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[Senate Report 108-347]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 701
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-347
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                  TULAROSA BASIN WATER RECLAMATION ACT

                                _______
                                

               September 20, 2004.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1211]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1211) to further the purposes of title 
XVI of the Reclamation Projects Authorization and Adjustment 
Act of 1992, the ``Reclamation Wastewater and Groundwater Study 
and Facilities Act'', by directing the Secretary of the 
Interior to undertake a demonstration program for water 
reclamation in the Tularosa Basin of New Mexico, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and an amendment to the title and recommends 
that the bill, as amended, do pass.
    The amendments are as follows:
    1. Strike out all after the enacting clause and insert in 
lieu thereof the following:

SECTION 1. TULAROSA BASIN FACILITY.

  (a) In general.--The Secretary of the Interior (referred to in this 
Act as the ``Secretary'') shall construct, manage, and maintain a test 
and evaluation facility (referred to in this Act as the ``facility'') 
at the Tularosa Basin, located in Otero County in the State of New 
Mexico capable of processing at least 100,000 gallons of water per day.
  (b) Objectives of Facility.--The facility shall be used to carry out 
research on, and to test, demonstrate, and evaluate new desalination 
technologies to produce potable water from saline or other unsuitable 
water, including analysis of effects on energy consumption, byproduct 
disposal, and operations and maintenance costs to determine the most 
technologically-efficient and cost-effective means to produce potable 
water from saline or other unsuitable water using desalination 
technologies.
  (c) Technology Plan Development.--The Secretary shall contract with 
Sandia National Laboratory (referred to in this Act as ``Sandia'') to 
develop a desalination technology plan (referred to in this Act as the 
``plan'') not later than 1 year after the date on which funds are made 
available for the purposes of this Act. The plan shall--
          (1) be developed in consultation with the Secretary and the 
        Secretary of Energy;
          (2) consider the experience of similar facilities and 
        research programs operated by the Federal government and by 
        other research institutions; and
          (3) include recommendations for the siting and configuration 
        of the facility and the research and development program to be 
        undertaken at the facility.
  (d) Review of Plan.--The Secretary shall review the plan and may 
modify or change any recommendation after consultation with the 
Secretary of Energy.
  (e) Construction of Facility.--Not later than 3 years after the date 
of completion of the plan, the Secretary shall construct the facility 
in accordance with the recommendations contained in the plan, including 
any modifications or changes. The Secretary may contract with other 
Federal agencies, State agencies, educational institutions, and private 
entities for construction of the facility.
  (f) Memorandum of Agreement for Operation.--The Secretary and the 
Secretary of Energy shall enter into a Memorandum of Agreement for the 
operation of the facility and the conduct of research under this Act. 
Research may be conducted at the facility and may also be carried out 
at any laboratory facility determined to be suitable by Sandia. The 
Secretary and the Secretary of Energy shall establish a technical 
advisory panel drawn from Federal or State agencies, academic 
institutions, and private or public entities to provide program 
guidance and technical assistance in the operation of the facility and 
conduct of research.
  (g) Provision of Water.--
          (1) In general.--The Secretary shall dispose of all water 
        produced by the facility under contract with 1 or more 
        communities located in Otero County, New Mexico where the water 
        would be supplementary to water provided by public water 
        systems or wells in the communities and only after Sandia 
        notifies the Secretary that the water is of a consistent, 
        reliable quality.
          (2) Cost.--Any water provided by the Secretary to a community 
        under paragraph (1) shall be provided at a cost not to exceed 
        the fair market value of the water.
          (3) Use of revenue.--The Secretary may use the amounts 
        collected under paragraph (2) to assist in paying the 
        operational costs of the facility.

SEC. 2. RESEARCH AND DEVELOPMENT PROGRAM.

  The Secretary and the Secretary of Energy may undertake research and 
development of desalination technologies in addition to the program 
carried out at the facility directly or by contract, interagency 
agreement, cooperative agreement, or grant. Any agreement or grant may 
be made only on the basis of a competitive, merit-reviewed process. The 
Secretary and the Secretary of Energy may carry out the program at a 
location outside the United States after consultation with and approval 
by the Secretary of State.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

  Appropriations may be made to the Secretary and to the Secretary of 
Energy. There are authorized to be appropriated such sums as may be 
necessary to carry out the provisions of this Act, but not to exceed--
          (1) $1,500,000 for development of the plan under section 
        1(c);
          (2) $3,000,000 (January 2003 price levels), plus or minus 
        such amounts, if any, as may be required by reason of ordinary 
        fluctuations in construction costs as indicated by engineering 
        cost indexes applicable to the types of construction involved 
        for the construction of the facility;
          (3) $6,000,000 for each of fiscal years 2005 through 2010 for 
        transfer to Sandia to carry out research programs associated 
        with the facility; and
          (4) $10,000,000 for each of fiscal years 2005 through 2010 
        for research and development activities under section 2 of 
        which not more than $1,500,000 in any fiscal year may be for 
        research undertaken directly by the Secretary and not more than 
        $1,000,000 in any fiscal year may be for grants to institutions 
        of higher education (including United States-Mexico binational 
        research foundations and interuniversity research programs 
        established by the 2 countries).

    2. Amend the title so as to read: ``A bill to direct the 
Secretary of the Interior to undertake a demonstration program 
for water reclamation in the Tularosa Basin of New Mexico, and 
for other purposes.''.

                         PURPOSE OF THE MEASURE

    The purpose of S. 1211 is to direct the Secretary of the 
Interior to undertake a demonstration program for water 
reclamation in the Tularosa Basin of New Mexico, and for other 
purposes.

                          BACKGROUND AND NEED

    Continued shortage of water in the Western United States 
has led many communities to investigate desalination as a 
method of transforming previously unuseable water to potable 
water. Saline or brackish water exists in aquifers underlying 
large portions of the United States, and many of these areas 
coincide with areas facing future water shortages. Inland 
desalination, while providing an opportunity faces several 
critical issues including: (1) difficulty in the disposal of 
concentrate or brine removed from the brackish or saline water; 
(2) reducing the overall cost of water production which is 
highly correlative with energy costs; and (3) lack of 
technology that can be cost-effectively implemented for small 
communities. While the cost of desalination is high for all 
users, inland areas do not have the benefit of economies-of-
scale and ocean release of concentrate.
    The U.S. Bureau of Reclamation began conducting 
desalination research over 30 years ago. As the pioneer in this 
field, much of the research produced continues to be today's 
state of the art membrane technology used in the reverse 
osmosis process. Funding, however, for the U.S. Bureau of 
Reclamation desalinization research program has progressively 
decreased.
    In the 2001 Energy and Water Appropriations Act, Congress 
appropriated funds to begin a partnership between the Bureau of 
Reclamation and Sandia National Laboratories. Together, these 
two entities jointly led a multi-agency effort to develop a 
desalination technology roadmap which was completed in early 
2003. The roadmap identifies in detail, the operational hurdles 
that hinder wider application of desalination technology to 
water supply problems in the United States and articulates a 
research agenda that can be implemented to overcome these 
hurdles. A key element of that research agenda is the Tularosa 
Basin Desalination Facility.
    The Tularosa Basin is a groundwater basin that occupies 
much of south-central New Mexico and extends through Texas 
toward the Mexican border. The great majority of water in the 
basin is of brackish to saline quality. This location was 
chosen for the demonstration facility for several reasons. 
Primarily, the basin is an excellent area for demonstration 
projects to access an array of water qualities over short 
geographic areas. Additionally, the large quantities of native 
water allow the facility to have a design capacity of 100,000 
gallons per day without impacting other communities or water 
rights holders. Finally, the local communities have been active 
partners, providing land and rights-of-way, and helping with 
well and facility permitting. The community engagement is based 
on the growing realization that the Tularosa basin groundwater 
is currently an unused but potentially valuable long-term 
resource.

                          LEGISLATIVE HISTORY

    S. 1211 was introduced by Senator Domenici on June 9, 2003 
and referred to the Energy and Natural Resources Committee. 
Senator Bingaman is a co-sponsor. The Subcommittee on Water and 
Power held a hearing on S. 1211 on June 17, 2004. The Committee 
on Energy and Natural Resources ordered S. 1211, as amended, 
favorably reported on July 14, 2004.

                        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 S. 1211, 
if amended as described herein.

                          COMMITTEE AMENDMENT

    During the consideration of S. 1211, the Committee adopted 
an amendment in the nature of a substitute. The substitute 
amendment addresses concerns raised during the Subcommittee 
hearing and in written submissions.
    The first change provides that water produced by the 
demonstration facility shall be sold to surrounding communities 
at fair market value and the proceeds from the sale of the 
water will be used to help pay the operational costs of the 
facility.
    The second change strikes from the title of the Act 
reference to title XVI of the Reclamation Projects 
Authorization and Adjustment Act of 1992.
    There were also several technical amendments.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 subsection (a) directs the Secretary of the 
Interior to construct and manage a test and evaluation facility 
at the Tularosa Basin located in Otero County, New Mexico.
    Section 2 subsection (a) sets forth the purposes of the 
Act.
    Subsection (b) provides that the objectives of the facility 
are to perform research on and test new desalination 
technologies.
    Subsection (c) directs the Secretary of the Interior, in 
collaboration with Sandia National Laboratory and the Secretary 
of Energy, to develop a desalination technology plan, recommend 
a location for the facility, and recommend research to be 
carried out at the facility.
    Subsection (d) directs the Secretary of the Interior to 
review the plan and make any necessary modifications to the 
plan after consulting with the Secretary of Energy.
    Subsection (e) directs the Secretary of the Interior to 
construct a facility consistent with the recommendations 
contained in the plan no later than three years after the date 
of completion of the plan.
    Subsection (f) directs the Secretary of the Interior and 
Secretary of Energy to enter into a Memorandum of Agreement for 
operation of the facility and research to be undertaken 
pursuant to the Act. Research may be carried out at the 
facility or other laboratory facilities determined to be 
suitable by Sandia National Laboratory. The Secretary of the 
Interior and the Secretary and Energy shall establish a 
technical advisory panel to provide technical assistance in the 
operation of the facility and the conduct of research.
    Subsection (g) directs the Secretary of the Interior to 
sell water produced by the facility to surrounding communities 
located in Otero County, New Mexico after Sandia National 
Laboratories notifies the Secretary that the water is of 
consistent, reliable quality. The water shall be sold at fair 
market value and proceeds from the sale shall be used for 
operation of the facility.
    Section 2 provides that the Secretary of the Interior and 
Secretary of Energy may undertake research and development of 
desalination technology in addition to research carried out at 
the facility. The additional research may by carried out 
directly, by contract, interagency agreement, cooperative 
agreement, or grant.
    Section 3 authorizes to be appropriated $1,500,000 for 
development of the plan, $3,000,000 for construction of the 
facility, and $6,000,000 for each fiscal year, 2005 through 
2010, for Sandia National Laboratory to carry out research 
programs associated with the facility. The Act also authorizes 
to be appropriated $10,000,000 for each fiscal year, 2005 
through 2010, for research in addition to the Sandia-led 
research carried out at the facility.

                   COST AND BUDGETARY CONSIDERATIONS

    The Congressional Budget Office estimate of the costs of 
this measure has been requested but was not received at the 
time the report was filed. When the report is available, the 
Chairman will request it to be printed in the Congressional 
Record for the advice of the Senate.

                      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 S. 1211. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
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 S. 1211.

                        EXECUTIVE COMMUNICATIONS

    On June 16, 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 S. 1957. These reports had not been 
received at the time the report on S. 1211 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 Interior at 
the Subcommittee hearing follows:

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

    Madam Chairman and members of the Subcommittee, I am John 
Keys, Commissioner of Reclamation. I am pleased to be here 
today to present the Department of Interior's views on S. 1211, 
a bill to undertake a demonstration program for desalination of 
brackish inland groundwater in the Tularosa Basin of New 
Mexico, as well as to provide Reclamation additional authority 
to undertake desalination research through a variety of 
institutional arrangements, or outside the United States.
    The Tularosa desalination test and evaluation facility will 
be capable of processing at least 100,000 gallons of water per 
day at the Tularosa Basin in New Mexico. In the FY 2002 Energy 
and Water Appropriations Act, Congress directed the Bureau of 
Reclamation, in cooperation with Sandia National Laboratories, 
to evaluate the potential for developing such a desalination 
research facility in the Tularosa Basin of New Mexico. The 
facility study began in January 2002. Reclamation entered a 
phased design/build contract with Laguna Construction Company, 
Inc. in July 2003. Congress provided $4 million for the 
continuation of this project in fiscal year 2004. Construction 
will begin this month.
    The Administration supports Congressional interest in 
pursuing avenues of research that look at potential long-term 
methods of augmenting scarce water supplies, including both 
technical and market approaches. We are interested in working 
with the Congress to determine whether the research program 
identified in S. 1211 meets the federal Research and 
Development Investment Criteria. These criteria were developed 
over several years through a process of intense, thorough 
consultation with the research community. They include four 
main elements:
           Relevance;
           Quality;
           Performance; and
           Criteria for R&D Programs Developing 
        Technologies That Address Industry Issues.
    Applying the criteria to the proposed research will help 
determine the appropriate federal R&D role, if any. As the 
Administration considers the appropriate level of federal 
involvement, there are a few provisions of the bill that we 
would like to work with the Committee on.
    Reclamation's Science & Technology program, which plans and 
coordinates the bulk of our research activities, is our main 
program for identifying and implementing our research 
priorities. This program received a high rating during its 
recent evaluation under the Administration's Program Assessment 
Rating Tool (PART), which rated it as `Effective'. This 
recently revamped program should play a central role in the 
determination of which research priorities the Bureau should 
pursue. We are concerned that the bill as currently written 
does not make use of this well-established expertise. If we are 
to build, manage, and maintain the facility, as provided for in 
Section 1(a) of the bill, the legislation should also clarify 
that we will have more than a physical custodial role, i.e., 
our underlying program responsibility should be delineated, and 
that should include a central role in determining research 
priorities. Our process, in turn, is subject to the federal R&D 
Criteria sketched out above.
    Additionally, while we welcome opportunities to partner 
with other agencies of the federal government, particularly 
where we have complementary missions and capabilities, we are 
concerned that, as originally drafted, our role under the bill 
could be reduced to a funding path through the Department of 
the Interior to other government agencies and laboratories. If 
funds are ultimately appropriated to Interior, we want to take 
more direct stewardship responsibility for the underlying work. 
We suggest that funds for other agencies should be appropriated 
directly to those agencies, for there is no compelling reason 
to funnel them through Reclamation.
    The Administration suggests that the portion of the bill 
that would provide treated water to local communities at no 
cost be rewritten to say that any such sale of water must be 
for fair market value.
    Furthermore, facility operation and maintenance should be 
based on user fees. Larger demonstration projects, in most 
cases, would be conducted off-site at urban and rural locations 
under field conditions, and are not contemplated in the 
construction of Tularosa.
    While some facility users would be funded out of 
Reclamation's research budget, supplemental fees could come 
from the many other agencies currently funding desalination 
research, such as the Office of Naval Research or the 
Department of Energy when they perform work at Tularosa. In the 
future we would hope that additional agencies would join the 
list of desalination researchers using the facility.
    We would be happy to work with the Subcommittee to further 
develop these concepts.
    Madam Chairman, our thinking on desalination will continue 
to grow and mature as the research field does, and as the 
federal government further subjects desalination research to 
scrutiny under the federal R&D criteria. We welcome the 
opportunity to work closely with the Committee as that process 
unfolds, beginning with adjustments to S. 1211.
    Madam Chairman, this concludes my remarks and I would be 
happy to answer any questions.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 1211, as 
ordered reported.

                                  
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