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[House Report 110-503]
[From the U.S. Government Publishing Office]

110th Congress                                            Rept. 110-503
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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 AUTHORIZING THE SECRETARY OF THE INTERIOR TO CONSTRUCT FACILITIES TO 
PROVIDE WATER FOR IRRIGATION, MUNICIPAL, DOMESTIC, MILITARY, AND OTHER 
USES FROM THE SANTA MARGARITA RIVER, CALIFORNIA, AND FOR OTHER PURPOSES

                                _______
                                

               December 19, 2007.--Ordered to be printed

                                _______
                                

  Mr. Rahall, from the Committee on Natural Resources, submitted the 
                               following

                              R E P O R T

                         [To accompany H.R. 29]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 29) to authorize the Secretary of the Interior 
to construct facilities to provide water for irrigation, 
municipal, domestic, military, and other uses from the Santa 
Margarita River, California, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 29 is to authorize the Secretary of the 
Interior to construct facilities to provide water for 
irrigation, municipal, domestic, military, and other uses from 
the Santa Margarita River, California, and for other purposes.

                  BACKGROUND AND NEED FOR LEGISLATION

    During the early 1900s, agriculture and ranching developed 
in the upper Santa Margarita River basin using water diverted 
from the Santa Margarita River and water extracted from wells 
near the river. By 1940, base flow in the river had been 
reduced to such an extent that water users in the lower basin 
filed a lawsuit against water users in the upper basin. The 
result of this lawsuit was the ``1940 Stipulated Judgment,'' 
which partitioned water between the upper basin and the lower 
basin. Since then, three other major lawsuits over rights to 
this water have taken place, and three planned water supply 
projects have failed to resolve the conflicts.
    The most recent of these projects, the Santa Margarita 
Project, was to use federal money to develop a two dam and 
reservoir project on the river for the benefit of Fallbrook 
Public Utility District and the U.S. Marine Corps Base at Camp 
Pendleton. The estimated cost of the project was $22 million in 
1954 dollars, or $254 million in today's dollars. The effort to 
implement this project stalled in 1984 after almost twenty-two 
years of study and significant state and federal agency 
support.
    The lack of adequate water supply poses a serious problem 
for water users in the Santa Margarita River basin. 
Urbanization, especially since 1970, has transformed the area 
in San Diego County from large ranches to tract homes. In the 
lower basin, the modest agricultural use of land and water, 
primarily for citrus and avocado trees, has stayed relatively 
constant. The creation of Camp Pendleton Marine Base, which 
covers most of the lower basin, added a relatively small, 
constant demand for water for base operations. Camp Pendleton 
officials, however, are concerned that future water demands in 
the lower basin could significantly increase in order to 
support a major military mobilization or to provide adequate 
habitat for endangered species.
    One salient issue in the most recent project relates to 
three water rights permits held by Bureau of Reclamation 
totaling 185,000 acre-feet on the Santa Margarita River. These 
permits were intended for surface water impoundment that, at 
one time, Reclamation was proposing to develop. Under 
California law, these permits must be perfected (be put to 
beneficial use) by December 31, 2008 or the water rights may be 
lost.
    The proposed Santa Margarita Conjunctive Use Project 
authorized by H.R. 29 provides for enhanced recharge and 
recovery from the underground basin on Camp Pendleton to 
provide a water supply for both Camp Pendleton and the 
Fallbrook Public Utility District (the District), as resolution 
of the long-standing water rights disputes between the United 
States and the District. The project, as proposed, will develop 
16,000 acre-feet of water annually, including Camp Pendleton's 
existing perfected water rights on the Santa Margarita River. 
As envisioned by the bill, 9,600 acre-feet would be used by 
Camp Pendleton and 6,400 acre-feet by the District. An ongoing 
feasibility study being conducted by the Bureau of Reclamation 
is evaluating a reasonable range of project alternatives to 
develop the water supply.
    The project will provide a safe, reliable, drought- and 
earthquake-proof water supply--enough for 35,000 families. The 
project would improve and partially privatize the water supply 
system on Camp Pendleton, which will receive better-quality 
water in quantities sufficient to meet water needs up to its 
ultimate planned utilization. The project also sets aside and 
preserves valuable riparian and upland habitats of one of the 
last free flowing rivers in California, using 1,384 acres 
originally purchased for a dam and reservoir.
    The proposed project authorized by H.R. 29 includes the 
construction of enhanced groundwater recharge facilities that 
contain a new collapsible diversion weir and 46 acres of new 
recharge ponds. The enhanced recharge potential is 14,000 acre-
feet per year (af/yr), in addition to the naturally occurring 
recharge. The collapsible weir will divert flows, facilitate 
transport of sediments to the lower river and estuary, and 
provide beach replenishment. The project will also include the 
construction of eight or more new production wells, monitoring 
wells, and a collection system to provide a total of 18,000 af/
yr of extraction capability. The project water will be 
distributed to the existing Camp Pendleton and the District 
distribution systems through construction of two pump stations 
and approximately thirteen miles of transmission pipeline. The 
pipeline will also connect Camp Pendleton to the regional water 
delivery system for emergency supply purposes.
    Major activities taking place in preparation for project 
implementation include a pre-feasibility study completed by the 
Bureau of Reclamation for a joint feasibility study and 
Environmental Impact Report/Environmental Impact Statement 
under the California Environmental Quality Act and the National 
Environmental Policy Act. Funding for this effort comes from 
several federal sources, including Camp Pendleton, Military 
Construction, and a Reclamation Planning account, as well as 
local funding contributed by the Fallbrook Public Utility 
District.
    Similar legislation was passed by the House of 
Representatives in the 108th and 109th Congresses.

                            COMMITTEE ACTION

    H.R. 29 was introduced on January 4, 2007 by Rep. Darrell 
Issa (R-CA). The bill was referred to the Committee on Natural 
Resources, and within the Committee to the Subcommittee on 
Water and Power. The bill was also referred to the Committee on 
Armed Services.
    On October 10, 2007, the Full Natural Resources Committee 
met to consider the bill. The Subcommittee on Water and Power 
was discharged from further consideration of the bill, and H.R. 
29 was ordered favorably reported to the House of 
Representatives by unanimous consent and without amendment.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Definitions

    This section defines various terms in the bill.

Section 2. Authorization for construction of Santa Margarita River 
        Project

    This section authorizes the Secretary of the Interior to 
construct, operate, and maintain the Santa Margarita River 
Project in accordance with the final feasibility report and 
this Act. The Secretary may construct the Project only after 
the Secretary determines that: (1) the Fallbrook Public Utility 
District and the Department of the Navy have entered into 
contracts to repay to the United States appropriate costs; (2) 
the authorized California officer or agency has granted water 
use permits to the Bureau of Reclamation; (3) the District has 
agreed that it will not assert against the United States any 
prior right to water in excess of the quantity deliverable 
under this Act and will share water based on equal priority and 
a specified ratio; and (4) the Secretary has determined that 
the Project has economic, environmental, and engineering 
feasibility.
    It is the intent of the Committee that all environmental 
and regulatory permits will be in place prior to initiating 
project development. The Bureau of Reclamation is expected to 
complete its feasibility report by June 2008. The draft 
Environmental Impact Report/Environmental Impact Statement is 
expected to be ready for public review and comment by December 
2008.

Section 3. Costs

    Once the project is completed, the Department of the Navy 
will be responsible for project costs in proportion to its 
benefit from the project as determined by the Secretary of the 
Navy.

Section 4. Operation; Yield allotment; Delivery

    The Secretary of the Interior, the Fallbrook Public Utility 
District, or a third party may operate the project, subject to 
the terms of a memorandum of agreement. Sixty percent of the 
project water supply is allotted to the Navy and forty percent 
is allotted to the District. Temporary water delivery contracts 
may be entered into for any unused portion of the Navy's 
allocation; the District is given first right to this water. 
The Navy retains the right to demand the use of water after 
giving 30 days notice.
    In the place of monetary payment, the Secretary of the Navy 
may accept in-kind consideration as deemed acceptable. In-kind 
consideration valued over $500,000 must be reported to the 
House of Representatives. Moneys paid to the United States 
under the temporary water contracts shall be deposited into a 
special account for the Department of the Navy.

Section 5. Repayment obligation of the District

    This section requires the District's general repayment 
obligation to be determined by the Secretary of the Interior, 
consistent with the Reclamation Project Act of 1939. For 
purposes of calculating interest and commencing repayment, 
pumping and treatment of groundwater from the project will be 
deemed equivalent to the first use of water from a water 
storage project. There will be no repayment obligation for 
excess water delivered to the Fallbrook Public Utility District 
under Section 4 of this bill.

Section 6. Transfer of care, operation, and maintenance

    The Secretary of the Interior may transfer the operation 
and maintenance of the project to the District or a mutually 
agreed upon third party under conditions satisfactory to all 
parties, including the Secretary of the Navy, for the portion 
of the project located within Camp Pendleton. If a transfer 
occurs, the District will be credited for costs associated with 
the Secretary's share of the project's operation and 
maintenance.

Section 7. Scope of Act

    This section states that the basis, measure, and limit of 
all rights of the United States pertaining to the use of water 
shall be the laws of the State of California. Four specific 
provisions are included in this section that limit how this 
section is to be construed with regard to water rights.

Section 8. Limitations on operation and administration

    This section states that the Project shall be operated to 
allow free passage of water to which the United States is 
entitled, and will not be administered or operated in any way 
that would impair or deplete the use of water the United States 
is entitled to use under California law.

Section 9. Authorizations of appropriations

    The bill authorizes an appropriation of $60 million for the 
planning, design, and construction of project facilities, to be 
indexed for inflation, and additional sums as necessary for 
project operation and maintenance purposes.

Section 10. Reports to Congress

    The Secretary of the Interior and Secretary of the Navy 
will report to Congress, within one year of passage of this Act 
and periodically thereafter, on whether and how conditions for 
construction of the project have been met.

Section 11. Sunset

    The authority of this Act will terminate 10 years after 
enactment.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to authorize the Secretary of the 
Interior to construct facilities to provide water for 
irrigation, municipal, domestic, military, and other uses from 
the Santa Margarita River, California, and for other purposes.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

H.R. 29--A bill to authorize the Secretary of the Interior to construct 
        facilities to provide water for irrigation, municipal, 
        domestic, military, and other uses from the Santa Margarita 
        River, California, and for other purposes

    Summary: H.R. 29 would authorize the Secretary of the 
Interior to participate in the design, planning, and 
construction of facilities to make water available from the 
Santa Margarita River for domestic and military uses. The bill 
would authorize the appropriation of $60 million to build the 
project and such sums as are necessary to operate and maintain 
it. H.R. 29 would terminate the authority to implement this 
project 10 years after the date of enactment of this 
legislation.
    Assuming appropriation of the necessary funds, CBO 
estimates that implementing H.R. 29 would cost $61 million over 
the 2008-2012 period and an additional $3 million after that 
period, including adjustments for anticipated inflation. If 
funds were appropriated to build this project, local users 
would be required to repay about 40 percent of construction 
costs over a 40-year period following completion of the 
project. Enacting this legislation, by itself, would not affect 
direct spending or revenues.
    H.R. 29 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 29 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

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                                                                  By fiscal year, in millions of dollars--
                                                          ------------------------------------------------------
                                                              2008       2009       2010       2011       2012
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                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level............................          0          6         19         19         20
Estimated Outlays........................................          0          5         17         19         20
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    Basis of estimate: Based on historical spending patterns of 
similar projects, CBO estimates that implementing H.R. 29 would 
cost $61 million over the 2008-2012 period and an additional $3 
million after that period, including adjustments for 
anticipated inflation. For this estimate, CBO assumes that H.R. 
29 will be enacted before the end of calendar year 2008 and 
that the necessary amounts will be appropriated over the 2009-
2013 period.
    H.R. 29 would authorize the Bureau of Reclamation to 
construct a water recharge and recovery system that would 
benefit the Fallbrook Public Utility District and the Marine 
Corps Base at Camp Pendleton in California. The feasibility 
study for this project is in the early stages of development 
and will not be completed until 2008. For this estimate, CBO 
assumes that construction would begin in 2009 and would be 
completed in 2013. This estimate includes $64 million for 
construction costs--the $60 million that would be authorized by 
the bill plus adjustments for inflation, which also would be 
authorized by the bill.
    Since the scope of the project is unclear, CBO cannot 
estimate the amount of funding needed for operations and 
maintenance. Any funds appropriated for operations and 
maintenance would be offset by payments to the Treasury from 
the district, except for those costs allocated to Camp 
Pendleton. CBO expects that money would not be appropriated for 
this purpose until after 2012. The bureau has the authority to 
transfer the operations and maintenance responsibilities for 
the project to the district or another entity if an acceptable 
arrangement can be established.
    After the project is constructed and once water is made 
available, the district would begin repaying its share of the 
capital costs of this project. Based on information from the 
bureau, CBO expects that the district would be responsible for 
repaying about $26 million over the 40-year period following 
construction. Any such collections would be credited to the 
budget on an offsetting receipt (a credit against direct 
spending). A change in direct spending cannot be credited to 
H.R. 29, however, because such receipts are contingent upon 
future appropriation actions to construct the project.
    Intergovernmental and private-sector impact: H.R. 29 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Enacting this bill would benefit the 
Fallbrook Public Utility District, and any costs that it might 
incur in association with the authorized project would be 
incurred voluntarily.
    Estimate prepared by: Federal costs: Tyler Kruzich; Impact 
on state, local, and tribal governments: Melissa Merrell; 
Impact on the private sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                           EARMARK STATEMENT

    H.R. 29 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e) or 9(f) of rule XXI.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.

                                  
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