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[Senate Hearing 108-64]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 108-64
FREMONT-MADISON CONVEYANCE; TUALATIN RIVER BASIN; IRVINE BASIN SURFACE; 
       HAWAII WATER RESOURCES; AND AMEND RECLAMATION PROJECTS ACT

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   on
                                     

                           S. 520                                S. 960

                           S. 625                                S. 993

                           S. 649

                                     
                               __________

                              MAY 13, 2003

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

                                 ______

88-129              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

                       Alex Flint, Staff Director
                     James P. Beirne, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                    LISA MURKOWSKI, Alaska, Chairman
            BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
JON KYL, Arizona                     BOB GRAHAM, Florida
LARRY E. CRAIG, Idaho                RON WYDEN, Oregon
JAMES M. TALENT, Missouri            TIM JOHNSON, South Dakota
JIM BUNNING, Kentucky                DIANNE FEINSTEIN, California
CRAIG THOMAS, Wyoming                CHARLES E. SCHUMER, New York
                                     MARIA CANTWELL, Washington

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

                         Shelly Randel, Counsel
                Patty Beneke, Democratic Senior Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Akaka, Hon. Daniel K., U.S. Senator from Hawaii..................    11
Brady, Brian, President, Board of Directors, Irvine Ranch Water 
  District, accompanied by Paul Jones, General Manager, Irvine 
  Ranch Water District...........................................    25
Carlson, Peter, Coordinator, Small Reclamation Program Act 
  Coalition......................................................    28
Ching, Chauncey, Professor, University of Hawaii.................    20
Craig, Hon. Larry E., U.S. Senator from Idaho....................     4
Crapo, Hon. Mike, U.S. Senator from Idaho........................     3
Feinstein, Hon. Dianne, U.S. Senator from California.............     5
Findaro, Joe, Washington Counsel, Fremont-Madison Irrigation 
  District.......................................................    17
Keys, John W., III, Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................     6
Murkowski, Hon. Lisa, U.S. Senator from Alaska...................     1
Raybould, Chairman of the Board of Directors, Fremont-Madison 
  Irrigation District............................................    19
Smith, Hon. Gordon, U.S. Senator from Oregon.....................    12
Wyden, Hon. Ron, U.S. Senator from Oregon........................     2

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    37

                              Appendix II

Additional material submitted for the record.....................    41

 
FREMONT-MADISON CONVEYANCE; TUALATIN RIVER BASIN; IRVINE BASIN SURFACE; 
       HAWAII WATER RESOURCES; AND AMEND RECLAMATION PROJECTS ACT

                              ----------                              

                         TUESDAY, MAY 13, 2003

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:32 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski presiding.

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

    Senator Murkowski. I am calling to order this meeting of 
the Subcommittee on Water and Power of the Energy Committee. I 
would like to welcome everyone this afternoon to the 
subcommittee. I appreciate your interest in the hearing and, 
given the critical challenges facing our country, the work 
performed by the subcommittee is critical. So I appreciate the 
attendance this afternoon.
    There are five bills before the subcommittee today designed 
to address the challenges facing our country. The first is S. 
520, the Fremont-Madison Conveyance Act, introduced by Senators 
Crapo and Craig; S. 625, the Tualatin River Water Basin Supply 
Enhancement Act of 2003, introduced by Senators Smith and 
Wyden; S. 649, the Irvine Basin Surface and Groundwater 
Improvement Act of 2003, introduced by Senator Feinstein; S. 
960, the Water Resources Act of 2003, introduced by Senator 
Akaka; and S. 993, the Small Reclamation Water Resources 
Project Act of 2003, introduced by Senator Stevens.
    I would like to extend a special welcome to you, Senator 
Crapo. I understand you will be making a statement in support 
of your legislation, S. 520. I would also like to welcome 
Commissioner John Keys of the Bureau of Reclamation, who will 
be testifying on behalf of the administration on all five of 
these measures.
    Additionally, I am pleased to have the following witnesses 
on our second panel. There will be: Joe Findaro, the D.C. 
counsel for the Fremont-Madison Irrigation District, who will 
be testifying in support of S. 520; Brian Brady, president of 
the Irvine Ranch Water District Board of Directors, who will be 
testifying in support of S. 649, the Irvine Basin Surface and 
Groundwater Improvement Act of 2003; Chauncey Ching, professor 
at the University of Hawaii, who will be testifying in support 
of S. 960; and Peter Carlson, the coordinator of the Small 
Reclamation Loan Program Coalition, who will be testifying in 
support of S. 993. So I appreciate all those of you who have 
taken the time to join us this afternoon.
    Rather than outlining the details of the five bills that we 
have before us, I will allow those introductions to be made by 
the Senators introducing the bills. It will I think shorten our 
time here in the subcommittee and will keep us from repeating 
ourselves.
    I would like to ask those committee members who can join me 
here this afternoon if they would like to make comments as 
opening statements, and we will go in the order that you have 
joined the committee. So with that, Senator Wyden, would you 
like to make some opening remarks?

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. Thank you, Madam Chair, and thank you for 
the cooperation that you and your staff have shown Senator 
Smith and I. He and I have an extremely important bill for 
Washington County, a fast-growing part of our State, and 
suffice it to say water agencies in nine cities there have 
joined to create a strong local partnership to find new ways to 
meet the area's growing water supply needs.
    Suffice it to say all of us as westerners--Alaska, Idaho, 
and California--have seen again and again the kind of divisive 
conflicts that we have had over water, that have occurred not 
just in our States but throughout the West. What Senator Smith 
and I offer as the model that is being used in Washington 
County is going to help the Federal Government join a 
partnership to avoid these kind of divisive conflicts and 
identify new sources of supply to meet our citizens' growing 
demand for water.
    The county's population has doubled since 1990. More people 
means more demand for water, and to a great extent what is 
going on in this particular county is really a microcosm of the 
West. Senator Craig and I have talked about this often. This is 
an area that has a very significant agricultural component, as 
Idaho does. It has a very significant high technology sector 
which is fast-growing, and suffice it to say all of these 
demands come together and there simply is more of a demand than 
there has been supply.
    So we are pleased to have a chance to work with the 
committee on an initiative like this that will help us look at 
a broad range of alternatives, from increasing existing storage 
capacity to considering conservation measures as a new way to 
meet our water needs.
    Madam Chair, the county chairman of the area, Tom Brian, 
wanted a statement submitted for the record. Senator Smith and 
I would like to have consent to have the chairman's, Chairman 
Brian's, statement put into the record. If that could be made 
possible, we would both appreciate it.
    Senator Murkowski. We will do that.
    Senator Wyden. Madam Chair, I thank you for your 
assistance.
    Senator Murkowski. Thank you.
    Senators Craig and Feinstein, I am reminded that Senator 
Crapo will only be with us for a few minutes. If you would not 
mind, if he could go ahead and make a comment and then we could 
go back to your opening statements.
    Senator Feinstein. Fine.
    Senator Murkowski. Senator Crapo.

          STATEMENT OF HON. MIKE CRAPO, U.S. SENATOR 
                           FROM IDAHO

    Senator Crapo. Thank you very much, Madam Chair. I have to 
go preside over the floor in just a few moments and I 
appreciate you accommodating my schedule.
    I want to thank you and all the members of the committee 
for this opportunity to testify on S. 520, the Fremont-Madison 
Conveyance Act. Senator Craig, my colleague from Idaho, is my 
joint cosponsor on this measure and I commend his able and 
strong partnership in working on this bill, and I again thank 
you for rescheduling this hearing on this issue as the Senate 
works on critical national energy policy legislation.
    I would also like to express my appreciation to Mr. Joe 
Findaro, who will be testifying on a later panel on behalf of 
the Fremont-Madison Irrigation District. Joe will be providing 
a fuller account of the history of FMID's operations in the 
development of the conveyance proposal, so I will keep my 
remarks brief.
    I also want to express my appreciation to the Bureau of 
Reclamation, Commissioner John Keys, an honorary Idahoan and 
one who has been instrumental in promoting title transfer 
legislation such as this. He and his staff have spent many 
diligent hours making this legislation a reality.
    As a part of recommendations to reinvent government 
programs under the last administration, we had identified title 
transfer to irrigation facilities for which construction costs 
have already been paid out as a good and cost-effective 
government policy. Congress has already undertaken several of 
these proposals, including two in Idaho, and I commend this 
committee for its leadership in advancing them.
    S. 520 would require the Secretary of the Interior to 
convey title to portions of the district currently under 
ownership of the Bureau, namely the Cross-Cut Conversion Dam, 
the Cross-Cut Canal, and the Teton Exchange Wells, to FMID. The 
district has managed these facilities since their creation in 
1938 and by all accounts has done an excellent job of 
maintaining and operating these facilities. FMID has also a 
strong record of working within the community to manage the 
facilities in a manner that reflects and complements the unique 
ecological surroundings in which they reside.
    Over the past few years, representatives of the district 
have partnered aggressively with the local community, the 
Bureau, irrigators, the Shoshone-Bannock Tribe, and 
environmentalists to secure an ecologically sensitive and cost-
effective transfer. I commend all the parties for their work on 
such a delicate and complex process.
    I believe this legislation represents the fruits of that 
successful partnership, and I look forward to working with all 
the parties as this legislation moves through the legislative 
process.
    Just this past October, this committee passed this Fremont-
Madison Irrigation Conveyance Act and in November it was 
approved by the full Senate. This compromise bill reflects the 
hard work of FMID, local environmental communities and the 
tribal representatives to address their varying interests. It 
is my hope that this committee and Congress will complete the 
work that was initiated in the previous session. To that end, I 
look forward to working with all the parties as this 
legislation proceeds through the legislative process.
    Madam Chair, this measure is important to the people of 
eastern Idaho and reflects the spirit pioneered by this 
committee in partnership with the Bureau to advance previous 
title transfer proposals. I commend your leadership in calling 
this hearing and offer my services as the committee works to 
enact the Fremont-Madison Conveyance Act.
    Senator Murkowski. Thank you. We appreciate you taking the 
time this afternoon to join us.
    With that, Senator Craig.

        STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Well, thank you very much, Chairman 
Murkowski.
    Senator Crapo has in large part expressed our desires and 
will with S. 520. Both he and I have worked collectively on it. 
I want to thank Joe Findaro and others who have been very much 
involved in working out the differences for this transfer of 
title.
    Last July, the committee had a hearing on a previous 
version of the Fremont-Madison Act. The bill we are discussing 
today is similar to that. While it retains most of that 
language from the last session, there have been some 
compromises that were necessary and important to work out 
amongst the stakeholders involved here, and I think we have 
worked those out.
    The Shoshone-Bannock Tribe's concern has I believe been 
met. The Henry's Fork Foundation and Trout Unlimited have 
withdrawn their opposition due to drought language included in 
the bill. So the language, while it is not new, does 
incorporate the changes we think are appropriate and necessary 
after the bill died in the 107th last year.
    We are back and we appreciate the opportunity for this 
subcommittee to work its will and the full committee to 
consider it as we move it out to the floor for the final 
consideration of the Senate. These kinds of title transfers in 
reclamation projects once paid out were a commitment that we 
believe is an appropriate way to handle the law, because the 
law said just that. There has been some resistance over time, 
but as we have worked out our differences we think that these 
projects now should reside in the private sector, responsible 
for the public resource obviously that they manage along with 
the entitled resource of water rights, and we think this bill 
effectively demonstrates that and reflects that kind of a 
commitment.
    We thank you very much.
    Senator Murkowski. Thank you.
    Senator Feinstein.

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

    Senator Feinstein. Thank you very much, Madam Chairman, for 
holding the hearing, and I want to thank Chairman Domenici for 
calendaring a bill that I have introduced. This bill has been 
introduced by Representative Cox in the House of 
Representatives and I am introducing it on behalf of the Irvine 
Water District, and I believe Mr. Brady is here and will be 
testifying about the bill.
    The reason I am introducing it as a separate bill from the 
CALFED bill, which you all know about, is because of my 
understanding that the Irvine Ranch has done the early studies 
and has the match, the 75 percent of the money, and is ready to 
go ahead with it. Because of the water quality concerns and 
groundwater concerns, it is my belief that I want to push 
things to get water improvements in the State.
    This bill authorizes up to $19 million in funds to cover 25 
percent of the costs of constructing the water projects in 
southern California. The first project is called the Natural 
Treatment System and it will build a network of wetlands to 
filter surface water and urban runoff in the San Diego Creek 
Watershed and the Upper Newport Bay. It is based on the 
performance of a single constructed wetland in the area and we 
expect the Natural Treatment System to filter out 126,000 
pounds of nitrogen and 21,000 pounds of phosphorus from the 
watershed each year and reduce levels of harmful bacteria by as 
much as 26 percent.
    The second project, the Irvine Desalter, will clean 
brackish groundwater and provide drinking water for between 
20,000 and 40,000 people. This water district covers 266,000 
people by night, half a million people by day. By allowing the 
Irvine Basin to access another water source, the desalter will 
reduce dependence on imported water and take considerable 
pressure off of other water resources, including the Colorado 
River. The Irvine Company has already donated the land 
necessary to build the desalter.
    The final project will construct a regional brine line to 
dispose of brine directly into the ocean. Like much of 
California, the Irvine Ranch Water District is a leader in 
water reclamation and recycling efforts. However, buildup of 
too much salt in the system can hamper these reclamation 
efforts. The brine line will allow the district to continue its 
innovative efforts to ensure that water is used more than once 
while increasing use of brackish water resources. The brine 
line will allow the water district to maximize conservation and 
recycling efforts while utilizing a new water source.
    Now, these are title 16 projects. The Government's share 
cannot exceed more than 25 percent. As I mentioned, the Irvine 
Basin Water District has the other funding. They are ready to 
move forward with a relatively modest investment. We can make a 
real difference in water quality and water supply.
    There is a problem and I would ask Mr. Brady to address 
this up front. It is my understanding that Commissioner Keys 
may oppose this project and my understanding is that he may 
oppose it, I gather, because they have not done all of the 
studies. But the President's fiscal year 2004 budget proposes 
only $13 million for this program. That is barely a third of 
the $36 million funding in the year 2002. So I am hopeful that 
the Commissioner will be willing to support title 16 projects 
like those in S. 649 because they are small, they are discrete, 
they make sense, they are cost effective, and they help.
    Thank you very much.
    Senator Murkowski. Thank you.
    At this time let us go to panel one, the Honorable John 
Keys, the Commissioner for the Bureau of Reclamation, 
Department of the Interior. Welcome to the subcommittee.

         STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, 
       BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Keys. Madam Chairman, it is my pleasure to be here 
today, my first time to testify before you, and it is certainly 
a pleasure to be here.
    Is there a certain order that you would like for me to take 
off in, or just whichever comes first?
    Senator Murkowski. Well, we have been kind of addressing 
them just in the order that we have in our packets. So if you 
need to go out of that order, you just let us know which one 
you are referring to.
    Mr. Keys. Very good.
    Senator Murkowski. But starting with S. 520, the Fremont-
Madison Conveyance.
    Mr. Keys. Thank you very much.
    Madam Chairman, S. 520, to transfer title of the 
facilities, lands, and permits on the Fremont-Madison 
Irrigation District, is a good bill. Facilities under 
consideration are the Cross-Cut Diversion Dam and Canal, the 
Teton Exchange Wells, and the Idaho Department of Water 
Resources permit that goes along with those wells. The 
facilities under consideration for transfer are used 
exclusively for irrigation and they have been operated and 
maintained by the district ever since they have been in 
existence.
    While the Cross-Cut Diversion Dam and Canal are paid out by 
the district, the legislation provides for the payment for the 
Teton Exchange Wells. They are currently evaluated at about 
$277,000 based on the outstanding balance to be repaid by the 
district. We have been working very closely with the district 
over the past years in this title transfer effort. We worked 
very closely with the Henry's Fork Foundation, with the tribe, 
and other sponsors there.
    When we testified last year on this bill, there were a few 
small concerns with the legislation. Since that time we have 
worked closely with the district, with the Henry's Fork 
Foundation, and other people there and those issues have 
subsequently been addressed, and the administration supports S. 
520 as written.
    Before I go ahead, I would certainly like to compliment the 
district board chairman Jeff Raybould and their executive 
director Dale Swenson on the yeomen's work that they have done 
on this title transfer program, and certainly Senators Craig 
and Crapo have been there all the way with them.
    S. 625 would authorize the Secretary of the Interior to 
complete a study of the feasibility of several methods to meet 
future water supplies for agriculture, municipal, and 
industrial uses in the Tualatin River Basin in northwestern 
Oregon. Reclamation has been working closely with the regional 
wastewater entity, Clean Water Services, the several 
municipalities in the basin, the Tualatin Valley Irrigation 
District, and other interests there to develop a plan that 
would increase available storage for local use and preserve the 
important environmental benefits so valued by the local 
residents.
    The merits of the proposed feasibility study are sound and 
reasonable, and therefore the administration supports S. 625 as 
it is written.
    Madam Chairman, S. 960 would amend two acts of Reclamation, 
the Reclamation Wastewater and Groundwater Study and Facilities 
Act, commonly called title 16, and the Hawaii Water Resources 
Act of 2000. Under the Hawaii Resources Act of 2000, we are 
currently working with the Hawaii Department of Agriculture to 
study rehabilitation of five irrigation systems on the islands. 
We are currently working on Oahu, the Hanaku Ditch on Maui, the 
Kokei Ditch on Kawaii, Kekaha Ditch on Kawaii, and the East 
Kawaii Irrigation System, and those studies are due to be 
completed during this year.
    Because S. 960 was introduced as recently as April 30, we 
have had little time to thoroughly analyze the merits of the 
legislation. Therefore, until we have had the opportunity to go 
through it more carefully, we cannot support S. 960 at this 
time. I might add that the tremendous backlog of current 
projects in title 16 that have already been authorized, because 
of that we would currently oppose the addition of any new 
projects, as based on recent funding levels, it could take 
Reclamation more than 15 years to complete those projects 
already authorized, of which there are about 27 of them.
    Madam Chairman, the next one that I would talk about is S. 
649, which would amend the Reclamation Wastewater and 
Groundwater Study Facilities Act, which is title 16, to 
authorize the Secretary to participate in projects within the 
San Diego Creek Watershed in California, and other purposes, 
commonly called the Irvine Basin Surface and Groundwater 
Improvement Act of 2003.
    Reclamation has had preliminary discussions with the Irvine 
Ranch Water District about proposed surface water treatment, 
groundwater treatment, and brine disposal components of the 
project. However, S. 649 authorizes the design and construction 
of the project before Reclamation or the project sponsors have 
completed the feasibility study that meets the legal 
requirements of title 16. Reclamation prefers that feasibility 
studies be completed first to determine whether these 
particular projects warrant Federal construction authorization. 
Therefore, we believe the legislation is premature and the 
Department cannot support S. 649.
    I would add here again that the Department also opposes 
enactment of the legislation because of those currently 
authorized 27 projects that are ahead of this one and the 
backlog that would take us about 15 years to get past and get 
into it.
    The last bill that I would talk about is S. 993, which 
would amend the Small Reclamation Projects Act to authorize 
$1.3 billion for three new programs: a revised and expanded 
grant and loan program within the Bureau of Reclamation, a 
small reclamation water resources management partnership 
program, and a 10-year loan guarantee program. The Department 
recognizes the realities of an aging Federal and non-Federal 
water infrastructure that will need rehabilitation over the 
next several decades and understands the many other future 
needs involving ecosystem restoration efforts, new water 
supplies for increasing demands, conservation efforts, and 
improvements in the quality of our rivers and streams.
    It was with this recognition that led Secretary Norton to 
recently release the Department's vision for meeting water 
needs in the future, ``Water 2025: Preventing Crisis and 
Conflict in the West.'' That document is intended to focus 
attention on the reality that explosive population growth in 
the western urban areas, the emerging need for water for 
environmental and recreational uses, and the national 
importance of crop production on western farms and ranches is 
driving major conflicts between those competing uses of water.
    The thrust of with Water 2025 is to focus existing 
resources on areas where scarce Federal dollars can provide the 
greatest benefits. While some of the programs identified in S. 
993 are consistent with the intent of Water 2025, the overall 
programs authorized by this bill would strain Reclamation's 
financial and administrative resources and, if enacted, would 
make it even more difficult to meet our current obligations. 
Therefore, the Department cannot support S. 993.
    Madam Chairman, that concludes my oral remarks. I would 
certainly stand to answer any questions that you might have on 
our statements on any one of those five bills.
    [The prepared statements of Mr. Keys on S. 520, S. 625, S. 
649, S. 960, and S. 993 follow:]

        Prepared Statements of John W. Keys, III, Commissioner, 
           Bureau of Reclamation, Department of the Interior

                                 S. 520

    My name is John Keys. I am Commissioner of the Bureau of 
Reclamation. I am pleased to provide the Administration's views on S. 
520, the Fremont-Madison Conveyance Act, which directs the Secretary of 
the Interior to transfer title of certain Federal owned facilities, 
lands and permits to the Fremont-Madison Irrigation District 
(District).
    The facilities under consideration for transfer in S. 520 the Cross 
Cut Diversion Dam and Canal, the Teton Exchange Wells and the Idaho 
Department of Water Resources permit number 22-7022 B are associated 
with the Upper Snake River Division, Minidoka Project and the Lower 
Teton Division, Teton Basin Project, respectively, and are located near 
Rexburg in eastern Idaho. The facilities under consideration for 
transfer are used exclusively for irrigation purposes and have always 
been operated and maintained by the District. While the Cross Cut 
Diversion Dam and Canal are paid-out by the District, the legislation 
provides for a payment for the Teton Exchange Wells, which are 
currently valued at $277,961, based upon the outstanding balance to be 
repaid by the District.
    Mr. Chairman, over the last few years, we have been working very 
closely with the District and numerous other local organizations 
including the Henry's Fork Foundation, a local conservation and 
sportsmen's organization, to work through the issues on the title 
transfer for the features, lands and water rights associated with this 
project. We have made great progress in narrowing the scope of the 
transfer to meet the District's needs, protect the interests of the 
other stakeholders, and ensure that the transfer does not negatively 
impact downstream contractors of the integrated Snake River system. I 
testified before this Subcommittee last year that we had a few minor 
concerns with the legislation. Those issues were subsequently addressed 
and the Administration supports S. 520 as written.
    In conclusion, Mr. Chairman, I have had the opportunity to work 
with the District over the last few years to reach the point where we 
are today. I would like to take this opportunity to compliment District 
Board Chairman Jeff Raybould and their Executive Director, Dale 
Swenson, for their diligence and commitment in working with us and the 
other interested entities of eastern Idaho on the issues surrounding 
this transfer. I would also like to thank Senator Crapo and Senator 
Craig and their staffs for their cooperation.

                                 S. 625

    Thank you for the opportunity to testify on S. 625, the Tualatin 
River Basin Water Supply Enhancement Act of 2003. The legislation 
authorizes the Secretary of the Interior, in cooperation with affected 
local entities, to complete a study of the feasibility of various 
methods to meet future water supplies for agriculture, and for 
municipal and industrial uses.
    Reclamation has been working closely with the regional wastewater 
entity Clean Water Services, several municipalities in Washington 
County, Oregon, the Tualatin Valley Water District, and others, to 
develop a plan that will increase available storage for local use and 
preserve the important environmental benefits so valued by the local 
residents. A tremendous amount of local effort has been expended to 
develop useful information upon which a feasibility study by 
Reclamation may be based. The study partners have also invested 
considerable effort to begin the planning process at the local level, 
with the assistance of Reclamation. A full range of potential 
approaches to meeting future water supply needs will be considered, 
including market-based incentives and other economic incentives. As 
such, the merits of the proposed feasibility study are sound and 
reasonable and therefore the Administration can support S.625. However, 
it is important to note that this project is not included in the 
Administration's Fiscal Year 2004 budget request.

                                 S. 649

    I am pleased to appear before this Subcommittee to provide the 
Department's views on S. 649.
    S. 649 would amend the Reclamation Wastewater and Groundwater Study 
and Facilities Act (43 U.S.C. 390h et seq.), commonly called Title XVI, 
to authorize the Secretary of Interior to participate in projects 
within the San Diego Creek Watershed in California and for other 
purposes.
    Reclamation has had some preliminary discussions with the Irvine 
Ranch Water District about proposed surface water treatment, 
groundwater treatment, and brine disposal components of their project. 
However, S. 649 authorizes the design and construction of the project 
before Reclamation or the project sponsors have completed a feasibility 
study that meets the legal requirements of title XVI. Reclamation 
prefers that feasibility studies be completed first to determine 
whether these particular projects warrant Federal construction 
authorization. Therefore, we believe the legislation is premature and 
the Department cannot support S. 649.
    The Department also opposes enactment of this legislation because 
authorizing new projects is likely to place an additional burden on 
Reclamation's already tight budget. With the tremendous backlog of 
existing Title XVI projects, we oppose the addition of new projects at 
this time. Based on recent funding levels, it could take Reclamation 
more than 15 years to complete funding of the 27 currently authorized 
projects. For these reasons, Madame Chairwoman, the Department cannot 
support S. 649.
    For the record, Madame, Chairwoman, in 1992, Congress adopted, and 
the President signed, the Reclamation Projects Authorization and 
Adjustment Act (Public Law 192-575). Title XVI of this Act, the 
Wastewater and Groundwater Study and Facilities Act, authorized the 
construction of five water reclamation and reuse projects. The 
Secretary was also authorized to undertake a program to identify other 
water recycling opportunities throughout the 17 western United States, 
and to conduct appraisal level and feasibility level studies to 
determine if those opportunities are worthy of implementation. The 
Bureau of Reclamation has been administering a grant program to fund 
these Title XVI projects since FY 1994.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act was enacted into law. This Act amended Title XVI and 
authorized the Secretary to participate in the planning, design, and 
construction of 18 additional projects, including two desalination 
research and development projects. Since 1996, Title XVI has been 
amended several other times and now there are 27 projects authorized 
for construction in eight states, and Reclamation has been granted 
authority to conduct planning studies in the State of Hawaii. Thank you 
for the opportunity to comment on S. 649.

                                 S. 960

    I am pleased to appear before this Subcommittee to provide the 
Department's views on S. 960.
    S. 960 would amend two Acts the Reclamation Wastewater and 
Groundwater Study and Facilities Act (43 U.S.C. 390h et seq.), commonly 
called Title XVI, and the Hawaii Water Resources Act of 2000 (Public 
Law 106-566, Title I).
    Because S. 960 was introduced as recently as April 30, 2003, we 
have had little time to thoroughly analyze the merits of the 
legislation. Therefore, until we have had that opportunity, we cannot 
support S. 960. We do note that Section 2 of the proposed legislation 
adds three additional projects to Title XVI. Due to the tremendous 
backlog of current projects already authorized under this program, we 
currently oppose the addition of any new projects. And, based on recent 
funding levels, it could take Reclamation more than 15 years to 
complete funding of the 27 currently authorized projects.
    Thank you for the opportunity to comment on S. 960.

                                 S. 993

    I am pleased to appear before this Subcommittee to provide the 
Department's views on S. 993.
    S. 993 would amend the Small Reclamation Projects Act (SRPA) to 
authorize $1.3 billion for three new programs: a revised and expanded 
grant and loan program within the Bureau of Reclamation; a Small 
Reclamation Water Resources Management Partnership Program; and a 10-
year loan guarantee program.
    The Department recognizes the realities of an aging federal and 
nonfederal water infrastructure that will need rehabilitation during 
the next several decades, and understands the many other future needs 
involving ecosystem restoration efforts, new water supplies for 
increasing demands, conservation efforts, and improvements in the 
quality of our rivers and streams. It was this recognition that led 
Secretary Norton to recently release the Department's vision for 
meeting water needs in the future. ``Water 2025: Preventing Crises and 
Conflict in the West,'' is intended to focus attention on the reality 
that explosive population growth in western urban areas, the emerging 
need for water for environmental and recreational uses, and the 
national importance of crop production on western farms and ranches is 
driving major conflicts between these competing uses of water. The 
thrust of Water 2025 is to focus existing resources on areas where 
scarce federal dollars can provide the greatest benefits. However, 
while some of the programs identified in S. 993 are consistent with the 
intent of Water 2025, the overall programs authorized by this bill 
would strain Reclamation's financial and administrative resources, and, 
if enacted would make it even more difficult to meet our many current 
obligations. Therefore, the Department cannot support S. 993.
    I note that the provisions in S. 993 are nearly identical to the 
provisions contained in S. 1882 introduced in the 107th Congress, which 
I testified on last July before this Subcommittee. The concerns I 
raised at that time remain true today.
    First, it would be a very costly program, requiring new and 
significant funding resources to implement. And, as previously 
mentioned, it also would compete with other Departmental priorities for 
funding.
    Second, the bill would greatly expand Reclamation's authority and 
jurisdiction to include not only projects in the 17 Western states and 
Hawaii, but also those located in the Commonwealth of Puerto Rico, 
Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, 
the Virgin Islands, and the Territory of the Pacific Islands. Given the 
number of other demands on Reclamation's budget and the number of 
already authorized but unfunded projects, we have concerns about adding 
any additional projects that would place additional burdens on to 
Reclamation's current workload.
    Lastly, establishment of a Loan Guarantee Program would require 
much lead time, and also require additional staffing. This program 
would need to be developed in a manner that meets the principles and 
standards set forth in OMB Circular No. A-129, Policies for Federal 
Credit Programs and Non-Tax Receivables, and the requirements of the 
Federal Financial Management Improvement Act of 1996. It also would put 
Reclamation in the role of a commercial loan officer for developers of 
projects, a role Interior's Inspector General criticized in a 1991 
audit report.
    The Department supports efforts to provide technical assistance to 
non-Federal water user entities in constructing and rehabilitating 
their water resource projects and in carrying out restoration efforts. 
However, the combined financial and administrative burdens imposed by 
this bill are such that we cannot support this approach. The Department 
welcomes the opportunity to work with Subcommittee members to find 
workable solutions to address Reclamation's aging water infrastructure 
and restoration needs.
    Thank you again for this opportunity to comment on S. 993. I would 
be happy to try and answer any questions you may have.

    Senator Murkowski. Thank you, Commissioner Keys.
    Senator Akaka and Senator Smith, I had invited the 
committee members to give a brief opening statement if they 
would like. We just heard the testimony from Mr. Keys on the 
five bills before us, but if you would like to take a moment to 
make your comments that would be certainly appropriate.
    Senator Akaka.

        STATEMENT OF HON. DANIEL K. AKAKA, U.S. SENATOR 
                          FROM HAWAII

    Senator Akaka. Thank you very much, Madam Chairman. I thank 
you for holding this hearing today to consider these water 
resource bills, including S. 960, legislation of great 
importance for my State of Hawaii.
    Madam Chairman, I would like to say a few words about my 
bill. This bill, which is supported by the Governor of the 
State of Hawaii, authorizes three projects and, Mr. Keys, you 
mentioned them, which are critical to water planning and 
delivery systems in the State of Hawaii. S. 960 would authorize 
a seawater desalination project on Oahu and two wastewater 
reclamation projects on Maui and the island of Hawaii. These 
projects are important to the State of Hawaii.
    The Board of Water Supply predicts that, even with improved 
conservation methods, the island of Oahu, with a population of 
over a million residents, will run out of potable water by 
2018. Other islands face similar scenarios in terms of limited 
water supplies. S. 960 will help to reduce demand on potable 
water sources.
    Madam Chairman, I would like to submit the testimony of 
Governor Lingle of Hawaii and the Board of Water Supply for the 
hearing record.
    Senator Murkowski. Yes, you may.
    Senator Akaka. Madam Chairman, it is with great pleasure 
that I also welcome Dr. Chauncey Ching, who will be providing 
testimony on behalf of the city and county of Honolulu, the 
county of Maui, and the county of Hawaii during the second 
panel. Dr. Ching is a distinguished agricultural economist and 
professor of agriculture from the University of Hawaii. Prior 
to that, he was a director of the Hawaii Institute of Tropical 
Agriculture and Human Resources.
    He works very closely with county and State officials in 
addressing our agricultural and water supply needs in the State 
of Hawaii.
    Again, I thank you for holding this hearing, Madam 
Chairman, and I thank Dr. Ching for coming. I also want to 
thank Commissioner Keys. I very much appreciate your appearing 
here today to provide testimony on these bills, and I realize 
that you have had a very short time to review S. 960. I hope to 
receive the Bureau's input as soon as possible and to work with 
you to incorporate your comments so that we can quickly move 
this bill forward.
    I appreciate the valuable technical support that the Bureau 
has provided to Hawaii on these and on other projects, and I 
look forward to working with you on this legislation.
    Thank you very much, Madam Chairman.
    Senator Murkowski. Thank you, Senator.
    Senator Smith.

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

    Senator Smith. Thank you, Madam Chairman, and welcome to 
John Keys. Good to see you here, sir, and I appreciate, John, 
your support, the administration's support of S. 625 as it 
relates to the Tualatin River watershed.
    Madam Chairman, I have a much longer statement if I may 
include it in the record. I will just state briefly that this 
is a very far-sighted piece of legislation that helps to 
foresee the water needs of salmon and of a much developed 
population that has grown substantially over the last decade 
and will likely continue. This really gets these communities 
ahead of the curve in meeting their environmental 
responsibilities and also their responsibilities to the economy 
of that area.
    So I thank the administration for supporting these studies. 
They need to occur if these projects can be developed and they 
need to happen in a timely way, and I thank you very much.
    [The prepared statement of Senator Smith follows:]
   Prepared Statement of Hon. Gordon Smith, U.S. Senator From Oregon
    Madam Chairwoman, I appreciate your convening this legislative 
hearing today to receive testimony on several pieces of legislation 
that are very important to the affected geographic areas, and to those 
who receive their water from these existing Reclamation projects.
    S. 520 would authorize the Secretary of the Interior to convey 
certain facilities, used exclusively for irrigation, to the Fremont-
Madison Irrigation District in the State of Idaho.
    This bill passed the Senate at the end of the last Congress, and I 
will support my colleagues from Idaho in their efforts to move this 
bill expeditiously in the 108th Congress.
    The second bill, S. 625, which I sponsored and is cosponsored by my 
colleague Senator Wyden, would authorize the Bureau of Reclamation to 
conduct certain feasibility studies in the Tualatin River Basin in 
Oregon. There is an existing federal Reclamation project in this 
rapidly growing area west of Portland.
    Developed in 1975, water from Hagg Lake--the impoundment behind 
Scoggins Dam--is currently used for river flow restoration, municipal 
water supply, and agricultural irrigation needs in the Tualatin River 
watershed. The lake also provides recreational opportunities, with park 
and recreational facilities operated by Washington County.
    The Tualatin River watershed contains the rapidly growing urban 
portion of Washington County, which includes the cities of Beaverton, 
Banks, Cornelius, Forest Grove, Hillsboro, North Plains, Sherwood, 
Tigard and Tualatin.
    This area, home to approximately 450,000 people, almost doubled its 
population in the last 20 years, and this trend is expected to 
continue.
    To better manage the existing resources of the Tualatin River Basin 
and to meet future water needs, several cities and districts partnered 
to develop an Integrated Water Resources Management Strategy in 1997.
    This work identified the following areas of challenge in meeting 
future water supply needs: municipal and industrial demands that are 
expected to double by 2050; maintaining existing irrigated agriculture; 
water needs for Spring Chinook salmon and steelhead populations 
recently listed under the Endangered Species Act; and additional flows 
to restore river flow and improve water quality, since the Tualatin 
River and its tributaries are considered water quality-limited under 
the Clean Water Act.
    This bill is an important first step in helping these communities 
meet future water supply needs. It would authorize the Bureau of 
Reclamation to conduct feasibility studies in the basin, in cooperation 
with the local communities which are already contributing significant 
financial resources to addressing these needs.
    It is imperative that these studies move forward expeditiously, 
since water supplies in the basin will be strained within 10 years. The 
Bureau of Reclamation actually sought funding for this study in its 
fiscal year 2002 and 2003 budget requests.
    Since that time, it has determined that it lacks sufficient 
authority to conduct these studies, which is why this bill is needed at 
this time.
    One of the other bills to be heard today is S. 993, a bill which I 
introduced to amend and update the Small Reclamation Projects Act of 
1956. The underlying Act established Reclamation's small loan program, 
and was used successfully for decades by eligible water districts for 
smaller projects.
    During the last Administration, a decision was made not to accept 
any more loan applications for this program, despite the remaining 
funds of over $200 million under the current authorization ceiling.
    This effort to update the program is a recognition that the funding 
needs for many irrigation districts and other eligible entities have 
changed in recent years. As a result of threatened and endangered 
species, as well as higher environmental standards, water users are 
being called upon to modify their conveyance and distribution systems, 
to screen diversions, and to mitigate for certain project impacts.
    Generally speaking, these are not the types of projects that are 
attractive to commercial lenders. The small loan program, as updated by 
this bill, can provide an important funding source for the types of 
investments we are requiring water users to make. This bill provides a 
mix of loans, grants and loan guarantees that would be important tools 
to resolving watershed conflicts and maintaining healthy agricultural 
economies throughout the rural west.
    Madam Chairwoman, I appreciate the opportunity to work with you to 
move these bills out of Committee as soon as possible. I look forward 
to hearing from the witnesses who are going to appear before us today 
on these and the other bills on the agenda.

    Senator Murkowski. Thank you, and we will make sure your 
comments are included in the record.
    Commissioner Keys, as far as--I am going to start in 
reverse just to keep you on your toes here. This would be S. 
993, the Small Reclamation Water Resources Project Act. As I 
understand, the Small Reclamation Projects Act program is 
presently dormant and I am wondering if the Bureau could 
restart the program without this legislation, or whether 
legislation will be necessary in order to move forward with it?
    Mr. Keys. Mr. Chairman, it could be started without 
legislation now. There have been a number of administrative 
actions that have kept it dormant for several administrations 
now. Certainly a lot of those would have to be addressed, like 
the authority and jurisdiction that Reclamation has has been 
criticized by the Inspector General in a 1991 audit report. In 
plain language, they do not like Reclamation being in the 
banking business. We are a water resources management 
organization and when we get into the loans and having to set 
interest rates and that sort of thing they get very 
uncomfortable, and the Inspector General has been critical of 
our role in that process.
    Senator Murkowski. Well, recognizing then that they do not 
like you to go into the banking business, do you feel that this 
legislation perhaps redirects the Bureau from the primary 
purpose of irrigation and reclamation?
    Mr. Keys. Mr. Chairman, in some way, shape, form, or 
fashion there needs to be a provision as this bill provides. 
The aging infrastructure around the western United States is 
getting to crisis proportions in some places and the local 
irrigation entities are looking for some way to renew 
facilities.
    I am not sure that that is Reclamation's role in the water 
management of the West, and we are trying in Water 2025 to 
define that role, to see where conservation, where the renewal 
of facilities can best accomplish the needs for water over the 
next 25 years.
    The Small Reclamation Project Act in its current 
configuration does not lend itself to being amenable to that. 
It has requirements in there for irrigation pieces. This 
legislation would expand it much beyond what we do now, beyond 
our 17 Western States and Hawaii. It takes it into a lot of the 
territories and so forth.
    It also has loan guarantee materials there that we do not 
have authority for, and it would certainly even require a lot 
of lead time, and we would have to be in the role of a 
commercial loan officer which we have not traditionally done.
    Senator Murkowski. Let us skip over to S. 649, the Irvine 
project. How does this particular project fit within the 
overall goals and objectives of the CALFED initiative, of that 
project?
    Mr. Keys. Senator, I think it fits within that. It also 
fits within our title 16 program. In my testimony I indicated 
that we have been working with the Irvine Ranch people. We just 
have not completed the feasibility study that we feel should be 
done before the Irvine Ranch is included in the title 16 
program. Completing the feasibility study lets us know if it 
has all of the requirements, if it is financially and 
engineeringly feasible, and so forth. We would prefer that the 
studies be completed before it be included.
    Senator Murkowski. Questions of the committee members? 
Senator Feinstein?
    Senator Feinstein. Thank you very much. I would like to 
take up where you left off, Senator Murkowski.
    Mr. Keys, as to a Department feasibility study, is it not 
true that the Department has been sitting on numerous staff-
completed feasibility studies for title 16 projects for several 
years?
    Mr. Keys. Madam Chairman, Ms. Feinstein, there are some 
that have been completed that we have not acted on.
    Senator Feinstein. My understanding is that you have been 
sitting on the Bay Area recycling study since 1998 and the 
southern California recycling study since 2001.
    Mr. Keys. That is correct.
    Senator Feinstein. Well, then the question comes, can you 
fairly impose a requirement of a Department-completed 
feasibility study when in all honesty the Department has not 
been completing feasibility studies?
    Mr. Keys. As I said, there are some that have been 
completed. The backlog that we have there is certainly at times 
much beyond our capability to fund them. If you look at the 
total authorized projects, it is almost in the area of $3 
billion. We do not have that kind of funding to put into those 
projects.
    Certainly, the title 16 program was developed as a 
demonstration program so that we could demonstrate the 
reliability, the feasibility, the doability of wastewater 
recycling and reuse to show how it could be part of a good 
water resource management program. We have been doing that for 
over 10 years and certainly it has proven that it is a good 
one, a good program.
    Now, some of those that are not funded we just have not 
been able to get to.
    Senator Feinstein. So essentially what you are saying, 
then, is you are going to oppose any new program for 
authorization under title 16?
    Mr. Keys. One of the things we are trying to look at under 
title 16 is to see if it would be valuable for us to refocus 
that program. In other words, as a demonstration program it has 
shown that wastewater reuse and recycling is very valuable and 
it has shown a lot of the different techniques and technologies 
to go along with it.
    We are hoping that that program can sort of shift and look 
at desalination to see if there are opportunities there that we 
can work with cities to find new water supplies, either from 
brackish groundwater or desalinating ocean water.
    Senator Feinstein. Your very Department is trying to wean 
California off of its Colorado River supply and this is a 
substantial problem, and the only way it can be successfully 
done is to develop alternatives. As I understand this brackish 
water desalter, it would provide an alternative water for over 
20,000 people who are now drawing their water from the Colorado 
River, and yet the very Department that says, California, you 
have got to wean your way off of this water, is saying, we are 
not going to authorize a project to enable you to do it.
    Mr. Keys. It boils down to we just do not have enough money 
to go around at times. We would prefer that the feasibility 
study on this project be done before it be included in the 
program.
    Senator Feinstein. Thank you, Madam Chairman.
    Thank you, sir.
    Senator Murkowski. Senator Akaka.
    Senator Akaka. No.
    Senator Murkowski. Senator Smith.
    Senator Smith. Thank you, Madam Chairman.
    John, I am interested in the loan program that may or may 
not be available to small water users. You spoke in your 
testimony about the 2025 program. I believe it has funding of 
$11 million behind it. Frankly, I am worried that that is 
wholly inadequate to do, to even begin to meet the demand that 
is out there from irrigators who are now, frankly, under a 
whole new set of environmental mandates that are very expensive 
to meet in terms of infrastructure. They are the kinds of 
things that give them the ability to stay in business, but not 
have, frankly, the ability to make any money at business. So 
banks are loath to loan them money for environmental projects.
    My understanding is that in the last administration no more 
applications were accepted for these small loan issues, even 
though there was authorization of an additional $200 million 
available to them. But now the program the Bush Administration 
is proposing under 2025 does not seem to do it.
    The bill that we have before the committee today, S. 993, I 
think actually does take those Federal dollars and stretch them 
much further when it is done under some grants, some loans. And 
the updated program, the program we are trying to update, is 
literally called the Small Reclamations Project Act of 1956.
    Can you comment about this whole issue and what the 
administration's thinking is?
    Mr. Keys. Mr. Chairman, Senator Smith, Water 2025 is not a 
loan program. Water 2025 is trying to focus on where we stand 
with water in the Western United States, take a look 25 years 
into the future and see where we will potentially encounter 
future Klamath-type situations and stay out of that type of 
situation that can be caused by expanding and growing 
population. It can be caused by administrative problems such as 
the Endangered Species Act, growing needs for recreation, for 
other water-related needs of our society.
    The Western Water Initiative that is part of our 2004 
budget has four main components. The first one is water 
conservation measures, and of course $11 million is a drop in 
the bucket when you look at what we are trying to do across the 
western United States. But it is a collaborative effort to try 
to go to the States and the local folks and say: Here is where 
the problems are, here are some programs that we have that we 
can demonstrate to you that would work and where we could start 
some demonstration type projects to show the benefits more of 
conservation type things and prove that it would work, like 
lining canals, putting in control facilities, putting in 
monitoring facilities, and that sort of thing.
    Senator Smith. So it is more from the Federal Government to 
State government?
    Mr. Keys. It would work very closely with the State 
Governments.
    Senator Smith. How about when it gets right to the ground 
with farmers who want to use this old project under the 
Eisenhower administration of small reclamation projects? Is 
that still available to them?
    Mr. Keys. The whole Water 2025 effort is a multi-
governmental effort. We would be working on behalf of Interior 
from our side with the programs that we have authorized. The 
Department of Agriculture would work very closely with us on 
those programs that they have authorized to work directly with 
the farmers, such as we are doing in the Klamath Basin now, 
where they are working on land treatments and other water 
conservation programs that they already have.
    Most of the work that you see under Water 2025 is within 
existing authorizations, ones that we already have to do 
conservation work with irrigation districts, ones that the 
Department of Agriculture has, that the Environmental 
Protection Agency has, that the Corps of Engineers has, and 
that sort of thing.
    Senator Smith. John, I want to tell you how tremendously 
impressed I was with the work the Bureau has done at Klamath. 
The headgates that I helped Ann Veneman and Gale Norton open 18 
months ago was an old rusty structure that has now been 
replaced with a state of the art system that truly will protect 
the fish resource that is there and I hope go a long way 
towards mitigating the concerns that the tribes have and that 
the environmentalists have in terms of our commitment to saving 
the suckerfish, and it certainly is a brighter day for the farm 
community in that area as well.
    Thank you and I hope that we can work with you on S. 993, 
the Small Reclamation Projects Act of 1956, and update it so it 
can still be utilized, because I think it may be needed in 
addition to the 2025 program.
    Senator Murkowski. Senator Akaka.
    Senator Akaka. Yes. May I ask Mr. Keys a question about the 
report. I know that we introduced S. 960 in April 2003 and that 
you have had little time to thoroughly analyze the merits of 
the legislation, and I know, as you pointed out, that you have 
many projects, as a matter of fact 15 years to complete 
funding, 27 currently authorized projects, as an example.
    My question to you is, would you have an idea of when we 
might be able to hear from you?
    Mr. Keys. Mr. Chairman, Mr. Akaka, there are three main 
parts of S. 960. The first part that I know much more about, 
the Hawaii Water Resources Act of 2000, we have an existing 
study under way with the Department of Agriculture in Hawaii 
and that is due to be done this fall, and we would certainly 
report back. It is on those five projects that we are working 
on rehabilitation of facilities.
    To expand that into the other 19 or 20 or however many 
others we would purport to look at, we could let you know how 
long that would take within a month. On the seawater desal and 
the wastewater project on Maui and Hawaii, we could give you a 
rough estimate of how long it would take within that same 
period of time, realizing that there are those other projects 
that are authorized and certainly these new ones would get in 
line with.
    Senator Akaka. Thank you very much. I really appreciate 
that.
    Thank you, Madam Chairman.
    Senator Murkowski. Thank you.
    Thank you, Commissioner Keys. I appreciate your testimony 
this afternoon. I look forward to working with you on these 
various bills that we have before us, the committee staff as 
well as the sponsors, to either review those issues that you 
have not had an opportunity to do so thoroughly, but we will be 
looking forward to working with you on these. So we appreciate 
your time this afternoon.
    Mr. Keys. Thank you very much.
    Senator Murkowski. Let us now call up panel two, and this 
afternoon we will have before us: Mr. Joe Findaro, the 
Washington counsel for the Fremont-Madison Irrigation District; 
Mr. Brian Brady, president, Board of Directors of the Irvine 
Ranch Water District; Mr. Chauncey Ching, professor at the 
University of Hawaii; and Mr. Peter Carlson, coordinator for 
the Small Reclamation Loan Program Coalition, Will and Carlson, 
Incorporated.
    Gentlemen, good afternoon and welcome to the committee. We 
will start at this end with you, Mr. Findaro, if you would like 
to give us your comments this afternoon on the legislation 
before us.

 STATEMENT OF JOE FINDARO, WASHINGTON COUNSEL, FREMONT-MADISON 
                      IRRIGATION DISTRICT

    Mr. Findaro. Madam Chairman, thank you very much for 
holding this hearing. I appreciate the opportunity to testify. 
I would like to submit testimony for the record on behalf of 
Jeff Raybould, chairman of the Board of Directors of the 
Fremont-Madison Irrigation District. Jeff could not be here 
today because he is chairing a meeting in Idaho of the Idaho 
Potato Commission.
    Fremont-Madison provides a supplemental water supply to 
approximately 1,500 water users irrigating approximately 
200,000 acres associated with the original Island Park and 
Grassy Lake Projects, as well as the failed Teton Dam Project. 
In 1993, Fremont-Madison and the Henry's Fork Foundation, a 
local environmental group, helped form the Henry's Fork 
Watershed Council, which is a grassroots community forum that 
uses a non-adversarial consensus-based approach to problem-
solving and conflict resolution among citizens, scientists, and 
agencies with varied perspectives.
    Fremont-Madison originally submitted a resolution to the 
Bureau requesting transfer of title from Reclamation to FMID of 
Island Park Dam, Grassy Lake Dam, the Cross-Cut Dam and Canal, 
and the Teton Wells. In the course of this effort, the 
Watershed Council held a meeting in June 2000 to discuss this 
proposal. There was no opposition to title transfer of the 
Cross-Cut Dam and Canal and the Teton Wells from any 
representatives of the Watershed Council, although some 
concerns were expressed with respect to Grassy Lake and Island 
Park. So they pared back their proposal request with the Bureau 
and that is why we have the facilities in this legislation 
today.
    We are here as a partner with the Bureau of Reclamation and 
we appreciate the active participation of Commissioner Keys and 
his staff, particularly Matt Ames and James Hess. Last year 
this legislation passed in both the House and the Senate, but 
in different forms, and we urge the committee to act as 
expeditiously as possible.
    I believe it should be viewed as a model. It is the result 
of extensive outreach on the part of the Irrigation District to 
include all interested parties not just the Henry's Fork 
Foundation, but also Trout Unlimited and the Shoshone-Bannock 
Tribes at the Fort Hull Reservation. We are not aware of any 
local interest or any national group that opposes this bill.
    I spent about 21 years both in Interior and outside 
Interior working on water resources matters. In the last 6 
years, I have worked on about 5 title transfers that have been 
signed into law, and I want to make a comment with respect to 
what Commissioner Keys said. I think these title transfers, and 
particularly Fremont-Madison, tie in nicely with the Water 2025 
initiative. In an era of declining Federal budgets and aging 
infrastructure, these types of title transfers allow the locals 
who have been responsible for operating and maintaining these 
projects, who have a proven track record of working with local 
environmental groups, who have either paid off the project or 
are willing to pay any outstanding debt, to move forward so 
that the locals can in fact take title and better maintain and 
better manage the projects that they are responsible for.
    In closing, I would like to thank Senator Crapo and Ken 
Flanz on his staff, Senator Craig and Mark Hilmer from his 
staff, Congressman Simpson and Brandon Tucker from his staff, 
and also the committee staff that have worked on this, 
particularly Jim Beirne, Shelley Randall, and Patty Beneke, as 
well as former staff member, Colleen Deegan.
    I would be pleased to answer questions you might have.
    [The prepared statement of Mr. Raybould follows:]

         Prepared Statement of Jeff Raybould, Chairman of the 
        Board of Directors, Fremont-Madison Irrigation District

    Madam Chair, Members of the Subcommittee, I am Jeff Raybould, 
Chairman of the Board of Directors of the Fremont-Madison Irrigation 
District (FMID) in Idaho. I am here to testify in support of S. 520.
    This legislation would require the Secretary of the Interior to 
convey certain facilities to our District pursuant to the Memorandum of 
Agreement with the Bureau of Reclamation. These facilities include: the 
Cross Cut Diversion Dam, the Cross Cut Canal and the Teton Exchange 
Wells.
    FMID was created under the laws of the State of Idaho in 1935 to 
enter into a repayment contract with the United States Bureau of 
Reclamation for the construction of Island Park Dam, Grassy Lake Dam 
and the Cross Cut Diversion Dam and Canal. The forty year repayment 
contract was paid out in 1979 by the spaceholders of FM1D.
    FMID provides a supplemental water supply to approximately 1,500 
water users irrigating approximately 200,000 acres associated with the 
original Island Park and Grassy Lake projects as well as the failed 
Teton Dam project. Forty canal companies existed prior to the creation 
of FMID. The canal companies supply the natural flow water (primary 
water supply) to lands of their stockholders. They also conduct their 
own operation and maintenance. Most of the lands served by FMID are 
also lands of the canal companies. The FMID uses these canal companies 
to deliver storage water.
    In 1993, FMID and the Henry's Fork Foundation, a local 
environmental group, helped form the Henry's Fork Watershed Council 
which is a grassroots community forum that uses a non-adversial, 
consensus-based approach to problem solving and conflict resolution 
among citizens, scientists, and agencies with varied perspectives.
    FMID originally submitted a resolution to the Bureau of 
Reclamation, requesting transfer of title from Reclamation to FMID of 
Island Park Dam, Grassy Lake Dam, Cross Cut Dam and Canal and the Teton 
wells. FMID worked closely with the Henry's Fork Foundation to develop 
a consensus on how title for all these facilities could be transferred.
    In the course of this effort, the Watershed Council held a special 
meeting in June, 2000 to discuss the transfer of facilities. At this 
time, there was no opposition expressed to title transfer of the Cross 
Cut Dam and Canal and the Teton wells from any representative of the 
Watershed Council. As a result of these consultative discussions, FMID 
decided to only go forward with seeking title to the Cross Cut Dam and 
Canal and the Teton wells.
    The Cross Cut Dam is located on Henry's Fork of the Snake River 
which diverts water into the Last Chance and Cross Cut Canals. It is a 
concrete gravity weir with a structural height of 17 feet and a total 
length of 457 feet. It was completed in 1938. The Cross Cut Canal 
begins at the Cross Cut Dam. The canal is approximately 7 miles long 
with a capacity of 600 cubic feet/second (cfs) at the head.
    The canal diverts storage water from the Henry's Fork near Chester 
and conveys it to the Teton River. In addition to conveying storage 
water to users on the Teton River, the canal also conveys natural flow 
water to some of the lands within the Fall River Irrigation Company 
system. A portion of the Cross Cut Canal was constructed through the 
already existing Fall River Canal. FMID has operated and maintained the 
canal since it was built. FMID and Fall River jointly employ a canal 
manager to address operation and maintenance needs.
    Five Teton Exchange Wells were constructed by the Bureau of 
Reclamation in the early 1970's as part of the Lower Teton Division. 
They were designed to provide groundwater in exchange for water storage 
in Teton Reservoir. Failure of the Teton Dam in June, 1976 made the 
constructed wells the only additional supplemental water source 
available to irrigate the lands affected by the Teton Dam failure.
    In 1977, FMID and the Bureau entered into a contract to allow the 
use of the wells as a backup water supply in drought years. This 
contract provides for the use of wells, pumps, motors and appurtenant 
facilities over a 25 year period.
    Water from the five wells is pumped into the lower Henry's Fork 
system to augment supplemental irrigation water supply for FMID in dry 
years. FMID pays for all operation, maintenance and replacement costs.
    FMID has conducted extensive outreach with local entities in 
response to the proposed title transfer and we will continue to do so 
as the process moves forward. Throughout the process we have been 
willing to make changes to satisfy concerns that have been raised, 
including a drought management planning provision. It is worth noting 
that the Henry's Fork Foundation is on record supporting this 
legislation and that Trout Unlimited is on record not opposing this 
legislation.
    This concludes my remarks. Thank you for allowing me to appear 
before your subcommittee today. I would be pleased to answer any 
questions you might have.

    Senator Murkowski. Thank you. We appreciate that. It is 
nice to know that you got all the bugs worked out of it within 
the time period that you have been given, so that is good to 
hear.
    Let us next go to Mr. Chauncey Ching. We will hold 
questions until we have heard from everyone in the panel. Mr. 
Ching.

            STATEMENT OF CHAUNCEY CHING, PROFESSOR, 
                      UNIVERSITY OF HAWAII

    Mr. Ching. Madam Chairman, other members of the committee: 
Good afternoon. My name is Chauncey Ching. I am professor of 
Agricultural Economics at the University of Hawaii. On behalf 
of the counties in the State of Hawaii, I thank you for 
allowing us to offer some comments on S. 960, and I also wish 
to thank Senator Akaka for his visionary interest in water and 
in Hawaii's agriculture.
    I have submitted written testimony and, rather than go 
through the details of that testimony, I would like to 
reiterate four points contained in that testimony. First, in 
Hawaii water is our most limiting natural resource. Second, the 
Hawaii water study that is being conducted is incomplete. 
Third, there is wide acceptance of any evolving water resources 
use and development strategy in Hawaii. And lastly, the three 
projects proposed for authorization is consistent with the 
strategy.
    On the first point, water is our most limiting resource. 
This may seem like a strange statement to make when we think of 
Hawaii as a lush tropical paradise. It is, but on many parts of 
our islands we have visual similarities to the high deserts of 
the Western United States. We have alarming projections of 
water use relative to water recharge rates, where on Oahu, 
where the main population is, we will run out of fresh water in 
the year 2023. More recently, the chief engineer of the 
Honolulu Board of Water Supplies indicated to me that they have 
updated their models and we may run out sooner, perhaps in 
2018.
    Lastly, I note that Hawaii has been plagued by drought. 
This is not a phenomenon limited to Western States, Western 
U.S. States, but rather we have had drought over the last 7 or 
8 years, some being very, very severe, and I simply point out 
to you in the drought outlook as late as April of this year, 
April 17 actually, Hawaii is in the second severest category of 
drought on the big island, and on the third category on the 
islands of Oahu, Molokai, and Maui.
    Regarding the second point, the Hawaii water study as 
conducted is incomplete, not because of the folks doing the 
work, but rather due to funding limitations. The report will be 
out some time in September of this year, first to the Bureau 
and then to the Congress. But the study addresses only 5 of the 
14 major irrigation systems in the State. It addresses only a 
few reuse and recycling alternatives. It provides only cursory 
water diversification assessment and it provides only limited 
consideration of some of the policy, legal, and institutional 
barriers that impact water use in Hawaii.
    In other words, much more needs to be done and we would 
welcome Federal assistance and will continue to work with our 
State legislators to seek the matching funds needed for this 
study, which would provide a blueprint of all our actions in 
the near to intermediate term.
    Regarding point three, there is a wide acceptance of an 
evolving water resources use and development strategy in 
Hawaii. Rather than focusing on some of the more complicated 
hydrologic and other models, we have stepped back and simply 
looked at simple supply and demand concepts. On the supply 
side, we are encouraging and promoting preservation and 
enhancement of watersheds, and these are the natural ones that 
are primarily tropical forests. We are promoting improved 
storage reserve surface water. These are manmade structures. We 
are pursuing practices to recharge groundwater aquifers that 
have been subject to less recharge since the decline of sugar 
cane plantations. And we are also expanding our search for new 
water sources, the so-called diversification of water issues.
    On the demand side, we have encouraged the adoption of 
conservation technologies to use less water, to minimize waste 
by making some of our delivery systems more efficient--these 
are primarily irrigation systems--and then also to substitute 
recycled water for potable water when appropriate.
    The three projects proposed for authorization is consistent 
with this strategy. All three projects have two characteristics 
in common: one, they are all located on the dry side of three 
different islands; and secondly, all areas are expected to be 
subject to rapid population growth.
    Briefly, the desalination project at Kalaeloa on the island 
of Oahu is a seawater desalination project. It will serve the 
so-called second city on Oahu, second to Honolulu, called 
Kapolei, where population is currently 67,000 people and will 
increase, projected at least, to 114,000 in the next 20 years. 
This results in an increased demand of about 10 million gallons 
per day of potable water.
    The plant, if realized, will be located on former lands of 
the military, specifically the Barber's Point Naval Air 
Station, and land has been granted to the city and county, 
specifically the Board of Water Supply, at this time.
    The second project is a wastewater reuse project on the big 
island of Hawaii, again on the western, on the dry side of the 
island. Here two things are anticipated. One is to increase the 
treatment of the effluent waste to the highest level, tertiary 
treatment; and then to distribute these waters for irrigation 
purposes, for environmental purposes, for threatened and 
endangered species, and for reducing the risk of coastal water 
discharges.
    The last project is on the island of Maui, on the northwest 
portion of the island. Here again, the county of Maui has 
considerable experience in wastewater reuse and recycling, has 
demonstrated this in the southern part of the island, and would 
like to duplicate this on the northwest portion of the island. 
What is needed here is infrastructure, primarily storage tanks 
and pipelines.
    In the above comments, I have tried to describe four items: 
the severity of the water issues in Hawaii; the need to expand 
the Hawaii water study; the strategy we are implementing to 
address these issues; and three projects that are consistent 
with the strategy. We are excited and supportive of the 
provisions of S. 960 and urge your support. Thank you for 
letting me represent the views and concerns about our most 
limiting natural resource, water. Thank you.
    [The prepared statement of Professor Ching follows:]

 Prepared Statement of Chauncey Ching, Professor, University of Hawaii

                              INTRODUCTION

    Madame Chairperson and other members of the Committee, on behalf of 
the counties in the State of Hawaii, I thank you for allowing me to 
offer testimony on Senate Bill 960, to amend the Reclamation Wastewater 
and Groundwater Study and Facilities Act to authorize certain projects 
in the State of Hawaii and to amend the Hawaii Water Resources Act of 
2000 to modify the water resources study. In particular, we thank 
Senator Akaka for his visionary interest in the water issues impacting 
Hawaii and for introducing this bill.
    My name is Chauncey Ching. I am a professor of Agricultural 
Economics at the University of Hawaii. As part of my responsibilities 
of facilitating the transition of Hawaii's agriculture from large scale 
plantations to smaller scale diversified agriculture, I worked with all 
members of Hawaii's Congressional delegation in convening two meetings 
in 2001 to address the resource that most limits sustainable 
development in Hawaii--water. While this may sound strange for an 
island state located in a tropical/subtropical ecosystem, water is 
unquestionably our most limiting resource.
    Perhaps unknown to those who have not visited Hawaii, we have areas 
on the leeward sides of all of our islands that have very limited water 
supplies and have remarkable similarities to the high deserts in the 
Western United States. Further, the U.S. Seasonal Drought Outlook 
(released by the National Oceanic and Atmospheric Administration, NOAA, 
on April 17, 2003) shows four categories of drought in the country. The 
most severe condition is ``Drought to persist or intensify'' and the 
second most severe is ``Drought ongoing, some improvement.'' While 
Hawaii is not in the most severe category, a large part of the Big 
Island is in the ``Drought ongoing, some improvement'' category; and, 
other parts of the state are in the ``Drought likely to improve, 
impacts ease'' category--less severe but drought conditions 
nevertheless.

         BACKGROUND AND EVENTS CONDITIONING INTEREST IN S. 960

    In part, the meetings in 2001 were initiated as preparation for the 
conduct of the Hawaii Water Study mandated in the Hawaii Resources Act 
of 2000. In anticipation of this study, it was increasingly apparent 
that the water issues in Hawaii were so enormous that our only chance 
of effectively addressing them was to ensure the highest level of 
collaboration among federal, state, and local governmental agencies and 
the private land owners.
    One of the most alarming statistics about our state comes from the 
Honolulu Board of Water Supply. About two years ago, leaders of this 
county agency noted that we, on Oahu, will run out of fresh water in 
2023. While this was very disconcerting, a few months ago I was told 
that the Board of Water Supply had updated and improved its forecasting 
models and now we will run out of fresh water in 2018! [Source: 
Challenges and Opportunities--A Board of Water Supply Look at Water for 
the 21st Century, Water Resources Research Center Conference, January 
15, 2003]
    Without question, this is a startling projection. It gets my 
attention and I trust it gets yours as well. Rather than panic and 
choose to be overwhelmed, we use this projected shortfall in freshwater 
recharge rates relative to freshwater use rates to guide our thinking 
and actions and spur our efforts to realize our charge of maintaining 
and improving quality of life for current and future generations. 
Clearly, if we treat this projected shortfall as a self-fulfilling 
prophecy, we are ignoring and sacrificing future generations' rights to 
a quality of life at least comparable to that which we enjoy today. We 
use this statistic, which applies directly to the island of Oahu but 
has implications for all islands, as a ``wakeup call'' signaling the 
importance of water resources in the Hawaii's sustainable development 
plans. This statistic was a clear signal that we needed to devise and 
implement a plan to address very limited water resources in Hawaii.

        AN EVOLVING WATER RESOURCES USE AND DEVELOPMENT STRATEGY

    For many of us, a useful way of thinking about water resources in 
Hawaii was in terms of supply and demand. From the supply side, we 
include preservation and enhancement of watersheds, improved storage to 
preserve surface water, practices that recharge ground water aquifers, 
and exploration of new, supplemental sources. On the demand side, we 
include employment of conservation technologies to use less water, 
vigilance to minimize wasting water through inefficient delivery 
systems, and, substituting the use of recycled water for potable water 
in those applications where public health and safety are not 
compromised. Of course, there are also activities that impact both the 
supply and demand for water e.g., use of recycled water for irrigating 
landscapes and other agricultural activities while concurrently 
recharging ground water aquifers.
    While supply and demand provide a useful context for strategic 
thinking, there were those present who constantly reminded us that 
whatever strategy we devised needed to serve community interests, those 
of the state, and the nation. Any water resources use and development 
strategy necessarily needed to ensure minimal impact on the natural 
environment since we are simply stewards of these resources for current 
and future generations.

                         THE HAWAII WATER STUDY

    This study, mandated in the Hawaii Resources Act of 2000 is 
underway and scheduled for completion in September 2003. The $300,000 
appropriated by Congress for this purpose was matched by the Hawaii 
State Legislature. The Hawaii Department of Agriculture is the 
coordinating entity charged with overseeing completion of this work.
    Preliminary analyses suggest that the findings to be reported in 
September only begins to articulate the issues and corrective actions 
for a comprehensive set of problems that impacts practically all 
residents and visitors, all segments of the economy including a large 
military complex, and the natural resources within the state and in the 
coastal waters under national and international jurisdictions.
    The study to be reported addresses only five of the fourteen major 
irrigation systems developed by sugarcane plantations over the past 150 
years, identifies only a few alternatives for reuse and recycling of 
water, barely touches on water diversification strategies, and only 
mentions the legal, institutional, and public policy barriers that must 
be addressed if we are to be responsible and effective stewards of 
water resources.
    Based on the components of the water resources issues that remain, 
we are encouraged by the amendment to increase the funding limit for 
the Hawaii Water Study. At the same time, we continue our efforts to 
apprise our state legislators on the significance of other aspects of 
the water resources issue not being addressed by the Hawaii Water Study 
and the importance of providing matching funds to address them.

     THREE SPECIFIC PROJECTS, PART OF THE WATER RESOURCES STRATEGY

    The three projects proposed for authorization in S. 960 are 
consistent with the evolving strategy for water resource use and 
development in Hawaii articulated above. These are priority projects 
identified at the county level. While a combination of county and state 
funds will be a critical part of the financing strategy, the counties 
are encouraged about the possibility of federal assistance through the 
Reclamation Wastewater and Groundwater Study and Facilities Act. For 
this reason, we support the provision in S. 960 to separate funding 
authority for this program for Hawaii projects from the funding limit 
set for the Hawaii Water Study.

Kalaeloa Desalination Project (Island of Oahu)
    Oahu (Honolulu) is home to about 72 percent of Hawaii's residents--
880,000 people in 2001. It is here that water use rates will exceed 
water recharge rates in 2018. While conservation measures have 
successfully reduced water use rates, new sources of supplemental water 
and substitution of recycled water for potable water are the two main 
activities being pursued to avoid the mining of water beginning in 
2018.
    The Board of Water Supply (BWS), City and County of Honolulu is 
responsible for the management, control and operation of Oahu's 
municipal water system. As part of this responsibility, the BWS seeks 
alternative methods to provide reliable, high quality potable water for 
Oahu's future. The desalination project proposed is centrally located 
in the secondary urban center of Kapolei, Ewa, Oahu. Ewa is a planned 
community of residential, commercial and industrial developments. Over 
the next 20 years the expected increase in population is 70% from 
67,000 to 114,000 people resulting in an additional demand of 
approximately 10 million gallons per day (mgd).
    Realization of the proposed project will help meet Ewa's projected 
2025 demand, conserve limited groundwater in the area, avoid impacts to 
the environment, streams, native flora and fauna from wells drilled in 
forested watersheds, increase water system reliability through drought 
mitigation (Oahu experienced a 5-year drought from 1998-2002, which 
affected municipal supplies and agriculture), and maintain consistently 
high water quality by minimizing seawater intrusion when water levels 
drop during drought conditions.
    More specifically, the proposed project is a 5 mgd facility of 
modular construction that allows the potential for future expansion. 
Seawater Reverse Osmosis (RO) Membrane Technology is proposed where 
approximately 11 mgd of seawater is needed to produce 5 mgd of potable 
water. Seawater source wells rather than direct ocean intake will be 
used to ensure higher water quality. Brine disposal will be through 
shallow cap rock wells with temporary brine holding ponds.
    The facility will be located on 20 acres of land granted from the 
U.S. Department of Health and Human Services through a Public Benefit 
Conveyance of surplus U.S. Department of Navy property formally known 
as Barbers Point Naval Air Station.

Kealakehe Wastewater Treatment Project (Island of Hawaii)
    This project is located on the west side of the Big Island of 
Hawaii, north of the Kona community. It is on the leeward side, the dry 
side, of the island, which has been plagued by drought during the past 
several years. The entity responsible for this project is the County of 
Hawaii, Department of Environmental Management.
    Effluent from the Kealakehe Wastewater Treatment Plant is currently 
being discharged into a temporary disposal sump. The effluent has a 
high suspended solids concentration due to an abundance of algae 
growing in the existing aerated lagoons. In order to maximize the reuse 
potential, the effluent should be treated to the highest level (R-1), 
while minimizing mechanical systems and chemical applications. Also, 
there is a need to provide habitat for two endangered bird species, the 
Hawaiian Stilt and the Hawaiian Coot. The birds have been nesting on 
land adjacent to the Keahole International Airport.
    This project will utilize subsurface wetlands to reduce the 
suspended solids prior to disinfection. Retrofitting an existing lagoon 
and completing construction of an additional lagoon would create the 
subsurface wetlands. An open surface wetland would also be constructed 
to reduce the effluent disposal, create habitat for the endangered 
birds, and provide recreational opportunities for the public.
    Realization of this project will reduce the risk of contamination 
to the coastal waters; transform the sewage effluent from a disposal 
liability to a resource asset; eliminate the need for expensive 
mechanical systems and chemical applications while upgrading the 
treatment process; protect endangered species; and, provide additional 
landscaping and recreational opportunities for the public.
    Preliminary assessments suggest that the cost to construct and 
operate conventional tertiary wastewater treatment systems would 
probably be cost prohibitive for a facility of this size. Further, 
discharge of treated wastewater could lead to degradation of coastal 
water quality and the loss of a valuable resource.
    Once the effluent water quality has been upgraded and the maximum 
amount of flow diverted for use onsite in the constructed wetlands, a 
distribution system would be needed to convey the recycled water to 
potential users. A Water Reuse Master Plan and an environmental 
assessment has been prepared which identifies these users and describes 
the necessity for a cost-effective distribution system.

Lahaina Recycled Water Distribution System Expansion Project (Island of 
        Maui)
    Maui County, through its Wastewater Reclamation Division, is one of 
the water recycling leaders in Hawaii. Over the last ten years, Maui 
has demonstrated its commitment to reusing recycled water from its 
wastewater reclamation facilities by building a solid foundation for a 
successful program. Key components of Maui's water recycling program 
include:

   Conducting feasibility studies to determine which areas of 
        the County would benefit the most from the use of recycled 
        water.
   Upgrading the wastewater reclamation facilities in these 
        areas to tertiary treatment (R-1) capability to allow for a 
        greater number of uses of the recycled water.
   Passing a mandatory recycled water ordinance, which requires 
        commercial properties within 100 feet of the County's 
        distribution system to use recycled water for irrigation 
        purposes.
   Adopting an innovative recycled water rate structure, which 
        recovers capital and operation/maintenance costs associated 
        with recycled water distribution from both recycled water users 
        and sewer users. This approach has resulted in recycled water 
        rates that are significantly less expensive than alternative 
        water sources and provides a monetary incentive for new users 
        to hook up to the County's recycled water distribution system.
   Creating the position of ``Wastewater Reclamation 
        Coordinator'' within the Department of Public Works. This 
        person is involved in all facets of the recycled water program 
        and performs the vital function of gaining community support 
        for recycled water use by administering a public outreach 
        program.

    Maui County currently uses approximately 25% or 4 million gallons 
per day of the recycled water it produces from its wastewater 
reclamation facilities. An important aspect that is limiting the 
increased use of recycled water within Maui County is the lack of 
adequate infrastructure to distribute recycled water to commercial 
properties. West Maui is a good example of this limiting factor. 
Recycled water is used in the area for irrigation of the Kaanapali Golf 
Courses. Even though the recycled water pipe line passes close to a 
number of commercial properties, which are interested in using recycled 
water, the distribution infrastructure is not adequately developed to 
allow these properties to connect to the system. A lack of adequate 
recycled water storage and associated pipelines are the main 
constraints to increased use of recycled water in the area.
    West Maui is a good candidate for increased recycled water use 
primarily because most of the properties mentioned above use potable 
water for irrigation. Potable water sources in the area are scarce. 
Frequent, prolonged droughts on Maui have contributed to this 
situation. If the recycled water is not utilized, it is disposed of 
through injection wells. Maui County has been encouraged to reduce the 
use of injection wells by the EPA and local environmental groups due to 
concerns that injection wells contribute nutrients to the near shore 
environment that cause algae blooms. The increased use of recycled 
water in West Maui will ease these concerns by reducing the use of 
injection wells for effluent disposal.
    Maui County ultimately plans to expand the use of recycled water in 
West Maui and is currently preparing a recycled water master plan. 
However, expansion of its recycled water distribution system will take 
time and money. Federal assistance will make it much easier for the 
County to accomplish its goal of expanding the use of recycled water in 
West Maui. Maui County respectfully requests that this project be 
authorized for federal assistance.

                           CONCLUDING COMMENT

    In the above comments, I have tried to describe the severity of 
water resources issues in Hawaii, the strategy we are implementing to 
address these issues, and three projects that are critical components 
of this strategy. We are excited and supportive of the provisions of S. 
960 and urge your support.
    Thank you for letting me represent views and concerns about water, 
our most limiting natural resource in the state of Hawaii.

    Senator Murkowski. Thank you, Mr. Ching.
    Mr. Brady.

STATEMENT OF BRIAN BRADY, PRESIDENT, BOARD OF DIRECTORS, IRVINE 
   RANCH WATER DISTRICT, ACCOMPANIED BY PAUL JONES, GENERAL 
              MANAGER, IRVINE RANCH WATER DISTRICT

    Mr. Brady. Good afternoon, Madam Chairwoman and Senator 
Feinstein, members of the committee. My name is Brian Brady and 
I am the president of the Board of Directors of the Irvine 
Ranch Water District, and I appreciate the opportunity to 
testify on S. 649. I would also like to express my sincere 
gratitude to Senator Feinstein for introducing not only the 
legislation, but for her leadership on many water issues in 
California.
    I would also like to mention and thank Christopher Cox, 
Representative Cox, for introducing identical legislation in 
the House of Representatives.
    There was an item that came up with Mr. Keys that I would 
like to address regarding the feasibility studies and for the 
record I would like to point out that the Irvine Ranch Water 
District has completed feasibility work on all portions of the 
project that is before you. In fact, on two of the major 
components, the natural treatment system and the Irvine 
groundwater desalter, we have done work well in advance or well 
in excess of the feasibility requirements, including design 
engineering, comprehensive water quality modeling, cost 
estimates, and both State and Federal environmental 
documentation.
    Some of this work has already been shared with the Bureau, 
as Mr. Keys had mentioned, and we would be happy to work 
closely with the Bureau in order to provide any more 
information on feasibility.
    Having said that and having listened to Senator Feinstein's 
excellent summary of most of what I was going to present to 
you, let me just briefly point out a few other aspects of the 
project before you. The San Diego Creek Watershed encompasses 
over 120 square miles in central Orange County. The San Diego 
Creek Watershed boundaries are approximately the same as the 
Irvine Water District's service territory. It includes the city 
of Irvine and portions of Lake Forest, Newport Beach, Orange, 
and Tustin, as well as some unincorporated areas of the county.
    Surface drainage and urban runoff containing fertilizers, 
pesticides, sediments, and pathogens flow through the San Diego 
Creek Watershed and into the Upper Newport Bay, severely 
impacting the water quality of the watershed and the bay. As a 
result of these water quality concerns, EPA has identified the 
San Diego Creek and Upper Newport Bay as impaired water bodies, 
and in order to protect the water quality of San Diego Creek 
Watershed and the Upper Newport Bay, which incidentally is the 
largest marine estuary in southern California, the Irvine Ranch 
Water District, in collaboration with the county of Orange and 
the cities I have already mentioned, is proposing to develop 
and maintain a system of manmade wetlands throughout the area 
that will utilize natural processes to remove unwanted 
sediments, nutrients, and other contaminants contained within 
the runoff, helping assure the dry weather flows reaching the 
bay meet Federal clean water standards.
    This watershed system of local wetlands--and there will be 
31 of them in total--will be engineered to capture sediment and 
trash and what is called the first flush from rains, and using 
natural processes to, as I said, to remove nutrients. This 
approach we believe not only is more environmentally friendly, 
it can be done for less money, and it also provides additional 
habitat.
    The other two portions of the project, the Irvine desalter 
will provide 5,400 acre-feet of new water and, as the Senator 
mentioned, between 20,000 and 40,000 people will be provided 
their drinking water supplies; and the final component being 
the brine line. The problem with reclaiming water is it 
produces highly concentrated brines and disposal of that is 
problematic. Our solution in this project is to put it back in 
the ocean, which is where salinity is not a problem.
    Madam Chairwoman, Senator, thank you for having us here 
today, for inviting us, and for considering this bill.
    [The prepared statement of Mr. Brady follows:]

   Prepared Statement of Brian Brady, President, Board of Directors, 
                      Irvine Ranch Water District

    Good afternoon, Mr. Chairman, Senator Feinstein, and the other 
distinguished Members of this Committee. My name is Brian Brady and I 
serve as President of the Board of Directors of the Irvine Ranch Water 
District. I appreciate the opportunity to testify before you today on 
S. 649, the Irvine Basin Groundwater and Surface Water Improvement Act 
of 2003. Let me also express my sincere gratitude to Senator Feinstein 
for introducing this legislation as well as for her outstanding 
leadership on a host of California water issues. I would also like to 
thank Congressman Christopher Cox who has introduced an identical piece 
of legislation in the House of Representatives.
    If I may, I'd like to briefly describe the role that the Irvine 
Ranch Water District plays in our community and the context within 
which our project is proposed. The Irvine Ranch Water District provides 
domestic water service, wastewater collection and treatment, water 
reclamation, and urban runoff treatment for the city of Irvine and 
portions of four surrounding cities as well as the County of Orange. In 
total, the District serves a resident population of over 266,000 with a 
daytime population of approximately 500,000. We enjoy approximately 275 
well-qualified employees who are committed to the mission of providing 
a safe, reliable water supply to our customers without sacrificing the 
environment. In fact, because of our outstanding staff, the District 
has been recognized with numerous regional, statewide and national 
awards for our leadership in developing innovative ways to provide 
water while protecting the environment. The District's General Manager, 
Paul Jones, is with me here today to assist in answering any technical 
questions that the Members of the Committee may have about the projects 
that would be authorized by this legislation.
    We are extremely excited about this legislation, as it will allow 
the Irvine Ranch Water District to even better serve the community and 
the environment. The Irvine Basin Surface and Groundwater Improvement 
Act would authorize the Bureau of Reclamation to participate in the 
design and construction of projects that will enhance the environment 
of a large portion of Orange County. This partnership would be a 
tremendous help to the District as we work to develop new groundwater 
supply projects and to protect the San Diego Creek watershed and Upper 
Newport Bay.
    Before I talk about the specifics of our proposed project, it is 
important to discuss the regional context and approach used by water 
and wastewater agencies in San Bernardino, Riverside, and Orange 
Counties to address water resource and urban runoff issues. 
Contemporary surface and groundwater resource management relies heavily 
on addressing issues on a ``watershed-wide'' basis. The Southern 
California coastal plain and its watersheds extend from the mountains 
to the ocean. One watershed, that of the Santa Ana River, extends 96 
miles from the San Bernardino Mountains to the Pacific, between 
Huntington and Newport Beaches. In terms of management, the Santa Ana 
Watershed Project Authority, or SAWPA as it is known, provides 
watershed-wide coordination of water resource management projects 
through a joint powers agreement among five regional agencies. These 
agencies have worked to develop numerous water reclamation, brackish 
desalting and water quality wetland projects in the three-county 
region.
    In the lower portion of the Santa Ana River system in Orange 
County, Orange County Water District, one of the five SAWPA members, 
manages the groundwater basin, and as discussed later, is a key partner 
in the groundwater component of the proposed project.
    With respect to coordination of surface drainage, or ``urban 
runoff'' issues, the County of Orange, in collaboration with the cities 
and agencies within the County, are developing new, innovative methods 
to treat contaminated surface runoff, including another component of 
this proposed project.
    All these aforementioned partnerships provide the basis for, and 
examples of, collaborative water resource management using a 
comprehensive ``watershed-wide'' approach.
    This brings us to the San Diego Creek watershed, which encompasses 
over 120 square miles in central Orange County. The San Diego Creek 
watershed's boundary is approximately the same as Irvine Ranch Water 
District's and includes the City of Irvine and portions of the Cities 
of Lake Forest, Newport Beach, Orange, and Tustin, as well as 
unincorporated areas of the County. Surface drainage, or urban runoff 
containing fertilizers, pesticides, sediment, and pathogens, flows 
through the San Diego Creek watershed and into the Upper Newport Bay, 
severely impacting the water quality of the watershed and the Bay. As a 
result of these water quality concerns, EPA has identified San Diego 
Creek and the Upper Newport Bay as ``impaired water bodies.''
    In order to protect the water quality of the San Diego Creek 
watershed and Upper Newport Bay, the largest marine estuary in Southern 
California, Irvine Ranch Water District, in collaboration with the 
County of Orange and the aforementioned cities, is proposing to develop 
and maintain a system of man-made wetlands throughout the area that 
will utilize natural processes to remove unwanted sediment, nutrients, 
and other contaminants from the runoff, thus helping to ensure that the 
dry weather flows reaching the Bay meet federal clean water standards. 
This watershed-wide system of local wetlands, 31 in total, will also 
use engineered basins to capture sediment and trash from ``first 
flush'' rains and use natural ecosystems to remove nutrients from dry 
weather runoff. This approach, known as a Natural Treatment System, 
will reduce the community's cost of protecting the water quality of the 
Bay, and will also provide additional neighborhood open space and 
wildlife habitat.
    In addition to completing the San Diego Creek Watershed Natural 
Treatment System, the proposed legislation would authorize Bureau of 
Reclamation to provide assistance in developing a related project to 
treat and reuse impaired groundwater within the groundwater basin.
    This portion of the proposed project will be built in conjunction 
with Orange County Water District. This portion of the project will 
consist of a well system and water purification plant that will remove 
salts and nitrates caused by natural geology and past agricultural 
drainage from a portion of the groundwater basin underlying the San 
Diego Creek watershed. The project will employ reverse osmosis 
technology to create a new, highly reliable local drinking water supply 
at a cost comparable to imported water supplies from the San Francisco 
Bay-Delta Estuary and the Colorado River. The project will reduce 
dependence on imported supplies and is consistent with the Bureau of 
Reclamation's objectives of reclaiming impaired water for beneficial 
uses.
    The final component of this project will be a regional brine line. 
In Orange County, just as it is throughout Southern California, 
wastewater reclamation for non-potable reuse is a critical component of 
the region's current and future water supply portfolio. Our region 
enjoys one of the most advanced systems of wastewater treatment, 
distribution and reuse in the world. Currently, brines are disposed in 
the sewer from industrial sources and existing or proposed impaired 
groundwater treatment facilities. This method of disposal is 
problematic as it dramatically increases the costs of treatment and 
impairs local water and wastewater agencies' ability to implement 
additional wastewater reclamation. To alleviate this problem, Irvine 
Ranch Water District proposes to construct a Regional Brine Line that 
consists of a separate system of pipes to segregate brine from sewage 
and dispose of the brine directly into the ocean where salinity is not 
a concern.
    The total cost of the projects to be authorized in S. 649 is 
slightly under $80 million. As you know, the Bureau of Reclamation's 
Title XVI program allows the Bureau to contribute up to 25% of the 
costs of planning, designing, and constructing projects like the ones 
that would be authorized by S. 649 up to a limit of $20 million. Our 
District and other local sponsors will be providing over $60 million 
toward the construction of these important projects.
    Mr. Chairman, Senator, thank you again for allowing me the 
opportunity to share my testimony with you. The Irvine Ranch Water 
District is committed to serving its customers in the most efficient, 
cost-effective and environmentally responsible manner. I am proud to 
serve as President of the Board for such an outstanding public agency. 
We are looking forward to working with the Bureau of Reclamation to 
make this project a success.
    Again, thank you for your time and consideration of my testimony. I 
will be glad to answer any questions you may have at this time.

    Senator Murkowski. Thank you, Mr. Brady.
    Mr. Carlson.

           STATEMENT OF PETER CARLSON, COORDINATOR, 
            SMALL RECLAMATION PROGRAM ACT COALITION

    Mr. Carlson. Madam Chairman, members of the subcommittee: 
My name is Peter Carlson. I am appearing today as the 
coordinator of the Small Reclamation Program Act Coalition, 
which is made up of the Natural Urban Agriculture Council, the 
Western Coalition of States, the Oregon Water Resources 
Congress, the Eastern Municipal Water District in Southern 
California, and the San Bernadino Valley Water District in 
California.
    I would like to submit for the record a letter of support 
for this legislation also from the Association of California 
Water Agencies.
    At the outset, let me state our strong support for S. 993, 
the Small Reclamation Water Resources Act of 2003, and express 
our appreciation to you for holding this hearing and to Senator 
Gordon Smith for introducing the legislation. The proposed 
amendments represent a 9-year effort to restructure the program 
and provide western water users with new options for addressing 
their water resource-related needs.
    Growth and aging of the infrastructure out West are the 
driving forces for this legislation. This westward growth is 
why enactment of S. 993 is so vitally important. I have been so 
impressed by the discussion of this Water 2025 document from 
the Department of the Interior that I would also like to submit 
it for the record, because I believe that it provides a further 
justification for the need for this legislation.
    There is presently not in place an active small reclamation 
loan program at the Bureau of Reclamation accepting proposals 
for projects. As a result, there is a program gap between the 
larger reclamation project that is typically before your 
subcommittee and the smaller programs that Reclamation offers, 
such as technical assistance. The Small Reclamation Water 
Resources Projects Act of 2003 would close that gap.
    The amendments contained in S. 993 address these issues in 
the following manner. No longer requiring irrigation as a 
project purpose in the program will allow for the development 
of projects in the urban-rural crossover setting that are more 
economically and environmentally sound, providing additional 
definition and expansion of the activities which could be 
undertaken through the program, especially for rehabilitation 
and betterment, and in the area of water quality improvements 
will help address aging infrastructure problems, as well as 
developing new opportunities to make better use of existing 
supplies without the need to create new water supply 
structures.
    The streamlining of the proposal process and the 
establishment of a definite schedule for proposal processing 
will give water users greater program confidence and certainty. 
The establishment of a new smaller partnership program under 
title 2 of the Small Reclamation Program Act Amendments and the 
activities that can be carried out under that program will 
facilitate problem-solving in a manner that gets the work done 
sooner, before more problems develop.
    Once this program is up and running, we see this as a $40 
to $60 million a year program, but that is probably a couple of 
years down the road. We appreciate the decision to increase the 
cost ceiling in the program from the approximate $359 million 
that is presently there to $1.3 billion under this legislation. 
This is one of the major changes in S. 993 from legislation 
introduced in the past. S. 993 calls for $900 million to be 
made available to carry out projects in title 1 of the 
amendments, $300 million for title 2, and $100 million for 
title 3.
    These numbers are not without foundation. When the program 
was suspended in 1995, there were notices of intent for 
projects totaling approximately $450 million. Approximately 
$170 million of this was for Native American projects. At the 
end of the 106th Congress, we conducted an electronic survey of 
a thousand water users in the West. We received responses to 
our survey from 12 of the 17 States indicating a strong 
interest in using title 1 and title 2 of the proposed 
amendments, further justifying in our mind the need for a 
ceiling increase.
    We have received--we have also received responses to the 
idea contained in S. 993 of setting aside 20 percent of the 
proposed ceiling in the program for Indian tribes and 
economically disadvantaged communities, an approach the water 
community strongly supports.
    The continuation of the Bureau of Reclamation's Small 
Reclamation Loan Program with the changes made by S. 993 in our 
mind is the most important and appropriate course to take at 
this time. There is strong interest out there and the belief 
that the small Reclamation loan program is the best vehicle to 
accomplish the work, for helping address the rural, urban, 
Indian population, and the water and environmental needs of the 
West.
    Thank you.
    [The prepared statement of Mr. Carlson follows:]

           Prepared Statement of Peter Carlson, Coordinator, 
                Small Reclamation Program Act Coalition

    Madam Chairman, Members of the Subcommittee, my name is Peter 
Carlson, I am President of the firm Will & Carlson, Inc., a Washington, 
D.C. governmental relations firm specializing in natural resource 
issues. I am appearing today as the coordinator of the Small 
Reclamation Program Act Coalition which is made up of the National 
Urban Agriculture Council (NUAC), the Western Coalition of Arid States 
(WESTCAS), the Oregon Water Resources Congress (OWRC) the Eastern 
Municipal Water District in Southern California (EMWD) and the San 
Bernardino Valley Water Conservation District in Southern California.
    At the outset, let me state our strong support for S. 993, the 
Small Reclamation Water Resources Project Act of 2003 and express our 
appreciation for your holding this hearing and Senator Gordon Smith for 
introducing the legislation. The proposed amendments represent an nine 
year effort to restructure the program and provide western water users 
with new options for addressing their water resource related needs.
    The Small Reclamation Program Act was last amended in 1986, and the 
amendments were appropriate for that time. The changes proposed by S. 
993 build on what we, the water users, have learned since that time and 
will make this an even better program from an environmental, business 
and socio-economic standpoint.
    According to the Western Water Policy Review Commission report from 
1998 ``Once the outpost of a young nation, today's West is home to 
nearly one-third of the American population. The region has experienced 
rapid population growth in recent years: western states grew by about 
32 percent in the past 25 years, compared with a 19-percent rate in the 
rest of the nation. By the year 2025, the West will add another 28 
million residents.''
    A more recent report from the University of Colorado's Center of 
the America West, of 11 Western states (California, New Mexico, 
Wyoming, Washington, Idaho, Utah, Arizona, Oregon, Colorado, Montana, 
Nevada), indicated that the 2000 census counted 61.4 million people in 
the Western states--a 21 percent increase from 1990. By 2050, 109 
million people will live in the Western States, the study estimates.
    This Westward growth is why S. 993, is so vitally important. There 
is presently not in place an active Small Reclamation Loan Program at 
the Bureau of Reclamation that is accepting proposals for projects. 
From our perspective, the proposed amendments would bring a number of 
important changes to the existing program that would help address the 
issues related to growth in the West. This decision, amending the Small 
Reclamation Loan Program, is an important step in investing in the West 
and putting in place a revitalized program that western water users can 
use to address the various needs associated with growth, whether they 
be water supply, water conservation, water quality, environmental or 
social purposes. There is currently a program gap between the larger 
Reclamation project that is typically before your Subcommittee and the 
smaller programs that Reclamation offers, such as technical assistance. 
The Small Reclamation Water Resources Project Act of 2003 will close 
that gap.
    The amendments contained in S. 993 address these issues in the 
following manner:

          1. No longer requiring irrigation as a project purpose in the 
        program will allow for the development of projects in the 
        urban-rural crossover setting that are more economically and 
        environmentally sound. This is precisely the area of greatest 
        need for support in development of small projects.
          2. Providing additional definition and expansion of the 
        activities which can be undertaken through the program, 
        especially for rehabilitation and betterment and in the area of 
        water quality improvements. This will help address aging 
        infrastructure problems as well as developing new opportunities 
        to make better use of existing supplies, without the need to 
        create new water supply structures.
          3. The streamlining of the proposal process, and the 
        establishment of a definite schedule for proposal processing 
        will give water users greater program confidence and certainty. 
        Proposals will no longer languish in the bowels of the 
        bureaucracy only to then have to wait years for an answer on 
        whether there is a Federal interest in the proposed work.
          4. The establishing of a new, smaller partnership program 
        under Title II of the SRPA amendments, and the activities that 
        can be carried out under the program. This will facilitate 
        problem solving in a manner that gets the work done sooner 
        before more problems develop, through the work being carried 
        out by the project sponsor within 18 months and a shortened 
        repayment period.
          5. The reduction of the repayment period for Title I projects 
        from 40 years to 25 years will also bring the program in line 
        with current business practices in the private sector and 
        lessen the financial exposure to the Federal government.
          6. Connecting the proposed work to organizations that have 
        legal authority and responsibility for such work on their 
        projects, and making sure that work is consistent with 
        applicable State water law will keep the program focused and 
        more accountable.

    As part of the discussions with the organizations I represent, 
which helped in the development of the ideas embodied in S. 993, some 
have questioned whether the Bureau's Budget would be able to 
accommodate this program. Western water user organizations have been 
working successfully on the Energy and Water Appropriations bill 
through our ``Invest In the West'' campaign to increase the allocation 
for the Bureau of Reclamation's Water and Related Resources program. 
Given the construction schedules associated with the program and the 
decision-making process that is built into the legislation, we see this 
as a $40 to $60 million a year program. We believe the Bureau of 
Reclamation should be able to accommodate such a level, given the 
changes to the program proposed by these amendments.
    We appreciate the decision to increase the cost-ceiling in the 
program from the approximate present remaining ceiling of $359 million 
to $1.3 billion in order to accommodate the interest out in the West 
for the program. This is one of the major changes in S. 993 from 
legislation introduced in past. S. 993 calls for $900 million to be 
made available to carry out projects under Title I of the amendments, 
$300 million for Title II and $100 million for Title III. These numbers 
are not without foundation.
    When the program was suspended in 1995 there were Notices of Intent 
for projects totaling approximately $450 million. Approximately $170 
million of this total was for Native American projects. There were 
another ten projects that were in or about to enter the construction 
phase. Two of the remaining projects are being completed by this past 
years appropriations leaving one remaining project to be constructed.
    At the end of the 106th Congress we conducted an electronic survey, 
based on similar legislation in the prior Congress, to assess the 
interest in the programs that would be developed under this 
legislation. Historically 15 of the 17 Western states have used this 
program. We received responses to our survey from water users in 12 of 
the 17 states indicating a strong interest in using both Title I and 
Title II of the proposed amendments.
    Since that time I have also received responses to the idea 
contained in S. 993 of setting aside up to 20% of the proposed ceiling 
in the program for Indian Tribes and economically disadvantaged 
communities, an approach the water community strongly supports. These 
amendments also open the program up to Hawaii, Alaska and the Insular 
areas so their water needs can be addressed as well, an idea that we 
also support.
    Another 1998 recommendation of the Western Water Policy Review 
Commission was ``Given the declining federal budgets, innovative 
sources of funding and investment, including public and private 
partnerships, must be found for the management and restoration of 
western rivers.''
    Part of the reason for including a section in this bill on 
guaranteed loans is to explore the initiation of a new loan guarantee 
section under the Act. The Federal Government has approximately forty 
guaranteed loan programs listed in the Federal Budget. The Loan 
Guarantee section of these amendments is to open the door for a new, 
innovative approach to assist in funding projects. We believe that 
making available such a new financial tool for the Bureau to explore 
and make use of (loan guarantees) could benefit the water users in the 
West by having projects developed in a more timely manner while we all 
continue to work together to increase the financial resources for the 
Bureau of Reclamation for other projects in the program. As we stated 
earlier, we don't envision this program being a heavy financial burden 
on the Bureau of Reclamation's Water and Related Resources budget, but 
we are willing to work with the Bureau to explore new ways, such as 
this proposal, to see if there are financial innovations that work in 
meeting our needs.
    I would like to address the issue of whether the Bureau of 
Reclamation should or shouldn't be in the loan business. Why is it that 
almost every Federal agency has a loan program, to assist in carrying 
out their activities, yet in past comments on the program the Bureau of 
Reclamation claims ``the current loan process (at Reclamation) suffers 
from a lack of trained credit officers to monitor loans as well as 
assist in determining economic feasibility, repayment terms, maturity 
dates, and interest rates . . .  Reclamation would continue to be in 
the business of developing repayment contracts and engaging in loan 
collection activities, two tasks for which the private sector is better 
suited than the Federal Government.'' The former Administration made 
great claims about Reinventing Government. Why can't Reclamation learn 
from the best of what other Federal agencies do with their loan 
programs and in turn benefit the public from a reinvention in their 
loan program? This is part of the reason why S. 993 is so important in 
terms of the prescriptiveness of the process, decision making time 
frames and the need to rewrite the guidelines for the new program
    Some would like Reclamation just to be in the grant business. We 
don't believe that would be a good idea. From FY91 to FY99 Reclamation 
provided approximately 4,600 grants worth about $750 million. Unless 
you tie the grants down like S.993 would do through the amendments to 
the program, I believe that a grant only program would be a recipe for 
waste and abuse. If the Bureau has such experience with grants, which I 
have been told are more burdensome to administer, and have so few 
loans, it would seem like they can figure out how to make a loan 
program work better from an administrative standpoint.

                               CONCLUSION

    The continuation of the Bureau of Reclamation's Small Reclamation 
Loan Program, with the changes made by S. 993, is the most important 
and appropriate course to take at this time. Based on the details in 
the Western Water Policy Review Commission report, our survey and 
meetings and conversations with water users in the West, there is a 
strong interest out there for a program that can help address the needs 
of the West, and a belief that the Small Reclamation Loan Program is 
the best vehicle to accomplish the work. Investing in the West through 
the proposed amendments to the program will be the best step forward 
into the 21st Century for helping the rural, urban, Indian population 
and the water and environmental resources of the West.

    Senator Murkowski. Thank you.
    Mr. Carlson, let me just ask you, and I apologize for not 
knowing a little bit more about the Small Reclamation Loan 
Program Coalition, but I am trying to--I had asked the question 
earlier of Commissioner Keys about whether or not this 
legislation would be necessary if we already have authorized a 
Small Reclamation Projects Act Program. So tell me how your 
coalition fits in with the existing authorization?
    Mr. Carlson. With the existing authorization, a number of 
the members of these associations and this one district in 
program have used the program in the past. The changes that are 
in this legislation proposed for the program--the program was 
last amended in 1986. These amendments modernize the program. 
One of the problems with the existing program is the 
requirement that you have an irrigation component to your 
project. A lot of these notices of intent that were put on hold 
had irrigation components that, if you will, sort of dwarfed 
the proposal.
    What this legislation would do is say you no longer have to 
have your irrigation as a project purpose, but priority should 
be given to existing reclamation projects where there is a 
nexus to doing the work, and then you move forward. So the 
irrigation component has been troublesome.
    The other thing that this legislation does that if they 
restarted the program it could not do is it shortens the 
repayment period from 40 years to 25 years. It sets a floor of 
25 percent for cost-sharing, so it could go further above, and 
then it creates this small Reclamation Partnership Program that 
has a number of expanded purposes, such as watershed planning, 
that some may question whether there is authority to do or not 
within the small loan program.
    Then it offers up a whole new tool, which is this loan 
guarantee component that presently does not exist, that might 
prove quite useful in terms of doing future work in the West.
    Senator Murkowski. So when I asked the question previously 
about whether or not this goes beyond the initial mission, if 
you will, of irrigation and reclamation, what I am hearing you 
say is that, yes, it probably does, but that is a good thing or 
a necessary thing.
    Mr. Carlson. It is a good thing. Because of the changes of 
environmental laws since 1956 and even since, what you may find 
in 1986 in terms of new environmental mandates that need to be 
met, new water quality changes that have to be met. So I would 
not consider this mission creep; I would consider it focusing 
on the work that needs to be done out West as a result of new 
things that water districts are finding that they are having to 
do that they were not required to do previously since this 
program has been around.
    Senator Murkowski. Mr. Brady, I want to ask you a question. 
You were talking about the desalination effort and the brine 
line, as you describe it.
    Mr. Brady. Yes.
    Senator Murkowski. And the plan is to essentially put the 
additional brine or water or whatever is left over after the 
desalination just directly into--where does it go, Newport Bay? 
I am just wondering. Has there been any kind of an analysis of 
the effects on the water of this additional salinity? I know 
that if you take a fish tank and you pour too much salt in, you 
will kill the fish. I am assuming you have done more scientific 
studies than this.
    Mr. Brady. Yes, Madam Chairman, we have. If I might, I have 
our general manager, Paul Jones, who is intimately involved 
with and familiar with the studies we have done. If I might 
have him give a brief answer.
    Senator Murkowski. Sure. Welcome Mr. Jones.
    Mr. Jones. Thank you, Madam Chairman. Paul Jones, general 
manager, Irvine Water District.
    Basically, the brine that is rejected from the desalter is 
concentrated salts and nitrates. There is no bacteria in that 
brine reject, and our proposal is to build a pipeline from the 
treatment plant through the area down to the Orange County 
Sanitation District, and they currently have a 5-mile outfall 
that we would connect to.
    The studies we have shown demonstrate that the salt and the 
nitrate level are far below the ambient level of that in the 
ocean which we would be disposing in.
    Senator Murkowski. Let me ask you then, just as a follow-
up, and I will not pretend to know anything about the 
desalination process other than that it does take an additional 
amount of energy in order to do it. And recognizing that 
California has had some issues when it comes to their energy 
issues, have you factored that into the equation about how or 
where we get the energy to do the desalination?
    Mr. Brady. Yes, we have. In fact, we are locating this 
proposed treatment plant next to another treatment plant that 
is being constructed for a different purpose, and they will 
share a site and in fact even share portions of a building. One 
of the things that we have looked at is an alternative of self-
generation rather than purchased electricity using natural gas. 
Currently we generate about half of the electricity for the 
district using natural gas, and the other half we use purchased 
electricity. So we have diversified, in a sense, to protect us 
from the energy markets in California. Gas goes up one year, 
electricity goes up the next year. There are shortages of 
electricity and we can rely more on the natural gas.
    So we have factored that into our thinking. It also 
provides some economies of scale, because we will build a 
generator for the plant that will serve both of those treatment 
plants that are on the site and that enables us to do it cost-
effectively.
    Senator Murkowski. I have to put in a plug for Alaska's 
natural gas to help you out here.
    Senator Akaka, did you have any questions that you wish to 
pose?
    Senator Akaka. Thank you very much, Madam Chairman.
    I want to thank Dr. Ching for being here, all the way from 
Hawaii, to testify before this committee on a subject that's 
not really only for Hawaii. It's really a subject for the 
entire country, and that is limitation of water. Lately we have 
even been talking about the Columbia River and the water supply 
issues.
    But water supply is a huge problem for our country, and 
what I would like to say to you, Dr. Ching, is that I hope 
Hawaii can set up a model as to how to take care of water 
needs.
    You also mention, with interest to me, that there were 14 
major irrigation systems in Hawaii that were developed by the 
sugar plantations in the last 150 years. These I understand are 
still in place. What we are asking with my bill is for studies 
of only five of these irrigation systems. So we have many other 
systems to work on. But the fact is that there is a possibility 
of making the best use of the systems that we have to provide 
adequate water for people in Hawaii.
    I wanted to ask you, of the water shortages in Hawaii which 
island would you say has the most critical problem for water?
    Mr. Ching. Senator, the island with the greatest demand on 
water is where all the people live and that is Oahu currently. 
But what is often missed is that even on other islands that do 
not have a large population, the population tends to converge 
on the dry sides of the island. If you look at the development 
in Hawaii, if you look at the big island, for example, the 
growth area is on the west side, on the Kona side. That is 
where there is no--there is not a great abundance of water and 
water needs to be brought over from the other side or you need 
to reuse recycled water.
    But Oahu at the current time, because roughly 70 percent of 
the population of the State reside on that island, 72 percent I 
believe by the last census.
    Senator Akaka. Am I correct to read with alarm that the 
Board of Water Supply thinks that by 2018 the island of Oahu 
will probably not have sufficient water supply?
    Mr. Ching. That is exactly correct. They waffle a little 
bit. Sometimes it is 2018, sometimes it is 2023, but it is very 
close. It is a little melodramatic, saying we are going to run 
out of water. What it does mean is that we start to mine water. 
We use more than we recharge the system with, and that is very 
critical if we think about future generations.
    Senator Akaka. Well, this raises the importance of what we 
are asking for, the study and help with our technology for 
recycling, as well as using the desaltination facility at 
Barber's Point in bringing forth potable water.
    Thank you so much for coming, and I appreciate your 
testimony and those of the entire panel.
    Thank you very much, Madam Chairman.
    Senator Murkowski. Mr. Ching, I have a very smart mother-
in-law who spent most of her years in Alaska and now lives on 
Maui. She is above Kihei in the area that you describe as being 
very, very desert-like, so I know very well from visiting with 
her some of the difficulties that you have.
    Just a very quick question about the study to assess the 
statewide water, the water resource issues. You say that it is 
incomplete and it is incomplete due to funding limitations. How 
much has been appropriated to date? What has the State's share 
been? Just give me some parameters here.
    Mr. Ching. The Hawaii Water Resources Act of 2000 
authorized $300,000 in Federal funds, to be matched by the 
State in like amount. So to date $600,000 has been made 
available. The lead agency is the Hawaii Department of 
Agriculture and, as you might expect, the focus has been on 
these over 150-year-old irrigation systems that took water from 
the wet side to the dry side of the island. If these systems 
are not sometimes refurbished or maintained, they are lost 
forever and you can never replace those systems. You could 
never--I always say you could never get an environmental impact 
statement to pass to do that kind of thing. But it is $600,000 
to date.
    Senator Murkowski. If you were to do it properly?
    Mr. Ching. Well, just on the agricultural side, we have 
essentially addressed a third of the problem, but we have not 
addressed some of the other issues, such as alternative 
supplies, outreach, use of recycled water, and just there is a 
whole bunch of what I would call institutional-legal issues 
that have to be addressed.
    For example, if we look at some of these irrigation 
systems, the land underneath the distribution system is owned 
privately, but the water apparently is owned by the State. How 
do we reconcile these differences that will have to be probably 
challenged in court before we are done?
    Senator Murkowski. Interesting.
    Well, thank you all. Thank you for your time, your 
testimony this afternoon. We have had the opportunity to 
perhaps shine a little bit of light on some of the challenges 
that face us over water in some very different parts of the 
country. So I appreciate the time and appreciate the attendance 
of all this afternoon.
    With that, we stand adjourned.
    [Whereupon, at 3:54 p.m., the hearing was adjourned.]

                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                   U.S. Department of the Interior,
                                     Bureau of Reclamation,
                                      Washington, DC, June 9, 2003.
Hon. Lisa Murkowski,
Chairperson, Subcommittee on Water and Power, Committee on Energy and 
        Natural Resources, U.S. Senate, Washington, DC.
    Dear Madam Chairwoman: Thank you for the opportunity to respond to 
the follow-up questions from the May 13, 2003 hearing before the Senate 
Subcommittee on Water and Power on the Bureau of Reclamation's Small 
Reclamation Program and the Wastewater and Groundwater Study and 
Facilities Act.
    Enclosed are Reclamation's responses to your questions. I would 
appreciate your assistance in inserting these into the hearing record. 
If you have further questions or concerns, please do not hesitate to 
contact me.
            Sincerely,
                                         John W. Keys, III,
                                                      Commissioner.
[Enclosure]
              Responses to Questions From Senator Bingaman
    Question 1. What is the history of the Small Reclamation Loan 
Program?
    Answer. Enactment of the Small Reclamation Projects Act (SR-PA) in 
1956 (P.L. 84984) established a loan program within the Bureau of 
Reclamation to assist non-Federal organizations authorized to contract 
with the United States with the construction or rehabilitation of their 
non-Federal water projects. The program is designed to accommodate 
multipurpose projects, with irrigation being a required project 
purpose. Other purposes include municipal and industrial water 
supplies, hydroelectric power, flood control, recreation, and fish and 
wildlife enhancement. Grants can also be provided for specific project 
purposes on a cost-share basis. Loan amounts are limited by statute, 
whereby in 2002, the maximum allowable total project cost for a SRPA 
loan was $62.1 million, with a maximum allowable loan and/or grant of 
$41.6 (2/3%) million.
    In 1987, Federal agencies were directed by the Congress (P.L. 100-
203) to sell many Federal assets, including Reclamation small project 
loans, to help reduce the budget deficit. Reclamation sold 166 loans 
back to the original borrowers on a prepayment basis. However, a 1991 
audit by the Department's Inspector General severely criticized 
Reclamation for its handling of the loan sale. Also, it found that 
there appeared to be sufficient funds available in the private sector 
to finance such small project undertakings, and suggested that 
Reclamation review its loan programs. This began a series of events 
that resulted in the suspension of all loan program activities and the 
initiation of an extensive program review. This suspension remains in 
effect to date.
    Release of the April 1995, REGO II Report by the National 
Performance Review Committee called for the elimination of all 
Reclamation small loan programs in that they no longer were essential 
to Reclamation's new mission.
    Question 1a. Has the program worked well?
    Answer. The SRPA Program was another tool to provide financial 
assistance to water entities in constructing and/or rehabilitating 
their non-Federal water supply systems. It also has the capability of 
assisting non-irrigation related project functions as well.
    Question 1b. Are legislative modifications necessary?
    Answer. The SRPA Program can be reactivated administratively, 
provided that program activities remain unchanged from those in effect 
prior to the program's suspension in 1993. However, to include other 
provisions, such as removal of the irrigation project purpose 
requirement, repayment of the irrigation repayment obligation with 
interest, or expanding the Program authority beyond the 17 Western 
states and Hawaii, as are being proposed by S. 993, would require 
legislative amendment of the 1956 Act.
    Question 1c. Do you think the $1.3 billion cost ceiling is 
appropriate?
    Answer. This will depend on the contents of the program that is 
eventually enacted into law. The ceiling of the current program is $1.2 
billion, of which approximately $375 million remains uncommitted.
    Question 2. Under what authority has the report been withheld?
    Answer. Prior to submittal to Congress, the Department wants to 
assure that the report meets Departmental requirements as well as the 
needs of the local entities.
    Question 3. How would the new authorities included in this bill 
interact with authority that Reclamation already has?
    Answer. The bill would greatly expand Reclamation's authority and 
jurisdiction to include not only projects in the 17 Western states and 
Hawaii, but also those located in the Commonwealth of Puerto Rico, 
Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, 
the Virgin Islands, and the Territory of the Pacific Islands. Given the 
number of other demands already placed upon Reclamation's budget, new 
projects, such as those envisioned in S. 993, would further strain 
Reclamation's existing financial and administrative resources, thereby 
making it even more difficult to meet its current obligations.
    Question 4. Is there a demand for this kind of grant and loan 
program?
    Answer. Reclamation's SRPA Program has always been the most popular 
of its loan programs, given it is designed to accommodate both Federal 
and non-Federal projects with multipurpose features. In various 
meetings with water users, it is apparent that there still remains much 
interest in and support for Reclamation's SRPA Loan Program. Although 
10 years has passed since suspension of loan activities, Reclamation 
staff continues to receive inquiries on obtaining loans and/or grants. 
Historically, the SRPA Program provided a financial avenue to assist 
entities in maintaining and/or upgrading their non-Federal water supply 
systems.
    Question 5. What criteria do you think the Secretary should apply 
in approving the grants, loans and guaranteed loans under this 
legislation?
    Answer. The new program would need to be developed in a manner that 
meets the principles and standards set forth in the Office of 
Management and Budget Circular No. A-129, ``Policies for Credit 
Programs and Non-Tax Receivables''. The circular prescribes the 
policies and procedures to be followed by Federal agencies when 
justifying, designing, and managing credit programs. It sets standards 
for extending credit, managing lenders participation in the 
Government's guaranteed loan programs, servicing credit and non-tax 
receivables, and collecting delinquent debt. Also, the requirements of 
the Federal Financial Management Improvement Act of 1996 will need to 
be addressed in developing new program criteria.
    Question 6. I understand that the Bureau is undertaking a study of 
water resources in Hawaii. Please describe the status of that study. 
What do you view as the most important water resource issues 
confronting that State?
    Answer. This water resources study is being completed by the Hawaii 
Department of Agriculture under a grant agreement with Reclamation. The 
Department of Agriculture has contracted the technical work to Water 
Resources Associates. Five water delivery systems have been identified 
for investigation. Field inspections, inventories, and assessments have 
been complete and the contractor is well underway with engineering 
evaluations. The study appears to be on schedule for completion by the 
end of the year.
    Based on previous meetings with the Hawaii Department of 
Agriculture and others, they report that an aging infrastructure and 
changing agricultural practices are causing serious problems for the 
agricultural delivery systems, while increasing water demand and 
limitations on new sources of water supply create challenges for the 
municipal sector.
                                 ______
                                 
              Response to Question From Senator Feinstein
    The Reclamation Wastewater and Groundwater Study and Facilities 
Act, P.L. 102-575, at Title XVI, Section 1606(c) mandatorily required 
that ``the Secretary shall submit the report authorized by this section 
to the [Congress] not later than six years after appropriation of funds 
authorized by this title.'' The Final Feasibility Report was completed 
in April 2001, but was not submitted to Congress as statutorily 
required--even though more than six years had already passed since the 
appropriation of funds.
    Question. When will the Department submit this report to Congress?
    Answer. The Southern California Comprehensive Wastewater 
Reclamation and Reuse Study report published in July 2002 has been 
under review in the Department of the Interior. Reclamation has 
completed a draft compendium of that report and we intend to initiate 
the submittal of our report to Congress after giving the local entities 
opportunity for review and comment.
                                 ______
                                 
             Responses to Questions From Senator Murkowski
    Question 1. S. 960 would authorize the Bureau to participate in 
three water management projects. What is the current state of 
development of these projects? Have feasibility or engineering designs 
been developed for each?
    Answer. Kalaeloa Desalting Plant--An engineering feasibility study 
was completed in June 2000. This study evaluated sites, desalting 
technologies, and provided the basis for design of a reverse osmosis 
membrane seawater desalting facility. Construction designs and 
specifications, being done under contract, are about 15 percent 
complete. A pilot plant is being constructed to test membrane filters 
and remote supervisory control and data acquisition. This pilot plant 
is scheduled to operate from June to September 2003.
    Kealakehe Wetland Treatment Facility--In 2001 the U.S. Geological 
Survey and Bureau of Reclamation published a Concept Design Summary 
that included a subsurface wetland pilot cell, subsurface wetland and 
lagoon, and free water surface wetland. Since then the two agencies 
have completed a design and specification for the pilot cell and will 
complete a design for the full wetland by the end of the year. 
Alterations of the treatment plant and conveyance facilities are being 
designed under contract.
    Lahaina Reclaimed Water Distribution System--The County is 
developing a recycling master plan that will include the feasibility of 
the Lahaina distribution system. This plan is scheduled for completion 
by the end of 2003.
    Question 2. The authorizing language does not provide estimates of 
funding. Do you have estimates of the funding needed for:

    a) Developing seawater desalination on Oahu?
    Answer. The estimated cost of the Title 16 portion of the Kalaeloa 
Desalting Plant is $40 million.

    b) Solving the effluent discharge problems at the Kealakehe 
wastewater treatment plant?
    Answer. The cost of this project is estimated at $16 million.

    c) Extending the Maui recycled water pipeline to Lahaina?
    Answer. The distribution system at Lahaina is estimated to cost 
$4.5 million.
                                 ______
                                 
       Responses of Dr. Ching to Questions From Senator Murkowski
                 s. 960, the hawaii water resources act
    Question 1. The bill authorizes ``such sums as may be necessary'' 
to undertake these three water projects. What is the estimated price 
tag for these projects?
    Answer:

 
------------------------------------------------------------------------
                         ESTIMATED PROJECT COSTS
 
                                KALAELOA
 
2 Basal & 2 Caprock Exploratory wells......................   $1,600,000
Design.....................................................   $3,571,500
    EIS $285,000...........................................
    Pilot Plant $884,700...................................
Design, Surveys, Permits $2,401,800........................
Construction (5 mgd @ $8/gallon)                             $40,000,000
 
      Total................................................  $45,171,500
 
                                KEALAKEHE
 
Storage reservoir and distribution main....................   $3,000,000
Upgrade to R-1 (tertiary) treatment........................   $3,000,000
Distribution System with hike/bike trails..................   $1,000,000
Subsurface Wetland Pilot Cell..............................     $610,000
Subsurface Wetlands and Lagoon.............................   $5,600,000
Free Water Suface Wetlands.................................   $2,600,000
 
      Total................................................  $15,810,000
 
                                 LAHAINA
 
Booster Station: $1,125,000................................   $1,125,000
4.500' of 15'' pipe line @ $250/ft.........................   $1,125,000
1 MG tank @ $1.25/gallon...................................   $1,125,000
Modify tail outlet @ Kaanapali Golf Course pond............      $25,000
Misc. laterals and meters; 7 @ $5,000/lateral..............      $35,000
SCADA control system modifications.........................      $25,000
Land acquisition...........................................   $1,000,000
 
      Total................................................   $4,460,000
 
      GRAND TOTAL..........................................  $65,441,500
------------------------------------------------------------------------

    Question 2. Have feasibility or engineering designs been developed 
for each proposed project?
    Answer. Kalaeloa--In June 2000, the Board of Water of Supply 
conducted an engineering feasibility study; the design construction 
plans and specifications are approximately 15 percent completed.
    Kealakehe--A master reuse plan and environmental assessment have 
been prepared. Preliminary design of wetlands has also been completed. 
The Bureau of Reclamation has done all the preliminary engineering and 
design for the project and the County has an memorandum of 
understanding with the Bureau pertaining to this project.
    Lahaina--A recycled water master plan is currently being developed 
for West Maui. A feasibility analysis is part of this master plan 
development.
    Question 3. What, if any, environmental impacts will result from 
the construction of the three proposed projects?
    Answer. Kalaeloa--Realization of the project will diversify and 
supplement potable water sources and will enable water supplies to be 
consistent with rapid population growth in this part of Oahu. In short, 
this project will enable the Board of Water Supply to maintain water 
use rates below potable water recharge rates.
    Kealakehe--The environmental assessment for the master reuse plan 
concludes that there will be no significant impact. An amended 
environmental assessment needs to be prepared for the wetlands. It is 
anticipated, however, that realization of the wetlands will reduce the 
risk of coastal water contamination, transform the recycled water from 
a disposal liability to a resource asset, capable of irrigating parks, 
playgrounds, highway landscaping and agricultural activities. In 
addition, the wetlands will postpone the need to develop new potable 
water sources in the area and provide additional landscaping and 
recreational opportunities for the public.
    Lahaina--The environmental impacts will be positive. Potable water 
use will decrease with increased recycled water use. There will be less 
reliance on the potable water wells in the area, which will improve 
water quality (less chlorides), increase the water table level and 
extend the life of the wells. In addition, the current use of injection 
wells for effluent disposal at the Lahaina facility will decrease. The 
Environmental Protection Agency has expressed some concern that 
injection wells may contribute nutrients to coastal waters, which may 
result in seaweed blooms. Decreased injection well usage addresses this 
concern.
    Question 4. What is the status of the study to assess statewide 
water resource issues? How much federal money has been appropriated to 
date for this effort? How much state funds have been appropriated to 
date?
    Answer. This study, mandated in the Hawaii Resources Act of 2000 is 
underway and scheduled for completion in September 2003. The Congress 
appropriated $300,000 for federal fiscal year 2002 for this purpose. 
The Hawaii State Legislature provided $300,000. The Hawaii Department 
of Agriculture is the coordinating entity charged with overseeing 
completion of this work.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                   State of Hawaii,
                                        Executive Chambers,
                                         Honolulu, HI, May 8, 2003.
Hon. Lisa Murkowski,
Chairperson, Subcommittee on Water and Power, Committee on Energy and 
        Natural Resources, U.S. Senate, Washington, DC.
    Dear Senator Murkowski: In anticipation of the May 13, 2003 hearing 
before your Subcommittee on Water and Power, I am writing to ask for 
your support of the Hawaii Water Resources Act of 2003 (S. 960). As you 
may know, the State of Hawaii is one of the most isolated landmasses on 
the planet. We rely entirely on rainfall to recharge our ground water 
aquifers and supply our streams. Fresh water is the most important 
natural resource in our State and it is imperative that beyond 
conservation, we explore other ways of meeting our water needs.
    While each of our County Water Departments has implemented water 
conservation efforts, we are still facing potential water shortages in 
highly developed areas of the State. I am very interested in finding 
alternative means to augment our water supply to meet our State's 
increasing water demands. There are several county projects in the 
planning stages that will utilize seawater desalination and wastewater 
recycling technologies as means to augment our limited resources. 
Successful passage of S. 960, giving authorization for the Secretary of 
the Interior to participate in reclamation projects in Hawaii, would be 
a significant step in helping us reach our goals.
    I would like to briefly remark upon the importance of each of the 
three reclamation projects included in the language of S. 960: (1) The 
desalination project in Kalaeloa, Oahu will help the Honolulu Board of 
Water Supply meet potable water demand beyond the year 2020 (current 
demand projections show the island of Oahu reaching its water supply 
limit in 2020); (2) the wastewater-recycling project in Kealakehe, 
Hawaii will allow Hawaii County's Department of Environmental 
Management utilize recycled wastewater for environmental purposes to 
provide a wetland habitat on the island of Hawaii; and (3) the recycled 
water distribution project in Lahaina, Maui will enable Maui's 
Wastewater Division to increase the use and delivery of recycled water 
to areas with increasing non-potable water demand.
    Hawaii faces many difficult water resource challenges as our demand 
for water increases. As Governor of our beautiful state, I strongly 
believe that every effort must be made to conserve our water resources 
for future generations, while seeking alternatives to meet our current 
and future water demands. It is with these goals in mind that I request 
your support for S. 960. If you have any questions or need more 
information, please contact Mr. Ernest Lau, Deputy Director, Hawaii 
Commission on Water Resource Management at (808) 587-0214.
            Sincerely,
                                              Linda Lingle,
                                                          Governor.
                                 ______
                                 
                             Board of Water Supply,
                               City and County of Honolulu,
                                         Honolulu, HI, May 8, 2003.
Hon. Lisa Murkowski,
Chairperson, Subcommittee on Water and Power, Committee on Energy and 
        Natural Resources, U.S. Senate, Washington, DC.

Subject: Senate Bill S.960, to Amend the Reclamation Wastewater and 
Groundwater Study and Facilities Act and the Hawaii Water Resources Act 
of 2000

    Dear Chair Murkowski: Thank you for the opportunity to provide 
testimony in support of Senate Bill (SB) S. 960, the Hawaii Water 
Resources Act of 2003.
    The Board of Water Supply (BWS), City and County of Honolulu, 
humbly requests your assistance in passing S.960 to amend the 
Reclamation Wastewater and Groundwater Study and Facilities Act to 
authorize a seawater desalination and two wastewater reclamation 
projects in the State of Hawaii, and to amend the Hawaii Water 
Resources Act of 2000 to modify the water resources study.
    Through this bill, the BWS is seeking cooperative funding for the 
construction of a 5.0 million gallon per day seawater desalination 
facility for direct potable use within the Ewa district of Oahu, 
Hawaii.
    The Ewa district is designated as the secondary urban center for 
Oahu and is a master planned community of residential, commercial and 
industrial developments. The population in Ewa is expected to increase 
by 70 percent over the next 20 years.
    As an island, Oahu's natural water resources are limited. To 
provide a truly sustainable supply of safe drinking water and to insure 
the long-term protection of the environment, the BWS must leverage 
innovative technology like desalination. The future of our State 
depends on our ability to support Oahu's growing population and economy 
while enhancing the natural beauty of our islands and the quality of 
life of our communities.
    We are all touched by periods of extended drought, and Oahu is no 
different. We have just experienced five years of low rainfall and as 
an island, we have few alternatives. Importing water from a neighboring 
state is not an option, and yet, we are surrounded by a huge resource 
in the Pacific Ocean. Seawater desalination is our future, and we urge 
the support of Congress to help Oahu meet our drinking water needs for 
future generations.
    Thank you for your consideration and support of Senate Bill S. 960.
            Very truly yours,
                                        Clifford S. Jamile,
                                        Manager and Chief Engineer.
                                 ______
                                 
   Statement of Tom Brian, Chairman of Clean Water Services Board of 
    Directors, on Behalf of Water Supply Feasibility Study Partners
    Chairwoman Murkowski, thank you for the opportunity to provide you 
with testimony in support of S. 625, a bill to authorize the Bureau of 
Reclamation to conduct certain feasibility studies in the Tualatin 
River Basin in Washington County, Oregon. My name is Tom Brian, 
Chairman of the Washington County Board of Commissioners and Chairman 
of Clean Water Services' Board of Directors. This testimony is 
submitted on behalf of Washington County, Clean Water Services, the 
Cities of Banks, Beaverton, Cornelius, Forest Grove, Hillsboro, North 
Plains, Sherwood, Tigard, and Tualatin, as well as the Tualatin Valley 
Water District. All these are collectively known as the Tualatin Basin 
Water Supply Partnership.
    I would first like to take this opportunity to thank our Senators, 
Mr. Gordon Smith and Mr. Ron Wyden for their leadership in this matter 
and other matters of importance to the State of Oregon and its 
citizens. As the sponsors of S. 625, they are attempting to help 
prevent serious water shortages that could become critical in just a 
few years. The Tualatin Basin has an increasing demand for Municipal 
and Industrial water, Agricultural water and water for Environmental 
applications. With their efforts, and your support, we can avoid the 
unfortunate shortages impacting other basins in the northwest.
    Washington County, Oregon has a population exceeding 470,000 
people. Since 1987, the number of jobs in the County has doubled to 
approximately 220,000. Our population has doubled since 1990. 
Washington County is truly the economic engine that drives the rest of 
the State of Oregon. Washington County is home to the ``Silicon 
Forest'' where companies such as Intel, NEC, Tektronix and Lattice have 
a major presence. These high tech industries and other businesses need 
clean, reliable and plentiful water; that is one of the reasons they 
came to Oregon and the population growth has followed.
    Washington County and the Tualatin River Watershed also have a 
large agriculture industry (approximately 27,000 acres of irrigated 
farmland) and a rapidly growing nursery stock business continues to 
expand in our area. With $214 million in gross farm sales, Washington 
County recently moved from being ranked fifth to third in the State. 
The nursery industry has become Oregon's number one agricultural 
commodity, located in large part in Washington County. This industry, 
too, is a large user of water.
    Water suppliers will be unable to meet public water supply needs 
unless additional sources are available by 2012. The Tualatin River, 
fed by a network of creeks that drain over 700 square miles, is 
Washington County's only river. Nearly 80 miles in length, the Tualatin 
River begins in the Coast Range and meander through forest, farm and 
city to its confluence with the Willamette River at the city of West 
Linn, Oregon. The watershed does not have a snow pack to sustain summer 
river flows.
    Investments in wastewater treatment during the past three decades 
have resulted in the Tualatin River being healthier than it has been in 
generations. However, it still remains identified as ``water quality 
limited'' according to the Clean Water Act. Efforts must be made now to 
improve the environmental health of the watershed to ensure its future 
economic vitality. Two fish species on the Tualatin River, Spring 
Chinook and steelhead are listed as threatened under the Endangered 
Species Act. Restoration of fish habitat will require more water. 
Expanding the Westside water source is critical to the reliability and 
security of the Portland Metropolitan Region water supply system.
    With all these competing needs for water, it is no wonder that 
there is not enough to go around. As municipal, industrial, 
agricultural and environmental water demands grow, a solution must be 
found. The parties have developed an Integrated Water Resources 
Management strategy as a framework to address water resources 
management within the watershed. It is estimated that the demand for 
water in the Tualatin Basin will double by the year 2050, which means 
there is the need for an additional 50,000 acre feet of water per year.
    Hagg Lake, an impoundment, which is created by Scoggins Dam on 
Scoggins Creek, a Tualatin River tributary was created in 1975 and is a 
Bureau of Reclamation facility. Washington County, in partnership with 
the Bureau of Reclamation operates a County park at the lake. Water 
from Hagg Lake is currently used for river flow restoration, municipal 
water supply, and agricultural irrigation needs in the Tualatin River 
watershed.
    The water resource agencies in Washington County and the Bureau of 
Reclamation have been working collaboratively to meet the long-term 
water resource needs for all the competing interests. In fact, the 
partners and the Bureau of Reclamation signed a Memorandum of Agreement 
on March 12, 2002, which defined the roles and commitments of the 
parties in conducting the Study. The parties have developed an 
integrated water resource management strategy that has resulted in the 
Tualatin Basin Water Supply Feasibility Study (WSFS). The WSFS will 
study the impacts and benefits of a range of source options for 50,000 
acre feet of needed water and select a preferred alternative as part of 
an EIS.
    It is estimated that the EIS/Planning Report for the Tualatin Basin 
Water Supply Project will cost $6.87 million, of which our local 
partners are funding the majority, $3.8 million. We are in need of $2.9 
million from the Bureau of Reclamation. The Bureau has been requesting 
small amounts of federal funds for the past number of years, but we 
need to move the Study along at a quicker pace. What the EIS and Study 
will show is yet to be determined, however, a number of alternatives 
are already being discussed. These include: expansion of Hagg Lake by 
raising Scoggins Dam either 40 or 20 feet; transfer of Willamette River 
water for irrigation; expand aquifer storage systems; increased 
conservation; and, expanded reuse of cleaned wastewater for irrigation. 
In combination with an extensive public involvement process, the intent 
of the Study is to determine the feasibility of these options and 
determine which or which combination is best to solve the issues facing 
the Basin.
    It is our plan that we continue on with the timetable set forth by 
the project partners. We hope to complete the Study by December 2004. 
Based on the study's findings, we anticipate beginning the permitting 
requirements in January 2005, with final design in January 2006 and 
construction in January, 2007. We hope to complete construction of the 
selected alternative in June 2010. This is an ambitious schedule, we 
know, but it is one that is necessary to meet the projected water needs 
of this diverse and rapidly growing community. To accomplish this 
timetable, we need this authorization and federal funding in the amount 
of $2.9 million in fiscal year 2004 and we seek your committee's 
approval of S. 625.
    Thank you again for the opportunity to submit testimony regarding 
this important matter in the Tualatin Basin, Oregon. We have enjoyed a 
great working relationship with our partners at Scoggins Dam, the 
Bureau of Reclamation, and we expect this relationship to continue as 
we move forward. We at Clean Water Services are available at anytime if 
you, your staff or committee members would like further information.

                         Resolution No. 2002-14

           Fremont-Madison Irrigation District Title Transfer

    WHEREAS, Fremont-Madison Irrigation District (Fremont-Madison) is 
involved in a process to obtain the transfer of the legal title of 
portions of certain physical facilities used by Fremont-Madison, 
namely: the Cross Cut Diversion Dam, the Cross Cut Canal, the five (5) 
developed wells drilled pursuant to Idaho Water Permit 22-07022 and the 
assignment of said permit, all of which property rights are presently 
held by the United States, Bureau of Reclamation (Bureau); and
    WHEREAS, Fremont-Madison is also working with the Bureau to 
complete the administrative process for the title transfer and is 
drafting a bill to convey the said facilities to Fremont-Madison for 
introduction in the Congress of the United States; and
    WHEREAS, Fremont-Madison has controlled, managed, operated, and 
maintained the said facilities with permission and direction from the 
Bureau at all times since they were constructed.
    NOW, THEREFORE, BE IT RESOLVED, That the Idaho Water Users 
Association supports Fremont-Madison in their effort to acquire legal 
title from the United States to the Cross Cut Division Dam, the Cross 
Cut Canal, the five (5) wells developed under Permit 22-07022, together 
with the right to further develop wells under Permit 22-07022, but only 
pursuant to a plan which mitigates for injury of all irrigation water 
users and which is approved by the Idaho Department of Water Resources.
                                 ______
                                 
                  Association of California Water Agencies,
                                      Sacramento, CA, May 12, 2003.
Hon. Gordon Smith,
U.S. Senate, Russell Senate Office Building, Washington, DC.

Re: Support of the Small Reclamation Water Resources Project Act of 
2003 (S. 993)

    Dear Senator Smith: The Association of California Water Agencies 
(ACWA) supports your Small Reclamation Water Resources Project Act of 
2003 (S. 993). As you know, ACWA represents over 440 water districts 
throughout the state who collectively deliver over 90 percent of 
California's agricultural, residential and industrial water supplies. 
Passage of this legislation will greatly aid in the development and 
expansion of local water programs in California and the other 
Reclamation states.
    ACWA supports this legislation because the grants and loans it 
makes available to agencies allows them to develop projects that 
promote efficient water use, develop new water supplies, and enhance 
the environment within their service areas. This program promotes state 
and local participation in small Reclamation projects that will provide 
local benefits.
    ACWA is pleased to support S. 993 and appreciates your leadership 
on Western water issues.
            Sincerely,
                                         David L. Reynolds,
                                     Director of Federal Relations.
                                 ______
                                 
                       Idaho Water Users Association, Inc.,
                                           Boise, ID, May 12, 2003.
Water and Power Subcommittee, Senate Energy and Natural Resources 
        Committee, Senate Dirksen Office Building, Washington, DC.

Re: S. 520--Fremont Madison Conveyance Act

    Dear Madam Chairwoman: This letter is provided on behalf of the 
Idaho Water Users Association (IWUA) in support of S. 520, the Fremont-
Madison Conveyance Act. IWUA represents more than 300 irrigation 
districts, canal companies, ground water districts, water districts, 
municipalities, public water suppliers, hydropower interests, 
aquaculture companies, agri-businesses, professional firms and 
individuals, all dedicated to the wise and efficient development and 
use of our water resources. IWUA members deliver water to approximately 
2.5 million acres of irrigated land. IWUA is affiliated with the 
National Water Resources Association and the Family Farm Alliance. IWUA 
is proud to count Fremont-Madison Irrigation District among its 
members.
    IWUA has strongly supported title transfer legislation for its 
members, including Burley Irrigation District and Nampa & Meridian 
Irrigation District. Both of these bills became law. We commend Idaho 
Senators Larry Craig and Mike Crapo for introducing S. 520 and urge 
your subcommittee to favorably consider the legislation.
    IWUA adopted the attached resolution at is Annual Conference in 
January 2003, expressing support for Fremont-Madison Irrigation 
District's title transfer. We request that this letter of support and 
IWUA's resolution by included in the official hearing record of the 
subcommittee. Thank you.
            Sincerely,
                                         Norman M. Semanko,
                              Executive Director & General Counsel.

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