environmental values absolutely need to be protected, how 
much water is necessary to do that, how we get to where we need 
to be.
    From that standpoint, I do think that Federal resources 
would help solve some of the gap problems, not just the gaps in 
terms of ensuring that growing cities have what they need, but 
also the gaps in terms of how do we satisfy the environmental 
needs, how do we protect the remaining fisheries that are out 
there.
    Thank you.
    The Chairman. Thank you very much.
    Tom, you are next. Could we try to make them brief now?
    Mr. Davis. I will try to be as brief as I can be.
    I think Federal dollars are spent, better spent, other 
places. I think a lot of this knowledge is there. We have 
interstate river compacts on every river in the West, and 
obviously the States have a role of allocating the water in the 
States and within each State. I think the Federal funding 
should look more at developing technology similar to what is 
being there on the desal plant that is going in at Alamagordo, 
New Mexico. I think those are the type projects that maybe the 
Federal dollars should look toward, overall technology 
increases that will help all of us.
    The Chairman. Mr. Kuharich.
    Mr. Kuharich. Mr. Chairman, the Statewide water supply 
initiative identified three key findings and all three of them 
had a Federal nexus. The first one had to deal with Federal 
funding. Federal and State funding was going to be necessary in 
order to meet some of the supply gaps that were going to 
develop between now and 2030.
    The second one was permitting. Permitting was identified as 
one of the primary implementation hurdles to any water supply 
project.
    The third one was the issue of environmental and 
recreational demands for water, which are growing in Colorado, 
I think as with all Western States. There the problem is one of 
cost. Once you mitigate the project, if there are any other 
enhancements involved environmental or recreational uses have 
no way of generating the revenues to pay for those 
enhancements.
    The Chairman. Thank you very much.
    Mr. Underwood.
    Mr. Underwood. I think there is a need to have a national 
energy--national water strategy. They all go hand in hand, I 
guess. Water strategy, primarily looking at how do you direct 
the research, how do you direct the new technologies, is 
precipitation management viable for the United States, is 
vegetative management a viable tool.
    So some of these, if you look at a national energy 
strategy, you are advancing things, the tools that can be used 
by individual States or in the river basins. Assessments or 
looking at integrated planning, I do not know so much about 
assessments, but I would look at the integrated planning, not 
so much the assessment within an area but how do you--what is 
the best approach that you should be using for river basins or 
regions as a whole.
    The Chairman. Thank you very much.
    Senator Bingaman, if you want to follow-up.
    Senator Bingaman. Let me just ask one other question, Mr. 
Chairman. My impression is that when we talk about coordination 
of water management and integration of water management, one 
area that we all know exists, but I think has gotten way too 
little attention, is this whole issue of the mining of 
underground aquifers. You go State to State, each State has a 
whole different set of rules either governing this or not 
governing this.
    For example, Texas has a whole different set of laws. They 
have no limits on underground mining, mining of underground 
aquifers. We have major limits in New Mexico. When you bring 
the subject up and say, what are we doing about the depletion 
of the Ogallala Aquifer, people say: This is a States' rights 
issue. Well, at some point we are not going to have any water 
on the New Mexico side because we have allowed Texas to pump it 
all out. I do not know that it is going to be an adequate 
explanation at that point to say that was a States' rights 
issue.
    I think the same thing on transboundary water or 
transboundary aquifer assessment that we are trying to get done 
on the U.S.-Mexico border. Some way or another we need to start 
looking at the underground resource and recognizing that we are 
not fighting about what is coming down the river near as much 
as we are fighting about what is being pumped out of the 
ground.
    I do not know the extent to which any of those issues are 
getting addressed. My sense is they are not getting addressed 
very effectively. Chuck, maybe you have some thoughts on that. 
Go ahead.
    Mr. DuMars. I think they are not being addressed 
effectively. They are being addressed on a State by State basis 
with different degrees of interest depending on the State. But 
as I said in my statement, there is an unavoidable analogy to 
our oil reserves. When you mine ground water, it is gone, and I 
think that there is no place that we have tried--I personally 
have worked in the Juarez-El Paso area for years and worked on 
draft compacts, international compacts for ground water mining 
legislation or parallel legislation. It is now at a crisis 
point in the frontera, in the border there, and it is now--in 
the Ogallala and other places we are now faced with a choice, 
are we going to save water for future generations or not?
    When it becomes national in scope, I think there is a 
national interest there in making, facilitating agreements that 
reach consensus on how we treat these aquifers.
    Senator Bingaman. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Well, I want to just make a point and if any of you want to 
comment that would be fine. Then I will yield to any other 
Senator.
    I keep hearing use of the words, words like we need to 
develop technology, the technology of producing good water from 
saline, cleaner water from water that has pollutants in it. I 
think that is one of the big things we could address. I am of 
the opinion that the Federal Government could set up some 
centers of technological excellence with reference to the 
application of science and technology to various water 
problems.
    We are going to try that this year and we will try to 
extract a little additional testimony from some of you on how 
that might work. What we were thinking about was maybe four 
centers in the United States built around a national laboratory 
and a university, with private sector input, a certain amount 
of dollars, managed in some way so that everybody was working 
toward the same goals, maybe some duplication but to 
disadvantage the idea of everybody doing the same thing, which 
we tend to do in research.
    Do any of you have a feeling about that kind of thing as an 
idea? And then I will yield quickly to the other Senators. 
Anybody?
    Mr. Underwood.
    Mr. Underwood. I think it is a good idea, because you 
cannot do all of the research in one area. A lot of it, you may 
even have--you are going to produce a solid or a sludge that 
you are going to have and so you have the disposal of the 
byproduct of even the improved water treatments. But water 
treatment, if you look at cleanups, if you look at meeting the 
Safe Drinking Water Act, you go through the recycling, 
etcetera, all of those have a water treatment component, and 
what we are trying to do is how do you reduce that cost to make 
it more effective.
    But when you do that, when you remove something, then you 
have to dispose of it. So I think you need to do the adequate 
not just on the treatment itself, but on the disposal.
    The Chairman. John.
    Mr. Tracy. Yes, I think that is a very good idea, and I 
think the regionalization of the research centers is very 
important because of the different physical circumstances that 
exist in the different regions that are water-short, especially 
in the Western United States, and having some type of 
technological centers where you have a combination of the 
State, the universities, Federal agencies, would really be a 
good focus for directing the activities.
    The Chairman. Yes?
    Mr. Kuharich. Mr. Chairman, briefly, I think it is 
important to separate out the water policy, which has 
traditionally been a States' rights issue, from water research, 
which I think can benefit everybody.
    The Chairman. Okay. Any other Senators? Yes, Senator 
Salazar?
    Senator Salazar. I have just a quick question and that is--
before I do that, let me just say to Rod Kuharich and to 
Melinda Kassen, welcome here to Washington from Colorado and 
thank you for the good work that both of you do back there.
    My question is to Dennis Underwood and to Rod. That is a 
question about transfers of water from agriculture to municipal 
uses. I think for all of us, especially in the West, what we 
see happening in many of our States and our communities is that 
you have agricultural communities that are devastated when you 
have water moving to the economic uses that can afford to pay 
the much higher dollar.
    I know that MWD in southern California has been undergoing 
some agreements with the agricultural community that has been 
good for the cities and has been good for agriculture. Rod, I 
think some similar things are under way in the State of 
Colorado and I would like you to briefly just comment to the 
panel on some of these sharing arrangements, because at the end 
of the day, especially for those of us from the western part of 
the country, we know that 90 to 95 percent of our water is 
consumed by agriculture.
    So one of the opportunities is how can we enhance our water 
supply for municipal and other uses, but at the same time keep 
from devastating rural communities that are dependent on water 
supply for agriculture?
    Mr. Kuharich. Thank you, Senator. That was not a plant. It 
was a great question.
    The Statewide water supply initiative addressed this head-
on. I think, to be blunt about it, if it is not new water it is 
going to be ag water for development in Colorado. One of the 
things we are facing which we identified is the need to develop 
our unused compact allocations throughout the State, but also 
to work with agricultural water in some sort of a cooperative 
arrangement where we could get ag fallowing, where there could 
be reliability to municipal providers as well as economic 
security to the ag communities that remain viable through the 
process.
    I think you will find that Colorado will be moving toward 
an idea like this probably as early as this summer, to try to 
come up with projects and processes that are a win-win for 
everybody in the State.
    Mr. Underwood. We have had quite a bit of experience in ag 
to urban transfers. What we try to do is really make it an 
effective partnership. You are not changing water rights, you 
are not changing land ownership, you are not losing prime 
agricultural lands. You are doing it in a partnership.
    Ag is facing, just like the water community, is facing a 
lot of competition from the world down under. A lot of our 
growers in California used to be able to control the markets 
because of the wintertime, etcetera. But now the world down 
under competes with that and so it is a harder life for them, 
too.
    So there is a way of putting together partnerships that 
become effective without changing and losing prime agricultural 
land. I will give you a few quick examples. Whether you are 
doing on-farm improvements, are you doing system improvements, 
are you doing long-term fallowing programs which allow for some 
crop rotation, some lands that go out, that come back in and 
are more productive than when they went out? You are looking at 
some even where we have actually purchased some lands and then 
leased them back to farming.
    You also have 1-year water supply options. So there is a 
variety of partnerships you can do with agriculture. Yes, 
agriculture is one of the larger amounts of water that is 
available, but you also need to sustain American agriculture. 
So there are ways of doing both.
    The Chairman. Thank you.
    Any other Senators?
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    I am sorry to all of you that I have missed the testimony 
and I wish that I had had a chance to hear some of the 
comments.
    The question that I have relates to whether or not we are 
at a point where we need to consider a national strategic water 
reserve similar to what we have with our petroleum reserve. 
When we recognize the vulnerability that we have as a Nation, 
we think about things like oil. But think about what happens 
when our water supply is threatened. Do we need to--are we at 
that point where we have to have that discussion, that 
conservation?
    I do not even know who to throw this out to, but your 
comments?
    Mr. DuMars. Well, I talked a little bit about that in my 
testimony. What I suggested was--I am Chuck DuMars from New 
Mexico--was that the States at the State level--States are 
beginning to evaluate their own reserves and make choices about 
how much they are going to need for future generations and 
looking at their mined aquifers and so on, and there has been 
some testimony and discussion about the fact that I think it is 
clear that the States are moving and that each State is moving 
in that direction or needs to be encouraged to go in that 
direction, in order to make sure we do have water reserves for 
our energy production and for agricultural production.
    I think that the States are evaluating that and looking at 
that. We need to do that more. So I concur with your suggestion 
that we need to evaluate the resources.
    But what my testimony was was that I thought that the 
States need to be encouraged to do that more and they are 
beginning to look at that more, but over the next 10 years 
there is going to be a crisis if we do not maintain water 
supplies for our agricultural and energy production, at the 
same time understanding what our environmental needs are and 
trying to meet those needs.
    Senator Murkowski. Well, certainly from a State like mine 
in Alaska, where we have incredible water reserves, we are 
sitting okay. We can take care of most of our needs. But in 
some of the Western States where we know we have critical 
shortages, it may not be so easy to look toward the future and 
figure out how you are going to produce that reserve.
    So I appreciate your State analysis. I am just wondering if 
from a national perspective we need to think about that.
    Senator Thomas [presiding]. Could we go forward now?
    Senator Murkowski. She has got one comment.
    Ms. Birnbaum. I just wanted to add one thing. Actually, 
from New Mexico also, the State of New Mexico just passed a law 
to create a strategic water reserve and the purpose of that 
water reserve was to meet the State's needs both for compact 
purposes with Texas and to maintain adequate in-stream flows 
for endangered species.
    One of the things that States are looking at in terms of 
having a water reserve is making sure that they also have 
enough water in rivers to maintain river ecosystems at the same 
time that they meet all their uses. But New Mexico just passed 
a bill on this.
    Senator Murkowski. Thank you, Mr. Chairman.
    Senator Thomas. Thank you.
    Thank you very much. I appreciate it and we are ready to 
call our next panel. While they are being seated, let me say 
this is called the ``Future Role of the Bureau of 
Reclamation.'' The Bureau was established in 1902 to help 
develop and settle the arid West through irrigation and 
multiple use projects. Over 100 years later, the West is 
largely settled, its population booming. Agriculture, urban, 
and environmental needs now compete for a limited, sometimes 
overallocated, water supply.
    We have heard from our panelists that the Bureau is faced 
with significant challenges, such as the impact of 
environmental requirements on project operations, increasing 
demands for non-agricultural uses such as M&I purpose and 
ecosystem recreation uses, aging water infrastructure and new 
security needs and funding for new projects.
    The question for this panel: What should the Bureau's role 
be in the 21st century? So as soon as we get settled here, we 
will go forward.
    Since my voice is not very good, would you give us your 
name and whom you represent, please.
    Mr. Semanko. Mr. Chairman, my name is Norm Semanko. I am 
with the National Water Resources Association.
    Senator Thomas. Thank you.
    Mr. Atwater. My name is Richard Atwater and I am with the 
WateReuse Association.
    Mr. Tyrrell. Senator, my name is Pat Tyrrell, Wyoming State 
Engineer, and I am here today invited by the Western States 
Water Council.
    Senator Thomas. Good. I recognize you.
    Mr. Keppen. Senator, my name is Dan Keppen. I am the 
executive director of the Family Farm Alliance. I am from 
Klamath Falls, Oregon.
    Mr. Buller. Mr. Chair, Senators, my name is Galen Buller 
from the city of Santa Fe--I am sorry. Mr. Chairman, I am with 
the city of Santa Fe, Water Division director.
    Mr. George. Senators, I am Rick George and I am with the 
Confederated Tribes of the Umatilla Indian Reservation in 
Oregon.
    Senator Thomas. The other side has gotten a little smaller, 
I noticed.
    Ms. Bach. This is pretty comfortable odds, I would say. I 
am Maryanne Bach. I am the Director of Research and Development 
for the Bureau of Reclamation.
    Senator Thomas. Very well, and now the chairman has 
returned.
    The Chairman. Thank you very much.
    Let us proceed. If you will start, Norm, and we appreciate 
it very much.

  STATEMENT OF NORM SEMANKO, ON BEHALF OF THE NATIONAL WATER 
                     RESOURCES ASSOCIATION

    Mr. Semanko. Mr. Chairman, members of the committee, thank 
you. It is my privilege to be here and thank you for providing 
this leadership in looking at water issues from a national 
level.
    The National Water Resources Association strongly suggests 
that our good partners for many years in the Bureau of 
Reclamation have a strong and legitimate role well into the 
foreseeable future. We have four primary suggestions in that 
area.
    No. 1, the first and highest priority in dollars and human 
resources should be directed to the efficient and effective 
operation of existing projects in such a manner as to honor 
existing commitments and provide authorized benefits in a safe 
and reliable manner. We think this is consistent with the 
current Commissioner, John Keyes', direction to his staff and 
we think that should be continued.
    The basic operation and maintenance and safety of 
impoundments is essential to ensure that the authorized 
purposes and benefits of existing infrastructure continue in an 
effective and efficient manner.
    Second, Congress should clarify, reaffirm, Reclamation's 
relationship to the States, the longstanding responsibility for 
allocating water resources within their jurisdictions 
consistent with interstate compacts and decrees, by affirming 
again its longstanding policy, Congress's that is, of deferring 
to the States with regard to allocation and administration of 
water rights. This is reflected in section 8 of the current 
Reclamation Act and again should be reaffirmed.
    Third, with regard to aging infrastructure, there are many 
projects that have met or exceeded their design life, having 
been around for 100 years in many cases. They are in need of 
modernization. Currently the Bureau does not have a program in 
our view which enables water users to rehabilitate their 
projects and pay off those costs over a reasonable period of 
time. Such costs are currently considered operation and 
maintenance costs and consequently must be paid back in the 
year they occur. This is a problem that if not addressed will 
result in severe consequences in the decade ahead.
    Finally with regard to future development, few of us 
envision a future infrastructure development program and 
financing arrangement like the original reclamation program 
which facilitated the development and economic growth of the 
West, but it is time to recognize and address a new generation 
of infrastructure development needs and financing realities for 
the growing part of our country.
    An essential element is a basin by basin needs assessment 
of authorized but unfunded projects and projects in the 
planning stages. This assessment cannot be developed without 
the active involvement and leadership of western Governors, 
water resource professionals, and State and local officials.
    With that, Mr. Chairman, I have provided a copy of our 
written comments to the staff. Thank you.
    [The prepared statement of Mr. Semanko follows:]
  Prepared Statement of Norm Semanko, on Behalf of the National Water 
                         Resources Association
         role of the bureau of reclamation in the 21st century
Historical Perspective
    The nation as a whole has come to take for granted the benefits 
that flow from the omniscience and vision of the policy-makers who, at 
the beginning of the 20th century created the federal/non-federal 
partnership that settled the West--The Reclamation Program. Reclamation 
projects authorized by Congress continue to provide numerous and 
substantial benefits for the entire United States.
    The Reclamation program was initially enacted with the passage of 
the Reclamation Act on June 17, 1902. Essentially, the Reclamation Act 
provided for the proceeds from the sale of public lands in 16 western 
states to be deposited in a fund (the Reclamation fund) to be used for 
the ``. . . construction and maintenance of irrigation works for the 
storage, diversion, and development of waters for the reclamation of 
arid and semi-arid lands in the said States and Territories . . .'' It 
was one of several acts concerning the transfer and development of 
public land in the Western United States. The Reclamation Act is bound 
up with these other laws concerning the allocation, transfer, and use 
of the nation's public lands. The exploration and settlement of the 
west became a matter of great national interest in the latter half of 
the nineteenth century.
    As the Reclamation program changed throughout the early part of the 
twentieth century, the combination of a simple message, clear vision, 
and great leadership remained intact. In less than 40 years, the 
Reclamation program evolved from single purpose irrigation projects, 
funded by a revolving fund, with 10 year repayment periods, to complex 
multi-purpose projects, funded by appropriations, with 40 year 
repayment periods, and power revenues assisting in the repayment of 
irrigation debt. Given these significant program changes, the program 
message continued to be that of ``making the desert bloom,'' and the 
basic purpose continued to be to promote regional economic development 
by developing irrigated agriculture. The Reclamation program stayed on 
this course until the late 1960s.
    The Reclamation Program is vitally important to the West and the 
Nation as a whole. Reclamation projects authorized by Congress provide 
numerous and substantial benefits for the entire United States. Among 
these benefits are: (1) flood prevention and protection totaling in the 
tens of billions of dollars; (2) generation of substantial amounts of 
hydroelectric energy using water as a renewable no-cost fuel source; 
(3) delivery of irrigation water to hundreds of thousands of acres of 
farmland in semiarid and arid regions that has increased and stabilized 
agricultural production in those regions; (4) water-based outdoor 
recreation facilities that provide recreation for millions of visitors 
annually; (5) municipal and rural domestic water supplies for over 30 
million people; (6) recharge of underground aquifers and water 
supplies; (7) fish and wildlife habitat including new fisheries, 
wildlife management areas, and hundreds of thousands of acres of 
habitat and marshes throughout project distribution systems and 
facilities; and (8) major surface water transportation.
                          mission obfuscation
    Reclamation has never had a comprehensive Organic Act describing 
its mission, much less recent revisions reflecting the evolving needs 
of the west (unlike the National Park Service, the Bureau of Land 
Management, and the Forest Service). Rather, its role and associated 
authorities evolved through a series of individual project acts; many 
Reclamation administrative acts concerning such matters as contracting, 
financing, and general administration; the overlay of federal 
environmental law; the waxing and waning of the federal commitment to 
Indian programs; legal interpretation by Interior's legal staff, as 
well as the courts, of the many, varied, and sometimes inconsistent 
federal statutes associated with the Reclamation program; and the 
direction provided by its own internal assessments and policy 
directives. The absence of an organic act results in less clear 
Congressional direction and contributes to the difficulty of providing 
consistent program direction.
    During the 1960s, three issues began to impact Reclamation's 
``mission'' bringing focus to this lack of Congressional direction. The 
first was a gradual reduction of strong Congressional leadership on 
water issues. Members such as Senator Hayden and Congressmen Aspinall, 
Johnson, Sisk, and Moss left office in the '60's and '70's. The 
Reclamation program had fewer strong champions in the Congress and less 
standing in the Department of the Interior. The second had been a 
concern throughout the Reclamation era and involved questions of the 
economic justification for further federally funded Reclamation project 
development. The third issue concerned the environmental impacts 
associated with Reclamation program activities
    Reclamation's construction program was dropping off significantly, 
and the planning program was moving away from traditional water 
projects. Funding for the loan program was reduced and, ultimately, 
virtually eliminated. Several projects were re-authorized (Garrison, 
Central Arizona, Central Utah, Central Valley, Truckee Carson, etc.) to 
reflect emerging fiscal, environmental, and/or Indian interest 
resulting in a piecemeal widening of Reclamation responsibility. This 
change in legislative direction by the Congress added credence to what 
many in Reclamation viewed as a change in public interest associated 
with the Reclamation program. Further, Reclamation's power marketing 
and transmission program was transferred to the newly established 
Department of Energy in the late 1970s.
    From the 1930s to the 1970s, the power and construction programs 
provided the funding stability required to run the Reclamation program 
in the traditional manner. As these program functions were transferred 
or significantly reduced, Reclamation managers found it more difficult 
to support the historic organizational arrangements. Overhead costs 
began to go up significantly. With a greater interest in cost recovery, 
these cost fell, to a greater extent, on the largest remaining program: 
operation and maintenance of exiting projects. Since O&M cost are 
recovered from the water and power users in the year they are incurred, 
this drove up costs to customers, creating another problem for 
Reclamation and its user community.
    Lacking clear Congressional direction on its mission in the form of 
an organic act or some other form of overall policy guidance, and 
recognizing all of these changes and the resulting effects on program 
management, Reclamation's leadership went through a series of internal 
assessments with resulting policy documents. These reviews and 
documents include:

   1987 Assessment
   1988 Implementation Plan
   1992 Strategic Plan
   1994 Blueprint for Reform
   1997 Bureau of Reclamation Strategic Plan, 1997-2002

    In 1997, Reclamation published its five-year Strategic Plan 
pursuant to the Government Performance and Results Acts of 1993. The 
plan states three mission objectives:

    1. Manage, develop, and protect water related resources.
    2. Protect the environment.
    3. Improve our business practices and increase productivity of our 
employees

    The objectives are supported by 18 strategies and five-year goals 
associated with each strategy. (Interestingly enough, contract renewal, 
which is a near-term vital interest to many Reclamation project water 
users, is not even mentioned in the Strategic Plan.) The Strategic Plan 
states broad objectives and numerous sub-objectives (strategies), and 
includes ambitious five-year goals. The five-year plan includes 
Reclamation's historic mission regarding facilities, operation, 
maintenance, and dam safety. It incorporates environmental protection 
as a fundamental mission of Reclamation. In many ways, it commits 
Reclamation to being all things to all people, as it pursues its 
mission and mission objectives.
    The five-year Strategic Plan basically says that Reclamation will 
continue its traditional activities, but with equal emphasis on 
environmental protection and remediation. Recreation and Indian Trust 
responsibilities are further emphasized as Reclamation objectives. The 
problem is that there does not appear to be agreement in Congress or 
among Reclamation project water users that 1) this is Reclamation's 
future mission, or 2) this mission is being carried out at this time--
or can be carried out in the future-in an acceptable manner.
    Given the significant additional responsibilities in the 
environmental area imposed by the Congress, the renewed attention to 
tribal obligation and the shifts in policy direction and institutional 
change over the past 10 years, it is no wonder Reclamation is 
struggling for a clear sustained direction. Reclamation can accommodate 
adjustments to program direction from year to year and remain 
effective. It has demonstrated this over the years. However, direct and 
sudden reversals of program direction and organizational philosophy 
have had a profoundly negative effect on the organization. A 20 percent 
reduction in staffing and a loss of historical leadership and 
institutional knowledge has also contributed to Reclamation's 
instability.
         role of the bureau of reclamation in the 21st century
    Reclamation's ``mission'' has become so blurred over the past 
twenty-five years that it is important for Congress to consider a 
system of priorities for funding of the Reclamation's many programs. We 
believe it is time for Congress to bring some clarity to the future of 
the Reclamation program. There are several possible directions the 
Reclamation program can move in the immediate future.
    We strongly suggest that there is a legitimate role for Reclamation 
into the foreseeable future. Reclamation manages over 350 high dams in 
the west. Some agency needs to be administratively responsible for the 
operation and maintenance of these facilities. Until--and unless--they 
are transferred out of federal jurisdiction, this seems an important 
and legitimate role for Reclamation.
    Reclamation's history is entwined with the development of the West. 
That development goes on today at an unprecedented rate, and is placing 
significant pressure on a finite water supply. Ideally, Reclamation 
should have sufficient resources to support the states by performing 
the full range of functions that diverse western water interests are 
demanding today. Regrettably, recent history has demonstrated that 
fiscal and human resources are not unlimited. Therefore, the 
Reclamation must focus its limited resources on priority projects and 
programs. The following priorities are proposed:

   The first and highest priority in dollars and human 
        resources should be directed to the efficient and effective 
        operation of existing projects in such a fashion as to honor 
        existing commitments and provide authorized benefits in a safe 
        and reliable manner.
   The second priority should be the timely completion of 
        ongoing construction so authorized benefits can be realized 
        within a reasonable time frame. This includes pass through 
        funding associated with authorized construction projects 
        currently underway.
   The third priority should be the funding or execution of new 
        activities or projects to provide expanded beneficial use from 
        existing facilities in response to increasing demands being 
        placed on western water resources.
   The fourth priority should be funding and execution of 
        innovative new projects or activities.

    The first priority is directed at protecting the existing federal 
investment and honoring existing commitments by assuring the 
uninterrupted and undiminished flow of authorized benefits from 
existing projects. As long as the federal government insists on 
retaining title to these project facilities, it must place their 
operational integrity as the highest priority. This priority must be 
fully funded or Reclamation risks unsafe structures and loss of project 
benefits. Every effort must be made to identify means to fund this 
priority, including off budget approaches. If Reclamation is unable to 
fully fund this priority level, it should identify those facilities 
with the least national interest and immediately initiate title 
transfer to the local beneficiaries. To do otherwise is to create a 
maintenance deficit that will never be overcome.
    The second priority is to complete currently ongoing construction 
activities in the shortest possible time frame. This serves two 
interests. First, it will allow the public to realize the benefits 
associated with the expenditure of taxpayer funds at the earliest 
possible time. Second, it will minimize the cost of constructing the 
project by reducing non-contract costs and the effects of inflation 
associated with long construction periods. Any effort to discontinue 
funding ongoing construction should be a result of an informed decision 
by the Administration or the Congress and should not be a decision by 
default.
    The third priority is directed towards deriving the most public 
benefit possible from exiting facilities. At the direction of Congress 
and with the support of the states, additional project benefits can be 
derived from existing facilities. The use of existing facilities to 
meet new water needs is often the most cost effective and expedient. 
These efforts should be supported by the existing project beneficiaries 
and be consistent with the state water law.
    The fourth priority includes new construction and other activities 
not associated with existing projects or ongoing activities. There are 
many good activities that may fall in this priority level and this is 
not to say they should not be pursued. However, in these fiscally tight 
times for Reclamation, these new activities should not be funded to the 
detriment of the higher priority program activities. These new 
activities may need to be funded from federal sources other than the 
Reclamation program or from non-federal sources.
    Along with prioritizing the Reclamation program, Reclamation must 
continue to pursue efforts to reduce the cost of doing business. 
Reclamation is making efforts to empower field offices and flatten the 
organization, and should be encouraged to finish what has been started. 
There remains room for significant improvement.
    Reclamation must administer the projects under its jurisdiction to 
achieve the benefits authorized and directed by the Congress. It is not 
for Reclamation, but the Congress, to determine if there is a higher 
purpose toward which the existing facilities should be used. Until--and 
unless--the Congress authorizes these additional purposes, Reclamation 
should dedicate its efforts to assure the effective and efficient 
delivery of presently authorized benefits. As Congress considers 
additional project purposes, current project beneficiaries must be 
involved with and supportive of any legislation affecting their 
interest in the project.
    Lastly, as the Congress, the Administration, and the water 
community deliberate the future of the Reclamation program, certain 
actions need to be taken in conjunction with the program priorities 
addressed above. They include the following:

   Clarify Reclamation's relationship to the states' long-
        standing responsibility for allocating water resources within 
        their jurisdictions, consistent with interstate compacts and 
        decrees. Reclamation should affirm its long-standing policy of 
        deferring to the states with regard to allocation of water 
        resources and administration of water rights.
   Assure that Reclamation actions are consistent with its 
        authorities. Many, if not most, Reclamation projects have very 
        narrow project purposes, and cannot be expected to meet every 
        current interest in water without reconsideration by the 
        Congress.
   Clarify the relationship and obligations to Reclamation 
        contractors, as opposed to other interest. Reclamation has 
        specific legal and policy obligations to Reclamation project 
        contractors. Reclamation has an obligation to consider the 
        concerns of others and address impacts of contracting. These 
        are not the same relationships and should not be treated as if 
        they are.
   Develop incentive-based approaches to current water 
        allocation problems. Increasing demands are being placed on 
        Reclamation project water for wildlife, endangered species, 
        recreation, environmental remediation, etc. Rather than taking 
        this water from historic water users through regulation or 
        legislation, Reclamation should provide incentive based 
        approaches to resolution of water problems that ensure 
        provision of water for historic users, while responding to new 
        demands.

    The Chairman. Thank you very much.
    We will proceed now with Mr. Atwater.

     STATEMENT OF RICHARD ATWATER, WATEREUSE ASSOCIATION, 
                         ALEXANDRIA, VA

    Mr. Atwater. Thank you, Mr. Chairman, members of the 
committee. Again, my name is Richard Atwater and I am 
representing the WateReuse Association, and again I have a 
written statement that I will submit for the record, but I will 
be brief.
    We likewise think the Bureau of Reclamation has a vital and 
important role in the 21st century. Certainly, given that it is 
103 years old and it has been around for over a century, it has 
a strong, vital, historic role, and we would say that in the 
future it needs to continue to provide strategically a 
leadership role in those areas in the Western States where it 
has really a very strong statutory authority, for example like 
the Colorado River Basin. It needs to provide leadership in the 
areas of innovative solutions, problem-solving, and importantly 
I think, and I think the committee will be looking at that as I 
heard the comments of the chairman, is the role in the 
partnership of evaluating new technologies, new research and 
development, and the application of that to solve our problems.
    As others have already pointed out, we are not going to 
create new water in the West except through the application of 
new technologies where we reuse, recycle, and repurify waters 
that historically were unusable.
    So that clearly is what I think is a strategic role for the 
Bureau. Short-term--and we can talk about the broader 
perspective of how to approach that--the Bureau of Reclamation 
now is partnering with the Department of Energy, Sandia Labs, 
here at the WateReuse Research Foundation, and the American 
Water Works Research Foundation to do a road map on 
coordinating research. Certainly that is one example with your 
new research centers, that we can expand upon that and using 
that road map with these new centers of excellence would 
certainly be an excellent approach to expanding that ongoing 
effort.
    Second, I would say that last fall through the omnibus 
legislation Congress enacted the Council on Environmental 
Quality to do a government-wide task force to look at the 
existing programs and existing efforts in water recycling, 
desalinization and such, to collaborate and coordinate. 
Clearly, not only the Bureau of Reclamation, but EPA, the Army 
Corps, the Department of Agriculture, and, frankly, in the 
areas like desalinization probably the Navy does more work than 
all the domestic agencies combined. That collaboration of 
research I think would be clearly something that would be 
useful and cost effective.
    Then finally, let me just suggest that innovative 
financing--certainly we have difficult budgets and historically 
I think the targeted grants in the range of 10 to 25 percent, 
for example, to Bureau of Reclamation with the highly 
successful title XVI water recycling and desalinization 
programs, that kind of program, where you are demonstrating and 
developing new technologies to point out whether or not they 
are economic, proven operational, the questions that members 
asked about sea water desalinization. Well, the only way you 
are going to learn from that is actually have operating one 5, 
maybe 10 million gallon per day plants. And certainly 
throughout the West, every major metropolitan area needs to 
expand and stretch its supplies through water recycling and 
reuse.
    With that, again I will submit my comments for the record.
    [The prepared statement of Mr. Atwater follows:]
     Prepared Statement of Richard Atwater, WateReuse Association, 
                             Alexandria, VA
        2. role of the bureau of reclamation in the 21st century
    The USBR was established in 1902 with a mission of ensuring 
adequate water supplies for the developing West. Congress recognized 
the need for multi-purpose water supply projects and authorized 
municipal and industrial supply as a mission of the Bureau of 
Reclamation in 1907. When the Bureau was established, the total 
population in the 17 western states was approximately 11 million 
people. In 2004, the population in the West totaled 97.2 million and is 
growing rapidly. The mission of the Bureau in developing municipal and 
industrial water supplies is even more critical today than it was 100 
years ago.
    The primary mechanism used by the Bureau to ensure adequate water 
supplies in its first century of operation was to build dams for 
storage of scarce water resources and the generation of hydroelectric 
power with irrigation supplies. While the mission of the Bureau has not 
fundamentally changed (although today the municipal and industrial 
supply issue is much more critical than the historic emphasis on 
irrigation supplies)--and need not change--in the 21st century, the 
mechanisms of ensuring adequate supplies must be dramatically 
different. The Bureau should play a leadership role in the development 
of alternative water supplies (e.g., water reuse and desalination), 
ensuring water use efficiency, and developing less costly and less 
environmentally disruptive means of storage such as aquifer storage and 
recovery (ASR) or groundwater conjunctive storage management (e.g., 
Orange County Water District's Groundwater Recovery Project). In many 
cases this is true for several federally authorized projects: Southern 
Nevada Water Project, Central Arizona Project, San Juan-Chama 
(Albuquerque), and the Hoover Dam/MWD's Colorado River Aqueduct. The 
Congress in 1986 recognized the need to augment the supplies of the 
Colorado River to meet the future needs of the river basin, but in 1986 
the emphasis was on large importation projects. Today, it is 
appropriate for the Bureau to focus on water reuse, desalination, and 
water use efficiency.
    The Bureau should take a leadership role in cutting edge technology 
to treat and reuse water. Title XVI is an example of a sound Federal 
investment. Under this program, the Federal government provides no more 
than 25% of the total capital costs while the local water agency 
contributes 75% or more. Thus, the Federal government leverages 
resource effectively, assists the local water agency with achieving an 
enhanced credit rating, and assumes no long-term financial obligation 
with operation and maintenance costs. 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. 
Compare this to the historic Federal Bureau authorizations of the 
Central Arizona Project, the Central Utah Project, and the Central 
Valley Project which provided 100% upfront capital financing and long-
term subsidized repayment contracts (plus in some cases operating 
subsidies for many years).
    The USBR should collaborate with the CEQ Task Force (described in 
the response to question #1) to address roles and responsibilities of 
different Federal agencies in addressing western water problems in 
collaboration with state and local governments.

    The Chairman. You talked about an existing consortium. Tell 
us, what was that again, the one that exists now?
    Mr. Atwater. Yes. The Bureau of Reclamation, working with 
Sandia Labs through the Department of Energy, with our 
WateReuse Research Foundation and the American Water Works 
Association Research Foundation over the last 2 or 3 years put 
together a road map, a plan, if you will, on overall R&D. It is 
a collaborative effort where our water users, the State of 
California, the State of Florida for example, have contributed 
substantial amounts of moneys to leverage the Federal 
investment here in, in this case, like a four to one ratio with 
outside funding.
    Again, it is an integrated approach to looking at the 
research and the application of technologies that will help 
solve our water problems.
    The Chairman. Let us proceed. We are going to take you now, 
Patrick Tyrrell, Western States Water Council.

  STATEMENT OF PATRICK T. TYRRELL, WYOMING STATE ENGINEER, ON 
           BEHALF OF THE WESTERN STATES WATER COUNCIL

    Mr. Tyrrell. Thank you, Mr. Chairman, members of the 
committee. Good afternoon. Again, my name is Pat Tyrrell, 
Wyoming State Engineer. However, today I have been asked to sit 
and talk on behalf of the Western States Water Council and its 
18 member States in discussing the future of the Bureau of 
Reclamation.
    The Bureau of Reclamation has an important and continuing 
role in meeting present and future water supply needs in the 
West. That role continues to evolve, from being a large builder 
to a water and power purveyor and manager. I have three areas 
where that role is most important, I believe. First of all, 
rehabilitation, as Mr. Semanko mentioned, of existing projects, 
necessary maintenance, and dam safety-related work must be a 
top priority. Second, water conservation efforts will continue 
to be essential. Third, the development of new supplies is 
essential, using both storage and more innovative techniques, 
such as water reuse, ground water recharge, desalinization, and 
control of phreatophites, to name a few.
    To fund this work, Congress could consider or should 
consider increasing appropriations for the Bureau of 
Reclamation projects and programs using the unobligated balance 
in the Reclamation Fund. The actual unobligated balance at the 
end of fiscal 2004 was over $3.8 billion and it is estimated to 
grow to about $5.9 billion at the end of fiscal 2006. This fund 
was created in 1902 and Congress intended these funds to be 
used to meet the need for water development and management in 
the West.
    The Bureau's numbers for information today for 
rehabilitation for aging infrastructure are about $645 million 
for the foreseeable future and approximately $227 million over 
the next 5 years for safety work. In fiscal 2004, $4 million 
was directed toward Water 2025 initiative challenge grants, 
while over 100 proposals were received, requesting more than 
$25 million to help fund $98 million in needed western water 
delivery system improvements. For fiscal 2005, the Bureau has 
again received over 100 proposals, asking for in excess of $35 
million for new projects with an estimated total cost of more 
than $115 million.
    Such programs and new legislative authorities need funding. 
That again could be provided from the Reclamation Fund, 
including these Water 2025 challenge grants, drought planning 
and mitigation, small rural community needs, etcetera.
    Finally, the Bureau and Western States must continue to 
work in a partnership that meets the diverse needs of the 
growing population. First, the Federal Government must continue 
to respect State-granted property rights to water and the 
rights of States to allocate and manage their water resources. 
Second, the Bureau should adopt proactive non-regulatory 
incentive-based approaches to managing water under its control 
consistent with States' rights. Finally, Reclamation should 
continue to pursue and fund work related to the existing 
Bridging the Head Gate Partnership and drought planning and 
preparedness activities.
    On behalf of the Western States Water Council, I appreciate 
the opportunity to join in this important discussion on the 
future water needs of the West and the Nation.
    Thank you.
    [The prepared statement of Mr. Tyrrell follows:]
 Prepared Statement of Patrick T. Tyrrell, Western States Water Council
                                proposal
    Expand and fully fund Bureau of Reclamation programs to meet 
identified needs.
                                preface
    The Bureau of Reclamation operates hundreds of dams and reservoirs 
in the West supplying water and power to millions of people, irrigating 
millions of acres for food and fiber, providing flood control and 
recreation, and maintaining instream flows for fish and wildlife 
habitat, including anadromous and threatened and endangered aquatic 
species. The value of federal Reclamation projects in assisting western 
communities survive the continuing drought in the West, particularly 
the Northwest, can not be overstated. Two of Reclamation's expressed 
``mission goals'' are: (1) managing, developing and protecting water 
and related resources to meet the needs of current and future 
generations; and (2) operating and maintaining facilities safely, 
reliably, and efficiently to protect the public investment.
    Reclamation has stated, ``Our challenge is to balance and provide 
for the new mix of resource needs in the West. . . . [P]roviding 
recreational opportunities and protecting the environment have become 
important to the public, while municipal and industrial development is 
demanding more, high quality water. With Western population growth . . 
. the future will be filled with greater demands on limited resources. 
Balancing the needs in the West and providing water resources has 
brought into focus our ability to manage existing water efficiently and 
effectively, and to resolve conflicting needs through cooperation from 
multiple stakeholders and customers.''\1\
---------------------------------------------------------------------------
    \1\ Draft 2000-2005 Strategic Plan, October 22, 1999.
---------------------------------------------------------------------------
    Reclamation's mission goals have been subdivided into a number of 
long-term goals that include: (1) providing leadership in delivering 
water and power; (2) increasing water use efficiency and availability; 
(3) ensuring effective operations of facilities; and (4) operating, 
maintaining and rehabilitating facilities to ensure reliability and 
cost-effectiveness--to name a few. Its strategy for accomplishing these 
goals lists several guiding principles that include: (a) the use of 
broad based proactive conflict resolution methods; (b) continuing a 
close working relationship with traditional water users, while forging 
relationships with other users; and (c) promoting and using 
partnerships to create sustainable solutions, leverage resources and 
learn from others.
    The Bureau of Reclamation and western state water managers, 
represented by the Western States Water Council, have many common 
interests. In a 1997 report for the Western Water Policy Review 
Advisory Commission, the Council declared, ``In the arid West, 
providing adequate water supplies to meet future demands continues to 
be a priority.'' Making more water available for new and expanded uses 
and increasing water use efficiency are critical, given the fast 
growing population of the West, subsequent demands for water for 
domestic and municipal uses, continuing agricultural water demands, and 
increasing demands for water for environmental uses, particularly the 
needs of endangered and threatened aquatic species. Reclamation has and 
will continue to play an essential role in meeting western water 
demands.
  what should the future role of the bureau of reclamation be in the 
                                 west?
    While the construction of large new federal dams and reservoirs is 
unlikely for the foreseeable future, Reclamation faces an enormous 
challenge related to its portfolio of aging dams and related 
infrastructure. Dam safety must be a priority. Reclamation is also 
actively pursuing programs to help irrigation districts and other water 
users make the most efficient use of available supplies. The Council 
supports this proactive, non-regulatory, incentive-based conceptual 
approach to administering federal water conservation programs, and the 
related ``Bridging-the-Headgate'' Partnership. We support the overall 
objective of these activities, which is to work together as federal-
state-local partners for the sustained and efficient use of western 
agricultural water supplies.
    The Congress is considering reauthorizing and extending the Small 
Reclamation Projects Act with more money for loans and grants for water 
development. This is an important program which deserves congressional 
support.
    Interior's Water 2025 Initiative is an example of Reclamation's 
efforts to address water resources challenges in the West before 
conflicts reach a critical impasse, as in the Klamath River Basin. 
Western states believe the scope of the program is insufficient to meet 
the growing need. As Senator Domenici has declared, the appropriation 
of $20 or $30 million a year in new money is woefully inadequate to 
address our needs. However, the success in leveraging federal, state 
and local resources through Water 2025's challenge grants is an example 
of what can be accomplished if we are willing to work together. It 
would appear that matching non-federal support could easily be found 
for $100 million in federal money.
    As discussed later in the statement on drought, the Council has a 
long history of work in the area of drought planning and management. We 
support Reclamation's efforts with respect to assistance for state and 
local drought response and relief activities.
   should the bureau undertake water supply augmentation activities?
    The development and use of new water supplies to meet present and 
future demands is a priority for western states. More storage is 
essential. Reclamation has been and should continue to be a leader in 
the development of a number of alternatives and technologies that 
promise to help meet future water needs: (1) ground water recharge, 
storage and recovery projects; (2) water reclamation and reuse 
projects; (3) desalination; and (4) phreatophyte control, including 
eradication of salt cedar. There may be other opportunities to increase 
water storage and yields from wetlands/streambanks through better 
management of state and federal lands and riparian zones. New 
opportunities may exist for increasing the efficiency and yield of 
existing federal, state and local water supply systems through project 
modifications or re-operations. Further, new reservoirs and off-stream 
storage projects should not be ruled out.
    As explained in the Council statement on water supply, the Council 
strongly supports federal legislation to provide technical and 
financial assistance for small rural communities struggling to meet 
their water supply needs. Legislation is needed to create a systematic, 
integrated approach to investigating, authorizing and constructing 
projects to meet rural western needs in close cooperation with State, 
local and regional entities, as well as tribes. Existing authorities, 
such as the Drinking Water State Revolving Loan Fund, are not 
sufficient to meet the needs of small rural communities, which are 
facing serious obstacles in securing the resources necessary to ensure 
an adequate and reliable water supply for their future. New authority 
and significant new funding is essential to better meet the needs.
           what role should the bureau play with respect to 
                    the west's (other) future needs?
    Endangered species and western water management are and will 
continue to be intertwined. Finding water for fish and farmers, as well 
as growing municipal and industrial needs, within the parameters of 
state water law and federal environmental law is a challenge that must 
be successfully met. Reclamation and others are already deeply involved 
in negotiating and implementing programs to purchase and lease water 
for endangered species, provide incentives to restore and protect 
habitat, build fish screens and fish ladders, etc. With respect to the 
issue of dam removal, the engineering issues and legal and 
socioeconomic issues, as well as functional alternatives to small and 
large dams need to be carefully considered. Reclamation has experience 
and expertise in these areas.
    The needs of native American tribes and settlement of Indian water 
rights claims is another priority concern for state and federal water 
managers. As explained in a separate statement on the subject, the WSWC 
has and will continue to support the successful negotiation and 
implementation of settlements that provide certainty for all 
stakeholders. The Bureau of Reclamations plays an important role in 
achieving this goal.
    The efficient, effective and safe operation of Reclamation 
facilities is important. Moreover, state and local officials--in 
cooperation with Reclamation and other federal water managers--together 
need to look at water problems and opportunities to increase water 
yields on a watershed or river basin basis. Participation by all 
interested parties in grassroots watershed efforts holds the promise of 
success in resolving many, but not all, western water problems--water 
quality problems, as well as quantity problems.
    Federal water project transfers to local ownership, as well as 
operation, and the transfer of federal project and wheeling of 
nonproject waters are also important areas for cooperative action 
between Reclamation and state and local interests.
                     comments on funding mechanisms
    The billion dollar question is how should Reclamation programs and 
projects be funded? The President's FY06 budget request for the Water 
and Related Resources account totals $802 million, down from $859 
million appropriated last year. Further, the request anticipates that 
off-setting receipts collected by the Western Area Power Administration 
(WAPA) for operation and maintenance and other expenses allocated by 
Reclamation to WAPA would reduce the final appropriation to some $771.6 
million. According to program and financing figures and estimates, new 
budgetary authority (gross) for obligation has dropped from $994 
million in FY04, to $972 million in FY05 and is projected to be $919 
million in FY06. Total gross outlays would be $940 million, compared to 
an estimated $1.028 billion in FY05 and $953 million in FY04.
    Meanwhile, the unobligated balance in the Reclamation Fund is 
expected to grow from $3.877 billion at the end of FY04 to an estimated 
$4.812 billion for FY05 and $5.905 billion in FY06. Created by the 
Reclamation Act of 1902, the Reclamation Fund was envisioned as the 
means to finance western water and power projects with revenues from 
western resources. Its receipts are derived from water and power sales, 
project repayments, certain receipts from public land sales, leases and 
rentals in the 17 western states, as well as certain oil and mineral-
related royalties. It is a special fund within the U.S. Treasury that 
is only available for expenditure pursuant to annual appropriation 
acts. With growing receipts, in part due to high energy prices, and 
declining federal expenditures for Reclamation purposes, the 
unobligated figure gets larger and larger--while the money is actually 
spent elsewhere for other purposes. While receipts in the past were 
insufficient for the construction of major federal projects such as 
Grand Coulee and Hoover Dams, which required the appropriation of 
general Treasury funds, today it appears that the Reclamation Fund 
could serve as a revolving account that would pay for Reclamation and 
related water resources programs and needs in the West.
    Examples of similar federal authorities include the Highway Trust 
Fund, Land and Water Conservation Fund, Southern Nevada Land Management 
Act and most recently the Arizona Water Rights Settlement Act.
    Another alternative might be to create state revolving funds 
(similar to the popular Clean Water and Safe Drinking Water SRFs) that 
could be capitalized with dedicated Reclamation Fund receipts, in 
excess of agency appropriations, to assist in financing state and local 
water resource development and conservation projects and programs, or 
water right acquisition and water trust programs. Such funds might also 
be used to finance water conservation and water resources related 
environmental restoration projects and programs (to protect instream 
resources, endangered and threatened species, etc.).
    On the other hand, some 25 years ago, Senator Domenici and the late 
Senator Daniel Patrick Moynihan proposed a [block grant] program to 
assist states with their water development needs, which western states 
thought merited consideration. Virtually every western state already 
has some type of water resources related assistance programs in place 
that would benefit. Further, it would keep the proceeds for development 
of western resources in the West as the Congress envisioned in 1902.
    Federal Reclamation funds might also be authorized to provide a 
Water Insurance Trust to guarantee the repayment of state and local 
water related bonds. The WSWC has in the past supported such an 
insurance fund, as well as the use of tax-exempt bonds to finance water 
resources needs. State and local agencies have always financed the 
majority of their own water needs, but federal assistance has and will 
continue to be important.
    The federal government has in the past usually taken the lead on 
large regional basin-wide and multi-state multi-purpose projects (with 
particular national objectives). While the era of big dams may indeed 
be over, a role for the federal government remains. Perhaps it is time 
to focus federal financial resources intended to aid in western water 
development to help state and local agencies meet the future challenges 
of supplying adequate water of suitable quality in the face of growing 
municipal and industrial demands and federal requirements to protect 
public health and the environment.
    Fully funding and expanding past and present Bureau of Reclamation 
programs to meet identified needs, and/or authorizing the use of 
Reclamation Fund money to capitalize a new federal SRF (or otherwise 
assisting existing state and local programs), would go a long way 
towards meeting the growing demands placed on western water resources.

    The Chairman. Thank you very much.
    Family Farm Alliance, Dan Keppen. Would you now proceed, 
please.

         STATEMENT OF DAN KEPPEN, EXECUTIVE DIRECTOR, 
                      FAMILY FARM ALLIANCE

    Mr. Keppen. Mr. Chairman and members of the committee, 
thank you for this opportunity to speak today.
    The Family Farm Alliance has represented family farms, 
ranchers, and irrigation districts in 17 Western States for the 
last 17 years. We are the Bureau of Reclamation's customers and 
we are focused on one thing: to ensure the availability of 
reliable, affordable, irrigation water supplies to western 
agriculture.
    What should the role of Reclamation be in the 21st century? 
Its primary role should be to continue to fulfill its core 
mission of delivering water and power in accordance with 
contracts, water rights, and other requirements of State and 
Federal law. Just as important, Reclamation should operate, 
maintain, and modernize its infrastructure in the most cost 
effective manner possible. All of Reclamation's other 
activities are secondary.
    Others on this panel have underscored their concerns about 
the aging of Reclamation facilities. We share those concerns 
because our communities rely on those facilities for their very 
existence. We also are the ones who pay most of the costs in 
maintaining and modernizing Reclamation projects. In general, 
irrigators are obligated to pay 100 percent of the costs of 
project operations and maintenance, which covers everything 
from repainting guard shacks to replacing multi-million-dollar 
flood gates, plus irrigators must pay those costs immediately, 
not over time. That is why family farmers, ranchers, and 
irrigation districts want to see Reclamation operated in the 
most cost effective way possible.
    An engineering committee of the National Academy of 
Sciences is currently focusing on the question of what 
cooperatives should remain with Reclamation and what work might 
be performed by others. The alliance welcomes this review and 
we are actually compiling experiences from around the West, 
both good and bad, to develop specific recommendations for the 
Academy. We have included five sample case studies as 
attachments to our written and more detailed testimony that you 
should have received yesterday.
    In summary, urban growth and competition for water supplies 
are driving western farmers off the land at a time when 
American food production in general is following other 
industries offshore in search of lower costs. Western irrigated 
agriculture is a critical national resource and the role of 
Reclamation in the 21st century should be to protect and 
enhance that resource.
    Thank you.
    [The prepared statement of Mr. Keppen follows:]
         Prepared Statement of Dan Keppen, Executive Director, 
                          Family Farm Alliance
    topic #2: role of the bureau of reclamation in the 21st century.
    What should the future role of the Bureau of Reclamation be in the 
West? Should the Bureau undertake water supply or supply augmentation 
activities which are designed primarily for municipal and industrial 
purposes, such as the Title XVI Program? Please also include comments 
on potential financing mechanisms such as grants or loan guarantees. 
What role should the Bureau play with respect to addressing: the West's 
future water needs; drought and flood planning and response; water 
infrastructure, including dam safety and site security; facility 
operation and maintenance; rural water needs, including in Indian 
country; hydroelectric power; recreation; watershed restoration; and 
water use efficiency?
    The Family Farm Alliance strongly supports the focus of the Bureau 
of Reclamation (Reclamation) on fulfilling its core mission of 
delivering water and power in accordance with applicable contracts, 
water rights, interstate compacts, and other requirements of state and 
federal law. Inherent in this definition of core mission is the need to 
prioritize the expenditure of federal funds and other resources of the 
Department of the Interior. Water 2025, so long as it continues to 
recognize that transfers and the use of market mechanisms must be 
voluntary and pursuant to state law, provides a strong foundation for 
defining the role of the Bureau in meeting future water needs of the 
West.
    As is recognized by Secretary Norton's Water 2025 Initiative, it is 
imperative that Reclamation provide for the operation, maintenance, and 
modernization of existing water supply infrastructure. Many Reclamation 
facilities are approaching the end of or are past the design life of 
the facilities. In addition, many of these facilities also need to be 
replaced with modern designs that provide for greater water management 
efficiency. Sound business practices dictate that this existing 
infrastructure, and the water supply provided by these facilities, be 
protected and preserved prior to the dedication of scarce funds to the 
development of new supplies. With respect to the specific question 
regarding the role of the Title XVI Program, the Family Farm Alliance 
observes that many of the existing and potential recipients of these 
funds are entities that have the financial capacity to fully fund the 
development of alternative water supplies. The Title XVI Program should 
not be funded at the expense of taking care of existing infrastructure 
and protecting important agricultural communities that do not have the 
same financial capabilities.
    The Family Farm Alliance supports the Water 2025 matching grant 
program, and suggests that it be expanded to provide additional 
opportunities for the investment in water conservation and efficiency 
measures. However, because this program is unlikely to meet all of the 
needs for funding the repair and modernization of existing facilities, 
additional funding mechanisms must be developed. Alternatives include a 
return to the Small Project Loan Program, or the development of 
federally backed loan guarantees that will enable water users to access 
alternative sources of capital in order to repair and modernize 
existing infrastructure. With respect to financing projects, the 
historical use of zero interest loans already authorized by Reclamation 
law still has some merit; especially when it has been conclusively 
shown that many projects have returned their construction costs to the 
Treasury many times over from tax revenues directly related to the 
project benefits. Even in areas of less intensive irrigation and 
population, benefits from the various projects have more than returned 
their cost, especially when all of the project benefits, including 
those not originally authorized and assigned costs, are considered.
    Another possibility would be to allow entities with annual 
repayment obligations to shift those obligations to operation, 
maintenance and replacement reserve accounts. Although this does have 
an impact to the return to the Treasury, it could reduce the potential 
need for future assistance for major rehabilitation. Also, it would 
seem appropriate for Congress to allow for the capitalization of OM&R. 
Many of the infrastructure problems on old Reclamation facilities could 
have already been addressed if capitalization of OM&R had been 
authorized.
    A number of years ago the Family Farm Alliance took the lead in an 
effort to provide for cost containment and accountability for work by 
the Bureau of Reclamation that was either funded in advance by water 
users or subject to repayment obligations. With the cooperation of the 
Bureau of Reclamation in general, and Jack Garner in particular, great 
progress was made in this regard. However, given that federal, state, 
local, and private funds will be scarce, it is imperative that these 
efforts continue.
    Recent events on several fronts that are related to this issue have 
been a source of concern to the Family Farm Alliance. First, the 
unfortunate experience with the cost overrun on the Animas-La Plata 
Project provided a warning signal that additional work was needed to 
ensure that Reclamation continues to focus on cost containment and 
accountability for projects funded through the Reclamation Program. 
Second, a number of our members have dealt with situations where cost 
estimates for work that would be done by the Bureau of Reclamation were 
substantially over the cost of having the work done by the local 
district itself or under contract with private consultants. There 
appear to be at least two reasons for the divergence in the cost 
estimates--excess staffing by Reclamation for work, with attendant 
increases in costs, and the requirement of design standards that are 
excessive or unjustifiable. Third, the Family Farm Alliance is deeply 
concerned to hear that at least one district has been forced to use 
Reclamation staff for design work and was not given the option of doing 
the work itself or having it performed by qualified consultants. This 
incident is of great concern because it is contrary to the practice 
elsewhere in Reclamation, where contractors who are paying for the work 
have had the option to have the work performed by Reclamation or by 
qualified consultants.
    In light of the fact that neither Reclamation nor water users can 
afford to waste money through over-staffing or noncompetitive 
practices, the Family Farm Alliance encourages the Committee to take a 
very hard look at the policies and practices of Reclamation with regard 
to the involvement of the Reclamation programs located at the Denver 
Federal Center. The Family Farm Alliance also plans to provide input to 
the ongoing review of these aspects of Reclamation by the National 
Academy of Engineering, which appears to be focusing on the question of 
what capabilities Reclamation should maintain within the agency and 
what work or functions can and should be performed by others. However, 
regardless of the outcome of this review, fundamental fairness requires 
that when a water user is paying for work in advance or through 
repayment mechanisms, that water user should have the option to have 
the work executed in the manner that provides the most return for the 
investment.
    These concerns regarding cost containment and accountability do 
not, in general, implicate the work done at the Regional and Area 
Reclamation Offices. The Family Farm Alliance is proud of its 
partnership with Reclamation, and believes that Reclamation has much to 
be proud of in its service to water users and the public.

    The Chairman. Thank you.
    The city of Santa Fe, Galen Buller, nice to have you here. 
You had a little water this year.

  STATEMENT OF GALEN BULLER, DIRECTOR, SANGRE DE CRISTO WATER 
                 DIVISION, CITY OF SANTA FE, NM

    Mr. Buller. Mr. Chairman, we had a little snow for a 
change. It has been nice.
    The city of Santa Fe, New Mexico, has, like I think many 
municipalities, woken up as a result of the 2002 drought. We 
see the need for protecting and augmenting our sources of 
supply. The city has been involved in a number of projects to 
do just that: water management and protection, conjunctive 
management between its surface and its ground water sources, 
conservation measures which have brought per capita usage in 
the city to among the lowest in all of the Southwest, and reuse 
projects, infrastructure rehabilitation, and that kind of 
thing.
    But as the result of approaching those needs, we have also 
identified a number of issues. We are involved in one of the 
longest running adjudications in the country that involves 
Native American water rights. We are involved with the silvery 
minnow issues and other environmental community concerns. We 
have the need for contract renewals with the Bureau of 
Reclamation for our San Juan-Chama water. And we are involved 
with the agricultural community as well.
    All of these issues also provide opportunities for 
partnerships and we have tried to pursue those. Those 
partnerships also involve at the Federal level the Bureau of 
Reclamation, who we have seen as a close partner through these 
years and would like to continue that relationship.
    But we do feel that it is time to revisit Reclamation's 
mission for the 21st century. It fulfilled its 20th century 
mission, we think, and there is a new mission that can be 
filled. There are several statutory mission goals that I think 
should explicitly be included.
    The first would be new arrangements for water projects and 
agreements that do not expire or terminate, to provide 
municipalities with secure and continuous access to the water 
supplies they depend on.
    The second is to cooperate to develop water supplies and 
sources of water through more efficient storage and 
desalinization projects, protecting our existing sources of 
supply through watershed restoration and protection and 
maintenance of water conveyance efficiencies.
    The third is to streamline market-based conversions of 
water used for irrigation, for maintenance and industrial 
purposes, and to meet environmental needs.
    The fourth is to provide grants and loan guarantees to 
assist municipals that are demonstrating a strong and capable 
commitment to help themselves.
    The fifth is to develop or provide water to settle Indian 
water rights and Federal reserved water rights claims.
    We believe that some of these are evolutionary, perhaps 
some are revolutionary, but all are necessary.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Buller follows:]
    Prepared Statement of Galen Buller, Director, Sangre de Cristo 
                  Water Division, City of Santa Fe, NM
     topic 2. role of the bureau of reclamation in the 21st century
    The Bureau of Reclamation has largely fulfilled the mission that 
Congress assigned to it over 100 years ago. Sustained rates of 
population growth have literally become a way of life in New Mexico and 
throughout the West, bringing significant challenges and unprecedented 
pressures on our water resources for meeting municipal and industrial 
needs. Now is the time for Congress to revisit Reclamation's mission 
for the 21st century to undertake water supply and supply augmentation 
activities in the West for the purpose of assisting municipal and 
regional water providers to meet their water supply and drinking water 
needs.
    Congress should address several related topics in Reclamation's new 
mission to squarely include municipal water supply development and to 
help municipal providers obtain and maintain reliable sources of 
supply. Our experience in water resources management in New Mexico 
suggests that Reclamation's revised statutory mission should explicitly 
include the following:

   Implement new arrangements for Reclamation water projects 
        and agreements that do not expire or terminate, to provide 
        municipalities with secure and continuous access to the water 
        supplies that they depend on to meet their long-range needs.
   Cooperate with states and municipalities to develop water 
        supplies, including new sources of water supply through more 
        efficient storage of water and desalination; protecting 
        existing sources of supply through watershed restoration; and 
        protection and maintenance of water conveyance efficiencies.
   Streamline market-based conversions of water used for 
        irrigation for municipal and industrial purposes and to meet 
        environmental needs.
   Provide grants and loan guarantees to assist municipalities 
        that are demonstrating a strong and capable commitment to help 
        themselves.
   Develop or provide water to settle Indian water rights and 
        federal reserved water rights claims.

    Each of these topics is discussed briefly below.
    Municipalities, such as Santa Fe, depend on water service contracts 
for significant portions of their water supply portfolio. In many 
cases, these contracts have expiration dates and may have renewal 
arrangements that are subject to Reclamation's discretion. As an 
example, the City of Santa Fe and its regional partners are now 
investing over $100 million in a new system to divert and treat the 
City's allocation of Reclamation's San Juan-Chama Project water, even 
though the City does not currently have a permanent or even long-term 
agreement for use of that water. Given the importance of water supply 
for the well being of the people and economies of the West, it would be 
appropriate for Congress to limit Reclamation's discretion in renewals 
of these types of contracts and to establish congressional policy 
favoring replacement of water service contracts with permanent 
arrangements that do not expire.
    The water supplies of the West are generally fully developed, 
except for the new usable water that more efficient water storage and 
desalination can provide. Reclamation's 21st century mission should 
squarely include both of these areas of endeavor. Similarly, 
Reclamation's mission should also include watershed restoration and 
protection and maintaining the efficiencies of water conveyance in 
order to maintain the productivity of watersheds upon which 
municipalities depend for their water supply, and protect water 
supplies from losses suffered in conveyance. Aquifer storage and 
recovery has great potential for storage of municipal water supplies in 
a manner that eliminates evaporative losses, increases net supplies, 
and increases drought reserves, yet its widespread use will be hindered 
until further applied research is conducted. Reclamation should be 
specifically authorized to assist municipalities with aquifer storage 
and recovery and desalination projects that will reduce water losses, 
facilitate the development of waters of lower raw water quality, and 
increase drought reserves. Congress also should direct Reclamation to 
avoid damage to municipal water supplies through maintaining the 
efficiency of water conveyance. Santa Fe, for example, is directly hurt 
if reduced water conveyance efficiencies on the Rio Grande contribute 
to low water storage levels in Elephant Butte Reservoir, which in turn, 
prohibit Santa Fe's storage of native water in its Santa Fe River 
Canyon Reservoirs. If environmental restoration needs require 
additional water losses in conveyance, Reclamation should be 
responsible for offsetting those additional losses so as to keep 
municipal water supplies intact.
    Reclamation's use of a historic federal law (the 1920 Miscellaneous 
Purposes Act) to convert irrigation water supplies to municipal and 
industrial purposes should be discontinued. While the vast majority of 
all the water development of water in the West was for irrigation 
purposes in order to settle the West, municipal and industrial and 
``urban'' growth now represents virtually all increases in water use. 
But its vibrant municipalities and industries and economies need water. 
Congress should provide for a mechanism that streamlines the process of 
market conversions of water to these contemporaneous needs, while 
providing fair compensation to the farmers through the market.
    As demands on supplies increase, water supply development projects 
become even more expensive--often measured in the hundreds of millions 
of dollars even for communities of Santa Fe's size. Congress provided 
very low cost development of water originally for the West. Congress 
should provide new mechanisms to provide some grant funding and loan 
guarantees for the expensive projects that municipalities need, such as 
aquifer storage and recovery, desalination, and other technological and 
infrastructure needs, to secure their water supply futures. Further, 
each of Reclamation's existing funding programs should be reevaluated--
potentially through input from current and potential future local 
project sponsors--to identify the strengths, weaknesses, and 
applicability in meeting the evolving needs of communities throughout 
the West.
    Providing finality through realistic and fair settlements of tribal 
and federal water rights claims is essential for the well being of 
western municipalities, specifically including Santa Fe (as detailed 
further in our submittal for Topic 3, Indian and Federal Reserved Water 
Rights). Reclamation should be assigned an explicit role to help fairly 
settle these matters and bring the uncertainty that surrounds them to 
an end.
    Together, we believe that these specific changes to Reclamation's 
mission and responsibilities will allow Reclamation to fulfill a 
critical role in meeting the evolving and growing water needs of the 
American West.

    The Chairman. Thank you very much.
    Mr. Rick George, Confederated Tribes of the Umatilla Indian 
Reservation. We are pleased to have you, sir. Thank you.

 STATEMENT OF RICK GEORGE, CONFEDERATED TRIBES OF THE UMATILLA 
                       INDIAN RESERVATION

    Mr. George. Thank you, sir. Good afternoon, Mr. Chairman, 
members of the committee. Senator Smith, hello from Oregon, 
where it is finally raining and snowing.
    Senators, today I would like to use as an example the 
Umatilla Basin Project to illustrate what we think the Bureau 
should be in the 21st century. We have chosen that example, 
one, because it is in the home of the Umatilla Indian 
Reservation and of Senator Smith, and also because it is a 
success.
    It is located on the Umatilla River in northeastern Oregon, 
and we believe that the Umatilla Basin Project represents a 
national model for the Bureau of Reclamation, and again one 
that demonstrates success. Not to be presumptuous, but the 
tribes believe that success should define the Bureau of 
Reclamation in the 21st century.
    The Umatilla Basin Project's success is demonstrated by its 
accomplishments. The project restored a dry riverbed, drained 
dry in fact by a previous Reclamation project, and it restored 
it to a partially flowing Umatilla River once again. The 
project thus enabled the tribes to recover salmon to the basin, 
salmon that the tribes have a treaty right to, and today the 
basin has gone from zero salmon for over 70 years to 30,000 
adult salmon coming back to the basin--another demonstration of 
success. Senator Smith can now fish for salmon in downtown 
Pendleton.
    The project protected and even enhanced irrigated 
agriculture while restoring the Umatilla River and restoring 
the fishery. Finally, the project set up the opportunity to 
negotiate the settlement of the water rights, the Federal 
reserved water rights for the Confederated Tribes of the 
Umatilla Indian Reservation, and finally bring equity to the 
water allocation in the Umatilla Basin.
    Last, Senators, the Umatilla Basin Project under the Bureau 
of Reclamation's leadership brought neighbors together, and 
ultimately that is the end result of success. It is a people 
factor, and in the Umatilla that people factor of success was 
achieved.
    We are now working on the final phase, phase three of the 
Umatilla Basin Project. We hope to bring that back to this 
committee for authorization just like phase one and two were 
brought to this committee and shepherded through Congress by 
Senator Mark O. Hatfield.
    I thank you for your time today.
    [The prepared statement of Mr. George follows:]
Prepared Statement of Rick George, Confederated Tribes of the Umatilla 
                           Indian Reservation
        2. role of the bureau of reclamation in the 21st century
    The Umatilla Basin Project (UBP) Act (100 P.L. 557; 102 Stat. 2782 
Title II), passed by congress in 1988 under the visionary leadership of 
Sen. Mark O. Hatfield, is the hallmark example of the need for, and the 
potential of, the U.S. Bureau of Reclamation in planning, designing and 
implementing projects to address water supply and water resource 
management in the West.
    In the UBP the Bureau of Reclamation (BOR) played the central 
federal agency role in planning (EIS and feasibility report), designing 
and constructing the water supply and distribution infrastructure. This 
role was important not just because they had the expertise, but also 
because they had the history. It was the BOR in the early 1900's (see 
#1 Water Supply and Resource Management Coordination) that constructed 
and subsequently operated the irrigation reclamation project that de-
watered the Umatilla River and that the UBP ultimately fixed.
    In a nutshell, the infrastructure for the UBP took advantage of the 
existing irrigation delivery system, and added new, large capacity 
water pumps capable of pumping over 200 cubic feet per second (cfs) of 
water. The new pumps were located near the mouth of the Umatilla River 
where it empties into the Columbia River. With restoration of Umatilla 
River streamflows as the project goal, the UBP pumps lift water from 
the Columbia River and delivers it to the existing Umatilla River 
irrigation distribution system. From a water management perspective, 
for every bucket of water not diverted from the Umatilla River, a 
bucket is pumped from the Columbia River to the Umatilla Basin 
irrigation system. The end result is a partially restored Umatilla 
River (about 50% of total spring-fall stream flow is now left in-
channel for fish) and partially recovered spring and fall chinook and 
coho salmon populations. Summer steelhead, pacific lamprey and other 
native fish stocks continue to be nurtured toward recovery and along 
with the salmon runs require additional water and habitat restoration 
(see #3 Indian and Federal Reserved Water Rights). Further, this unique 
``water exchange'' between the Columbia and the Umatilla rivers, 
regulated under Oregon water laws, results in no net loss to stream 
flows in the Columbia River. This results from the bucket for bucket 
exchange that leaves the same amount of water in the Umatilla River and 
which ultimately empties back into the Columbia River.
    The BOR played a diversity of roles in the negotiation, development 
and implementation of the UBP. These roles can be divided into the 
following categories:

    1. Proponent--under the leadership of then-Regional Director John 
Keys, the BOR worked closely with key stakeholders, CTUIR and three 
irrigation districts, to help to find common ground.
    2. Expert--the BOR was the irrigation infrastructure, reservoir 
contracting, state water rights connection and project design and 
construction expert.
    3. Trust--a key component to allocating water in the 21st Century 
is trust. The BOR in the 1980's and 1990's provided key senior 
personnel to stay involved in basin-level negotiations between CTUIR 
and irrigation districts and later with citizen groups and others 
interested in the outcome. CTUIR believes that had it not been for the 
active, personal involvement and presence of then-Regional Director 
John Keys and his staff the UBP may not have been completed.

    Twenty first Century roles for the BOR should continue to be:

    1) Advocate for and assistance in settlement of federal reserved 
water rights for Tribal governments.
    2) Assistance in planning and constructing the infrastructure 
necessary to serve the basic current and future water needs of Tribal 
governments as part of satisfying reserved water rights by striving for 
compatibility with existing water uses and rights.
    3) Providing expertise in developing and implementing solutions to 
water allocations, planning and management of water resources.
    4) Providing direct assistance to Tribal governments in the forms 
of in-kind personnel assistance (e.g. water resource engineering), 
funding agreements to fund Tribal self governance work related to water 
development and management, assisting Tribal governments to manage BOR 
facilities that serve Tribal Governments, assisting Tribal governments 
in marketing and managing trust water resources, providing technical 
assistance to Tribal governments in quantifying and planning for the 
later negotiation and settlement of Tribal water rights claims.
    5) Watershed restoration and water acquisition for instream flow 
restoration.

    Most important for completion of a long-lasting Umatilla Basin 
water solution is for the BOR to complete the shared vision of Sen. 
Mark Hatfield, the CTUIR and the Umatilla Irrigation Districts--
Settlement of CTUIR reserved water rights and completion of Phase III 
of the Umatilla Basin Project. Major legal and procedural 
accomplishments are being made between CTUIR and the Westland 
Irrigation District that are paving the way for BOR planning and design 
of Phase III and for a negotiated settlement of the CTUIR water rights. 
A request for authorization of construction of Phase III of the 
Umatilla Basin Project and the infrastructure needed to serve CTUIR 
consumptive water needs will be before the Energy and Natural Resources 
Committee in the next couple of years.
    Phase III of the Umatilla Basin Project will provide Columbia River 
water for Westland Irrigation District, the last remaining and largest 
irrigation district on the Umatilla River. Completion of Phase III will 
provide enough water in combination with the existing Phases I and II, 
and most importantly, water that is not obligated to competing uses, 
for CTUIR on-Reservation consumptive uses and for instream flows to 
protect the recovered salmon populations and to allow for recovery of 
lamprey, steelhead and other important resources. Senator Mark Hatfield 
challenged the Umatilla River Basin to achieve that goal--final and 
complete water management and allocation settlement--20 years ago. That 
goal is now within the vision of the CTUIR and basin irrigation 
districts, the Honorable Governor of Oregon Theodore Kulongoski and we 
look forward to working with the Committee to make it happen.

    The Chairman. Thank you very much.
    Bureau of Reclamation, could I ask you, Ms. Bach?
    Ms. Bach. Yes, Mr. Chairman.
    The Chairman. In last year's omnibus appropriations bill I 
had some language put in there that the Council on 
Environmental Quality (CEQ) undertake a review of existing 
Federal water use--I think somebody alluded to it here--water 
reuse, recycling, reclamation programs. Do you know what the 
status of that effort is?
    Ms. Bach. Mr. Chairman, I am familiar with the language 
that was in the omnibus appropriations bill and sought to 
verify the status of that and I do not have the status for you 
at this time, but I would be happy to provide it for the 
record.
    The Chairman. I think it would be important that you do 
that. We keep talking about it, but we ought to start with some 
basis to know what we have got going.
    Ms. Bach. Certainly, Mr. Chairman.
    The Chairman. You will provide us that as soon as you can?
    Ms. Bach. Yes, I will, Mr. Chairman.
    The Chairman. Senator Bingaman, do you have any questions 
of the panel?
    Senator Bingaman. Yes, thank you, Mr. Chairman.
    Let me ask, Mr. Buller. You have a couple of statements in 
your testimony here which caught my attention. You say: 
``Reclamation's use of a historic Federal law, the 1920 
Miscellaneous Purposes Act, to convert irrigation water 
supplies to municipal and industrial purposes should be 
discontinued.''
    Then you also say, a couple of sentences later: ``Congress 
should provide for a mechanism that streamlines the process of 
market conversions of water to these contemporary needs''--I 
think they are talking about municipal and industrial needs--
``while providing fair compensation to the farmers through the 
market.
    I am a little unclear as to what you see as the need for 
Congress to get involved in this. As I understand, in our State 
and in most States if you have got a willing seller of a water 
right and you have got a willing buyer of a water right, then 
the transfer occurs. Why does Congress need to be providing a 
mechanism in this area? And why should we change this Federal 
law to prohibit Reclamation from converting irrigation water 
supplies to these purposes?
    Mr. Buller. Senator, let me first say that I am not 
advocating that the Federal Government step in and take over 
where State water law has worked so well over the years. Let me 
take those one at a time.
    The Miscellaneous Purposes Act of 1920 has been the 
mechanism that the Bureau of Reclamation has used to help 
facilitate those kinds of transfers of Reclamation projects. It 
has become, I think, cumbersome and it does not really lend 
itself to creative thinking and creative methodology, or it 
does not really create a mechanism for providing financing the 
way that it perhaps could.
    The suggestion there is that somehow we look at new 
legislation that fosters creativity in the transfer of water 
rights from agricultural to municipal and industrial where it 
makes sense to do so.
    As to the other question, why do we need the Federal 
Government's participation in that, the Bureau of Reclamation 
has had a long tradition of helping to facilitate the transfer. 
It is not in lieu of State law; it is done pursuant to State 
law. But that expertise in how transfers could occur from the 
agricultural community to the municipal and industrial uses 
that are the ones that we see the most need for, at least from 
my perspective. That expertise might be there to help.
    We have had several examples just in the city of Santa Fe, 
and you may be aware of some of them, Senator, where we have 
tried to bring agricultural rights to the city and, for various 
political reasons and others, they have not worked out. That 
might be fine that they did not work out. There might have been 
all kinds of problems. But we could use the expertise in how 
over the years the Bureau of Reclamation has helped to make 
that happen.
    Senator Bingaman. Thank you very much.
    Senator Smith [presiding]. Thank you, Senator.
    With the chairman's permission, I want to welcome 
especially Anton Mentorn and Rick George from the Umatilla 
Indian Reservation, and also Dan Keppen, the new executive 
director of the Family Farm Alliance. They are both here from 
Oregon and are very active in constructive ways to resolve the 
disputes over water and provide a reliable source of water for 
farmers, as well as to take better care of our natural 
resource.
    Rick George hit on something that I do not know whether 
people in the audience necessarily fully understand just how 
successful the Umatilla Project has been. Rick explained, I 
think, that it is literally an exchange of water from the 
Columbia River in order to leave water in the Umatilla River, 
and this has enabled us to restore salmon runs while preserving 
the livelihood of many farmers in this area.
    It has been incredibly successful and I salute the tribe 
and the farmers for this creative effort, and the Bureau of 
Reclamation for being an integral part of making this happen.
    Rick, you indicated that this could be a model for a 
national model. Obviously, it is possible as a model in Oregon 
because the Columbia River as a main stem of the water resource 
has an awful lot more water than places like the Rio Grande or 
even the Colorado River in a relative sense.
    But I wonder, Maryanne, are there other areas in the West 
where the Umatilla Project could be a model to solve these 
environmental and farming disputes?
    Ms. Bach. Senator, what I would say is that, given the 
number of reservations that are in the West that are in 
geographically colocated areas as Reclamation projects, that 
there are undoubtedly opportunities for crossover of 
understanding of what happened on this project and elsewhere 
and how it could be applied.
    Senator Smith. Well, let me use this forum to encourage the 
Bureau to look to the Umatilla Project as a way to solve these 
very real problems between the environment and the users that, 
just like fish, they cannot live without water either.
    Rick, you started your comments by noting that it is 
raining in the Northwest. The last time I checked we were 40 
percent below normal in the snowpack. What is it today with the 
recent spring rains?
    Mr. George. Well, the west side is starting to catch up. We 
are above 50 percent now. But on the east side we are still 
down below 50 percent.
    Senator Smith. Dan, Dan Keppen, you noted that the Family 
Farm Alliance is compiling case studies of how the Bureau of 
Reclamation deals with local water agencies on construction and 
other issues. Have you found some cases you can talk to us, 
whether they are good or bad, that you can highlight?
    Mr. Keppen. Well, I have summarized five of them in the 
written testimony that I submitted to you. What we are doing 
right now is putting together a larger report that we intend to 
submit. It is kind of a subset of the National Academy of 
Sciences. It is called the NAS Board on Infrastructure and the 
Constructed Environment, and they are actually doing an 
independent peer review of how Reclamation does business, in 
particular looking at opportunities perhaps to outsource some 
of the design and build work.
    So we want to engage in that process in a constructive way. 
There are some bad horror stories out there, but there are also 
some very good stories. We are about halfway through putting 
this effort together and I have got five of them laid out in 
your testimony, two from California that we consider to be 
success stories, three that outline some kind of consistent 
themes that we are hearing.
    Generally, the concerns are not with the area offices or 
the regional offices. It is more with the technical services 
center in Denver is where we are hearing the concerns. So I 
would encourage the committee to track this Academy assessment 
and perhaps that could form the basis for some policy 
discussions later on.
    Senator Smith. Several years ago the Appropriations 
Committee required the Bureau to submit a report outlining 
direct and indirect operations and maintenance costs for each 
of the Federal reclamation projects. Do you know whether or not 
Reclamation's overhead costs remain high or have they gone 
down? What does the report tell us?
    Mr. Keppen. Well, I have only been on board for a month, so 
still catching up on all the multitude of reports we put 
together. Norm has been pretty active with Family Farm 
Alliance. He might want to engage on that.
    I would just say specifically we are hearing some concerns 
of higher costs in specifically the engineering and cultural 
resource studies, 40 to 50 percent of constructed costs 
sometimes, which is pretty high. I was an engineer when I 
started out in the private sector and those costs generally 
ought to be around 15 percent or so of the magnitude of the 
costs that we are talking about.
    Senator Smith. Is that accurate?
    Mr. Semanko. Mr. Chairman, in my day to day role I serve as 
executive director of the Idaho Water Users Association and 
also serve on Dan's advisory committee. We have mixed bag 
stories from Idaho and we are in the process of helping Dan 
compile those stories, and I think we would be pleased to 
provide those to the committee.
    There is not a one size fits all answer. We are hearing 
good stories and bad stories and it is kind of spotty.
    Senator Smith. Also, Dan, the Family Farm Alliance has 
discussed many times with me the need for more water storage in 
the West. You are not talking about dams, but has the Alliance 
identified ways to create water supplies that would be 
available in lean years?
    Mr. Keppen. Well, next week there is a House Resources 
Committee hearing that has to do I think with storage of both 
ground water and surface water. At that time the president of 
our Alliance I think is scheduled to come out and testify, and 
the Alliance will roll out a data base that we have been 
working on for the last 2 years that will basically lay out a 
summary of what folks at the ground level have seen on the 
books for a long time, projects that have been there but have 
not been developed.
    We are not saying that this is necessarily a proposal or 
anything like that. But basically what we are saying is, here 
are some ideas and we want to use it as a basis for catalyzing 
the discussion on the need to enhance supplies, and also to 
develop other case studies that can specifically identify why 
these things have not moved forward so we can come back with 
some constructive suggestions.
    Senator Smith. Thank you all for being here.
    Mr. Keppen. Thank you.
    Senator Smith. Thank you, Mr. Chairman.
    The Chairman [presiding]. Anybody else?
    [No response.]
    The Chairman. Thank you very much.
    Let me ask. When we were putting together a bill that we 
will reintroduce with modifications, that I think was 
bipartisan and the House was interested in also, which would 
set up some centers of technology and innovation excellence, we 
started off with a very fundamental question, which it was not 
easy for us to answer. That was, where should you--what 
department of the Federal Government should that be in?
    Normally, you would think the Department of the Interior. 
Then you would ask, are they experts in technology and science 
and innovation in terms of water purification, water 
enhancement, and the like? So I would like to ask, do you have 
any ideas with reference to that? Not long answers, but where 
does it belong? I concluded there was no logical place, so I 
thought maybe it ought to be the Department of Energy since its 
laboratories would be the basic researchers. But we did not 
have unanimous feeling on that.
    Anybody have an idea? We can start over there perhaps. Dan, 
do you have any ideas?
    Mr. Keppen. Senator Smith's office?
    [Laughter.]
    Mr. Keppen. I would say really the Department of the 
Interior. A lot of the agencies within Interior I think are 
well suited to deal with the issue. The areas of disconnect I 
see: NOAA Fisheries needs to get pulled in there somehow. They 
are in Commerce and sometimes they are out of the loop. But I 
would think Interior would be the proper role if that is going 
to happen.
    The Chairman. Anybody else?
    Mr. George. Mr. Chairman, I would agree. I think if we are 
going to talk about water we need to go to the agencies that 
would be the experts in water, and I think those agencies are 
in the Interior.
    The Chairman. Anybody else?
    Mr. Tyrrell. Mr. Chairman, I tend to agree. You have some 
of the best water scientists in the world in the USGS and the 
Bureau of Reclamation. I would use them.
    The Chairman. USGS?
    Mr. Tyrrell. Yes.
    Mr. Atwater. The only thing I would add to that 
historically, for example, desalinization technology was 
developed by the Bureau of Reclamation in the 1960's. But your 
suggestion with the Department of Energy is a good one. What I 
had suggested earlier in my testimony, certainly there is a lot 
of good research at EPA, and clearly the Army Corps of 
Engineers has research centers that are internationally 
renowned.
    So again, you have got to look at the collaboration and the 
coordination between the different Federal agencies.
    The Chairman. That is really what is the important part as 
I saw it.
    Thank you all very much. Nice to have you here. Thank you, 
ma'am.
    The third panel, please. There are only four people on 
that: Mr. Bell, Mr. D'Antonio, somebody from the Nordhaus Law 
Firm in Albuquerque, and Mr. Echohawk.
    The Chairman. Mr. Bell, I am going to just call on you and 
as I do I will tell them who you are: Mr. Craig Bell, Western 
States Water Council.
    Mr. Bell. Thank you very much.
    The Chairman. Thank you.
    May we have order, please.

  STATEMENT OF CRAIG BELL, EXECUTIVE DIRECTOR, WESTERN STATES 
                         WATER COUNCIL

    Mr. Bell. We appreciate very much the opportunity to be 
here today.
    The Council consists of representatives appointed by the 
Governors of 18 Western States and so we have a great interest 
in the subjects of this conference, no more so than the one 
that I will be speaking to. The Council believes that there is 
no more important obligation of the United States than that of 
its trust obligation to Native Americans and particularly their 
water claims, and the settlement thereof is not only important 
to Native Americans, but also to the country as a whole.
    We support, therefore, the settlement of these claims 
throughout the country. In so doing, we work closely with the 
Western Governors Association and I am authorized to say today 
that the recommendations that are in the paper are also 
endorsed by the Western Governors Association.
    We wish to commend the Congress for their approval of these 
settlements in the past. They have saved untold millions of 
dollars in public and private moneys that would otherwise go to 
prolonged and costly litigation.
    A key component of that success has been the 
administration's policy to establish negotiation teams, both to 
achieve and implement settlements. Unfortunately, we believe 
funding for those teams is currently inadequate and needs to be 
supplemented. We would hope the Congress would do so and urge 
them to do so, so that particularly Native Americans can 
participate appropriately.
    We also believe that the funding of water settlements 
should be a mandatory obligation of the United States. That is, 
that obligation is analogous to and no less serious than the 
obligation of the United States to pay judgments that are 
rendered against it, and we believe there is precedent for 
doing so and we have provided legislative language to do so in 
our written statement submitted to the committee. We believe 
that would be an important progress, step of progress in terms 
of achieving future settlements.
    We believe that the settlement of Federal non-Indian 
reserved rights is also important. It has much to commend it. 
One of the ways in which these settlements can be achieved is 
within the context of State adjudications, and these are also 
costly. One of the things that complicates that is the fact 
that in 1992 the Supreme Court ruled that the Federal 
Government is exempt from paying filing fees associated with 
those general adjudications. This creates a hardship for other 
users, who have to subsidize those adjudications, including 
States.
    We would hope that Congress would remedy that by reversing 
the effects of that holding, simply requiring the Federal 
Government to pay filing fees to the same extent as other 
private water users. We believe that would be substantially 
helpful in funding these adjudications.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Bell follows:]
         Prepared Statement of Craig Bell, Executive Director, 
                      Western States Water Council
                               proposals
    1. Provide adequate funding for Interior negotiating teams for both 
achieving and implementing settlements in order to facilitate increased 
tribal participation and significantly advance the goal of achieving 
water rights settlements.
    2. Enact legislation to establish a funding mechanism to ensure 
that any land or water settlement, once authorized by the Congress and 
approved by the President, will be funded without a corresponding 
offset to some other tribe or essential Interior Department program.
    3. Enact legislation to require that the federal government pay 
filing fees for its claims in state general adjudications to the same 
extent as private water users.
 what effort should be made by the federal government to encourage the 
        adjudication or settlement of indian water right claims?
    The Western State Water Council has for years actively supported 
the negotiated settlement of the water claims of Native Americans. The 
Council believes that the settlement of Native American water claims is 
one of the most important aspects of the United States' trust 
obligation to Native Americans and is of vital importance to the 
country as a whole. The Council adopted a policy advocating the 
settlement of water claims in 1986 and has maintained this policy 
consistently since that date.
    The Congress is to be commended for its support of negotiated 
Indian water right settlements. Over the past 25 years, more than 
nineteen settlements of Indian land and water rights have been reached 
in the western states and approved by the Congress. These settlements 
have helped save untold millions of dollars of public and private 
monies through avoidance of prolonged and costly litigation. A key 
component of this success has been the Administration's efforts to 
establish and maintain negotiation teams for both achieving and 
implementing settlements. Unfortunately, the level of funding for these 
negotiation teams is currently inadequate to meet the needs. Moreover, 
a significant cut in funding is being proposed for the FY06 federal 
budget. Consistent with the trust responsibility of the United States 
to the tribes, we urge Congress to provide the necessary funding to 
facilitate increased tribal participation which could significantly 
advance our mutual goal of achieving water rights settlements.
    In addition, an appropriate funding mechanism must be found for 
water settlements, or the Administration's settlement policy may become 
a nullity.
    The current practice is to treat the funding of water settlements 
as discretionary, with the result that a settlement can only be funded 
with a corresponding reduction in some other discretionary component of 
the Interior Department's budget. The practical effect of this 
budgetary policy is to significantly hinder the funding of water 
settlements. It is very difficult for the Administration, the States or 
the Tribes to negotiate settlements knowing that they will only be 
funded at the expense of some other Tribe or essential Interior 
Department program.
    Funding of water settlements should be a mandatory obligation of 
the United States government. The obligation is analogous to, and no 
less serious than the obligation of the United States to pay judgments 
which are rendered against it. We urge that steps be taken to change 
current policy to ensure that any water settlement, once authorized by 
the Congress and approved by the President, will be funded. If such a 
change is not made, all of these claims will be relegated to 
litigation, an outcome which ought not to be acceptable to the 
Administration, the Congress, the Tribes or the States.
    The following is draft legislative language which, if enacted, 
would make mandatory the funding of any water settlement authorized by 
Congress and approved by the President. It would appropriately treat 
the funding of the settlement of Indian water right claims as a 
judgment against the United States. It is proposed as language to amend 
an Interior appropriations act or a supplemental appropriations act:
    ``Such sums as may be necessary, not to exceed $250,000,000 in any 
fiscal year, shall hereafter be available for payment of amounts 
authorized in Indian land and water claims settlement Acts, subject to 
the same protections and limitations as funds appropriated in 
satisfaction of a judgment of the Indian Claims Commission or the 
United States Claims Court in favor of any Indian tribe, band, group, 
pueblo, or Indian community.''
    Historically, judgments upholding Indian claims rendered by the 
Court of Claims or the Indian Claims Commission have been treated and 
paid as were other judgments by the Court of Claims, and have not been 
included as part of Interior's budget. As recently as 1992, the Indian 
Claims Commission ruled that compensation should be paid to the tribe 
which it would have received related to lands taken for construction of 
the Grand Coulee Dam. The compensation was paid from the ``judgment 
fund.''
    We acknowledge that there may be other approaches to achieving the 
desired result than the above language. In 1996, Congress established a 
trust fund to rectify the failure to perform restoration work that was 
supposed to have ameliorated the negative effects to the Crow Creek 
Sioux Tribe from the Pick-Sloan Project. The trust was funded by 
placing into an account at the Department of Treasury 25% of receipts 
from the power revenues generated by the Pick-Sloan Missouri River 
Basin Program every fiscal year until the total of $27.5 million is 
achieved. Interest on the corpus of the trust is to provide for the 
construction, operation and maintenance of a water system on the 
reservation. We look forward to exploring various approaches in 
resolving this vital issue.
  should a similar effort be made to quantify other federal reserved 
                                rights?
    A policy favoring settlement of non-Indian reserved right claims is 
also important, although these claims are not associated with the 
federal government's trust responsibility for Indian tribes. Such 
settlements offer advantages which include: (1) the ability to be 
flexible and to tailor solutions to the unique circumstances of each 
situation; (2) the ability to promote conservation and sound water 
management practices; and (3) the ability to establish the basis for 
cooperative partnerships. While funding for the settlement of these 
claims is also vital, the dynamics are somewhat different and one 
important aspect arises chiefly in the context of state general stream 
adjudications discussed below.
    are adjudications an appropriate means to quantify those rights?
    States in the West have developed comprehensive judicial and 
administrative proceedings (general stream adjudications) to quantify 
and document relative water rights within basins, including the rights 
to waters claimed by the United States under either state or federal 
law. These adjudications are typically complicated, expensive civil 
court and/or administrative actions that involve hundreds or even tens 
of thousands of claimants. Such adjudications give certainty to water 
rights, provide the basis for water right administration, reduce 
conflict over water allocation and water usage, and incidentally 
facilitate important market transactions for water rights in the West. 
Congress recognized the benefits of state general adjudication systems 
and by adoption of the McCarran Amendment (43 U.S.C. Sec. 666), 
required the federal government to submit to state court jurisdiction 
for the adjudication of its water right claims.
    Although water right claims by federal agencies are often the 
largest and/or most complex claims in state general adjudications, the 
United States Supreme Court, in the case of United States v. Idaho, 508 
U.S. 1 (1992), determined that the McCarran Amendment does not require 
the United States to pay filing fees, which pay for a portion of the 
costs associated with conducting adjudications. This holding means that 
the cost of adjudicating some of the most difficult claims in a state 
general adjudication has shifted entirely to private water users and 
state taxpayers. This drain on the resources of states and lack of 
federal government financial support significantly inhibit the ability 
of both state and federal agencies to protect private and public 
property interests.
    This is nowhere more evident than in the Klamath Basin where 
approximately 400 of the 700 claims being adjudicated are federal 
claims. The complexity of these federal claims, coupled with a series 
of lawsuits filed in federal court by federal agencies, has 
significantly delayed the state adjudication. Further, because they are 
not subject to fees and costs like other water users in the 
adjudication, federal agencies have filed questionable claims that may 
have been otherwise tempered. In Idaho, for example, the Forest Service 
initially filed 3,700 last minute claims in the Snake River Basin 
adjudication just prior to the initial court action on the adjudication 
fee issue. After the Forest Service used these last minute claims to 
quantify the fiscal impact of paying fees and after the State of Idaho 
incurred considerable expense investigating these claims, the Forest 
Service withdrew all but 61 of the claims, and the state adjudication 
court has since dismissed all but 9 of the claims.
    With this background, the western states have attempted to address 
this problem in the Congress. Bills have been introduced in Congress 
that would require all federal agencies filing water right claims in 
state adjudications to pay fees and costs to the same extent as a 
private party to the same proceeding. New Mexico proposed alternative 
legislation to provide federal funding support to each of the states 
pursuing general stream adjudications, based on a formula assessing the 
relative need for such support. These proposals have not advanced 
within Congress. We urge you to address this inequity. Payment of 
filing fees by federal agencies was in fact a common practice prior to 
the unfortunate U.S. Supreme Court ruling on the Forest Service claims 
in Idaho.
    In addition, while not within this Committee's jurisdiction, it 
should also be noted that varying Tribal water quality standards (as 
well as the lack thereof) and checkerboarded reservations, raise 
serious state concerns over administration--on and off the 
reservations--which have yet to be resolved. In order to prevent voids 
in regulation, state water quality standards should be effective on 
Indian lands until replacement standards have been adopted by tribal 
governments which are treated as states, or promulgated by EPA. 
Congress should provide direction that will aid in cooperative 
resolution of water quality issues. All efforts should be made to 
develop consistent tribal/state water quality standards at adjoining 
jurisdictional boundaries.

    The Chairman. Thank you very much.
    We are very pleased to have the State Engineer from the 
State of New Mexico, John D'Antonio. You do not have the 
easiest job in the world. It is a hard trip up here, but I 
imagine it is a little reprieve from what you go through every 
day out there in the State. But we think you are doing a great 
job, and thank you for coming and sharing your views with us.

            STATEMENT OF JOHN D'ANTONIO, NEW MEXICO 
                         STATE ENGINEER

    Mr. D'Antonio. Thank you, Mr. Chairman, members of the 
committee.
    Again, three issues that I want to stress up front: funding 
Indian water rights without a corresponding reduction in 
Department of the Interior funding is very important; 
fulfilling the U.S. trust responsibilities to tribes and avoid 
liability issues is a big benefit. I know the benefit is the 
sense of community and harmony within the basin among all water 
users because of certainty of water rights, and that includes 
economic benefits.
    The completion of water rights adjudication is a priority 
for New Mexico. New Mexico supports settlement of Indian water 
right claims and Federal reserved water right claims. The 
cooperation from the Federal Government is essential to bring 
closure to New Mexico's settlement negotiations. The direct 
benefits of completing the adjudication of Indian water rights 
and Federal reserved rights include the removal of a barrier to 
economic development for both Indians and non-Indians and also 
savings to all parties on the high costs of protracted 
litigation.
    The need in New Mexico is acute. We have 22 tribes, 
nations, and pueblos within the State. Only one, the Jicarilla 
Apaches, have been fully adjudicated. The remaining claims, 
they have senior water rights, they have a priority on a large 
quantity that, if recognized and fully exercised, could 
displace significant numbers of non-Indian users that have 
State-based water rights.
    New Mexico's legislature is now considering legislation to 
establish an Indian water rights settlement fund. That is in 
order to comply with the State's portion of funding 
obligations, and I believe that bill was signed in New Mexico 
today. It was scheduled to be signed today. New Mexico, 
however, will not succeed unless there is a corollary effort by 
the Federal Government as far as funding goes.
    Federal action and inaction has contributed to uncertainty 
on settlements. There are shifts in Federal policy through 
implication that may reserve water without an actual 
appropriation. Lately we have had limited participation by DOJ 
and DOI in recent negotiations on the Aamodt and the Abeyta 
adjudications, and it makes sessions non-substantive. The 
Federal Government is unwilling to contribute to more than a 
fraction of the total proposed settlement cost and that is 
recently with the Aamodt case, and that causes extreme 
dissatisfaction to the negotiation process and again causes 
problems there.
    It would not be helpful or advisable for Congress to 
attempt quantification of Indian and Federal reserved rights 
outside the existing general stream adjudication process.
    New Mexico is proud of its accomplishment in negotiating a 
settlement agreement with the Navajo Nation, which was 
completed in December 2004. While the settlement provides for 
water rights and associated water development projects in New 
Mexico for the Navajo Nation, the Navajo Nation releases claims 
to water that would displace existing non-Navajo water users in 
the San Juan Basin. This cost is about $800 million in 2005 
dollars to the Federal Government. State, and local 
contributions total upwards of $160 million.
    In closing, again the three points I would like to stress: 
the funding of Indian water rights settlements without 
corresponding reduction in DOI funding is essential; benefits 
include fulfilling the U.S. trust responsibilities to tribes 
and avoiding liability issues; and also, the sense of community 
and harmony within the basin among all the users because of 
certainty of water rights is essential.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. D'Antonio follows:]
    Prepared Statement of John D'Antonio, New Mexico State Engineer
           topic 3: indian and federal reserved water rights
    The determination and quantification of Indian and federal reserved 
water rights is a matter of critical importance to all citizens, Indian 
and non-Indian alike, of the western states. This is an area where 
Congressional action can achieve direct and substantial benefits.
    Completion of water rights adjudications is a priority for New 
Mexico. Toward that end, New Mexico supports settlement of Indian water 
rights claims and federal reserved water rights claims. New Mexico has 
recently completed the negotiation with the Navajo Nation of a 
settlement of the Nation's claims for water rights in the San Juan 
River Basin in New Mexico, and is in the process of negotiating other 
Indian water rights settlements. Based on experience, New Mexico 
understands the difficulties of negotiating a settlement that must take 
into account competing demands for a finite resource. New Mexico also 
understands the need to balance the uncertainties of litigation against 
the challenges of meeting the needs of opposing interests. Cooperation 
from the federal government is essential to bringing closure to New 
Mexico's ongoing settlement negotiations and to resolving the many 
outstanding Indian and federal reserved water rights claims that exist 
in our state.
          1. determination of indian water rights claims and 
                  federal reserved water rights claims
    A. The direct benefits of completing the adjudication of Indian 
water rights claims and federal reserved water rights claims are 
significant. They include the removal of a barrier to economic 
development for both Indians and non-Indians, and the savings to all 
parties of the high costs of protracted litigation. These benefits 
would accrue to the nation as a whole.
    B. In New Mexico, the need for the adjudication of Indian and 
federal water rights claims is acute. The lands of 22 Indian Tribes, 
Nations, and Pueblos lie within the borders of New Mexico. Of these, 
only the water rights of the Jicarilla Apaches have been fully 
adjudicated. The remaining Indian claims are typically to water rights 
of such senior priority and large quantity that, if recognized and 
fully exercised, they could displace significant numbers of non-Indian 
water rights developed under state law. In one instance, the claims of 
the Navajo Nation are potentially so large that they could exceed New 
Mexico's apportionment under the Upper Colorado River Basin Compact.
    Based on an understanding of the importance of Indian water rights 
settlements, the New Mexico legislature is now considering legislation 
to establish an Indian Water Rights Settlement Fund. This fund would 
provide a mechanism for the state to comply with its funding 
obligations under potential Indian water rights settlements. This 
legislation recognizes the need for New Mexico to plan ahead to make 
the Indian water rights settlements successful, but New Mexico's 
efforts will not succeed without a corollary effort on the part of the 
federal government. Notwithstanding the current federal budget 
difficulties, the federal government needs to prioritize settlement and 
funding relating to Indian water rights.
    C. Federal action and inaction have contributed significantly to 
the considerable uncertainty surrounding Indian and federal water 
rights claims. This uncertainty accentuates the present urgent need for 
those claims to be adjudicated.
    In New Mexico, it is easy to see how actions and inaction of the 
federal government have contributed to the present uncertainty over the 
water rights claims of Pueblo Indians. It is well known, for example, 
that the early U.S. Supreme Court case of U.S. v. Joseph, 94 U.S. 614 
(1876) (in which the Pueblo Indians were determined not to be 
``Indians'' for purpose of the Non-Intercourse Act, with the 
consequence that they could own and alienate their lands, which they 
did), followed by the Court's 1913 decision in U.S. v. Sandoval, 231 
U.S. 28 (which reversed Joseph, finding that the Pueblos were, and 
always had been, subject to and benefited by the Non-Intercourse Act), 
threw into doubt the validity of some forty years of real estate 
transactions involving lands within Pueblo grants. In addition, the 
attempts by Congress to address the problem, by the Pueblo Lands Act of 
1924 and the 1933 Act, were wholly inadequate.
    The federal government also has contributed to the uncertainty 
surrounding the water rights claims of Indian Nations and Tribes other 
than the Pueblos, and of the federal government. Federal actions or 
policies that have contributed to this include the creation and 
dissolution of Indian reservations, periodic recurrence of radical 
shifts in federal Indian policy, and other federal actions which may 
``impliedly'' reserve water without an actual appropriation.
    D. It is therefore appropriate for the United States to provide 
substantial support to promote the completion of adjudication of Indian 
and federal reserved water rights claims, by both settlement and 
litigation.
    E. Congress helps enormously, of course, by legislative approval 
and funding of successful Indian water rights settlements, and this 
expectation of United States support is usually critical to achieving a 
settlement.
    New Mexico is proud of its accomplishments in negotiating a 
Settlement Agreement with the Navajo Nation. The Settlement was 
completed in December 2004 after years of negotiations and resolves the 
claims of the Navajo Nation to the use of waters of the San Juan River 
Basin in New Mexico in a manner that would inure to the benefit of the 
Navajo Nation and the State of New Mexico. The negotiating parties made 
great efforts to provide information to the public and third parties 
regarding the Settlement and to take comments into account in 
finalizing the Agreement.
    The Settlement provides water rights and associated water 
development projects for the benefit of the Navajo Nation in exchange 
for a release of claims to water that potentially might otherwise 
displace existing non-Navajo water uses in the San Juan River Basin in 
New Mexico. Along with the Settlement Agreement, the parties have 
negotiated: 1) a proposed court decree for entry in the San Juan River 
Adjudication setting forth the rights of the Navajo Nation to use and 
administer waters of the San Juan River Basin in New Mexico; 2) a 
proposed Settlement Act for Congress to authorize the Bureau of 
Reclamation to construct and operate the Navajo-Gallup Water Supply 
Project, to fund the Bureau of Reclamation to complete and rehabilitate 
Navajo water projects in the San Juan River Basin in New Mexico, and to 
approve the Settlement Agreement and other authorizations to secure to 
the Navajo Nation a water supply to meet the needs of the Nation and 
its members; and 3) a Settlement Contract to provide for deliveries to 
the Navajo Nation under Bureau of Reclamation water projects, namely 
the Navajo Indian Irrigation Project, the Navajo-Gallup Water Supply 
Project, and the Animas-La Plata Project. Continued cooperation from 
the federal government will be critical to ensure the benefits of this 
settlement can be achieved.
    In addition, under the Settlement, the federal government is 
responsible for providing approximately $620 million of the funding 
necessary to implement the settlement. The state is responsible for 
funding an additional $35 million and local parties and the Jicarilla 
Apache Nation are responsible for yet another $131 million. This level 
of funding represents a reduction from the amounts originally proposed, 
and New Mexico expects that the federal government will cooperate in 
enabling the Settlement to progress.
    F. Unfortunately, participation by the Departments of Justice and 
Interior in recent negotiations to resolve Indian water rights claims 
in New Mexico has been perfunctory and non-substantive.
    In addition to the Navajo settlement, New Mexico is in the process 
of negotiating settlements in the Aamodt adjudication, in the Nambe-
Pojoaque-Tesuque area, and the Abeyta adjudication, in Taos, both of 
which are long-standing water rights adjudication suits. In the Aamodt 
case, which has the distinction of being the oldest active case in 
federal court, settlement negotiations have been proceeding for over 
four years, and while the federal government participated in the 
negotiations through the Justice Department, recent public 
pronouncements that the federal government is unwilling to contribute 
more than a fraction of the total proposed settlement costs have caused 
extreme disruption to the negotiation process. It is unreasonable for 
the federal government to attend settlement discussions without 
meaningful participation, and to withhold substantive comments until a 
settlement is finalized and legislation is introduced before Congress. 
New Mexico is encouraged by the recent appointment of Jennifer Gimbel 
within the Department of the Interior to oversee Indian water rights 
settlements, and looks forward to working closely with her within the 
next few years to finalize the settlements under negotiation and obtain 
the necessary congressional support. New Mexico is also supportive of 
the comments made on this issue by the New Mexico delegation during the 
Senate Energy and Natural Resources Committee hearing on the Fiscal 
Year 2006 Interior Department budget.
    G. In most of the west, and certainly in New Mexico, it is crucial 
that all Indian and federal water right claims be adjudicated. The 
surface waters of New Mexico's streams were fully appropriated years 
ago, and the competing demands on the state's available water supplies 
do not allow the luxury of putting off quantification questions. The 
adjudication of reserved water right claims asserted by the federal 
government should be made a priority along with the adjudication of 
Indian water rights claims.
Recommendations
    1. Congress should make clear that the timely adjudication of 
Indian water rights and federal reserved water rights is an important 
priority of the United States deserving of special attention from the 
Departments of Justice and Interior.
    2. Congress should support the timely adjudication of Indian and 
federal reserved water rights at all levels of the process, by any 
available means, including:

   providing sufficient funding for, and the specific direction 
        to use, federal technical expertise and assets (through the 
        USBOR, USGS, etc.) to aid settlement negotiations; and
   requiring, as a condition of funding, annual reporting on 
        the progress of achieving Congress' goal of timely adjudication 
        of Indian and federal reserved water rights.

    3. Congress should fund settlements of Indian water rights claims 
without requiring corresponding reductions in Department of Interior 
programs.
                 2. role of water rights adjudications
    A. General stream adjudications, legislatively prescribed and 
undertaken by the states, are the indispensable tool for the 
determination of all competing water rights claims in a stream system. 
The needs and the history of each state are different, and the general 
stream adjudication process has taken different forms in different 
states, from quasi-administrative to strictly judicial, but all should 
be supported as no other viable alternative exists for the 
determination of federal and Indian water rights claims alongside 
competing water rights claims developed under state law. In New Mexico, 
where unappropriated water on its major rivers ceased to exist long 
ago, no other mechanism exists to determine the water rights of all 
parties. The adjudication of water rights is a process that must 
succeed for the benefit of all. The more timely this process is 
completed, the better.
    B. It would not be helpful or advisable for Congress to attempt 
quantification of Indian and federal reserved water rights outside the 
existing general stream adjudication process. While that process has 
sometimes suffered from delays and lack of needed resources, it is the 
only process which can legitimately determine all water rights claims 
in a basin in a fair and principled manner, and it is the process which 
Congress has explicitly approved with the passage of the McCarran 
Amendment.
Recommendations
    1. Congress should support the water rights adjudication process 
generally, including by:

   providing sufficient funding for the federal judiciary's 
        special needs in water rights adjudications, such as Special 
        Masters, and specialized clerk and support staff; and
   providing funding for the continuance of adjudication and 
        administration efforts by the states, many of which are 
        struggling to cope with the burdens of adjudicating and 
        administering water rights.

    2. Attempts to quantify Indian water rights and federal reserved 
water rights outside the existing general stream adjudication process 
should be avoided.

    The Chairman. Thank you very much.
    Now we have down here a Nordhaus Law Firm member. That is 
you, Steve?
    Mr. Greetham. ``GREET-ham.''
    The Chairman. ``GREETH-im''?
    Mr. Greetham. Yes. The pig welcomer, ``Greet Ham.''
    The Chairman. ``Greet-ham,'' okay.

STATEMENT OF STEPHEN GREETHAM, THE NORDHAUS LAW FIRM, ON BEHALF 
  OF THE PUEBLOS OF LAGUNA, SANTA ANA, SANTO DOMINGO, AND TAOS

    Mr. Greetham. Thank you very much, Senators, Mr. Chairman.
    I am here on behalf of the Pueblos of Laguna, Santa Ana, 
Santo Domingo, and Taos today. My firm also represents the 
Jicarilla Apache Nation, which has been referred to. They have 
already completed a successful settlement of their water 
rights.
    The questions that the committee has asked fundamentally 
turn on whether an adjudication is the appropriate way to 
proceed. An adjudication is essentially the only tool we have, 
and by that I mean a court decree declaring one's property 
rights in water. The real issue gets to whether sole reliance 
on litigation or a negotiated approach is the appropriate way 
to go, and I think New Mexico gives us some sad examples of 
exclusive reliance on litigation.
    Aamodt and Abeyta, two of the oldest Federal cases in the 
country, are 35, 39 years old respectively, dealing with five 
tribal claims in addition to the affected non-Indian 
communities. The Rio San Jose Basin is a State court 
adjudication that was filed in 1982 and not a single water 
right has yet been adjudicated in that action. This is simply a 
pace that is not keeping up with the increasing demands that 
are being placed on water supplies throughout the West.
    I have to say that the discussion so far talking about 
making increased supplies available will still not address the 
allocation of those supplies as among the different communities 
and individuals within any system.
    Contrasting the litigation track record, the negotiation 
track record in New Mexico gives a lot of reason for hope. The 
Jicarillas completed their settlement on one basin in 1998, 
another in 1999, and since the completion of the decree, the 
negotiated decree on their rights, they have entered into the 
water market as an economic player, which has benefited both 
the non-Indian users in providing senior sources of supply for 
municipal growth and economic development on the part of the 
Jicarillas.
    Aamodt and Abeyta are both pushing through. Those are two 
large settlements in northern New Mexico and they are both 
preparing to come back to D.C. for the second phase of the 
negotiation process.
    What role can Congress play, has been touched on. It was 
interesting that all of our comments touched on the same 
issues: money. The negotiation process is expensive and time-
consuming. The technical expertise, the legal requirements, 
require extensive resources. Taos Pueblo over the past year and 
a half has been in an intensive negotiation effort. They met 
120 times in face to face negotiation sessions last year and 
they are hundreds of thousands of dollars in debt, both to 
their in-house staff and to their technical consultants.
    Because of the Federal trust responsibility and because of 
the sprawling public interests in resolving the quantification 
of senior tribal water rights, the Federal Government--the 
easiest thing the Federal Government can do is to provide the 
resources to complete these efforts. On top of that, right now 
we operate in accordance with the 1990 settlement guidelines 
that the Department of the Interior promulgated after the first 
President Bush enacted the Indian Tribes Settlement Act. 
Congress should step in and declare the priority as well. To 
the extent Federal legislation is to be pursued to deal with 
Indian water rights issues, Congress should set the tone as far 
as declaring the priority in Federal policy to resolve these 
quantifications and a preference for true intergovernmental 
negotiated resolutions of the claims.
    Thank you.
    [The prepared statement of Mr. Greetham follows:]
    Prepared Statement of Stephen Greetham, The Nordhaus Law Firm, 
 on Behalf of the Pueblos of Laguna, Santa Ana, Santo Domingo, and Taos
 the united states must dedicate increased resources to the resolution 
 of tribal water rights claims and declare that effort to be a federal 
                            policy priority
    These comments--which are submitted by the Nordhaus Law Firm on 
behalf of the Pueblos of Laguna, Santa Ana, Santo Domingo, and Taos--
address two portions of the Committee's third question: (1) what effort 
should be made by the federal government to encourage adjudication or 
settlement of Indian water rights claims?; and (2) are adjudications an 
appropriate means to quantify those rights?
1. Tribal Water Rights Claims Must Be Resolved
    Resolution of outstanding tribal water rights claims is a critical 
priority throughout the West, both for the affected tribes and the 
states in which they are located. There is no dispute that Indian 
tribes possess the most senior water rights in the West. See, e.g., New 
Mexico v. Aamodt, 537 F.2d 1102 (10th Cir. 1976); New Mexico, ex rel., 
State Engineer v. Aamodt, et al., 618 F. Supp. 993 (D.N.M. 1985). 
Without a lawful quantification of those rights, however, efforts to 
manage water use in this arid region are profoundly hampered, and that 
has induced the State of New Mexico to declare the resolution of tribal 
water rights claims to be a critical state priority. See generally New 
Mexico State Water Plan at 11, 64-65 (Dec. 23, 2003) (available at 
http://www.seo.state.nm.us/water-info/NMWaterPlanning/ 

2003StateWaterPlan. pdf); cf. id. at Sec. E. Furthermore, regardless of 
planning and management difficulties, the absence of finality with 
respect to the scope and extent of tribal water rights unfairly 
undermines tribal efforts to develop those resources and to pursue 
desperately needed collective economic benefits, and the longer it 
takes to obtain finality, in fact, the more pressure there is on scarce 
water supplies that could otherwise satisfy tribal rights. The bottom 
line is that until outstanding claims are resolved, both the Indian and 
non-Indian communities throughout the West will be burdened by 
unnecessary conflict and uncertainty. See generally Western Water 
Policy Review Comm'n, Water in the West: Challenge for the Next Century 
(June 1998).
2. Exclusive Reliance on Litigation Efforts Is Inefficient
    The Committee has asked whether adjudication is ``an appropriate 
means'' for the quantification of water rights, and the general answer 
has to be ``yes.'' Under relevant state law, see generally NMSA 1978, 
Sec. 72-4-15 (1907), and the McCarran Amendment, 43 U.S.C. Sec. 666, 
the quantification of any right to water located within New Mexico, 
including tribal rights, must be decided by a court; indeed, absent an 
appropriate court order, the protection of those property interests may 
be compromised. See, e.g., United States v. Bluewater-Toltec Irr. 
Dist., 580 F. Supp. 1434 (D.N.M. 1984), aff'd, 806 F.2d 986 (10th Cir. 
1986). However, the fact that adjudication may be considered 
``appropriate'' does not end the discussion.
    For example, the adjudication of water rights by exclusive reliance 
on litigation has, by no means, proven efficient. For example, the 
Aamodt and Abeyta adjudications, which the state filed in federal court 
more than 35 years ago, have so far failed to produce a quantification 
of the water rights separately held by the Pueblos of Nambe, Pojoaque, 
San Ildefenso, Taos, or Tesuque. Similarly, although litigation was 
initiated more than 20 years ago to adjudicate all rights to the waters 
of the Rio San Jose, the state court in the Kerr-McGee adjudication has 
so far not entered a single interim order determining any non-Indian 
water right, nor did it order an expedited inter se subproceeding on 
the rights of the Pueblos of Acoma and Laguna until 2002. Procedural 
issues in that subproceeding continue to consume the parties' and the 
court's energies. In Abousleman, which will adjudicate the rights of 
the Pueblos of Jemez, Santa Ana, and Zia, the federal court ruled only 
last summer on cross-motions for summary judgment that were filed in 
[1989]. It is troubling that all of these actions relate to the 
adjudication of water rights on tributaries to the Rio Grande; at this 
time, there is no publicly known plan to commence a general 
adjudication of rights to the waters of the Rio Grande main stem, an 
action that could affect almost all of the federally recognized Indian 
tribes in New Mexico. One can only imagine how long such a 
comprehensive court action would take to complete.
    Adapting to these legal realities and consistent with the Interior 
Department's 1990 guidelines, 55 Fed. Reg. 9223 (Mar. 12, 1990), tribes 
have not relied exclusively on litigation. For example, the Jicarilla 
Apache Nation successfully concluded negotiations on a final settlement 
of its rights in the San Juan and Rio Chama basins in 1998 and 1999. 
The eight Pueblos that are party to the Aamodt, Abeyta, and Abousleman 
adjudications have likewise pursued a negotiated resolution of their 
claims, and at present, the Aamodt and Abeyta Pueblos are nearing 
closure on the local phase of those efforts. The Pueblos of Acoma and 
Laguna, on the other hand, have been unable to obtain sufficient 
attention from the United States for more than the most preliminary of 
discussions with the current federal negotiation team assigned to the 
Kerr-McGee adjudication. Largely due to a scarcity of resources, those 
negotiation efforts have proceeded slowly, when they have proceeded at 
all.
    The inefficiencies of relevant state law adjudication processes or 
the federal administrative negotiation guidelines do not necessarily 
constrain options for how to proceed with the quantification of tribal 
water rights. As the courts have stated, Congress has not abandoned 
tribal water rights to state law control or otherwise compromised the 
controlling authority of federal law with respect to those rights. See, 
e.g., Arizona v. San Carlos Apache Tribe, 463 U.S. 800 (1976); Aamodt, 
537 F.2d 1102. Accordingly, as discussed in the next section, Congress 
can-and should-act to improve the quantification process by declaring a 
federal priority for the resolution of tribal water rights, authorizing 
increased funding for the litigation and negotiation processes, and 
requiring the formal promulgation of clearer and more substantive 
guidance for intergovernmental water rights negotiations. Such an act 
would be appropriate given Congress' plenary authority over Indian 
affairs and, particularly, in light of the United States' trust 
responsibility with respect to the protection of tribal water rights.
3. Congress Should Declare the Resolution of Tribal Water Rights a 
        Critical Federal Priority and Require the Dedication of 
        Adequate Financial and Human Resources for the Fair 
        Quantification of Tribal Water Rights
    Fifteen years ago, the United States declared its preference for 
the negotiated resolution of tribal water rights. See 55 Fed. Reg. 
9223. Congress and the Administration must back that preference with a 
commitment of the funding and human resources necessary to bring these 
critical and complex efforts to fruition. The simple truth is that 
these efforts are expensive, especially for tribal governments that are 
too often hamstrung by insufficient financial resources. In the Abeyta 
negotiations, for example, Taos Pueblo's negotiation team, which 
includes paid tribal staff members as well as legal and technical 
consultants, has had to attend almost 120 negotiation sessions during 
2004. In January 2005, alone, the Pueblo team met in Abeyta negotiation 
sessions 21 out of 31 days. This recent pace, which was urged by the 
federal court and which was critical to the dramatic progress that the 
parties made last year, has required a tremendous dedication of 
resources. However, due to insufficient federal funding, the Pueblo was 
forced to allocate funds to the settlement effort at the expense of 
other essential Pueblo programs, and substantial work performed in this 
effort remains unpaid due to a lack of funds.
    Throughout the West, tribes have had no alternative but to commit 
scarce tribal funds on the quantification of their water rights, and 
the United States has not matched that tribal commitment, either in 
terms of funding or human resources. Recently, there has been much 
public attention paid to the Justice and Interior Departments' refusal 
to offer more than $11 million for the Aamodt settlement, a figure that 
pales in comparison to the settlement's estimated cost of more than 
$200 million. Furthermore, the Justice Department has tasked only one 
Denver-based attorney to represent fifteen of the Indian tribes in New 
Mexico that are currently engaged in litigation and/or negotiation over 
their water rights. No matter the skill of this able and committed 
attorney, his task is daunting. These brief examples represent the 
insufficiency of the federal commitment to the timely and fair 
resolution of tribal water rights claims.
    Finally, while financial and human resources are desperately needed 
for the successful and fair quantification of tribal water rights, 
Congress should also provide guidance and greater clarity as to how 
those resources could be most effectively and efficiently deployed. 
Through appropriate legislation, for example, it could:

   declare that the resolution of outstanding tribal water 
        rights claims is a federal priority;
   declare that the policy of the United States is to seek 
        resolution of tribal water rights claims through 
        intergovernmental (federal-tribal-state) negotiation;
   require that the Interior and Justice Departments develop 
        and implement plans for the completion of litigation or 
        negotiation of those claims;
   require that the Interior Department actively commence its 
        representation of the United States in any tribal water rights 
        negotiation at the earliest possible stage;
   establish a fund outside of the Interior Department annual 
        budget and appropriate to it sufficient money to cover annual 
        federal and tribal costs arising from ongoing quantification 
        efforts; and
   similar to what the New Mexico Legislature is presently 
        considering, establish a tribal water rights settlement fund 
        and appropriate to it sufficient money to cover the costs of 
        implementing future settlements.

    To provide greater clarity to the negotiation process, such 
legislation should also direct the Interior Department to promulgate 
regulations that:

   establish how timely intergovernmental negotiations for the 
        quantification of tribal water rights should be commenced and 
        conducted;
   standardize the ``shape of the table'' to preserve and 
        facilitate the intergovernmental (federal-tribal-state) nature 
        of these efforts;
   establish a uniform threshold scope for these efforts to 
        encourage an appropriate and realistic focus; and
   establish standardized procedures for developing timely 
        administrative policy on specific issues as they arise in 
        negotiations.

    The Pueblos do not propose a radical overhaul of the present 
negotiations process; nonetheless, the current administrative 
guidelines for the negotiated settlement of tribal water rights are too 
vague to provide adequately uniform direction or to facilitate timely 
progress. And perhaps more importantly, administrative guidelines do 
not carry the full weight of the United States' endorsement or 
authority, and such gravity would be appropriate in matters as critical 
as those affecting tribal trust resources.

    The Chairman. Thank you very much.
    Mr. John--would you tell me how to say your last name?
    Mr. Echohawk. ``Echo Hawk.''
    The Chairman. Echohawk. We look forward to hearing from 
you.

STATEMENT OF JOHN ECHOHAWK, EXECUTIVE DIRECTOR, NATIVE AMERICAN 
                          RIGHTS FUND

    Mr. Echohawk. Thank you, Mr. Chairman.
    I am the executive director of the Native American Rights 
Fund and we have been involved in Indian water rights 
litigation and settlements for 35 years. We are currently 
representing three tribes in that regard.
    I am also here on behalf of the National Congress of 
American Indians and the tribal representatives of the joint 
Federal tribal Indian water funding task force. As you know, 
Indian water rights is one of the most important issues to the 
tribes out there. You know that tribes are sovereign 
governments and each tribe reserves to itself the right to 
decide how to resolve its Indian water rights claims, whether 
that be through litigation or negotiation or through some other 
avenue.
    I think we are in agreement, those tribes involved in these 
negotiations, that what we need to focus on and what we would 
recommend to the committee is a focus on creating a funding 
mechanism to do that. Under the current system, funding of 
Indian water rights settlements is discretionary. So that means 
when we are negotiating these settlements we have to find money 
in the Interior budget somehow, and that is not very easy and 
that is a stumbling block that we face in terms of trying to 
reach settlements in these cases.
    What we would propose is that funding of these Indian water 
rights settlements be made mandatory. You may recall, Mr. 
Chairman, in the 107th Congress we worked with you to put 
together such a mechanism, providing for relief from the Budget 
Act so that appropriations for these settlements would not be 
scored against the budgets of the appropriators under the 
Budget Act.
    Since we do not have the Budget Act, I think it would 
behoove us all to try to find another, similar kind of funding 
mechanism that would accomplish the same thing. Some kind of 
annual automatic appropriation up to $250 million as we 
proposed in our proposal is I think a mechanism that we could 
look at, in effect a judgment fund for Indian land and water 
claim settlements, the $250 million figure based upon where we 
were at historically back in the 1970's when the settlement of 
these claims really got going. We think that is the way that we 
should go and that is what we would recommend to the committee.
    Finally, I would also point to the issue that Steve was 
focusing on and that is the need for funds for these tribes to 
be able to come to the negotiating table. So many of them do 
not have the resources to do that. Again, the funding to the 
Bureau of Indian Affairs for this purpose is very, very 
limited. Whatever funds come that way end up supporting 
litigation and the tribes who are ready to enter into 
negotiations are really left without the resources to do so. 
This of course also holds up this whole process of settling 
these claims.
    I would urge the committee to focus on those two areas, and 
again I appreciate the invitation to be here.
    [The prepared statement of Mr. Echohawk follows:]
  Prepared Statement of John E. Echohawk, Executive Director, Native 
American Rights Fund; Jacqueline Johnson, Executive Director, National 
   Congress of American Indians; and Bruce Sunchild, Co-Chair, Joint 
             Federal-Tribal Indian Water Funding Task Force
           topic #3: indian and federal reserved water rights
                               proposals
    a. Enact legislation to establish a funding mechanism to ensure 
that any Indian land or water settlement, once authorized by the 
Congress and approved by the President, will be funded without a 
corresponding offset to other tribal programs or essential Interior 
Department programs.
    b. Provide increased funding for Interior Department tribal 
programs that support tribal participation in settlement negotiations 
in order to facilitate increased tribal participation in negotiations 
and significantly advance the goal of achieving water rights 
settlements.
                               discussion
    What effort should be made by the federal government to encourage 
the adjudication or settlement of Indian water rights claims?
    The Native American Rights Fund, the National Congress of American 
Indians and the Indian Representatives on the Joint Federal-Tribal 
Indian Water Funding Task Force believe that the resolution of Indian 
water claims is one of the most important aspects of the United States' 
trust obligation to Native Americans and is of vital importance to the 
country as a whole. As sovereign governments, each tribe decides for 
itself how its water rights claims will be resolved and the federal 
government should honor that decision. We support those tribes who have 
decided to resolve their water rights claims through negotiated 
settlements, and those who are either pursuing litigation or have 
decided to wait to address their water rights issues.
    We commend the Congress and the Administration for recognizing that 
settlement of Indian water rights claims is an obligation of the United 
States government and for encouraging the settlement of those claims. 
However, an appropriate funding mechanism must be found for Indian 
water rights settlements or the settlement policy will become a 
nullity.
    The current practice is to treat the funding of Indian water 
settlements as discretionary, with the result that a settlement can 
only be funded with a corresponding reduction in some other 
discretionary component of the Interior Department's budget. The 
practical effect of this budgetary policy is to significantly hinder 
the negotiation and funding of new settlements. It is very difficult 
for the federal government, the tribes, the states and private parties 
to negotiate settlements knowing that they will only be funded at the 
expense of other tribes or essential Interior Department programs.
    We would note that Congress has given serious consideration to 
proposals to take Indian water settlements off-budget. In the 107th 
Congress, Chairman Domenici introduced S. 1186, that provided a 
budgetary mechanism to ensure that funds will be available to satisfy 
the Federal Government's responsibilities with respect to negotiated 
settlements of disputes related to Indian water rights claims and 
Indian land claims. S. 1186 is important legislation that deserves 
additional consideration by the Energy and Natural Resources Committee.
    Funding of Indian water rights settlements should be a mandatory 
obligation of the United States government. The obligation is analogous 
to, and no less serious than, the obligation of the United States to 
pay judgments which are rendered against it. We urge that steps be 
taken to change the current policy to ensure that any Indian water 
rights settlement, once authorized by the Congress and approved by the 
President, will be funded. If such a change is not made, all Indian 
water rights claims will have to be litigated or languish, an outcome 
which ought not to be acceptable to the federal government, the tribes, 
the states and private parties.
    The following is draft legislative language which, if enacted, 
would make mandatory the funding of any Indian water rights settlement 
authorized by Congress and approved by the President. It would 
appropriately treat the funding of the settlement of Indian water 
rights claims as a judgment against the United States. It is proposed 
as language to amend an Interior appropriations act or a supplemental 
appropriations act:

          ``Such sums as may be necessary, not to exceed $250,000,000 
        in any fiscal year, shall hereafter be available for payment of 
        amounts authorized in Indian land and water claims settlements 
        Acts, subject to the same protections and limitations as funds 
        appropriated in satisfaction of a judgement of the Indian 
        Claims Commission or the United States Claims Court in favor of 
        any Indian tribe, band, group, pueblo, or Indian community.''

    Historically, judgments upholding Indian claims rendered by the 
Court of Claims or the Indian Claims Commission have been treated and 
paid as were other judgments by the Court of Claims, and have not been 
included as part of Interior's budget. We acknowledge that there may be 
other approaches to achieving the desired result and suggest that such 
funding mechanisms might be considered in joint oversight hearings with 
the Senate Indian Affairs Committee.
    We also urge increased funding for the Interior Department to 
facilitate tribal participation in Indian water rights settlement 
negotiations. Without tribal participation in negotiations, settlements 
can never be reached. Too often the lack of funding slows the 
negotiation process or prevents tribes from negotiating at all. The 
limited Interior Department funding that does exist is prioritized for 
litigation and negotiations suffer. We urge Congress to provide 
increased funding that will facilitate increased tribal participation 
in water settlement negotiations and significantly advance the goal of 
achieving water rights settlements.

    The Chairman. Thank you very much, all four of you.
    Senator Bingaman, did you have anything you would like to 
ask?
    Senator Bingaman. Thank you, Mr. Chairman.
    Let me ask our State Engineer, John D'Antonio. You have 
some fairly strong statements here in your testimony, which I 
appreciate. You say: ``Unfortunately, participation by the 
Departments of Justice and Interior in recent negotiations to 
resolve Indian water rights claims in New Mexico has been 
perfunctory and non-substantive.''
    Then a little later you say: ``It is unreasonable for the 
Federal Government to attend settlement discussions without 
meaningful participation and to withhold substantive comments 
until a settlement is finalized and legislation is introduced 
before Congress.'' Then you go on to talk about how you are 
encouraged that Jennifer Gimbel has been appointed to oversee 
this set of issues.
    One point that Senator Salazar made when we had a budget 
hearing on the Department of the Interior budget earlier this 
year was that we have got a systemic problem in the Department 
of the Interior, in that every time you put somebody in this 
kind of a key position, responsible for working on these 
negotiations, if they prove capable they are promoted to 
another job, and therefore the position is vacant again.
    The current Solicitor, Sue Ellen Wooldridge, was in this 
job and then she was--it was determined that she was capable, 
so they promoted her to a different position. She is now the 
Solicitor. That was the comment Senator Salazar made, as I 
understand it or as I recall it.
    Do you think that is a fair comment? Do you think there is 
something else that we could be trying to do here at the 
Federal level to get a consistent level of expert involvement 
by the Department of the Interior on these important issues?
    Mr. D'Antonio. Mr. Chairman, Senator Bingaman, our 
frustration in New Mexico--and again, we are actively involved 
in three water rights settlements, the Aamodt which has been--
it is the longest Federal lawsuit that is out there. And then 
we have the Abeyta adjudication also, which is in the Taos 
area.
    What we have seen is, the most frustrating part is 
negotiating for 3 or 4 years thinking that there is a level of 
involvement, especially on the funding side, from the Federal 
Government, and going through a set of plans, which again in 
most cases in order for us to settle Indian water rights we 
have to give something up in order that the tribes or pueblos 
give up a future right to water. So it evolves into the Federal 
Government funding water projects essentially in the case of 
the Aamodt settlement. Obviously, a regional water system is 
essential. It was above $200 million.
    When parties are negotiating for longer than 4 years, but 
substantively for the last 4 years, and then all parties 
thinking there is going to be a nexus of $200 million there and 
the Federal Government comes in and says: we think perhaps 
there may be only $11 million to do it. It really throws a 
wrench into what progress has been made.
    I understand budget issues. I understand that the budget is 
a big concern for everybody. But I also understand that the 
certainty of those water rights settlements is going to enable 
us to move forward in every aspect of the State in terms of 
certainty for economic growth and our ability to allow us to 
market water amongst different parties.
    I am not sure I am answering your question fully here. I 
know Jennifer Gimbel is somebody that we have a lot of 
confidence in. We have worked with her closely, her being from 
Colorado, on other issues in other areas, and we think engaging 
her in some of the Indian water rights settlements discussions 
is only going to help.
    Senator Bingaman. Thank you.
    The Chairman. Senator.
    Senator Murkowski. Thank you, Mr. Chairman.
    We do not have any Indian water rights issues in my State, 
so I am listening very attentively to the concerns and the 
problems that you have raised. I had to lean over to my 
colleague the chairman here and say: I cannot believe that they 
have been trying to work through these settlements and this 
litigation for 25, 35 years, and it is still hanging out there.
    You have all cited the need for some funding at this end to 
kind of provide for the push. But other than the I guess it was 
$250 million annually that I understand was in Chairman 
Domenici's legislation that he had introduced in the 107th, 
there has not really been any discussion of what would be 
sufficient, what would be adequate.
    If you can tell me what you think would be adequate, tell 
me how we push it over the edge so that you do not have these 
settlements continuing for yet another 25 years? Just because 
you have the funding there does not necessarily mean that there 
is the impetus to resolve.
    Mr. Echohawk. I think the experience we have had in these 
Indian water rights cases is that in most instances the 
parties, once they come together, are going to be able to 
figure out a resolution on the ground, how they can all live 
together, how to make this thing work, because we are dealing 
with a situation where tribes generally have the senior rights 
and water rights holders under State law had rights that most 
of the time are junior to the tribes. The question is how to 
put those two together.
    We have the U.S. Government in the middle, having a role as 
trustee. They have not protected the tribal water rights, but 
at the same time they have encouraged the States to go ahead 
and develop water under State law. So the Federal Government 
plays a major role here and they need to be able to step up to 
the plate and fund their fair share of a settlement.
    They have not been able to do that in each and every case, 
and that is the basic problem that we have. That is why this 
funding mechanism that I proposed is the best way, because that 
is usually the reason the government cites for not being able 
to support a settlement, is the lack of funding.
    Senator Murkowski. Maybe I am confused. There is the 
funding for the settlement, but I thought you were also looking 
for assistance just to cover--it says ``annual Federal and 
tribal costs arising from ongoing quantification efforts and 
sufficient to cover the costs of implementing the future 
settlement.'' So you have got two fronts that you are looking 
at from a funding perspective, is that correct?
    Mr. Echohawk. Steve, you want to?
    Mr. Greetham. Yes, that is true, as far as the two funding 
components, now working on and then implementing whatever we 
agree to.
    I just want to make sure two things are clear. One, those 
long time lines. Folks have not been negotiating for 25 years. 
For example, in the Abeyta there have been negotiation efforts, 
but a lot of the efforts require extensive hydrologic and 
technical assessments to figure out how the watershed works. So 
you figure out what the available supply is. There is a lot of 
time-consuming technical work.
    Since August 2003 we have been working with a mediator and 
we have been meeting on a very aggressive schedule. When you 
contrast the time between sitting down to talk in a negotiating 
context versus going to the courthouse to sue, the time to 
complete is much quicker through the negotiation process.
    Also you mentioned, how can we be sure that there is going 
to be the impetus for folks to finish. The impetus exists. For 
example, on the Rio San Jose, on which you have the Pueblos of 
Akima and Laguna, the two pueblos back in the early 1980's took 
an action to Federal court to protect their water sources, 
their water supplies--they are down at the bottom of the 
system--as against junior diverters upstream. The Federal court 
kicked them out and said: I am sorry, you cannot protect 
anything until you have a court decree saying precisely what 
your water right is.
    So until there is a formal court decree quantifying, the 
tribes, their ability to protect their property interests and 
their sovereign interests in their water resources are 
compromised.
    The finality serves a tremendous value. John D'Antonio 
supervised or oversaw the formulation of the New Mexico State 
water plan back in 2002. In that document, which was the result 
of extensive public comment processes and intensive town hall-
type discussions, folks really highlighted on the problem of 
not even being able to plan as far as the use of water 
resources without having final quantifications of their rights.
    So it is not just a question of if we pay more money then 
folks will get the interest to finish. Folks are interested in 
doing it now. Two gentlemen are here from Taos Pueblo, Nelson 
Cordova and Gil Suazo. For the past 14 years they have 
essentially dedicated their lives to seeing the quantification 
of the tribe's water rights to closure, and they do it often 
without any payment or compensation from their tribe.
    But the commitment is there. The resources and the 
expertise need to be made available to complete the process.
    Senator Murkowski. I appreciate you clarifying the length 
of time that you have been involved in the negotiations.
    Mr. Bell. Senator, just one aspect of your question. I 
think the fact that this mechanism would make it mandatory 
means that the tribe would no longer be faced with the prospect 
of losing money for some important other Indian program if 
their settlement is funded. That has been something they have 
faced and it is a real disincentive for tribes to participate. 
This would solve that.
    The Chairman. Thank you very much.
    I do not believe we are saying, and we surely are not 
advocating, that the Federal Government say, we are going to 
cut Indian programs for the amount of money we had to settle a 
claims case for. We may be cutting Indian programs for some 
other reason that we may not like, but I do not think that is 
the case.
    I do think it is real that the Department is beginning to 
say, where do we get the money. I myself think it is a mistake 
for the Federal Government not to participate all the way up 
and down, because it seems to me if the end product is 
something that the Federal Government says is unreasonable, 
they should have been players all along talking about its 
unreasonableness, rather than wait until the end.
    The two that we have spoken of, Navajo and the long-term 
Aamodt case, are rather interesting in that the biggest portion 
of the settlement in each case is the construction of large 
public works facilities. So that one ends up saying the water 
right must be worth, who knows, X, and then you look out there 
and say, let us build two water lines. Now, what do they cost? 
And they are not necessarily related, but the water lines may 
cost $800 million. So the answer is the solution, the 
settlement, is build the water lines, in exchange for which the 
water rights are settled.
    You know, the Government could get involved in that much 
earlier and say, we do not think that is the way it should be 
settled. So I do not think they help the case to not get in it 
and argue--and I say that with you here; I have talked to the 
Secretary personally about it. Frankly, we have got to find 
money to settle the cases, and we will find it somewhere. They 
are looking for a stream of resources. That is how we settled 
the Arizona one. They found a stream of resources. It did come 
out of the budget, however, so there is no argument. It was 
sent over from another place that it was going, but it was 
coming out of the general fund in the final analysis.
    So we have to do that. It is a hard job, but we will have 
to do it.
    Let us see. Did you have one last comment, Mr. Attorney, 
Steven?
    Mr. Greetham. Just in following up on Senator Bingaman's 
comment earlier about in essence a modified Peter principle at 
work, that once folks demonstrate proficiency they get promoted 
out of their job of working on Indian water rights. 
Unfortunately, I think that is a sad example of the lack of 
institutional priority being brought to bear on the resolution 
of these claims.
    It is not just the money, although that is obviously the 
critical material component. But there needs to be a 
reinforcement of the institutional critical priority on seeing 
these efforts to closure.
    The Chairman. Well, two ways to look at it. Senator 
Salazar's approach may be looked on as something that he is 
against promoting people. So that I do not know where we are 
going. Those people want to get promoted. They do not want to 
be where they were.
    On the other hand, I would make one last observation. It 
has to do with payment of fees. The case was made we have got 
to pay for the Indian costs for the Indian litigation. I think 
you made the case. You ought to know, as a Senator we get a lot 
of complaints about the poor people that get sued too by the 
Indian claims, and they want us to pay their fees, too. They 
are poor, they do not have any money, and all of a sudden they 
get served with a subpoena and get in a lawsuit.
    They come up here one time, they asked Senator Bingaman and 
I to pay fees up and down the river for the people that were in 
the lawsuit. We did that once. It is a tough situation, but I 
wanted to say it is not all always only the Indian way, the 
Indian problem. It is another problem too for the non-Indian 
who has to pay. They were innocent, too. Not in a legal sense, 
but they did not know what was going on for 50 years, 100 
years.
    With that, we will go on to the next panel. Thank you very 
much.
    Okay, the last panel. We have six of you: the Awwa Research 
Foundation, General Electric, the Environmental Defense--I 
guess it is Environmental Defense Fund--Tom Graff; Groundwater 
Association; the city of Albuquerque; and the Texas Water 
Development Board.
    Can we get started? Are you ready, Awwa Research, Richard 
Karlin?

STATEMENT OF RICHARD J. KARLIN, DEPUTY EXECUTIVE DIRECTOR, AWWA 
                      RESEARCH FOUNDATION

    Mr. Karlin. I am. My name is Richard Karlin. I am the 
deputy executive director of Awwa Research Foundation. I want 
to thank the Senators for inviting us to participate in this 
conference.
    By means of introduction, I would like to describe what we 
are so that people put into perspective what we are talking 
about. Awwa Research Foundation, commonly known as AwwaRF, is 
nonprofit international, member-supported organization that 
supports research to enable water utilities, public health 
officials, and other professionals to provide reasonably safe 
and cost effective water for citizens.
    We get our resources from 900 voluntary contributions from 
water utilities around the world, mostly in North America, 
Congress, Federal and State agencies, and from other research 
organizations. We have a long history of partnering. We have 
partnered with 30 organizations from eight countries, including 
several governments, and have been able to parlay $52 million 
we have received from Congress into a $360 million program 
since 1986.
    With that in mind, we do believe that there is a Federal 
role in conservation technology and knowledge management 
regarding water resources. We think that the Federal Government 
should consider public-private partnerships as a cost effective 
approach for developing long-term solutions to the challenges 
facing the drinking water community. Provision should be made 
in any future programs, in our belief, that would require or 
encourage public-private partnering as a portion of the 
program.
    We believe nonprofit research organizations have several 
distinct advantages over purely Federal programs. No. 1, we can 
leverage Federal funding. As we indicated before, we have about 
a seven to one record on our leveraging. We believe that we 
have access to a lower overhead management process. We can 
access a national and international network of water 
researchers in a variety of ways. Last, we have active 
involvement by the actual end user to get real research needs 
and therefore real research results that can be used as opposed 
to studied.
    In summary, public-private partnering we believe is a win-
win opportunity for the Federal Government, water utilities, 
and the public because it not only leverages funding, but it 
provides for coordination that can help eliminate some of the 
duplication that sometimes happens in research.
    Thank you very much.
    [The prepared statement of Mr. Karlin follows:]
  Prepared Statement of Richard J. Karlin, Deputy Executive Director, 
                        Awwa Research Foundation
             4. conservation and technological developments
                              introduction
    Established in 1966, the Awwa Research Foundation (AwwaRF) is a 
member-supported, international, nonprofit organization that sponsors 
research to enable water utilities, public health agencies, and other 
professionals to provide safe and affordable drinking water to 
consumers. Resources to fund research come from voluntary contributions 
from nearly 900 public water utilities, Congress, federal and 
international agencies, and other research organizations.
    Since 1983, Congress has provided support to the AwwaRF, helping it 
become the centralized coordinator of studies that focus on the 
challenges faced by U.S. water suppliers. This congressional support 
has come in the form of earmarks in the VA-HUD Independent Agencies 
appropriations; 18 separate earmarks have provided $52 million in seed 
funding. Research lays the groundwork for cost-effective solutions to 
such issues as new technologies to control emerging water contaminants, 
aging infrastructure, finding new sources of water, conservation 
strategies, and keeping water supplies secure. 1Many of these same 
issues are described in the conference topic ``Conservation and 
Technological Developments.''
    As the leading organization for drinking-water studies, AwwaRF has 
partnered with 30 organizations worldwide in it research activities. 
Partners include federal and state agencies, research organizations 
from eight countries, foreign environmental and health agencies, and 
international drinking water organizations. Through these partnerships, 
the Foundation is able to leverage resources, maximize research 
efforts, and develop and disseminate broad-based knowledge to the 
drinking water community. By leveraging the $52 million provided by 
Congress, AwwaRF has funded a total research effort of over $360 
million on topics such as arsenic removal, disinfection byproducts, 
Cryptosporidium control, security, infrastructure renewal and 
replacement, perchlorate, and new technologies to address emerging 
contaminants in drinking water.
    Research supported by AwwaRF and its partners has resulted in 
development and validation of new treatment technologies that are 
effective, reliable, and affordable for removing drinking water 
contaminants of concern.
    Examples of the positive impact of AwwaRF research are:

   AwwaRF's pioneering research showed that ultraviolet 
        treatment was effective against Cryptosporidium so that the EPA 
        could recommend it as a treatment when developing regulations 
        for surface and groundwater regulations.
   Since the 1990s, many water utilities are now installing 
        membrane treatment processes as a result of the AwwaRF's 
        research that demonstrated that membranes are cost-effective 
        and reliable in meeting increasingly stringent regulations for 
        both large and small water utilities.
   In anticipation of lowering of the arsenic action level and 
        the emergence of perchlorate as a drinking water contaminant, 
        AwwaRF leveraged federal funds to perform multiple pilot-and 
        full-scale studies that will enable water utilities to 
        confidently select appropriate treatment technologies.
   AwwaRF research has impacted other areas important to water 
        utilities and consumers including energy conservation 
        practices, water conservation practices, cost-effective 
        desalination processes, aquifer storage and recovery of treated 
        drinking water, and automated metering to promote conservation.
                                proposal
    This proposal responds to the Senate Energy & National Resources 
Committee's request for comment as to the role of federal government in 
addressing the challenge of meeting the nation's ever-increasing demand 
for water.
    AwwaRF is submitting a proposal on the topic ``Conservation and 
Technology Developments.'' This topic addresses the development of new 
water technologies and operational strategies that can be used by the 
drinking water community to meet future water challenges, a primary 
focus of AwwaRF. The other topics focus on national policy issues.
    The U.S. water supply community, particularly in the arid 
Southwestern states, is increasingly challenged by limited water 
supply. In many areas this challenge is being amplified by persistent 
drought and significant population growth. Water utilities are being 
compelled to manage resources more cooperatively on a regional level, 
pursue conservation measures and rate-based incentives, and leverage 
appropriate technology advancements to develop alternative water 
supplies (e.g., desalination and reuse). These measures place 
significant financial burden on water suppliers and, in turn, their 
customers, the U.S. public. The federal government can help to ease 
this burden through public education regarding the realities of limited 
water supply, the cost and value of water, the public's role in water 
resource management, and through continued sponsorship of research and 
development on key water supply issues and technologies.
    With three decades of experience in successfully leveraging public 
and private resources to fund research that benefits the public, the 
AwwaRF supports the critical role of the federal government in helping 
to identify drinking water challenges facing the nation's public water 
systems, and providing resources to address these challenges. The 
AwwaRF believes that the most effective approach to solving these 
challenges is through cooperative efforts between federal agencies and 
the private sector. This approach helps ensure that the world-body of 
knowledge and national expertise are brought together to develop and 
implement reach strategies.
    Therefore, AwwaRF proposes the Senate Energy & Natural Resources 
Committee consider public-private partnerships as a cost-effective 
approach for developing efficient long-term solutions to the many 
challenges facing the drinking water community. The following 
information provides the basis for this proposal.
                          partnership approach
    Provisions should be made in future legislation to encourage and/or 
require the participation of nonprofit organizations, such as the 
AwwaRF. Nonprofit research organizations offer distinct advantages over 
a purely federal program.
    First and most importantly, nonprofit organizations can and will 
provide matching funding for research of interest to the water 
community. This leverage can be significant--documented six to one 
funding leverage for AwwaRF earmarks--and can be in many forms 
including a cash match, management fee contribution, and contractor 
contributions.
    Secondly, funding from the federal government can take advantage of 
the extremely low overhead rate provided by most nonprofit 
organizations. For example, the AwwaRF has a general administrative 
cost factor of 11 percent, which means that the great majority of 
funding is spent on research.
    In general, nonprofit research programs have excellent research 
management systems and processes in place. The AwwaRF operates one of 
the most efficient and internationally competitive processes available 
in the global water community. This process ensures that research 
issues are examined from different perspectives and that the most 
competent researchers for a specific issue are utilized.
    Industry-sponsored research programs, like AwwaRF, are closely 
connected to the user of the technology--water suppliers themselves--
thus ensuring the rapid dissemination and implementation of research 
developments. AwwaRF research is peer-reviewed, and the results are 
used by researchers, federal agencies, and the drinking water 
community.
    Moreover, AwwaRF members, primarily public water utilities, help 
determine appropriate research topics necessary to address their actual 
needs. The identification of ``real-world'' needs is the essential 
ingredient in producing research results that can be applied by water 
suppliers.
    Lastly, existing research organizations have a large network of 
researchers, both national and international, who have worked 
extensively on water issues. This network allows immediate access to 
the best talent in the world without creating the need to create a new 
institution and/or import of expertise. Results can produce better and 
faster without the lag-time inherent in creating a separate 
organization. Additionally, the international research community has 
the opportunity to provide technical and funding leverage to issues of 
common concern. Since many of the issues transcend national boundaries, 
a nonprofit organization with extensive international reach provides a 
mechanism for cooperation on a global basis.
    In summary, public and private partnering is a ``win-win'' for the 
federal government, water suppliers, and the public through leveraging 
of limited resources to develop the best knowledge to produce high 
quality, affordable, and consistently safe drinking water.

    The Chairman. It sounds like you were speaking in the past 
tense as to the Federal Government's participation. Is that 
because they used to, or they still do?
    Mr. Karlin. They still do. I am sorry if that was not 
clear. We are still active in several partnerships with the 
Federal Government through U.S. EPA, through Department of 
Energy, and through the Bureau of Reclamation.
    The Chairman. Thank you very much.
    How do you say your last name, sir?
    Mr. Sabol. ``KOLL-in SAY-ble.''
    The Chairman. ``SAY-ble.''

  STATEMENT OF COLIN SABOL, CHIEF MARKETING OFFICER, GENERAL 
                            ELECTRIC

    Mr. Sabol. Thank you, Mr. Chairman and members of the 
committee, for inviting me here today. I appreciate it.
    GE Water and Process Technologies is a leading global 
provider of water treatment systems and services. Water is the 
lifeblood of industry and our products and services conserve a 
billion gallons of water annually for our industrial customers. 
Our treatment systems create safe, affordable water for 
millions of people living in water-scarce regions around the 
world. We create and commercialize innovative technologies 
through the GE Global Research Center, where we have 2,500 
technologists, and we spend $3 billion on research and 
development annually.
    To ensure an adequate, safe supply of affordable water, a 
strategy that incorporates conservation and the development of 
new water resources is critical. Membrane-based treatment 
solutions are the key to creating these new water sources, such 
as brackish water aquifers, sea water, and even waste water. 
Membrane technology is proven effective, but remains a costly 
alternative to surface water treatment. Broader application of 
these technologies to create meaningful new water sources 
requires investment to reduce the energy consumption associated 
with the operation of these membrane systems.
    GE and other companies have created great strides in 
reducing the cost of desalinating sea water using membranes, 
from over $20 per thousand gallons in 1980 to now less than $4 
per thousand gallons today. We believe that a broad research 
and development program focused on membrane advancements and 
energy efficiency could lead to a 30 percent reduction in 
operating cost and a 25 percent reduction in capital cost of 
these systems. This would encourage industry and potable water 
providers to reduce their reliance on surface water sources by 
fulfilling their demand with new water sources.
    Thank you.
    [The prepared statement of Mr. Sabol follows:]
      Prepared Statement of Colin Sabol, Chief Marketing Officer, 
                            General Electric
 development of enabling technologies for enhancing water availability 
                          in the united states
National Need
    Worldwide water needs have been increasing rapidly due to 
population and industrial growth. In the past, water was seen as mainly 
a Middle-East or African issue, however, with the rapid growth in North 
America this view point is changing. In contrast to many areas of the 
world, the United States has enjoyed abundant supply of freshwater at a 
relatively low cost to the end user. Over the next few decades, 
however, factors such as population growth, increased industrial usage, 
and pollution of existing supplies may place a strain on the nations 
capability to supply the necessary quantities of safe freshwater. A 
case in point is the recent and projected growth in southeastern and 
southwestern regions of the country where safe freshwater shortages 
occur routinely during drought years. These regions may also face daily 
shortages in the not so distant future. The potential inability to meet 
the growing needs for freshwater will adversely impact public health 
and various economic sectors of the United States. To ensure adequate 
supply of safe freshwater at a reasonable cost, a combination of water 
conservation, reuse and recycling, as well as development of new water 
resources is critical. Since conventional water resources are limited, 
the development of new water resources will most likely come from 
existing impaired resources such as brackish water and seawater, in 
addition to water generated during energy production (oil, natural gas 
or coal bed methane production). It is imperative the U.S. government 
recognize this growing need and act quickly to fund research and 
development of enabling technologies in areas such as industrial water 
reuse, generation of potable water from non-potable sources using 
desalination powered by renewable energy, and low-cost seawater 
desalination. In all of these areas it is clear that various membrane 
technologies can play a significant role in helping the U.S. to protect 
and increase one of its most valuable resources.
    Desalination holds the potential for addressing the shortage of 
safe freshwater in the United States by processing vast inland brackish 
water supplies and coastal seawater. While desalination has the 
potential to address existing and future water needs, it has been 
plagued by high cost, making it non-competitive with natural resources 
used today. Of the available desalination techniques, reverse osmosis 
(RO), multi-stage flash, multi-effect distillation, and vapor 
compression, RO consistently has the highest demonstrated energy 
efficiency, typically 3-8 kWh/m3. Even at this higher efficiency, 
energy cost still accounts for roughly 45% of the cost of water in RO 
based systems. For many projected water starved regions of the country 
and remote, inland areas where grid connectivity is limited, the retail 
cost of energy ranges from $0.08-$0.12/kWh. While the cost of energy 
generation has dropped, for remote areas, the cost associated with 
transmission and distribution makes up a large percentage of the retail 
energy cost. Hence, alternative solutions are required for the 
production of safe freshwater.
    Two prevailing concepts for reducing energy cost associated with RO 
are to 1) reduce overall operating costs ($ per 1000 gallons of water 
produced) of desalination systems and 2) couple RO with renewable 
energy sources, such as wind and photovoltaics. Research and 
development focused on high recovery, low energy desalination systems 
would include efforts on high efficiency energy recovery devices and 
pumps, vertically nested signature system designs, enhanced 
pretreatments (antiscalants and filters), and finally low energy, high 
rejection membranes. The table below shows the dramatic improvement 
made in the industry to increase the permeability of RO membranes, 
which results in a decrease in the required power consumption of 
desalination systems. Membrane permeability, denoted by A-value, 
correlates directly to the operating pressure required for 
desalination. Cellulose acetate membranes require around 28 bar of 
driving pressure to achieve common flux targets, the most common 
polyamide membranes operate at only 15bar. In the past ten years there 
has been significant development of RO membrane technology that has 
lead to the commercialization of membranes with about twice the 
permeability. GE has presently working to develop RO membranes with 
even greater permeability, with a target driving pressure around 4bar. 
Combining the improvements in RO membranes with energy recovery devices 
and pretreatments could lead to an overall reduction in operating cost 
per 1000 gallons of at 30%, and a reduction of capital and land cost of 
25%.

------------------------------------------------------------------------
                                   Permeability  (A-   Driving Pressure
            Membrane                    value)*             (bars)
------------------------------------------------------------------------
Cellulose Acetate...............  35................  28
1993 state-of-the-art polyamide   10................  22
 RO.
1997 state-of-the-art polyamide   17................  15
 RO.
2002 state-of-the-art polyamide   22................  11
 RO.
New GE polyamide RO.............  30-50.............  2.8-4.8
------------------------------------------------------------------------
* A-value has units of 10^5 cm/(sec*atm)
Table: Industry improvement in RO membrane permeability

    Desalination via a hybrid approach, where renewable energy sources 
(RES) such as wind energy or photovoltaic are coupled with RO 
desalination, is another attractive alternative to conventional RO 
systems. It is apparent from investigating the cost structure of a 
traditional desalination system that energy, capital, and operation and 
maintenance cost are major factors. The advantages of a combined RES-RO 
system would address these factors. Coupling the energy generation 
directly to RO systems through the use of renewable energy sources the 
energy cost associated with transmission and distribution is avoided. 
In addition the RES resources throughout the nation correlates to 
potential impaired water resources that can be used for the development 
of new, safe freshwater, as shown below. Specifically, the plain states 
have abundant saline aquifers, which if cultivated, can yield 
freshwater for the agricultural economy. In the plains states, both 
wind and photovoltaic sources are prevalent and can be used for 
desalination. In the southwest, specifically New Mexico, Texas, and 
Colorado, significant growth in population is projected. These areas 
not only face the challenge of meeting the ever-increasing water 
demand, but also the restrictions of water rights on the use of 
available freshwater sources. The development of novel membrane 
materials and modules, energy recovery devices, and operating 
strategies in a flexible, modular RO configuration coupled with 
renewable energy sources offers an excellent opportunity to provide 
cost-effective freshwater.
Potential Program Scope
    GE Global Research in conjunction with its Infrastructure and Wind 
Energy business units will collaborate in the development of flexible, 
modular RO configurations. The key objectives of the program are:

   Design and fabricate advanced membrane materials
   Establish optimal efficiency through fluid dynamic modeling 
        of module designs
   Develop system level energy integration to design flexible, 
        modular RO configurations

    This program allows for the complete system development of cost-
effective desalination strategies that can be commercialized to meet 
the growing freshwater needs in the U.S. GE Infrastructure has state of 
the art membrane research and fabrication capabilities in its Osmonics 
facility located in Minnetonka, MN. Osmonics employs approximately 700 
people in areas including membrane research and development, design of 
modules and filters, and complete membrane systems fabrication. They 
have recently completed the construction of a 50,000 sq. ft. building 
to house a new $7 million state of the art membrane coater for 
desalination.

    The Chairman. Thank you very much.
    Tom Graff.

  STATEMENT OF THOMAS J. GRAFF, CALIFORNIA REGIONAL DIRECTOR, 
                     ENVIRONMENTAL DEFENSE

    Mr. Graff. Thank you, Mr. Chairman. I am Tom Graff, 
California regional director of Environmental Defense. The 
proposal that we submitted to the committee was jointly 
drafted, really principally drafted, by my Texas-based 
colleague, Mary Kelly.
    One can look at Western water policy in the United States 
as a glass being in effect half empty or half full. There are 
real problems. That is the half empty part. There is very 
substantial population growth. The most substantial population 
growth overall in the United States is occurring in the driest 
States of our country, and absent focused conservation efforts 
that will mean added stresses on our water supplies.
    We already have very significant environmental stresses and 
inequities. Declines of salmon and other iconic species, 
endangered species losses, starved rivers and parks have been 
impacted by dams and reservoirs and water operations, and 
climate change appears to be a looming challenge that we are 
going to have to face as well.
    We of course have uneven water supplies. Droughts are a 
fact of life in the West. Just in the last dozen years, 
California, the Mountain States, New Mexico, and now the 
Northwest have faced significant droughts. I would say we have 
only slowly reforming institutions and laws to cope with all 
these very real problems.
    But we also have--there is also an optimistic view, a glass 
half full point of view. Our institutions and public processes 
have been adapting. To take a California perspective, I go back 
to the omnibus bill that Senators Bradley and Garn were so 
intimately involved with in 1992 that led to the Central Valley 
Project Improvement Act of 1992 that was such an innovation in 
California, that led in turn to the CALFED program that Senator 
Feinstein had a big hand in prompting and nurturing along.
    The Colorado River States have gotten together on surplus 
criteria. We will see if they can do the same on shortage 
criteria. That of course was prompted and passed in part by the 
California 4.4 plan, which I actually did not think could 
happen, and then a quantification settlement agreement among 
southern California entities, both urban and agricultural, 
which has been another innovation.
    Of course, none of these innovations are perfect. They are 
all works in progress, but they have prompted positive change.
    The other and last major point I would like to make is 
bringing economics to bear on water policy is a healthy thing. 
Having beneficiaries pay the costs of the water that is stored 
and delivered to them is useful to prompt innovation. It is 
useful to prompt technological innovation, which is of course 
another topic of this panel. Urban water pricing reform can do 
the same. It will prompt conservation. It will prompt 
innovation.
    Last, voluntary transfers, which have also been discussed 
at some length already today, are another way for a limited 
water supply to be widely shared and usefully deployed.
    I would just, last, end by saying that one should account 
in these voluntary transfers for social and community and 
worker and environmental impacts. I think there was a question 
earlier about where is that happening in a way that is 
constructive and innovative. I would have people look at the 
local entity that has been created by the San Diego-IID 
transfer in southern California. There is a group of us that 
got together, a group of United Farm Workers, California Rural 
Legal Assistance Foundation, Latino Issues Forum, Environmental 
Defense, and others, who have been advocating for community and 
worker impact assessment and relief in connection with those 
transfers.
    Remarkably, the farm workers and the farm bureau down there 
are actually working together now in the context of this local 
entity. So I think voluntary transfers can be made to work, but 
one needs to take account of all the different impacts.
    Thank you.
    The Chairman. Thank you very much.
    Let us see. David Wunsch, National Groundwater Association.

STATEMENT OF DAVID WUNSCH, STATE GEOLOGIST OF NEW HAMPSHIRE, ON 
         BEHALF OF THE NATIONAL GROUNDWATER ASSOCIATION

    Mr. Wunsch. Thank you, Mr. Chairman, members of the 
committee. My name is David Wunsch. I am the State geologist of 
New Hampshire, but I am representing the National Groundwater 
Association this afternoon. Our association has over 16,000 
members and our association is predicated on the safe use and 
wise development of our groundwater resources.
    We are a unique association that is comprised of three 
different divisions, one being contractors, one manufacturers, 
and the scientific and engineering division which I represent. 
So diversity is truly one of our strengths.
    Recently we polled our membership as well as other State 
regulatory agencies that deal with water and State geological 
surveys about the knowledge of groundwater and the state of the 
science throughout the country, and our answers of course 
conform to some of the questions you asked for this committee.
    Some of our results are both consistent and alarming. For 
example, only 2 of 28 States reported that they have sufficient 
knowledge of the potential yields of their aquifers. In a 
follow-up survey, 41 of 43 States indicated they expected 
localized groundwater shortages within the next 20 years.
    There was also reported a wide disparity in the quality of 
groundwater monitoring programs and networks from State to 
State. These issues are not isolated to the arid Southwest. My 
native State of New Hampshire is also suffering water 
shortages, even with our humid climate, along the seacoast 
region of the State.
    Our membership consistently stated that the most useful and 
efficient action for the Federal Government--that the Federal 
Government could take, would be to increase funding for 
cooperative groundwater programs and data collection. A good 
example of a successful Federal-State partnership is the 
National Cooperative Geologic Mapping Program, which I know 
members of the committee are acquainted with. In this program 
the States leverage Federal funds and direct research to areas 
of their States in most need and share the data with the 
Federal Government, which creates national data bases.
    This same model could be utilized for programs such as 
aquifer mapping, which it was reported by our group needs more 
work, as well as enhancing State groundwater monitoring 
networks and trying to create parity among the States. One 
strength of this program is that it is statutorily established 
to define the work, it produces timely deliverables, and it 
keeps overhead costs under control.
    Another Federal initiative that has been echoed by others 
today is that there is a need for a national clearinghouse of 
both groundwater information and data, including real-time 
data, such as groundwater levels, that could aid in drought 
management, which hits different parts of the country at 
different times.
    Other research priorities cited by our membership include 
research on water use and conservation, aquifer storage and 
recovery and artificial recharge, alternative treatment 
systems, including using brackish water supplies, development 
of models and standards that bring data together, and 
translating this information in a usable form for policymakers.
    Studies on emerging contaminants and technologies to 
address these pollutants are also needed by the regulatory 
community. Of course, education for the public nationwide so 
they will understand the urgent need for responsible water use.
    I do not have written comments to submit for the record, 
but I will offer that National Groundwater has position papers 
and the results of our survey available for the committee.
    Thank you.
    [The prepared statement of Mr. Wunsch follows:]
 Prepared Statement of David Wunsch, State Geologist of New Hampshire, 
           on Behalf of the National Groundwater Association
                question 5: knowledge of water resources
    Given the fundamental role that water plays in dictating the 
quality of life and economic opportunities in our communities, do we 
have the level of scientific understanding needed to assess accurately 
the sustainability of the surface and groundwater resources upon which 
we depend? Do we have an adequate scientific understanding to address 
potential water use conflicts? What initiatives should be undertaken to 
improve our scientific understanding in these areas?
    While states are gathering the necessary data to inform decision-
making, no state has met its data collection goals. In fact, only two 
of 28 states responding to an NGWA survey are very confident they know 
the potential yield from all of the state's major aquifers. We lack the 
fundamental data necessary to adequately understand the nation's ground 
water resources and make informed decisions regarding its use and 
management (NGWA 2003a; 2003b).
    The federal government is currently playing and must continue to 
play a vital role as well. Although actual ground water management 
decision making is most effective when taking into account site-
specific considerations, federal funding of cooperative water quality 
and quantity data collection and aquifer mapping leverages the 
expertise and resources of the federal government with partners around 
the country.
    NGWA members identified increased federal funding for cooperative 
ground water quantity and quality data collection and aquifer mapping 
as the most useful actions the federal government could take. 
Additionally, NGWA identified increased research related to ground 
water availability and the development of a national clearinghouse for 
ground water quality and quantity information as a top priority 
requiring federal government leadership. The most important types of 
water data to expand identified by NGWA members include: accurate water 
use, water quality for all aquifers, ground water level monitoring 
networks, on-line aquifer data and ground water recharge rates. Within 
each area, examples of possible specific activities are provided for 
consideration and further discussion.
                               data gaps

   Establish a collaborative framework among federal, state, 
        local and non-governmental entities to address data gaps on 
        ground water resources. Collecting ground water data is costly, 
        given its location and variability. While specific data gaps 
        and priorities may vary around the country, collaboration will 
        help maximize everyone's data-gathering efforts.
   Increase federal funding for cooperative ground water 
        quantity data collection. Ground water professionals identified 
        the need for additional federal funding for cooperative ground 
        water quantity data collection as the most useful federal 
        action. The data would be used to fill information gaps and 
        will assist states in developing and implementing overall 
        ground water management goals. The federal government should 
        develop a cooperative program with the states and other 
        interested parties so goals meet not only the national but also 
        state and local needs as well. First steps include assessing 
        available data and identifying the appropriate role of federal 
        agencies. A potential model to follow is the National 
        Cooperative Geologic Mapping Program, which includes a federal, 
        state and educational component.
   Provide federal support for aquifer mapping. Funding for 
        geologic mapping is provided to state geological surveys 
        through the USGS STATEMAP program, the state component of the 
        National Cooperative Geologic Mapping Program. The STATEMAP 
        program utilizes state staff knowledgeable in the local geology 
        that maintains the data upon which much of the mapping is 
        based. The states, not the federal government, also select the 
        areas of the state that are in most need of mapping data. The 
        program provides a comprehensive understanding of the geology 
        at/near land surface, in which ground water is commonly a major 
        consideration. Limitations of the program are that it requires 
        1:1 matching of state funds; the mapping is required to be 
        completed within one year; derivative maps such as fracture 
        trends are not considered for funding; and maps do not 
        necessarily focus on delineating subsurface aquifers.
   Another federal-state cooperative program involves the USGS 
        and the state surveys from Illinois, Indiana, Michigan and 
        Ohio. This partnership, known as the Central Great Lakes 
        Geologic Mapping Coalition, is conducting three-dimensional 
        geologic mapping mainly at 1:24,000--scale, specifically 
        targeting the delineation of glacial aquifers. Limited funding 
        has allowed only pilot study areas to be mapped during the last 
        three years. However, the states and USGS have contributed 
        considerable federal and state funds toward the effort. If 
        additional funds are not forthcoming, it will take about 170 
        years to complete this mapping in high-priority areas of the 
        four states. Although under funded, the Coalition serves as an 
        excellent example of how a federal-state partnership can 
        address the specific needs of a region that is united by common 
        ground water issues
   Establish a national clearinghouse to identify sources of 
        ground water data and links to those sources. These data should 
        be disseminated widely to the public--or at least to authorized 
        public and private water professionals--using several formats. 
        These formats should include maps and reports showing 
        interpreted data as well as Internet-based access to archived 
        data and real time data collection. These data should be 
        available from links on already existing National Spatial Data 
        Infrastructure (NSDI) sites to make the information easier to 
        find and assure that the proper documentation of these data is 
        maintained.
                        research priority areas
    The following research areas have been identified by our ground 
water professionals as top priorities in the area of developing long-
term ground water sustainability plans:

   Research on water reuse and conservation
   Research on alternative treatment systems
   Research on development of brackish ground water supplies
   Development of models and data standards that can bring 
        together scientific data and inform local policy decision 
        makers.
   Research on aquifer storage and recovery or artificial 
        recharge.
   Research on emerging contaminants and the development of 
        remediation technologies that can be used to address new and 
        current pollutants.
         education and collaboration among federal, state, and 
                         local decision makers
    It is important for collaborative efforts among federal, state, 
local, and non-governmental entities and water professionals to educate 
decision makers, professionals, and the general public on topics 
including:

   What ground water data are being collected and what data are 
        needed.
   How to utilize ground water data to make sound decisions.
   What current research projects and technologies are being 
        developed, and how to incorporate these developments into 
        ground water management decision making.
   What long-term effects does water supply infrastructure 
        design have on the sustainability of the natural ground water 
        system, and how do we design systems that take those impacts 
        into consideration.
   What constitutes effective ground water conservation 
        measures and how to incorporate these initiatives on a state 
        and local level.

    The Chairman. Thank you very much.
    The city of Albuquerque. We are glad to have you, Jean 
Witherspoon.

  STATEMENT OF JEAN WITHERSPOON, ON BEHALF OF THE NEW MEXICO 
                  WATER CONSERVATION ALLIANCE

    Ms. Witherspoon. Thank you, Mr. Chairman and Senators. 
Thank you for this opportunity to speak. I am speaking on 
behalf of the New Mexico Water Conservation Alliance, although 
I am a city of Albuquerque employee.
    I am here to urge that conservation continue to be seen as 
a significant component of the strategy, the long-term water 
resource strategies in this country. Conservation is critical 
to the future of our being able to meet demand with a 
diminishing supply. Conservation has proven to be successful in 
many cities in the West, with reduction rates in per capita 
usage of 30 percent or more. This provides additional water to 
meet growth demands, to meet environmental demands, to meet 
endangered species demands, and that is water that you could 
not have bought anywhere else. So it is an amazing source of 
additional water supply.
    Another beauty of conservation is that it can be most 
effective in addressing new development, which many perceive as 
a lot of the problem. So conservation is getting directly at 
that source of additional demand.
    The Federal Government has been key to conservation being 
successful in this country, initially with the bold step to 
adopt the new plumbing fixture standards in 1992. There are a 
number of additional ways that the Federal Government supports 
conservation, including the Bureau of Reclamation Water 
Conservation Field Services Program, which gives grants to both 
small and large projects that are related to conservation. FEMA 
is involved in water conservation. Many of the Federal 
facilities go through performance contracting that includes 
water.
    The Energy Star program, which the Federal Government 
supports, has been incredibly helpful in getting energy 
efficient and water efficient appliances on the market and in 
people's homes.
    I would urge you in closing to continue this involvement, 
to make water conservation--to integrate it into even more 
programs where conservation is a requirement of water and waste 
water project funding, to include it in FNMA provisions for 
mortgages, and the many ways in which water efficiency can be 
integrated into existing programs and legislation.
    Thank you again for the opportunity.
    [The prepared statement of Ms. Witherspoon follows:]
  Prepared Statement of Jean Witherspoon, on Behalf of the New Mexico 
                      Water Conservation Alliance
     conservation and technological developments--executive summary
    Water conservation is critical to the future of this country. As 
population grows over time, demand increases, and supplies remain 
essentially the same, conservation must play a significant role in 
helping water providers meet demand. Water conservation is the easiest, 
quickest, and least expensive way to extend supplies dramatically.
    Urban areas have led the way in demonstrating that conservation can 
achieve dramatic results. In the West, major urban areas like Seattle, 
Washington, El Paso, Texas, Denver, Colorado, and Albuquerque, New 
Mexico have achieved reduction rates of 30% or more--extending adequate 
supply many decades into the future. These programs and others have 
proven that conservation can be successful, can significantly reduce 
usage, and will benefit both suppliers and users with little or no 
change in their quality of life.
    Technological advances in plumbing fixtures, appliances, irrigation 
equipment, and landscaping techniques have led the way in this effort. 
Replacing older equipment and appliances can immediately reduce user's 
water use dramatically. Focusing on management of water use, which 
requires education and understanding, is equally important. A xeriscape 
can use as much or more water than turf if it is not managed properly. 
Low flow plumbing appliances, if installed properly, can save one-third 
of a customer's usage almost ``overnight.'' But these fixtures and 
appliances must be properly maintained to continue to operate 
effectively.
    Many improvements in water delivery and use have not received the 
attention needed. Water systems typically have water losses or non-
revenue producing water of 7% to 40% of production. Smaller systems, in 
particular, may not have the resources to install even basic tools like 
meters in order to determine how much water is being lost between the 
source and the customer. Water pressure, though specified in the 
nationally-adopted Uniform Plumbing Code, is often ignored. Meters, 
which are essential to understanding usage, are often not replaced when 
malfunctioning or broken.
    The federal government, through the Bureau of Reclamation, the 
Environmental Protection Agency, and other agencies, has supported 
conservation through grants and promotion of advanced technology. These 
programs have suffered more recently, however, as some emphasis has 
shifted back to large supply and ``hard'' solutions. Competition for 
limited funds will become even more intense as the nation is forced to 
address its aging water and sewer infrastructure and the need for 
replacement. Federal support of water conservation, including ``soft'' 
components like education, must continue in order to maintain the 
success that has been achieved to-date and to more fully realize the 
benefits yet to be achieved through conservation.
              conservation and technological developments
Introduction
    The nature of water conservation in the United States has changed 
dramatically over the last decade. In the 1970's and '80's, 
conservation was used largely as a tool to carry utilities over periods 
of drought or infrastructure inadequacies. Conservation was utilized as 
a short term solution to a short term problem. In the last decade, it 
has become increasingly clear that conservation must be a component of 
many, if not most, long term water resource strategies for communities 
and states. In the West and in some areas east of the Mississippi, 
supply cannot meet the existing and/or growing demand if usage levels 
remain at the high per capita rates common in the '70's and '80's. 
Without reduction of usage and further development of new technology 
that increases supply at reasonable cost, many areas of this country 
cannot meet future demand. And as most areas become more conscious of 
this situation, the willingness to share and/or allow limited 
commitment of currently unused supply decreases.
    This presentation will focus on urban or community water use and 
conservation. While urban or domestic use is a small percentage of 
overall use in most western states, urban areas have led the way in 
demonstrating that conservation can achieve dramatic results. Many 
major urban areas, including Seattle, El Paso, Denver, and Albuquerque 
have achieved 30% or better reductions in per capita use. This has 
occurred concurrent with natural drought that has dramatically 
decreased precipitation for many of the last ten years. Areas 
historically dependent on ground water are now preparing to use surface 
water while, overall, use of ground water has increased as 
precipitation becomes less dependable. And, as flows in rivers 
decrease, demands for water for environmental purposes, e.g., 
endangered species and riparian habitat, increase.
    Lower precipitation levels are expected to become the norm in 
portions of the Southwest. Rivers such as the Colorado and Rio Grande, 
which were appropriated in the early, historically very wet twentieth 
century may very well not supply as much water as has already been 
appropriated, further increasing supply shortfalls. Population growth, 
while it has slowed in many portions of the Sun Belt, is still 
occurring at 3% to 10%, a trend which is not likely to change, 
particularly given the expected higher growth rates of Hispanic 
Americans (through both natural increase and immigration). Water 
conservation is vital to the future economic and environmental health 
of the country.
Technology and the Federal Role
    Technological advances affect water conservation in many ways. At 
the household level, the development of well-functioning, low water use 
toilets, showerheads, and other plumbing fixtures has provided the 
easiest, quickest, and least expensive ``fix'' to reduce water usage. 
For less than $200, any household can reduce its indoor per capita 
water use by one-third by simply replacing higher use fixtures. With 
minimal maintenance, these inexpensive fixtures will continue to keep 
usage down indefinitely. However, people must be educated to watch for 
and repair leaks, replace flappers with correct models, and manage 
their water use habits to reduce even further. Plumbing models which 
will further reduce the waste taken for granted with every flush are 
under development. Research is not adequate, however, to understand the 
limits of conventional sewage collection systems, i.e., whether sewer 
flows become inadequate if toilet flush volumes go too low.
    The federal government, through adoption of plumbing fixture 
standards in 1992, led the country into the needed, new conservation-
oriented mentality. Passing these laws at the federal level avoided 
much of the confusion and backlash that would have occurred if each 
state had to adopt its own laws. This same leadership is needed 
relative to new products which circumvent the intent of these laws, 
such as gang showers (multiple low flow shower heads used 
simultaneously in one stall) and continuous bleed-off evaporative 
coolers. Egregious water waste should not be acceptable just because a 
homeowner can afford expensive fixtures and high water bills.
    The federally-supported Energy Star program has been very 
successful in promoting the development, sale, and use of high water 
efficiency appliances. While the primary focus has been on energy, most 
low energy use appliances also use less water. At some point in the 
future, manufacture of high water use appliances should be prohibited, 
just as federal law now prohibits manufacture of high water use 
plumbing fixtures. Effort is now underway to develop a program for 
water use labeling requirements. This effort will help educate and 
inform the public in making wise water use purchasing decisions, in 
ways not possible now. Federally-supported financing programs, such as 
Fannie Mae mortgages, could also be utilized to increase the market 
penetration of high efficiency appliances and hot water on demand 
systems in new construction.
    In the dry West, landscaping can consume 30% to 50% of total urban 
use. This usage creates the high seasonal peak which drives and then 
underutilizes water system capacity. And, unlike indoor usage which can 
be treated and reused, this outdoor water use generally evaporates. Led 
by the landscaping community in Denver, xeriscaping (low water use 
landscaping) techniques and plants have been developed and 
individualized for the climate conditions in different parts of the 
West. The endless possibilities of this low use alternative to turf are 
being explored and promoted. And irrigation technology has changed 
dramatically as newer landscapes require less water and customers 
demand higher efficiency systems. Sprinkler system efficiency, 
particularly for large turf areas that are professionally managed and 
maintained, has gone from 50% to 70%+. Drip irrigation hardware 
continues to become both more sophisticated and easier for do-it-
yourselfers to understand.
    Additional research, promotion, and education is necessary before 
the potential reductions in landscaping use are approached even in the 
urban setting, however. The Bureau of Reclamation's Conservation Field 
Services Program, among other federal programs, has helped to fund 
local research and education projects. More recently, in some regions, 
these funds have been substantially reduced and restricted to exclude 
education efforts. At the customer level, research and development can 
provide products and information, but proper management and maintenance 
of the products depends on education and public information. Excluding 
this important component is diluting the effectiveness of more 
efficient products and plants. Uneducated homeowners are also more 
likely to overuse pesticides and herbicides, often leading to 
additional water use as well as contamination of storm and ground 
water.
    For the remaining non-residential urban water uses, research and 
development into lower use equipment, education to ensure efficient 
water management and maintenance, and financial assistance for major 
improvements is even more important. Commercial, industrial, and 
institutional users often ignore water costs and efficiencies while 
focusing on high cost, energy usage. Longer-term paybacks are often 
less acceptable, even if the changes will benefit the company, and 
saving water is often not within the accepted corporate mandate. 
Hospitals, for instance, often run high use wash equipment twenty-four 
hours a day even if that flow is not needed much of the day. Water 
bills are often paid by financial people who have no direct connection 
to either management or operational staff. And management may not 
communicate a commitment to efficient water use to staff, diffusing the 
ability of the organization to minimize usage.
    The federal government, through FEMA, educates facility managers 
about water conservation, as well as working more directly on some 
federal facilities to reduce usage. Performance contracting for federal 
facilities to reduce usage of energy is common, but is often not 
feasible for water because water costs are so low. And funds to 
implement water conservation improvements are often not available for 
federal facilities, similar to non-federal facilities. Since 9/11, 
security issues and the financial demands to meet these concerns have 
reduced the federal resources focused on water conservation in many 
areas. While the need to counteract terrorism is unquestionable, the 
need to ensure that federal facilities and the communities in which 
they are located will be able to meet future water demand is also 
critical. Excessive turf landscaping, leaking and inadequate 
infrastructure, and no metering of individual water uses are examples 
of inefficient use of water under federal control which need attention 
in many areas. In Albuquerque, development of innovative approaches to 
individual building water reuse was severely reduced or lost as a 
result of the focus on security issues.
    At the water provider or system level, many potential methods to 
reduce conservation have been inadequately addressed. Unaccounted-for-
water (UAW) or non-revenue water ranges from 7% to 50%, tending to the 
higher end for small utilities, which typically have volunteer boards, 
minimal staff, and very low water rates. While these losses cannot be 
eliminated, UAW rates of 7% to 12% are entirely feasible. The new 
standards for calculating these losses, while maybe improving 
understanding in the long term, have confused the issue and made data 
from different systems incomparable. Federal assistance in funding 
efforts to audit UAW, reduce loss from leaks, replace malfunctioning 
meters, and meter unmetered uses would help address this area.
    Federal water and wastewater funding should be available for these 
improvements, as well as rehab and replacement of older or worn lines. 
The need for rehab and replacement will become greater as the majority 
of the nation's water and sewer systems reach forty plus years; but 
other system needs, including UAW, cannot be ignored. Even self-
supporting UAW efforts, like testing, maintenance, and replacement of 
large meters, are often cut first when budgets get tight. And more low 
volume uses, like drip irrigation and continuous bleed-off evaporative 
coolers, may not be registered by meters, increasing the non-revenue 
water. Pressure issues have been addressed by a few utilities, but too 
many systems are not meeting the national Uniform Plumbing Code 
requirement for 80 psi. Pressure reduction valves are often not 
installed where needed, even though much of the conservation-related 
equipment, particularly drip irrigation, needs to operate on lower 
pressure.
    The Environmental Protection Agency assists utilities through Clean 
Water Act and Safe Drinking Water Act funds. Provision of these funds 
should be linked to development, adoption, and effective implementation 
of a water conservation plan, including measures aimed at customers, 
and education. The amount charged for water, i.e., rates, is a crucial 
component of these plans since low and/or decreasing block rates 
falsify the value of water, provide inadequate resources for utility 
improvements and conservation incentives, and may lead to utility 
failure.
    The EPA itself could also launch a more aggressive education 
campaign related to conservation, both by promoting conservation issues 
and solutions itself and through making materials available to 
communities and utilities. This federal role was more evident in the 
'80's when the need for ``permanent'' conservation was just beginning 
to be recognized. EPA grants should also be available for state 
conservation efforts, where issues and target population are much more 
diverse, the logical link between revenue and program doesn't exist, 
and the conservation effort may not be ``owned'' and/or financed by one 
agency.
    ``Larger'' ways to extend supply such as reuse and desalination are 
necessary, also. While reuse is not a solution in some cases, since it 
may reduce river flows, reusing gray or treated water for irrigation 
and other purposes help preserve potable water for drinking water 
purposes. In an urban setting, large scale reuse is most practical and 
safe while, in a rural setting, individual reuse is most practical. The 
Bureau of Reclamation has helped fund and will hopefully continue to 
help fund many large scale reuse efforts. The Bureau is also helping to 
fund some desalination projects. In inland areas, these may involve 
recovery of brine water which was formerly considered nonpotable. In 
the coastal areas, if costs can be brought down over time, desalination 
may provide a source for drinking water supply that would allow inland 
states to use more of the country's surface water supply. Additional 
research and expanding technology to bring the costs of treating ocean 
water down are needed.
Conclusion
    Water conservation can have a dramatic impact. In Seattle, 
Washington, which most people are surprised to find even needs 
conservation, water use has been cut dramatically over the last twenty-
five years. Over that period, the motivation for conserving has varied 
from avoiding the cost of new facilities to ensuring that water remains 
in the rivers for salmon, and the reductions have been significant. The 
city expects that, by finding additional ways to reduce usage, they 
will be able to keep production level for another ten to twenty years. 
To-date, Seattle has saved over 267 billion gallons of water or about 
820,500 acre feet.
    El Paso, Texas has reduced usage from 230 in 1978 to 140 gallons 
per capita per day in 2004. Water utility officials estimate they've 
saved $300 million in infrastructure costs through this reduction in 
usage.
    Albuquerque, New Mexico's sole source of water supply to-date has 
been ground water. Usage has been reduced from 250 to 177 gallons per 
capita per day. The program, which was adopted only ten years ago, has 
already saved over 54 billion gallons of water (167,250 acre feet) the 
equivalent of a year and a half's production. Despite a population 
growth rate around 3%, production is at mid-'80's levels; per capita 
usage is at an amazing late-'50's level (see Chart*). Albuquerque 
recently adopted a 40% goal which should continue to reduce production 
through 2010. Albuquerque also intends to begin using surface water by 
2007, providing a ``window'' of significantly reduced ground water 
pumping to allow the aquifer water levels to partially recharge.
---------------------------------------------------------------------------
    * The chart has been retained in committee files.
---------------------------------------------------------------------------
    Denver, Colorado initiated a conservation program around twenty 
years ago. The effort, which focused primarily on voluntary and 
education measures, was forced to change dramatically in 2001 due to 
the extreme drought. With the addition of mandatory measures, higher 
cost measures like rebates, and drought rates, usage dropped 
dramatically (see Chart).
    Each of these cities and their conservation efforts is unique. 
Annual rainfall ranges from 9 inches in Albuquerque to 37 inches in 
Seattle. Initial usage rates ranged from 253 gallons per capita per day 
in Denver to 154 in Seattle. One city uses exclusively ground water to-
date while three use a varying mix of ground and surface supply 
sources. What unites these cities is a community-supported commitment 
to reduce usage significantly through conservation programs supported 
almost entirely through utility revenues. Logically, as water becomes 
more limited, rates rise, though three of these cities' commodity rates 
do not exceed $3.50 per 1,000 gallons, a bargain compared to other 
potable liquids and compared to most other urban areas. While further 
reductions and price increases may be required, these cities have been 
able to greatly extend the water supply currently available to them for 
decades. (Please note--results from 2004 may be unusually low due to 
the wet fall and winter.)
    The federal government has played a part in the success of each of 
these conservation programs, through adoption of the federal plumbing 
standards, Energy Star promotions, Bureau of Reclamation grants, 
federal facility use reductions, and other programs. Support for 
communities and utilities that do not have the level of resources 
available to these cities of half of million or more population is 
needed even more. Conservation is, in fact, the easiest, quickest, and 
least expensive way to extend water supply. Reduction of per capita 
usage must be a component of this country's water resource strategy. 
Federal assistance, whether through funding or other methods, is 
essential to helping make this happen.

    The Chairman. Thank you very much.
    Texas Water Development Board, William Mullican.

STATEMENT OF WILLIAM F. MULLICAN, III, TEXAS WATER DEVELOPMENT 
                             BOARD

    Mr. Mullican. Thank you, Mr. Chairman, members of the 
committee. On behalf of the State of Texas, we want to thank 
you for your energy and interest in this very critical issue to 
the State of Texas. On behalf of the State, we will commit to 
working with you and your committee as you work for solutions 
to this very, very important issue.
    Sir Arthur Doyle, wearing his Sherlock Holmes hat, once 
said: ``It is a capital mistake to theorize before one has 
data.'' While I suspect that Sir Doyle was reflecting on trying 
to solve a crime mystery when he developed that concept, I 
think that there is a direct corollary between this and our 
issues with water. That is, for us to try to resolve our water 
issues without having a good foundation of good data and then 
the good tools to analyze that data, it would be a capital 
mistake for all of us.
    In the State of Texas, in 1997 we were suffering through 
severe drought and as a result of that the State put in place a 
bottom-up, public participation-based, regional water planning 
process that now is being utilized pretty much coast to coast 
as people work to address their water supply needs. When we 
first put that regional water planning process in place, the 
first thing that all of the public participants, the local 
entities, regional entities, that were participating in this 
process recognized was that we did not have good enough data on 
which to be making those policy decisions that were going to be 
impacting the State of Texas for the next 50 years.
    As a result of that, we have worked on aggressively 
developing both groundwater availability models and surface 
water availability models for all the major and minor aquifers 
and the river basins in the State of Texas. However, there 
continues to remain a need, a critical need, for additional 
data and tools to help us understand our water resources.
    Three recommendations I bring to you today that relate to 
data, water data, and issues that we would like you to take 
into consideration. First and foremost, at this time we have 
got to stop the erosion of Federal funding for the stream 
gauging program in the Nation. This is both going to create 
short-term problems and long-term problems. Without this 
information there is a variety of areas, both flooding and 
drought, development of projects, water supply projects, the 
whole water gamut is negatively impacted if we are not out 
there collecting good long-term record, scientifically based 
water data.
    The second recommendation--and Mr. Chairman, I think this 
would go to one of your questions. That is, a recommendation 
related to not only the identification and the assignment of a 
clearinghouse for water resources research, but also an entity 
that would be charged with roadmapping or developing the course 
of action for how that research should be conducted. Nothing is 
more frustrating, as one who is responsible for conducting a 
significant amount of water research in the State of Texas, as 
the realization of exactly how much duplication of effort is 
ongoing with respect to water research.
    So if we could put in place a process where not only is all 
the research that is developed readily available to the water 
community, but also to assign at least one entity to be charged 
with the recognition of all the Federal agencies that are being 
involved in water-related research and State agencies and other 
organizations, so that that process could be laid out and be 
done in the most efficient and effective manner. I think that 
would be a good thing.
    I think this relates also to, for example, the USGS has 
some wonderful groundwater scientists and surface water 
engineers that they can bring their strengths to. But also, the 
Department of Energy has some wonderful scientists that have 
been involved and will continue to be involved. If we could 
through a clearinghouse process--perhaps we could put in place 
where we would be able to take advantage of all those wonderful 
assets as we work together to try to ensure the future water 
supply needs of the Nation.
    Finally, in my written remarks that were submitted there 
are a number of specific topics of research that we would like 
to focus on, including we just do not have the science or the 
tools, for example, to understand surfacewater-groundwater 
interaction at a level that is demanded today by the 
policymakers, at least in the State of Texas and in other 
areas, like for example the quantification of recharge.
    Those are areas that there just needs to be a tremendous 
amount of additional effort put into.
    Thank you, sir.
    [The prepared statement of Mr. Mullican follows:]
      Prepared Statement of William F. Mullican, III, Texas Water 
                           Development Board
                question 5. knowledge of water resources

``It is a capital mistake to theorize before one has data.''
            Sir Arthur Conan Doyle

    Our knowledge of water resources is the foundation upon which we 
build our solutions to water needs. If this foundation is faulty and 
inadequate, our solutions are doomed to collapse, costing taxpayers 
billions of dollars and, in times of drought, adversely affecting 
millions of lives. Unfortunately, our knowledge of our water resources, 
our foundation, is not as strong as it needs to be, especially as our 
water demands grow relative to a fixed resource. Federal support for 
collecting and interpreting basic water resource information has been 
cut and continues to shrink. This is unfortunate because the data we 
need to make important policy and financial decisions concerning our 
water resources is shrinking at a time when problems with meeting our 
water demands are growing.
    During the drought of the 1990s, Texas instituted regional water 
planning, a process infused with local guidance of water planning in 
sixteen regions across the state. This process required a significantly 
more refined understanding of water resources in Texas, including the 
development of water availability models (WAMs) for water rights 
permitting of the major rivers and numerical groundwater availability 
models (GAMs) of the major and minor aquifers. As water becomes scarcer 
and scarcer and as people look closer and closer at water issues, the 
need grows for more water data and more thorough analysis of that water 
data.
 do we have the level of scientific understanding needed to accurately 
 assess the sustainability of groundwater and surface water resources?
    We do not have the scientific understanding to assess the 
sustainability of our water resources at the level currently required 
by our policymakers and citizens. For groundwater, we need a better 
understanding of the outcrop processes that affect recharge, the 
primary parameter for estimating sustainability. These processes 
include evapotranspiration and surface water and groundwater 
interaction. Many of our aquifers have no field-measured estimates of 
recharge. Our aquifers in the western part of the state are often 
lacking basic hydrologic information related to hydraulic properties, 
flow paths, and quality.
 do we have an adequate scientific understanding to address potential 
                          water use conflicts?
    We need more scientific studies to address potential interstate and 
international water conflicts. Streamgaging is less than adequate (less 
than 70 percent of needed gages are reporting data), and groundwater 
information is less than adequate (many aquifers with little 
information). Many water issues requiring more data are interstate and 
international in scope. Texas shares surface and groundwater resources 
with four states and Mexico. We have had surface water conflicts with 
New Mexico and Mexico (Rio Grande, Rio Concho, and Pecos River) and 
concerns about water conflicts with Oklahoma (potential export of 
surface and groundwater from reservations in Oklahoma to Texas and a 
potential reservoir in the Panhandle that would have affected 
Oklahoma). Other states face border issues as well. As demand for water 
grows, new issues and conflicts will appear. Good science is needed to 
understand the facts behind the issues so that fair and defensible 
solutions can be reached. More federal support in transboundary studies 
would help create a common database for resolving transboundary water 
issues.
what federal initiatives should be undertaken to improve our scientific 
                     understanding in these areas?
    Federal agencies have a long history of working with Texas to lay a 
strong foundation for water policy and financial decisions. After Texas 
joined the United States in 1845, the U.S. military dug wells on the 
High Plains in search of artesian water in one of the first 
hydrogeologic studies in North America. The U.S. Geological Survey 
(USGS) arrived in the 1880s to begin seminal work to characterize the 
surface and groundwater resources of the central part of the state. 
Over the years, the U.S. Geological Survey worked closely with various 
state and local agencies to characterize water resources in the rest of 
the state and implement and maintain water monitoring networks.
    Many local water-related activities are inherently federal in 
nature. Historical streamflow data are needed to accurately estimate 
the water supply yield and spillway requirements of a proposed 
reservoir; this data may derive from neighboring states. Two of Texas' 
largest reservoirs are located on state boundaries; two other major 
reservoirs are located on the border with Mexico.
Streamflow monitoring
    In 1998, at the request of Congress, the USGS prepared a report 
entitled ``A New Evaluation of the USGS Streamgaging Network'' stating 
that the network's ability to meet long-standing federal goals was 
being compromised because of the loss of streamgages, particularly 
those with long periods of record, and the declining ability of the 
USGS to continue monitoring flow at high priority locations when local 
funding is discontinued.
    In 1999, the USGS went to Congress to create the National 
Streamflow Information Program (NSIP) program. The vision of the 
program was to provide 100 percent funding for a base streamgage 
network and complement the continuous monitoring data with intense data 
collection during floods and droughts. There are 4,424 identified NSIP 
sites across the nation, and less than 70 percent are currently active 
and reporting data. This lack of basic data compromises our ability to 
conduct water resources research and assessments.
Assistance in meeting federal requirements
    The permitting and construction of a dam and impoundment of a 
reservoir or any project that crosses a water course requires 
compliance with the Clean Water Act (U.S. Army Corps of Engineers) and 
the Endangered Species Act (U.S. Fish and Wildlife). The supporting 
studies require the compilation and analysis of large amounts of data, 
the burden of which is generally placed on the local sponsor. More 
federal support in collecting the data and guiding the studies would 
benefit both the local sponsor and the federal interests, by ensuring 
that minimum standards of quality assurance on the data are met and 
that the ensuing studies are standardized and widely accepted.
Surface-water/groundwater interaction
    The interaction between surface water and groundwater is important 
for understanding both resources. Groundwater discharge to rivers and 
streams amount to substantial amounts of water, especially in the drier 
parts of the state. For groundwater, understanding how much groundwater 
flows into rivers (what flows out of the aquifer is equal to recharge) 
and out of rivers into the aquifer (direct recharge) helps better 
understand how to manage groundwater resources and the effects of 
pumping on water resources. More federal support in characterizing 
these interactions on a basin-aquifer scale would be useful for 
developing better models and protecting natural resources.
Climate change
    There remain significant uncertainties regarding the magnitude and 
impact of future climate change. What is known is that global 
temperatures are on the rise, as are sea levels. Most climate models 
also predict hotter summers and more evaporation for the United States 
in years to come; many predict increased hurricane activity and 
frequency of extreme weather events. Whatever our future climate looks 
like, it doesn't seem sensible to address the issue of climate change 
at the local level. Some kind of coordinated federal effort is needed 
to fully investigate the likely impacts of climate change and the 
recommend measures that need to be taken in order to minimize these 
impacts.
Research clearinghouse
    Many different federal agencies conduct work associated with water. 
There should be one user-friendly Webpage that users can visit to find 
reports and data from all of the federal agencies related to water. The 
information could be site specific (for example, to a particular state) 
or of wider applications across a large area. This research 
clearinghouse would ensure that money invested by the federal 
government in research projects is available and being used by 
stakeholders.
                                summary
    We do not have the scientific understanding to assess the 
sustainability of our water resources at the level currently required 
by our policymakers and citizens. We need more scientific studies to 
address potential interstate and international water conflicts. The 
federal government can assist in these issues by:

   expanding streamflow monitoring;
   assisting states in meeting Clean Water Act and Endangered 
        Species Act requirements;
   researching the interaction between surface water and 
        groundwater;
   assessing the effects of climate change on the nation's 
        water resources; and
   developing a research clearinghouse.

    Together, local, state, and federal governments can build a strong 
foundation of basic data and scientific solutions to for our water 
needs.

    The Chairman. Thank you very much.
    Our administration witnesses, we want to thank all of you 
for coming. Did you hear anything that prompts you to say 
something to us, which you just heard, any of you? Mr. Baldwin, 
Mr. Hirsh, Ms. Bach?
    [No response.]
    The Chairman. Do you have anything further?
    Senator Bingaman. Mr. Chairman, if I could just ask a 
question. The Texas Water Development Board, I know you folks 
have endorsed the bill that we reported out of the Senate for a 
transboundary aquifer assessment along the U.S.-Mexico border. 
I believe that your board has gone on record in favor of that 
legislation.
    In the last Congress I also had a bill that tried to get 
the Geological Survey authority and additional resources to 
pursue underground aquifer monitoring in the Ogallala. Is that 
something that you would also support?
    Mr. Mullican. The majority of my professional career was 
spent as a groundwater hydrologist, including a significant 
amount spent on the Ogallala Aquifer. There are many things 
that remain to be done on the Ogallala Aquifer and one of the 
things that we would like to work with you on on that 
particular piece of legislation is perhaps expanding what that 
legislation would allow, to go beyond the more basic aspects of 
that, because the Ogallala has had a lot of the basic 
hydrologic information collected, but looking at, for example, 
how can we enhance recharge to the Ogallala Aquifer, that is 
going to be--if we are talking about sustainability of a 
resource, we have got to look at mechanisms that would allow us 
to enhance recharge to the Ogallala.
    When we worked with your staff on that, that was one of the 
major elements that we really wanted to emphasize with you, was 
that that would be something that we would very strongly 
support.
    Senator Bingaman. We will try to get back with you on that 
and see if we can get your support. Thank you.
    The Chairman. Anything further?
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    I guess I looked at some of the comments from several of 
you and thought you should have been at the first part of the 
panel, because so much of what we have talked about today goes 
back to: Where is the water? Hop much water do we have? Once 
again, an incredible resource in this country, and we do not 
have a real accurate assessment of it. We have not mapped it, 
we have not surveyed it.
    I am sitting in a situation in my State, I am trying to 
define what the watershed capability is for a large project. We 
do not have any stream monitoring systems. We have got 12 up 
there now and we need another 100 to actually make a dent in 
what we are doing up there. But we have not mapped our 
resource. Whether it is oil or whether it is gas or whatever 
the resource is, until we know what we have and where we have 
it, it is tough to say, well, we have got to conserve this much 
and we have got to be doing this much over there.
    So I would just urge at the agency level, at the Department 
level: Let us identify what it is that we have. I am pleased to 
hear that within the National Groundwater Association you are 
working to push the monitoring that we need to do, to push the 
assessment.
    We will work with you, but it seems like we have got the 
cart before the horse here on a lot of this. Until we know what 
we are dealing with, it is tough to make good solid policy 
decisions.
    The Chairman. I want to thank all of you very much. I think 
the panel gave us some very good things to think about.
    On GE, I just wanted to ask. You described this enormous 
research capacity and then you suggested that the Federal 
Government ought to do the research. Was I hearing you right or 
were you saying on desalinization improvement that you have 
reached the point where you needed some other science applied?
    Mr. Sabol. You heard me right. I think, while there is a 
great deal of money that GE puts toward research and 
development, the pace of change and the pace of what we need to 
develop can always be accelerated with additional funding. We 
think that putting additional funding toward desalinization 
membrane technologies can only get us ready for when we really 
know what our problem is and we will be prepared to deal with 
it.
    The Chairman. Could I just ask you? Maybe you are not the 
right one, but I am rather upbeat about the possibility that 
desalinization will become economic in all respects, both the 
closed circle, get rid of the end product, and cost. Do your 
experts share the same thing?
    Mr. Sabol. I am not sure that desalinization will ever be 
as cost effective as dealing with surface water, so treating a 
lake or a river, it is hard to imagine it will ever be that 
cost effective. But brackish water treatment can certainly 
become close to what it costs to treat surface water, and I 
think desalinization can be reduced to a point where it becomes 
a much more attractive alternative.
    Senator Bingaman. I should have said ``brackish.'' I think 
that we have ignored the inland brackish water in the United 
States. There is a lot of it in our State. That is what we are 
looking at, not the ocean water. And brackish is easier to 
clean up, some kinds of brackish water.
    Mr. Sabol. Absolutely.
    The Chairman. Thank you all very much. We stand adjourned. 
Thank you very much.
    [Whereupon, at 5 o'clock p.m., the symposium was 
adjourned.]

                                    

      
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