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[Senate Report 108-331]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 687
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-331

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        SAN GABRIEL BASIN DEMONSTRATION PROJECT FUNDING INCREASE

                                _______
                                

                August 25, 2004.--Ordered to be printed

   Filed, under authority of the order of the Senate of July 22, 2004

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 1284]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 1284) to amend the Reclamation Projects 
Authorization and Adjustment Act of 1992 to increase the 
Federal share of the costs of the San Gabriel Basin 
demonstration project, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
Act, as amended, do pass.
    The amendment is as follows:
    On page 2, line 15, strike ``$12,500,000'' and insert 
``$6,500,000''.

                                Purpose

    The purpose of H.R. 1284 is to amend the Reclamation 
Projects Authorization and Adjustment Act of 1992 to increase 
the Federal share of the costs of the San Gabriel Basin 
Demonstration Project.

                          Background and Need

    The San Gabriel Basin Demonstration Project was authorized 
in section 1614 of the Reclamation Projects Authorization and 
Adjustment Act of 1992 (Public Law 102-575), as amended in 
1996. The project has three components: the Rio Hondo Water 
Recycling Program; the San Gabriel Valley Water Reclamation 
Project; and the San Gabriel Basin Demonstration Project. The 
authorization caps the Federal cost-share at 25 percent of the 
total cost of the project. The Federal share of the project is 
currently authorized at $38 million. Of this amount, 
approximately $32 million has been obligated.
    The aquifer underlying the San Gabriel Basin in southern 
California contains a variety of contaminants, including 
volatile organic compounds. Areas within the San Gabriel Valley 
have been placed on the national priority list by the 
Environmental Protection Agency and are subject to remediation 
under the Superfund program. Groundwater from the aquifer is an 
important supply of drinking water.
    Local project sponsors plan to expand the scope of the 
demonstration project. According to the measure's proponents, 
in order to expand the project's scope, an increase in the 
Federal cost ceiling authorization is necessary.

                          Legislative History

    H.R. 1284 was introduced by Congresswoman Napolitano on 
March 13, 2003, and referred to the House Committee on 
Resources. The Resources Committee's Subcommittee on Water and 
Power conducted a hearing on H.R. 1284 on April 1, 2003, and 
the full Committee discharged the measure on July 14, 2003. The 
House of Representatives passed H.R. 1284 under suspension on 
September 16, 2003. On September 17, 2003, the bill was 
received in the Senate and referred to the Committee on Energy 
and Natural Resources. On October 15, 2003, the Subcommittee on 
Water and Power held a hearing on H.R. 1284. The Energy and 
Natural Resources Committee, on July 14, 2004, by a unanimous 
vote of a quorum present, ordered H.R. 1284 as amended, 
favorably reported.

                        Committee Recommendation

    The Senate Committee on Energy and Natural Resources, in an 
open business meeting on July 14, 2004, by unanimous voice vote 
of a quorum present, recommends that the Senate pass H.R. 1284, 
if amended as described herein.

                          Committee Amendment

    During the consideration of H.R. 1284, the Committee 
adopted an amendment which increases the cost ceiling for the 
San Gabriel Basin Demonstration Project by $6,500,000 instead 
of $12,500,000.

                      Section-by-Section Analysis

    Section 1 increases the cost ceiling for the San Gabriel 
Demonstration Project by $6,500,000.

                   Cost and Budgetary Considerations

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 22, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1284, an act to 
amend the Reclamation Projects Authorization and Adjustment Act 
of 1992 to increase the federal share of the costs of the San 
Gabriel Basin demonstration project.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 1284--An act to amend the Reclamation Projects Authorization and 
        Adjustment Act of 1992 to increase the federal share of the 
        costs of the San Gabriel Basin demonstration project

    Summary: H.R. 1284 would increase the amount authorized to 
be appropriated for the San Gabriel Basin demonstration project 
in California by $6.5 million. Under current law, $38 million 
has been authorized to be appropriated for this project, and 
about $31 million has been appropriated to date. The project is 
designed to improve the quality and storage capacity of 
groundwater in the San Gabriel Basin. The increase in the 
authorized funding level would allow the Bureau of Reclamation 
to assist in the expansion of the project to include more 
facilities.
    Assuming appropriation of the authorized amount, CBO 
estimates that implementing the act would cost about $2 million 
in 2009 and an additional $5 million after that year. Enacting 
H.R. 1284 would not affect direct spending or revenues.
    H.R. 1284 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. Enacting this legislation would benefit the 
project's local sponsors.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1284 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

------------------------------------------------------------------------
                                By fiscal year, in millions of dollars--
                               -----------------------------------------
                                 2004   2005   2006   2007   2008   2009
------------------------------------------------------------------------
                    SPENDING SUBJECT TO APPROPRIATION
 Estimated spending under
 current law \1\
    Estimated authorization         1      1      2      2      2      0
     level....................
    Estimated outlays.........      1      1      2      2      2      1
Proposed changes:
    Estimated authorization         0      0      0      0      0      3
     level....................
    Estimated outlays.........      0      0      0      0      0      2
Spending under H.R. 1284:
    Estimated authorization         1      1      2      2      2      3
     level....................
    Estimated outlays.........      1      1      2      2      2      3
------------------------------------------------------------------------
\1\ About $7.5 million remains to be appropriated from the original
  authority for the San Gabriel demonstration project. The 2004 level is
  the amount appropriated for that year for the project.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
1284 will be enacted this year, and that the necessary funds 
will be appropriated for each year, but that no new funding 
requirements would be triggered until 2009. (The estimate 
assumes that amounts already authorized will be appropriated in 
2005 through 2008.) CBO estimates that implementing H.R. 1284 
would cost about $2 million in 2009 and an additional $5 
million after that year.
    Under current law, about $7.5 million remains to be 
appropriated from the original authority of $38 million for the 
San Gabriel Basin demonstration project. Based on information 
from the bureau, CBO expects that the new funds authorized 
under this act would not be required until 2009.
    Intergovernmental and private-sector impact: H.R. 1284 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Enacting this legislation would benefit the 
project's local sponsors.
    Previous CBO estimate: On June 23, 2003, CBO transmitted a 
cost estimate for H.R. 1284 as ordered reported by the House 
Committee on Resources on June 11, 2003. In June of 2003, CBO 
estimated that implementing H.R. 1284 would cost $11 million 
over the 2004-2008 period. Since that estimate was prepared, 
the Bureau of Reclamation has modified its plans to complete 
the San Gabriel Demonstration Project by extending its 
completion date until 2009. Because of that change, we now 
estimate that implementing the legislation would entail new 
costs of $2 million over the 2005-2009 period.
    Estimate prepared by: Federal Costs: Julie Middleton. 
Impact on State, Local, and Tribal Governments: Marjorie 
Miller. Impact on the Private Sector: Amina Masood.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out H.R. 1284. The bill is not a regulatory measure in 
the sense of imposing Government-established standards of 
significant responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of H.R. 1284.

                        Executive Communications

    On March 5, 2004, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Office of Management and Budget setting 
forth executive views on H.R. 1284. These reports had not been 
received at the time the report on H.R. 1284 was filed. When 
the reports become available, the Chairman will request that 
they be printed in the Congressional Record for the advice of 
the Senate. The testimony provided by the Department of the 
Interior at the Subcommittee hearing follows:

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

    Madam Chairman, and members of the Subcommittee, I am John 
Keys, Commissioner of the Bureau of Reclamation. I am pleased 
to be here today to comment on H.R. 1284, which amends the 
Reclamation Projects Authorization and Adjustment Act of 1992, 
to increase the Federal share of the cost of the San Gabriel 
Basin Demonstration Project.
    Based on our investigation of this project, we do not 
believe a cost ceiling increase is warranted at this time and, 
as we stated in testimony before the House Resources Committee 
on this bill, the Administration cannot support H.R. 1284 as 
written. We believe that there is sufficient funding available 
to provide the Federal cost share for all projects that are 
contemplated for the San Gabriel Basin cleanup program.
    Title XVI of P.L. 102-575, enacted in 1992, authorizes 
Reclamation to participate in the San Gabriel Basin 
Demonstration Project. There are three components of the 
project: the Rio Hondo Water Recycling Program, the Central 
Basin Municipal Water District; the San Gabriel Valley Water 
Reclamation Project with the Upper San Gabriel Valley Municipal 
Water District; and the San Gabriel Basin Demonstration Project 
being done by the San Gabriel Basin Water Quality Authority. 
Reclamation is authorized to provide up to 25 percent of the 
cost of planning, design, and construction of the project 
components for a Federal contribution of no more than 
$38,090,000.
    Congress provided the initial appropriation for the project 
in Fiscal Year 1994, and through Fiscal Year 2003, a total of 
$28,852,000 has been made available for the three components. 
Of that amount, all but $6,000 has been obligated to existing 
agreements. With the exception of Rio Hondo and San Gabriel 
Valley Reclamation components, all existing agreements have 
been fully funded. The Rio Hondo and San Gabriel Valley 
Reclamation components, which are water recycling projects, 
should be completed within the next two years, and are within 
$700,000 of being fully funded for the 25 percent Federal 
share. This leaves a net available amount of $8.6 million 
before the ceiling is reached.
    The primary component of the San Gabriel Basin 
Demonstration is the groundwater cleanup program that will 
result in the Basin being used as a conjunctive use water 
resource for the region. Reclamation, working closely with the 
San Gabriel Basin Water Quality Authority since 1994, has 
executed 9 funding agreements with the Authority tofund 
specific portions of the cleanup work. All agreements have been fully 
funded for the 25 percent Federal share.
    Over the last ten years that the project has received 
funding, the schedules for all three components have slipped 
significantly. In light of this, the San Gabriel Basin 
Demonstration Project has consistently carried over significant 
amounts of unexpected funds every year as a result of the 
extended schedules. Due to these delays, the construction 
schedule is not firm. In addition, smaller agreements to cover 
cleanup projects in the El Monte, South El Monte and Puente 
Valley Operable Units are being implemented. An agreement has 
been executed with the Water Quality Authority to fund design 
activities for these Operable Units. We have executed an 
agreement for the Monterey Park Treatment Facility, which is in 
the South El Monte Unit. To date we have obligated $2.425 
million for the project, and spent approximately $1,114,000 of 
that amount.
    We believe that the total funding ceiling provided by the 
title XVI authority and the Restoration Fund, which may also be 
available for these projects, is sufficient to provide the 
Federal cost share for all projects that are contemplated for 
the San Gabriel Basin cleanup program. This title XVI project 
has more than $8 million remaining under its ceiling after 
fully funding all current project obligations. The Restoration 
Fund has $25 million remaining under its ceiling after fully 
funding all current project obligations. We believe that this 
will adequately cover future projects being contemplated. 
Therefore, the cost ceiling for the San Gabriel Basin 
Demonstration Project authorized by title XVI does not need 
currently to be increased beyond its authorized limit and thus 
the Administration cannot support H.R. 1284.
    In conclusion, Madam Chairman, I want to add that we have 
an excellent working relationship with the San Gabriel 
Demonstration Project partners and look forward to working with 
them to complete this important project. This concludes my 
remarks. I would be happy to answer any questions at this time.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the Act, H.R. 1284, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

   THE RECLAMATION PROJECTS AUTHORIZATION AND ADJUSTMENT ACT OF 1992

 Public Law 102-575, as amended by Public Law 104-266 (43 U.S.C. 390h-
13)

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SECTION 1631. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated 
such sums as may be necessary to carry out the purposes and 
provisions of this title.

           *       *       *       *       *       *       *

    (d) Ceiling on Federal Share.--
          (1) Notwithstanding any other provision of sections 
        of this title and except as provided by paragraph (2), 
        the Federal share of the costs of each of the 
        individual projects authorized by sections authorized 
        by this title shall not exceed $20,000,000 (October 
        1996 prices).
          (2) [In the case] (A) Subject to subparagraph (B), 
        the case of any project authorized by this title for 
        which construction funds were appropriated before 
        January 1, 1996, the Federal share of the costs of such 
        project may not exceed the amount specified as the 
        ``total Federal obligation'' for that project in the 
        budget justification made by the Bureau of Reclamation 
        for fiscal year 1997, as contained in part 3 of the 
        report of the hearing held on March 27, 1996, before 
        the Subcommittee on Energy and Water Development of the 
        Committee on Appropriations of the House of 
        Representatives.
          (B) In the case of the San Gabriel Basin 
        demonstration project authorized by section 1614, the 
        Federal share of the cost of such project may not 
        exceed the sum determined by adding--
                  (i) the amount that applies to that project 
                under subparagraph (A); and
                  (ii) $6,500,000.

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