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S. HRG. 107–817

MISCELLANEOUS WATER PROJECTS

HEARING

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER

OF THE

COMMITTEE ON

ENERGY AND NATURAL RESOURCES

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ON

S. 1310 S. 2475

S. 1385 H.R. 706

S. 1824 H.R. 1870

S. 1883 H.R. 2115

S. 1999 H.R. 2828

JUNE 6, 2002

(

Printed for the use of the

Committee on Energy and Natural Resources

(II)

COMMITTEE ON ENERGY AND NATURAL RESOURCES

JEFF BINGAMAN, New Mexico, Chairman

DANIEL K. AKAKA, Hawaii

BYRON L. DORGAN, North Dakota

BOB GRAHAM, Florida

RON WYDEN, Oregon

TIM JOHNSON, South Dakota

MARY L. LANDRIEU, Louisiana

EVAN BAYH, Indiana

DIANNE FEINSTEIN, California

CHARLES E. SCHUMER, New York

MARIA CANTWELL, Washington

THOMAS R. CARPER, Delaware

FRANK H. MURKOWSKI, Alaska

PETE V. DOMENICI, New Mexico

DON NICKLES, Oklahoma

LARRY E. CRAIG, Idaho

BEN NIGHTHORSE CAMPBELL, Colorado

CRAIG THOMAS, Wyoming

RICHARD C. SHELBY, Alabama

CONRAD BURNS, Montana

JON KYL, Arizona

CHUCK HAGEL, Nebraska

GORDON SMITH, Oregon

ROBERT M. SIMON, Staff Director

SAM E. FOWLER, Chief Counsel

BRIAN P. MALNAK, Republican Staff Director

JAMES P. BEIRNE, Republican Chief Counsel

SUBCOMMITTEE ON WATER AND POWER

BYRON H. DORGAN, North Dakota, Chairman

BOB GRAHAM, Florida

RON WYDEN, Oregon

TIM JOHNSON, South Dakota

DIANNE FEINSTEIN, California

MARIA CANTWELL, Washington

THOMAS R. CARPER, Delaware

GORDON SMITH, Oregon

JON KYL, Arizona

LARRY E. CRAIG, Idaho

BEN NIGHTHORSE CAMPBELL, Colorado

RICHARD C. SHELBY, Alabama

CHUCK HAGEL, Nebraska

JEFF BINGAMAN and FRANK H. MURKOWSKI are Ex Officio Members of the Subcommittee

PATTY BENEKE, Senior Counsel

COLLEEN DEEGAN, Counsel

(III)

C O N T E N T S

STATEMENTS

Page

Bennett, Hon. Robert F., U.S. Senator from Utah ................................................ 9

Bingaman, Hon. Jeff, U.S. Senator from New Mexico .......................................... 3

Cantwell, Hon. Maria, U.S. Senator from Washington ........................................ 7

Christiansen, Don A., General Manager, Central Utah Water Conservancy

District, Orem, UT ............................................................................................... 39

Domenici, Hon. Pete V., U.S. Senator from New Mexico ..................................... 5

Johnson, Hon. Tim, U.S. Senator from South Dakota .......................................... 1

Keppen, Dan, Executive Director, Klamath Water Users Association, Klamath

Falls, OR ............................................................................................................... 45

Limbaugh, Mark A., Director, External and Intergovernmental Affairs, Bureau of Reclamation ............................................................................................. 17

Oveson, Jeff, Executive Director, Grande Ronde Model Watershed Program,

La Grande, OR ..................................................................................................... 41

Raley, Bennett, Assistant Secretary, Water and Science, Department of the

Interior .................................................................................................................. 15

Reid, Hon. Harry, U.S. Senator from Nevada ....................................................... 5

Smith, Hon. Gordon, U.S. Senator from Oregon ................................................... 4

Stagner, Jerry, Board Member, Elephant Butte Caballo Association, El Paso,

TX .......................................................................................................................... 36

Steele, John, President, Oglala Sioux Tribe, Pine Ridge Indian Reservation .... 28

Walden, Hon. Greg, U.S. Representative from Oregon ........................................ 11

Wyden, Hon. Ron, U.S. Senator from Oregon ....................................................... 8

APPENDIXES

APPENDIX I

Responses to additional questions .......................................................................... 55

APPENDIX II

Additional material submitted for the record ........................................................ 57

(1)

MISCELLANEOUS WATER PROJECTS

THURSDAY, JUNE 7, 2002

U.S. SENATE, SUBCOMMITTEE ON WATER AND POWER, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC.

The subcommittee met, pursuant to notice, at 2:35 p.m. in room

SD–366, Dirksen Senate Office Building, Hon. Tim Johnson presiding.

OPENING STATEMENT OF HON. TIM JOHNSON,

U.S. SENATOR FROM SOUTH DAKOTA

Senator JOHNSON. The Committee on Energy and Natural Resources, Subcommittee on Water and Power, will come to order.

Senator Dorgan—Chairman Dorgan is unavailable temporarily and

has asked that I chair this hearing at the outset. Obviously, when

Senator Dorgan is able to return, we’ll turn to the gavel over to

him.

Welcome to the hearing of the Subcommittee on Water and

Power. Today the subcommittee will receive testimony on several

pending bills involving various water projects throughout the West.

I’m pleased to be able to learn more about these bills, which are

authored by several of my colleagues and which I know are important to the residents of their States. We all can appreciate how crucial water is in the West.

The bills that we will hear about today are S. 1310 and H.R.

1870 providing for the sale of certain real estate in the Newlands

Project located in Nevada; S. 1385 and H.R. 2115, authorizing the

Secretary of the Interior to participate in the Lakehaven Water

Reclamation Project in Washington State; S. 1824 and H.R. 2828,

authorizing certain repayments relating to the Klamath Project in

Oregon; S. 1883, to authorize the Bureau of Reclamation to participate in rehabilitation of the Wallowa Dam in Oregon; S. 1999, to

reauthorize the Mni Wiconi Rural Water Supply Project in South

Dakota; S. 2475, to amend the Central Utah Project Completion

Act; H.R. 706, to direct the Secretary of the Interior to convey certain properties near the Elephant Butte Reservoir and the Caballo

Reservoir in New Mexico.

And I’m pleased to see my colleague, Senator Bennett, here

today. I also appreciate Assistant Secretary of the Interior Bennett

Raley being here to testify. In addition, I know that several of the

witnesses have traveled long distances in order to provide testimony to us, and we all appreciate your presence today.

2

I will, at the outset, begin with a brief opening statement on S.

1999 of my own, the prerogative of the chair, it seems——

[Laughter.]

Senator JOHNSON [continuing]. And then turn to my colleagues

for opening statements, and then, of course, to Senator Bennett. I

want to thank Senator Dorgan for holding this hearing today on S.

1999, legislation I’ve introduced along with my good friend and colleague, Senator Tom Daschle. This legislation will extend the

project completion date and increase the cost-ceiling authorization

of the Mni Wiconi Rural Water Project. S. 1999 is absolutely vital

to moving forward with water development efforts in my State.

I appreciate the help that the committee, the committee staff—

most notably, Patty Beneke—has provided to our efforts in South

Dakota to improve the quality and supply of drinking water. I also

want to thank the ranking minority member, Senator Smith, and

his staff for their cooperation on these important issues over the

years. I also want to thank John Steele, president of the Oglala

Sioux Tribe in South Dakota, for testifying today on behalf of all

four project sponsors, as well as Mike Hurley, the manager of the

West River/Lyman-Jones Rural Water System, and Jim McCauley,

the manager of the Lower Brule Sioux Tribe Rural Water System,

as well as Paul Little, of the Oglala Sioux Tribe. They are here

with us today. The fourth project sponsor is the Rosebud Sioux

Tribe.

I think it’s important to note that the Mni Wiconi Project is a

cooperative effort, as indicated by the four local sponsors. The three

tribal sponsors and the one non—tribal rural water sponsor have

all worked jointly since 1988 to help make this project a reality and

to meet a common goal—providing clean drinking water to a part

of our State that lacks both quality and quantity of clean drinking

water.

This project has become an important example of how Indian and

non-Indians in South Dakota can come together to solve one of the

biggest problems they collectively face. I want to thank, again, the

local project sponsors for their hard work in making the Mni

Wiconi Project a reality and demonstrating to the rest of the Nation how common goals can bring people of different cultures together.

The need for this legislation is simple. The Mni Wiconi Project

will not be constructed by the completion date of 2003, as provided

for in the 1994 law, because the Federal Government has simply

not provided the level of annual funding needed to finish the construction that quickly. Although funding has been in the $25 to $30

million range for the past 5 years or so, to have met the goal of

completion by 2003, the project would have needed funding levels

in the $40 million range. By stretching out the construction of the

project, the administrative costs associated with the project continue to go up, as well, thereby creating the need for increasing the

authorized cost ceiling of the project by another $58.8 million.

S. 1999 will extend the construction date to 2008, as I indicated

before, and this will be a reachable goal as the project can meet

that timetable if funding continues in the $30 million range.

Congress has become familiar with the Mni Wiconi Rural Water

Supply Project over the years, after passing the original authorizVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
3

ing legislation in 1988, and expanding the legislation in 1994. But

much progress has been made in recent years, and I’d like to take

this opportunity to update the committee on that important

progress.

The project is now more than 50 percent constructed, with Congress providing more than $200 million in funding over the past 12

years. The project sponsors also recently held a dedication ceremony for the water drinking plant completion. Significant progress

has already been made with thousands of South Dakotans already

receiving water either from the core pipeline of the project or from

temporary groundwater sources.

The Mni Wiconi Water Supply Project will deliver reliable, goodquality drinking water from a dependable source, the Missouri

River, and will result in an improved quality of life as well as economic development and job creation. The four project sponsors—the

Oglala Sioux Tribe, the West River/Lyman-Jones Rural Water System, the Rosebud Sioux Tribe, and the Lower Brule Sioux Tribe—

have done an extraordinary job in working together, and, once

again, I commend them for the level of cooperation and understanding they’ve all demonstrated.

I don’t believe our needs get any more basic than good-quality,

reliable drinking water, and I appreciate the fact that Congress has

shown support for the Mni Wiconi Project over the last number of

years. I look forward to continuing to work with my colleagues for

quick passage of this important legislation and to the continued

support of Congress for the Mni Wiconi Rural Water Supply

Project.

Again, special thanks to Chairman Dorgan for his support.

Thanks to the subcommittee and the committee as a whole for your

support and willingness to hold this hearing today.

Next, I will turn to my colleagues to see of they have opening

statements.

[The prepared statements of Senators Bingaman, Smith, and

Reid follow:]

PREPARED STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR

FROM NEW MEXICO

Thank you, Chairman Dorgan, for holding today’s Subcommittee hearing on several pending bills affecting water projects across the West. I am pleased that included among the bills to be considered is H.R. 706, the Lease Lot Conveyance Act

of 2002. This bill was introduced by Representative Joe Skeen from New Mexico and

I am happy to be working with my colleague from the House of Representatives,

as well as Senator Domenici, in support of getting this legislation enacted into law.

The bill directs the Secretary of the Interior to convey 403 lots that the Bureau

of Reclamation has jurisdiction over, and has been leasing for over 50 years, to the

Leaseholders Association representing individuals residing on the properties. The

lots are located around the Elephant Butte and Caballo Reservoirs in New Mexico,

and many of the lessees have been waiting several years to acquire their respective

lots. Enactment of this bill will fulfill their long-held expectations.

I understand that with the changes made to the bill in the House of Representatives, the Administration has no further objections to this legislation. I therefore

look forward to working with my colleagues in the Senate to move this legislation

forward and on to the President for his signature.

4

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

Mr. Chairman, I appreciate your convening this legislative hearing today to take

testimony on several water bills pending before the Subcommittee. I look forward

to hearing from the witnesses today.

I know that these bills are important to a number of communities and to many

of our colleagues. It would be my hope that we can resolve any issues with these

bills, and report as many of them as possible out of the committee before the August

recess. I look forward to working with you, Mr. Chairman, in a bi-partisan manner—as we have so many times in the past—to meet the water needs of these western communities.

I am the sponsor, with my colleague from Oregon, Senator Wyden, of two of the

bills before the Subcommittee today. The first bill, S. 1824, would authorize payments to certain Klamath Project water distribution entities for amounts assessed

by the entities for operation and maintenance of the Project’s irrigation works for

2001, and to authorize refunds to such entities of amounts collected by the Bureau

of Reclamation for reserved works for 2001. The second bill is S. 1883, the Wallowa

Lake Dam Rehabilitation and Water Management Act of 2001.

I want to welcome my colleague, Congressman Greg Walden here today, and I

look forward to hearing his comments on these bills as the sponsor of the House

companion legislation. I would also like to welcome Dan Keppen, the Executive Director of the Klamath Water Users Association, and Jeff Oveson, the Director of the

Grand Ronde Model Watershed Program. I appreciate your willingness to travel

back here in order to provide testimony today.

The first bill, S. 1824, to authorize Reclamation to reimburse the Klamath water

districts that paid for the operations and maintenance of the facility last year—yet

received no water—is a matter of fundamental equity and justice. Last year, for the

first time in the Project’s history, water users who receive their water from Upper

Klamath Lake received a zero water allocation.

Two biological opinions governed operations of the federal Klamath Project last

year. One was issued by the U.S. Fish and Wildlife Service with respect to suckers

and the other was issued by the National Marine Fisheries Service with respect to

coho salmon. Taken together, these two opinions both raised the lake level of Upper

Klamath Lake and increased flows in the Klamath River during an extreme

drought. The real tragedy for these 1,200 farm families is that in February 2002,

the National Research Council released a preliminary analysis of these two biological opinions which found that the underlying data did ‘‘not provide scientific support’’ for either the lake levels or the downstream flows—the two key management

requirements in the biological opinions.

In the name of equity, I believe the federal government needs to return these operation and maintenance payments. I know that the Administration is concerned

about setting a precedent, but frankly, I think the precedent would be a good

one.Too often, because there is no budgetary impact on the United States treasury,

the federal government is very cavalier with the lives and livelihoods of individuals.

This bill has already passed the House, and I would urge the Committee either

to mark up this bill, or to move the House-passed bill in the full Senate in an expeditious manner.

The second bill I have introduced, S. 1883, would authorize the Secretary of the

Interior, acting through the Commissioner of Reclamation, to participate in both the

rehabilitation of Wallowa Lake Dam and in the Wallowa Valley Water Management

Plan. Both of these projects enjoy wide local support—including water users, the

Nez Perce Tribe, and the local watershed council—and will improve water management and salmon habitat in the watershed. The local entities have developed these

two projects in consultation with numerous state and federal agencies. The projects

provide a positive approach to resolving the water challenges facing the basin. I am

proud of all of the work done to date by the project proponents to ensure broadbased support for their efforts.

While Wallowa Lake Dam is not a federal facility, I view the projects proposed

in this bill as critical to meeting the federal government’s tribal trust obligations

in the basin, as well as helping to recover federally listed endangered species.

Just yesterday, this Committee approved a $1.6 billion bill to authorize federal

spending for the Cal-Fed program. I supported that bill and my California colleague’s efforts to resolve significant water problems facing her state. However, as

I looked through the list of projects that will be funded in Phase I of that program,

I noticed that much of the money is going to lands or facilities that are not in federal ownership. I am hopeful of that same type of support for the efforts of Senator

Wyden and me to resolve, with a much more modest amount of money, the water

problems facing the Wallowa basin in our state.

5

I look forward to hearing from all the witnesses, and appreciate your work on

these important water issues.

PREPARED STATEMENT OF HON. HARRY REID, U.S. SENATOR FROM NEVADA

Mr. Chairman, thank you for giving me the opportunity to testify in favor of my

bill, which will provide the City of Fallon, Nevada, the exclusive right to purchase

approximately 6.3 acres of public land from the U.S. Bureau of Reclamation. I introduced this bill on August 2, 2001, and Senator Ensign has joined me as a co-sponsor.

Mr. Chairman, the 6.3 acres located in Fallon, Nevada, is part of the Newlands

Irrigation Project, which is operated by the Bureau of Reclamation. The Bureau’s

Newlands Project irrigates west-central Nevada counties with water from Lake

Tahoe and the Truckee and Carson Rivers.

Since 1984, the City of Fallon has leased the land from the Bureau for use as a

rail freight yard and loading facility. The City, the State of Nevada, the U.S. Department of Transportation, and the Southern Pacific Railroad have collectively invested a significant amount of money in this facility, which is responsible for over

400 jobs in the local community.

On January 1, 2000, the long-term lease agreement between the City of Fallon

and the Bureau of Reclamation expired. As negotiations began for a new long-term

lease, the City and the Bureau determined that it would be in their mutual interest

to transfer ownership of the property to the City.

Fallon is a rural agricultural community of 8,700 residents located in northern

Nevada approximately 70 miles east of Reno. The freight yard is an important municipal asset that is critical to the economic well-being of the community. The sale

of the land to the City would ensure future viability of the facility by enabling the

City to make long-term investments in the property without having to worry about

a lease renewal. Furthermore, the Bureau would be able to divest itself of an asset

that no longer fulfills its core mission, thereby allowing the agency to focus on its

traditional roles.

Mr. Chairman, my bill requires that The City of Fallon pay the Bureau of Reclamation the fair market value of the property as determined by an appraiser, without taking into consideration any structures or improvements on the property. The

proceeds from the sale will be returned to the Bureau’s Newlands Project fund accounts. The bill also makes the transfer to the City contingent upon the satisfactory

conclusion of all necessary environmental reviews.

Mr. Chairman, The Fallon Rail Freight Loading Facility Transfer Act is a winwin situation for all affected parties and provides assurance that a vital asset will

remain in the Fallon community and that the Bureau of Reclamation will continue

to focus on its important mission.

Senator JOHNSON. In addition, I’d like to request that each witness please summarize your statement at the appropriate time.

I turn to Senator Domenici for any opening statement that he

might have.

STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR

FROM NEW MEXICO

Senator DOMENICI. Thank you very much, Mr. Chairman. I want

to indicate to our New Mexicans, Jerry is here as the principal witness. Do you have any other New Mexicans with you?

Mr. STAGNER. Mike Knowles and his wife, Sherry.

Senator DOMENICI. But you’re the only going to testify, Mr.

Stagner?

Mr. STAGNER. That’s correct.

Senator DOMENICI. All right.

And I want to indicate that Senator Bingaman and I have talked.

He’s worked very hard moving this bill along, and he only has one

child, a son, and the son’s graduating from college, and I think we

figured, between all of us, we could do his work today and that he

should go, and so he did.

6

And also I want to say, early on in the record here, we’re passing

a bill that the U.S. House of Representatives already passed, and

it passed the House because one of the members that’s retiring

after many years of service, Representative Joe Skeen, worked tirelessly to get the various issues ironed out and to see that this bill

got out of the House and came here to the Senate before he retired.

This is a bill that’s long overdue, and time just got away from

everyone. A long time ago, 403 lots were leased to people that now

have little homes and backyards and picket fences, and they’re all

up against two lakes. Almost everybody is 55 and older, with a

very large number of 65 and older, and they can’t make any improvements, because the ownership rights are vague. And so

they’ve all worked together, including the U.S. Government. We

thank them.

They’re here, and we thank you for your indication that you approve of this legislation. This will make not just 403 people rather

happy with their government, finally, but it will show that, when

we set our heads to it, we can solve complicated problems that appear to have no answers.

Mr. Chairman, thank you so much for bringing us in on this so

these witnesses could get this behind them. I’d ask that my written

statement be made a part of the record.

Senator JOHNSON. Without objection.

Senator DOMENICI. I thank you.

[The prepared statement of Senator Domenici follows:]

PREPARED STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR

FROM NEW MEXICO

Mr. Chairman, thank you for holding this important hearing today on the Elephant Butte Lease Lot Conveyance Act. And I want to welcome Mr. Stagner, a

member of the Elephant Butte Lease Lot Board.

Today, this subcommittee has before it a piece of legislation that is of particular

significance to New Mexico. H.R. 706, The Elephant Butte Lease Lott Conveyance

Act, passed the House unanimously earlier this year, and I am glad that I can support this bill in the Senate. I also want to thank Congressman Skeen for his tireless

work on this bill in the House. Without his good efforts, I do not think that we

would be here today.

Let me take this opportunity to explain this bill’s significance. Starting in the

1940’s the Bureau of Reclamation began leasing lots of land around Elephant Butte

lake in New Mexico for $10 a year. The lease holders were told that if they did not

make improvements to the lots, the leases would revert back to the government.

Over the last 50 years, lease holders have made improvements to the lots such as,

houses, roads and other necessary infrastructure.

The majority of the lease holders are now over the age of 65 and live on fixed

incomes. The rental rates on these properties are increasing and many of the lease

holders will be priced out of their homes.

This bill will allow lease holders to purchase 403 lots from the Bureau of Reclamation for fair market value. This is a total of about 250 acres out of a total of

78,000 acres that is within the Elephant Butte and Caballo Reservoir boundaries.

This bill will provide security to many of the lease holders who have already invested time and money into improving these lots. I think it is also important to note

that allowing the lease holders to purchase these lots will in no way affect the

public’s access to Elephant Butte, or interfere with the Bureau’s operation of the

reservoir.

This bill has the support of New Mexico’s Congressional delegation, the Bureau

of Reclamation, as well as the 403 lease lot holders. This piece of legislation is important to New Mexico, and I strongly encourage my colleagues to support this bill.

This piece of legislation has been years in the making, and now that we have the

support of everyone involved, I hope that this bill will pass quickly through the Senate.

7

Senator JOHNSON. Senator Cantwell.

STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR

FROM WASHINGTON

Senator CANTWELL. Thank you, Mr. Chairman, and thank you

for conducting this hearing today.

I am pleased to see that today’s agenda includes legislation important to the State of Washington, the Lakehaven Water Reclamation bill, which will provide the capacity and reliability of waste

water systems in Washington State. I think my colleagues would

be interested to learn that this is substantially the same legislation

that passed the Senate in the 106th Congress. It is my hope that

we can move forward on this expeditiously.

Let me take a moment to remind my colleagues of what this bill

does. Consistent with the Reclamation Project Authorization Adjustment Act, it authorizes the Secretary of the Interior to participate in the design, planning, and construction, as well as land acquisition, for an important water reclamation project, the

Lakehaven Project in Washington.

This project is important for many reasons. The Lakehaven utility district is one of the largest in Washington State, with water

and sewer utilities providing 10.5 million gallons of water a day to

over 100,000 residents and numerous corporate facilities in King

County and parts of Pierce County. The demand for water from

these sources has increased to a point that the district may soon

exceed safe water production limits. It has also resulted in the reduction levels in all of the local aquifers.

Mr. Chairman, this project would begin to meet the needs of improving waste water systems serving a large segment of the Northwest population, and would provide additional protection for vital

natural resources using economically feasible technology and proven technology.

The Federal Government has a role in maintaining the systems

and assisting in building additional infrastructure to handle our

Nation’s massive needs. I would like to add, Mr. Chairman, that

the bill limits the Federal share to just 25 percent of the total

project cost, prohibits funds being provided by the Secretary from

being used for project operation and maintenance, and complies

with other limitations and obligations under the Reclamation

Projects Act.

I understand that the Department of the Interior opposes the authorization of this project on two grounds, the exact same arguments that the Department used to oppose the legislation in the

106th Congress, when the Senate saw fit to pass it. First, it opposes the authorization of projects before feasibility assessments

have been completed. I would simply point out that the authorization of this project does not preclude the feasibility study. The only

prohibition under this act is that no fund shall be expended on construction before that feasibility assessment can be completed. With

this legislation, we are in no way circumventing or changing that

requirement.

Secondly, I am sensitive to the fact that the Bureau of Reclamation has not been able to fully fund all those projects already authorized. However, I believe that this project in Washington State,

8

is crucial. The authorization back load should not sidetrack us from

pointing out important projects that must be done.

Mr. Chairman, the Nation’s need for improved water infrastructure is continuing to grow. Since 1972, the Federal Government

has spent about $73 billion on wastewater treatment programs.

While that’s certainly no minor contribution, the progress we’ve

made has been real. Something like 85 percent of wastewater has

been eliminated. But, unfortunately, with aging water collection

and treatment facilities across the country in the Nation, it is still

estimated that 35 to 45 percent of U.S. surface waters do not meet

the current water-quality standard.

So we have a big task, looking at our Nation’s 16,000 wastewater

systems and the enormous infrastructure that is needed to improve

them. And while Congress has appropriated $1.3 billion for wastewater infrastructure in fiscal year 2001, and another $1.3 billion in

the legislative year for fiscal year 2002, EPA has estimated that we

will need to spend $126 billion by 2016 to fully achieve the secondary treatment improvements of existing facilities. We still have a

long way to go, and I want to keep working on this issue with my

colleagues.

Again, the Lakehaven Water Reclamation Bill will take steps forward to improve the infrastructure needed in the Puget Sound region, an important area of our local economy that is at a point

where we cannot move further without having these improvements.

I appreciate my colleagues’ interest in having this hearing today

on this important legislation.

Senator JOHNSON. Senator Wyden.

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

FROM OREGON

Senator WYDEN. Thank you, Mr. Chairman. Let me thank you

and the committee for giving us a chance to air two important bills

for the State of Oregon, particularly for rural Oregon today. I want

to thank Jeff Oveson and Dan Keppen, who are out in the audience

somewhere. Jeff has done yeoman work on that Wallowa Dam

Project bill by way of bringing together a whole host of parties—

the farmers and the ranchers, the tribe, and the environmental and

citizens groups. In my view, Jeff and his folks have really raised

the bar for what it takes to come up with a collaborative effort, and

I want to thank him very much.

I’m also pleased that Dan Keppen is here. We have the congressman from the area, Congressman Walden here, who’s worked very

cooperatively with Senator Smith and myself. Both of the Oregon

bills are legislation that we have worked very closely on. The bill

that relates to the Klamath Basin, the Klamath Basin Project

Users bill, is a particularly important piece of legislation to our

State. The reimbursement of operation and maintenance funds to

Klamath Basin producers is just one step towards restoring equity

to a damaged system.

Last year was a low-water year. Emotions ran high. The Bureau

of Reclamation denied farmers in the Klamath Basin water, and,

at the same time, didn’t do a whole lot to help the environment either. While the canals were dry, the folks that would have used the

water from the Bureau of Reclamation’s Klamath Basin Water

9

Project were still required to pay for the operation and maintenance of a water system that was not delivering water. These operation and maintenance fees were taking essentially the last pennies out of desperate, desperate people at the time that Senator

Smith and Congressman Walden and I, along with the administration and a lot of people in the Basin, were trying to work out a way

to preserve agriculture in the Basin while improving the environment.

Senator Smith and Congressman Walden and I have been pursuing a number of important efforts, a comprehensive effort to address the needs of the Basin. I want to thank my colleagues from

the Oregon delegation, in particular, for working with me in a bipartisan way, and thank Dan Keppen for being here, as well.

This is a large puzzle, dealing with this Klamath Basin issue. I

think if we had our way, we would just divine that there would be

a whole lot more water immediately, and that is a little bit beyond

the purview of what the U.S. Congress can obtain. But certainly,

we can make a lot of progress in preserving agriculture, addressing

environmental needs, by bringing together the stakeholders on this

important piece of legislation. That’s what Congressman Walden

and Senator Smith and I have been trying to do. This is one of a

number of projects we’re pursuing together and on a bipartisan, bicameral basis. And we thank the committee for moving ahead with

the legislation.

Senator JOHNSON. Thank you, Senator.

Congressman Walden, do you want to take a position at the witness table?

And we will turn first, however, to Senator Bennett for his testimony. Welcome to the committee, Senator.

STATEMENT OF HON. ROBERT F. BENNETT, U.S. SENATOR

FROM UTAH

Senator BENNETT. Thank you very much, Mr. Chairman. I appreciate your holding the hearing and giving me the opportunity. I

have a written statement, as well as a statement from the Colorado

River Energy Distributors Association, that I would like to have included in the record.

Senator JOHNSON. Without objection.

Senator BENNETT. I want to welcome Don Christiansen, who is

the general manager of the Central Utah Water Conservancy District, who has done an excellent job during his tenure. And he’s

here in the audience, and I want to acknowledge that and thank

him for his service.

My bill, S. 2475, is a fine-tuning of the Central Utah Project

Completion Act, which was passed by the Congress in 1992 and

which represented the culmination of decades of effort on behalf of

the Congress to get this all worked out properly.

My father worked on the Central Utah Project when it was still

nothing but an idea and maybe a name on a piece of paper. He

served in this body for 24 years. Jake Garn succeeded him, served

for another 18. And I think the climactic moment of Jake’s career

was the passage in 1992, his final year, of this act. I was very glad

that they did that so that I didn’t have to deal with it when I succeeded Jake.

10

[Laughter.]

Senator BENNETT. But after 10 years of experience, there does

need to be some fine tuning of the act. I don’t believe anything that

we’re proposing is controversial.

The legislation has three main components. The first clarifies the

responsibilities of the Secretary of the Interior with respect to the

Central Utah Project. The second redirects unexpended budget authority for water conservation and reuse. And the third allows for

prepayment of repayment contracts. And the details of each of

these three are in my written statement.

Utah is one of the fastest-growing States in the country. It is also

one of the driest States in the country, in normal times. And right

now are not normal times. In some parts of the State, currently in

drought, we are running at 5 percent of normal. The overall statewide number is substantially higher than that, but it is misleading

for the description of the kind of drought we are facing as we get

towards Arizona and New Mexico, down in the southern part and

southeastern part of the State.

So, Mr. Chairman, I would hope there would be rapid consideration of this bill, and I very much appreciate your paying attention

to these issues.

[The prepared statement of Senator Bennett follows:]

PREPARED STATEMENT OF HON. ROBERT F. BENNETT, U.S. SENATOR FROM UTAH

Good afternoon. I thank Chairman Dorgan and Senator Smith for holding today’s

hearing. I would like to welcome Don Christiansen, the general manager of the Central Utah Water Conservancy District. During his tenure with the water conservancy district, Don has done an excellent job meeting the water needs of Utahns

in some of the nation’s fastest growing counties in the nation’s second driest state.

I appreciate the opportunity to discuss my legislation, S. 2475, with the subcommittee this afternoon. S. 2475 amounts to a fine tuning of the Central Utah

Project Completion Act (CUPCA), which this committee worked on and passed in

1992. Almost ten years after the enactment of CUPCA, experience and new realities

have made apparent the need for adjustments to one of the most complex undertakings authorized by the Colorado River Storage Project Act.

My legislation has three main components. The first clarifies the responsibilities

of the Secretary of the Interior with respect to the Central Utah Project. The second

redirects unexpended budget authority for water conservation and reuse. The third

component allows for prepayment of repayment contracts.

Through CUPCA, the Secretary of the Interior has full responsibility over the

Central Utah Project. Since 1992, the Central Utah Water Conservancy District has

developed an excellent working relationship with the Office of Central Utah Project

Completion, which reports directly to the Assistant Secretary for Water and Science.

My legislation would clarify the role of the secretary to make certain the secretary

will continue to retain responsibility after project completion. Furthermore, S. 2475

authorizes a pilot management program with the secretary through the Bureau of

Reclamation to assist the secretary with long-term management of the project.

The second component of my legislation will permit unexpended budget authority

for previously authorized projects to be used for water conservation measures, including the use of reverse osmosis membrane technologies, water recycling, and conjunctive use. As I mentioned in the beginning of my statement, Utah is one of the

fastest growing states and it is one of the driest states. Supporting technologies and

techniques that will allow water to be better utilized is one of the smartest things

we can do. The supplies of water are finite and the demands for water are increasing; by allowing unexpended budget authority to be used for water conservation, we

are stretching our supples. I believe this is a wise and prudent investment.

The third and final component of my legislation would allow for the prepayment

of repayment contracts and strike the 2002 sunset date. Obviously, this will allow

for the contracts to be paid off more quickly, benefitting water users and taxpayers.

Mr. Chairman, Utah is experiencing one of the worst droughts in a generation.

While this legislation will not help in the short term, I believe that if we are able

11

to make these small changes included in my legislation, especially the water conservation enhancements, Utah will be better situated for the future.

Senator JOHNSON. Thank you, Senator Bennett.

Congressman Walden.

STATEMENT OF HON. GREG WALDEN, U.S. REPRESENTATIVE

FROM OREGON

Mr. WALDEN. Thank you very much, Mr. Chairman. I greatly appreciate your courtesy in the opportunity to come and share some

comments before you today. And I want to follow up on the comments of my friend and colleague from Oregon, Senator Wyden, as

we’ve worked together on this and other legislation with Senator

Smith in a very productive and bipartisan and bicameral way in

the State of Oregon, kind of the Oregon way to do it here in the

Congress.

I’d also like to extend an official greetings to our Nation’s Capitol

to Dan Keppen, who is the executive director of the Klamath Water

Users Association, who has traveled to testify today, as well. He’s

a good friend and outstanding representative of the farmers at the

Basin.

I’d also like to welcome Jeff Oveson, as well. I’ll be talking about

the Wallowa Dam Bill in addition to this O&M refund legislation.

As Senator Wyden mentioned—and I have a statement that I’ll

put in the record, if I could, Mr. Chairman.

Senator JOHNSON. Without objection.

Mr. WALDEN. Thank you.

Mr. WALDEN. This legislation is very simple in—as Senator

Wyden outlined, last year our farmers in the Klamath Basin had

their water cut off for the first time in a hundred years. They barely got a drop. And yet they had to continue the payments for operating and maintaining a system that didn’t deliver anything to

them. And it seems like pretty standard principle in America that

you shouldn’t have to pay for something you didn’t get. And that’s

what this legislation addresses by providing, in effect, a refund to

people who are in very, very desperate straits.

This legislation was approved by the House Resources Committee without opposition, and cleared the House last November without opposition. What I’d like to share for you is a brief part of an

article that ran last week in the Portland Oregonian that I think

really puts in perspective the plight of these people and what they

face today.

It’s from the Oregonian, written by Michael Milstein. And it

reads, ‘‘Almost every day, Charlotte Rohrbacher shuttles four children to and from daycare and practices, takes community-college

courses, and deals with about 15 creditors wanting to know where

their money is. By 9 p.m., as she sits in her computer class, she’s

exhausted. By midnight, she’s lying awake, wondering which bill

collectors will call tomorrow.

‘‘This is what it means for a young family—farm family in the

Klamath Basin to go a year without irrigation water. It means the

big John Deere tractor that once turned their earth is gone, sold

for a fraction at auction. It means they are barely hanging on to

the two-story home that designed and built among the fields south

of Klamath Falls the year before the water was turned off. It

12

means Charlotte Rohrbacher spends hours on the phone with creditors she’s never met instead of working a ground she’s known all

her life. Some of them are back East in a little office building and

don’t know anything about Klamath Falls. They live in an apartment. ‘When you say, ‘‘No water,’’ they don’t know what you mean,’

she said.’

‘‘If anyone can tell them, she can. It’s been more than a year of

almost no income, since Federal agencies halted water to more

than a thousand farms in the Klamath Project, including hers, to

help protect fish through a drought. Congress handed cash relief to

waterless farm owners, but she and her husband lease most of

their land, so they got little of it. Water is flowing again this year.

Many are farming again. But, for her, it’s a year too late.’’

Hers is not a singular case, Mr. Chairman, members of the committee. A number of those farm families went bankrupt throughout

this process. Many hang on by just a string. This legislation will

help right part of a wrong, and certainly throw them a lifeline that

may allow them to survive another year and provide for their families. So when we talked about this being emergency legislation, indeed it’s an emergency for them that we can help rectify.

So I urge your support and want you to know that, again, it

had—this legislation had strong bipartisan support through the

U.S. House. And I appreciate Senator Wyden’s leadership in helping get this bill up for a hearing and for your consideration, and

Senator Smith’s help, as well.

Now, at the opposite end, 300-plus miles away from the Klamath

Basin, lies another community that’s trying to deal with water

issues in a way that has brought together farmers and environmentalists and others.

The most pressing concern that faces citizens of Wallowa County,

Oregon, right now is the potential disaster that looms from a decaying dam built in 1918. The 35-foot tall concrete does not come

close to meeting current dam-safety requirements for stability

against sliding and overturning, earthquake resistance, spillway

capacity, and outlet-tunnel conditions.

In 1996, the Wallowa Lake Dam was listed as a high-hazard

structure by the Oregon Water Resources Department. A sudden

failure and release of water would almost certainly result in loss

of life and property as well as severe environmental and economic

damage to the communities that are downstream. In fact, the dam

has been holding water at less than the maximum-authorized pool

levels since 1970, when it was judged to be a public-safety hazard.

Now, tucked away in the foothills of the Wallowa Mountains,

Wallowa Lake provides 800,000 recreational users annually with

water for boating, waterskiing, swimming, and fishing. The

Wallowa Lake Dam also provides irrigation water to 15,000 acres

of prime ag land, a potable water supply for the city of Joseph, and

flood controls for the cities of Joseph, Enterprise, and Wallowa. The

reservoir also provides base flows to the Wallowa River and Grand

Ronde Rivers, preserving and enhancing riparian habitat, fish

stocks, waterfowl, and overall quality.

The steps that are being taken to ensure both the economic vitality, as well as environmental enhancement, will serve as a model

for other rural watersheds in the West as they begin to rebuild and

13

update their current water management plans. The four phases of

the plan are—when they’re complete and thorough, they address

all the components that make for a healthy watershed and surrounding ecosystem, while helping the community that depends

upon it.

When they’re completed in 2006, there will be a community ensured from flooding, assuring fish protection, water conservation,

ag production, and a potable water supply, ESA-listed salmon restoration, fish passage, improved fish and wildlife habitat, hydropower energy production, economic stability, and continued recreational use.

So, Mr. Chairman, this is a bill that I think is very worthy of

your consideration. I appreciate, again, your indulgence and your

time, and submit the rest for the record.

[The prepared statement of Mr. Walden follows:]

PREPARED STATEMENT OF HON. GREG WALDEN, U.S. REPRESENTATIVE FROM OREGON

Chairman Dorgan, thank you for the opportunity to testify to your subcommittee

today, and thank you for your support and cooperation. I appreciate it a good deal,

as do the farming and ranching families of the Klamath Basin in southern Oregon

and northern California. I’d also like to thank my good friends from Oregon, Senators Smith and Wyden. Senator Smith’s sponsorship of the companion measure to

my bill that has passed the House, H.R. 2828, and Senator Wyden’s cosponsorship

of it exemplify their dedication to the Klamath Basin and our productive working

relationships. I’d also like to extend an official greeting to our nation’s capital to

Dan Keppen, the Executive Director of the Klamath Basin Water Users Association,

who has traveled from Oregon to testify today. Dan is a good friend and is an outstanding representative of the hard-working farmers and ranchers in the Klamath

Basin.

Mr. Chairman, S. 1824 gives hope to those people in the Klamath Basin whose

livelihoods face ruin as a result of the federal government’s decision to shut off

water to farmers and ranchers in the basin last year for the first time in the nearly

100-year history of the Klamath Project. S. 1824 originated with the hard work of

the House Committee on Resources in the form of hearings last year and subsequent passage in the House, and the work of the farmers and ranchers on the

ground who simply need to survive long enough to come to some solution that addresses the needs of both fish and the agriculture community in the Klamath Basin.

This legislation provides the measured relief these farmers and ranchers need, and

the relief they deserve.

Senators Smith and Wyden and I continue to work together with diligence to find

real and lasting solutions to the complex and difficult problems confronting the agriculture community, the Tribes and the environment of the Klamath Basin. President Bush has established an executive level working group to assist this effort, and

our collective efforts are making progress. Rest assured that in the months ahead

we will continue to bring legislation to address other, very significant issues in the

Basin.

S. 1824 provides a measure of fairness and a measure of emergency relief. It authorizes the Bureau of Reclamation to return or waive fees paid by irrigation districts and ultimately by their patrons this year. You see, the farmers, ranchers and

the irrigation districts in the Klamath Basin paid fees to run a system that never

delivered the water they were promised. One should not have to pay for something

they never received. In such a case, most of us would ask for a refund. And that’s

precisely what this measure provides, a fair and balanced refund. More importantly,

it puts money back in the hands of the farmers and ranchers who so desperately

need it to keep their operations afloat and the employees and businesses that depend on them.

S. 1824 would authorize the Secretary of the Interior to pay to each qualified

Klamath Project entity an amount of money that was assessed them for operation

and maintenance of the Klamath project for 2001. Section 2 defines ‘‘qualified Klamath Project’’ as an entity that: 1) has a water supply contract with the Bureau of

Reclamation for water from the Upper Klamath Lake and the Klamath River; 2) distributes water received under the water supply contract; 3) received a severely limVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
14

ited supply based on the 2001 annual operations plan issued April 6, 2001; and 4)

did not receive reimbursement from any state for these same expenses.

Mr. Chairman, some may look at the title of this bill, ‘‘The Klamath Basin Emergency Operation and Maintenance Refund Act of 2001,’’ and say, ‘‘This happened

over a year ago. There is no emergency.’’ Mr. Chairman and members of the Committee, I disagree wholeheartedly. If I may, I would like to read to you the opening

of a May 28, 2002 article from Portland’s Oregonian newspaper written by Michael

Milstein. It vividly shows how much of an emergency this legislation is to the people

of the Klamath Basin. It reads:

‘‘Almost every day, Charlotte Rohrbacker shuttles four children to and from

day care and practices, takes community college courses and deals with about

15 creditors wanting to know where their money is.

By 9 p.m., as she sits in computer class, she’s exhausted.

By midnight, she’s lying awake, wondering which bill collectors will call to- morrow. This is what it means for a young farm family in the Klamath Basin to go

a year without irrigation water.

It means the big John Deere tractor that once turned their earth is gone, sold

for a fraction of its cost.

It means they are barely hanging onto the two-story home they designed and

built among the fields south of Klamath Falls the year before the water was

turned off.

It means Charlotte Rohrbacker spends hours on the phone with creditors

she’s never met instead of working the ground she’s known all her life.

‘‘Some of them are back East in a little office building and don’t know anything about Klamath Falls. They live in an apartment. When you say, ’No

water,’ they don’t know what you mean.’’

If anyone can tell them, she can. It’s been more than a year of almost no income since federal agencies halted water to more than 1,000 farms in the Klamath Project, including hers, to help protected fish through a drought. Congress

handed cash relief to waterless farm owners, but she and her husband lease

most of their land, so they got little of it.

Water is flowing again this year. Many are farming again.

But for her, it’s a year too late.’’

Mr. Chairman, it’s not too late to do what is right. And while some may say that

this legislation is setting a precedence, I say back to them that last year’s water

shutoff was precedent setting for the Bureau of Reclamation.

This bill is the fair thing to do for a region that has experienced terrible hardship.

I hope that this Committee and the Senate can support this long overdue legislation. It has strong bipartisan support and passed the House without objection, so

shouldn’t get tied up in Washington, D.C. political snares. Thank you for hearing

the merits of the Klamath Basin Emergency Operation and Maintenance Refund Act

of 2001, and I urge the Committee’s speedy approval of it.

At the opposite end from the Klamath Basin of the congressional district that I

represent is yet another community that depends on a reservoir system and healthy

watershed. The most pressing of concerns that face citizens of Wallowa County, Oregon right now is the potential disaster that looms from the decaying dam that was

built in 1918. The 35 foot tall concrete dam does not come close to meeting current

dam safety requirements for stability against sliding and overturning, earthquake

resistance, spillway capacity, and outlet tunnel condition. In 1996, the Wallowa

Lake Dam was listed as a high hazard structure by the Oregon Water Resources

Department. A sudden failure and release of water would most certainly result in

loss of life and property as well as severe environmental and economic damage to

the communities that lie downstream. In fact, the dam has been holding water at

a less than the maximum authorized pool level since 1970 when the Oregon Water

Resources Department judged the dam to be a public safety hazard.

Tucked away at the foothills of the Wallowa Mountains, Wallowa Lake provides

800,000 recreational users annually with water for boating, water skiing, swimming

and fishing. The Wallowa Lake Dam also provides irrigation water to 15,000 acres

of prime agricultural land, a potable water supply for the city of Joseph and flood

control to the cities of Joseph, Enterprise and Wallowa. The reservoir also provides

base flows to the Wallowa River and Grande Ronde Rivers preserving and enhancing riparian habitat, fish stocks, water fowl and overall quality.

The steps that are being taken to ensure the economic vitality as well as the environmental enhancement will serve as a model for other rural watersheds in the

west as they begin to rebuild and update their current water management plans.

The four phases of the plan are both complete and thorough, addressing all of the

15

components that make for a healthy watershed and surrounding ecosystem, while

helping the community that depends upon it.

When the four phases of the Wallowa Lake Dam Rehabilitation project are completed in 2006 there will be a community insured from flooding and assuring fish

protection, water conservation, agricultural production, a potable water supply, ESA

listed salmon restoration, fish passages, improved fish and wildlife habitat, hydropower energy production, economic stability and continued recreational use. I applaud the citizens of Wallowa County for coming together to create such a well developed water management plan that will serve as a blue print for all other communities to follow.

The citizens of Wallowa County are asking Congress for help to assist them in

implementing these changes. While the cost of is high, the price pales in comparison

to the cost and damage that occurred this last year in the Klamath Basin, not to

mention the aversion of a potential catastrophe that puts residents of Wallowa

County at risk for their lives and livelihoods everday. Like any good proactive measure taken by congress, the initial cost should save the community and ultimately

the country millions of dollars as well as quite possibly an entire species of fish in

the future.

The Wallowa Lake Dam Rehabilitation and Water Management Act of 2001 fits

with the Bush administration desire to have local communities find solutions to

their local problems. It helps meet the trust obligations to the Nez Perce Tribe. It

helps meet stream flows for federally endangered species. And it brings a feeling

of safety to the people that depend on Wallowa Lake Dam.

Thank you very much, Mr. Chairman, for the opportunity to speak before your

Committee.

Senator JOHNSON. Thank you, Congressman. Thank you, Senator

Bennett. Unless there are any questions from the committee, I

thank you for your leadership and for sharing your views with us.

The next witnesses will represent the administration, the Honorable Bennett W. Raley, Assistant Secretary of Water and Science,

Department of the Interior; and Mark A. Limbaugh, Director, External and Intergovernmental Affairs, Bureau of Reclamation, Department of the Interior.

Welcome.

STATEMENT OF BENNETT RALEY, ASSISTANT SECRETARY,

WATER AND SCIENCE, DEPARTMENT OF THE INTERIOR

Mr. RALEY. Thank you, Mr. Chairman. On behalf of the Department, it’s a pleasure to be here. We’re glad to be back in front of

the committee, and thank you and the committee members and

committee staff for the many courtesies you’ve extended us as

we’ve worked through issues.

I serve as Assistant Secretary for Water and Science in the Department of the Interior, and I’m here to present the administration’s views on S. 2475. In light of the fact that Senator Bennett

has ably described the legislation, I would like to proffer my written testimony for the record, and, if that’s acceptable, simply conclude by saying that, while the administration has a few issues,

we’re certain that we can work them out with Senator Bennett and

you and members of the committee so that this legislation could go

forward.

So if I could submit my testimony for the record, I’ll save

time——

Senator JOHNSON. Without objection.

Mr. RALEY [continuing]. For the work you’ve got. Thank you.

[The prepared statement of Mr. Raley follows:]

16

PREPARED STATEMENT OF BENNETT RALEY, ASSISTANT SECRETARY,

WATER AND SCIENCE, DEPARTMENT OF THE INTERIOR

My name is Bennett Raley. I serve as the Assistant Secretary–Water and Science

in the Department of the Interior. I appreciate the opportunity to appear before you

to provide views of the Department on S. 2475 which would amend the Central

Utah Project Completion Act. The proposed legislation attempts to clarify the responsibilities of the Secretary of the Interior with respect to the Central Utah

Project, to redirect unexpended budget authority for the Central Utah Project for

wastewater treatment and reuse and other purposes, to provide for prepayment of

the repayment contract for municipal and industrial water delivery facilities, and

to eliminate a deadline for such prepayment.

The Central Utah Project Completion Act, Titles II-VI of P.L. 102-575, provides

for the completion of the construction of the Central Utah Project (CUP) by the Central Utah Water Conservancy District. The Act also authorizes funding for fish,

wildlife, and recreation mitigation and conservation; establishes an account in the

Treasury for deposit of these funds and other contributions; establishes the Utah

Reclamation Mitigation and Conservation Commission to coordinate mitigation and

conservation activities; and provides for the Ute Indian Water Rights Settlement.

The Administration has previously expressed concerns with this legislative proposal, and would like to work with the Chairman and the Committee to modify the

language to include several important amendments, amendments which must be

made in order for us to support the legislation.

In addition, the Department of Justice has indicated that it is examining whether

the bill’s provisions authorizing Central Utah Water Conservancy District to control

assignments of administrative responsibility within the Department of the Interior

raise constitutional difficulties. The Administration is also prepared to work with

the Committee and the Chairman to eliminate any constitutional infirmities.

Section 201(b) of Public Law 102-575 (Act) essentially deauthorized several of the

project features without clarifying how the amounts previously expended in investigating and planning those projects and features should be dealt with. S. 2475

would clarify that these costs are non-reimbursable and non-returnable, which could

result in a paygo impact.

In addition, amendments to Section 201(e) of S. 2475 provide the Secretary with

sufficient flexibility to continue to utilize the expertise and capability within the Bureau of Reclamation to fulfill her responsibilities under the Act. These provisions authorize a pilot management program within the Bureau of Reclamation. The pilot

management program will provide a mechanism for the Secretary and the District

to create a mutually acceptable management program within the Bureau of Reclamation to assist the Secretary in her responsibilities for the long term management of the Bonneville Unit. It is important that the Secretary be given the flexibility to extend the pilot management program indefinitely. It is also important to clarify that the amendments to this section of the Act, which expand the designation

of authorities which are specifically reserved to the Secretary and may not be delegated to the Bureau, to include aspects of the Colorado River Storage Project Act

(CRSP), are limited to the Bonneville Unit and do not affect other aspects of the

CRSP. Further, the amendments do not affect the Bureau of Reclamation’s and

Western Area Power Administration’s responsibilities regarding all matters relating

to all CRSP power functions including power revenues, power rates, and ratemaking. Therefore, the Administration supports the amendments to Section 201(e)

of the Act.

Over the past several decades the population along the Wasatch front in Utah has

grown dramatically which has resulted in an increased demand for municipal and

industrial water. The last paragraph of Section 202(a)(1)(B) of the Act only provides

for features to deliver irrigation water. S. 2475 includes an amendment to this section of the Act to provide the flexibility to construct features that also deliver municipal and industrial water. The Administration supports this amendment.

The amendments to Section 202(c) of the Act, as proposed in S. 2475, section 1(d),

do not designate a specific amount that would be available for these expanded activities, but rather authorizes the entire amount of available ceiling under the other

units of the Central Utah Project to be made available. S. 2475 should be modified

to: (1) limit the amount available under Section 202(c) to a specific amount; (2) deauthorize the balance of the unexpended budget authority provided for in the other

units of the Central Utah Project; and (3) delete the authorization for Hatchtown

Dam in Garfield County. The Administration does not support the amendments to

Section 202(c) of the Act unless these changes can be incorporated into the amendments. We would appreciate the opportunity to work with the sponsors of the legisVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
17

lation, the Utah delegation, and the Congressional committees to modify the amendments to Section 202(c) such that they would be acceptable to all parties.

The Administration supports the amendments to Section 210 of the Act as proposed in Section 1(e) of S. 2475.

Again, Mr. Chairman, if the changes recommended above are made, the Administration would support S. 2475. I would be happy to answer any questions you may

have.

Senator JOHNSON. Are there any questions from the committee?

Senator DOMENICI. I was just going to comment that with that

kind of conduct, we’ll be nice to him forever.

[Laughter.]

Senator JOHNSON. I think your brevity has won friends on the

subcommittee.

Mr. RALEY. Senator, may I have that in writing?

[Laughter.]

Senator JOHNSON. I’m not sure the gratitude can be banked, but

it’s here for today.

[Laughter.]

Mr. RALEY. And, Senator, if you will excuse me, my colleague is

going to testify as to the rest of the legislation on——

Senator JOHNSON. Very good.

Mr. RALEY [continuing]. But I did—given that this is a hearing,

I wanted to come and tell you how glad you’re up and running.

Senator JOHNSON. Very good.

Mr. Limbaugh.

STATEMENT OF MARK A. LIMBAUGH, DIRECTOR, EXTERNAL

AND INTERGOVERNMENTAL AFFAIRS, BUREAU OF RECLAMATION

Mr. LIMBAUGH. The last comment is foreboding to me, as I have

six bills to testify on, so I’ll try to be brief.

My name is Mark Limbaugh. I’m the Director of External and

Intergovernmental Affairs for the Bureau of Reclamation here in

Washington, D.C., and I’m pleased to be here to represent the Department on these bills.

I’ll just go down the list here and give our comments, if that’s

okay, Mr. Chairman, and submit all of my written comments for

the record.

Senator JOHNSON. Very good.

Mr. LIMBAUGH. S. 1310 and H.R. 1870, concerning the Fallon

Rail Freight Loading Facility Transfer. The House passed H.R.

1870 and referred to the Senator, and it’s nearly identical to S.

1310, so both of these bills, I will speak to simultaneously. It’s

about the sale of the—of 6.3 acres of real property within the

Newlands Project in Nevada to the city of Fallon, Nevada. The Department supports the proposed conveyance, and would support S.

1310 with a suggested amendment. The Department does support

H.R. 1870, as passed by the House and referred to the Senate.

An important provision of H.R. 1870 requires the city of Fallon

to pay for the appraisal of the property, and we encourage that the

committee—to amend S. 1310 to adopt this language that appears

in Section (b)(1)(A) of H.R. 1870, as passed by the House.

This concludes my statement on S. 1310 and H.R. 1870.

On S. 1385 and H.R. 2115, the Lakehaven Washington Reuse

Project. Although there are a few drafting differences between S.

18

1385 and H.R. 2115, my comments will be applicable to both bills,

as they are presented.

While the Department strongly encourages local water recycling

efforts, we must oppose authorizing this additional Federal recycling project. Both bills authorize the Secretary of the Interior to

participate in the design, planning, and construction of and land

acquisition for the Lakehaven Water Reclamation Project in the

State of Washington.

Title 16 and subsequent amendments authorized the construction

of 25 reclamation reuse projects and also authorize the Secretary

to undertake a program to identify wastewater recycling opportunities and conduct appraisal level and feasibility studies in analyzing

the viability of these future projects.

Today, Congress has provided funding to design, plan, or construct 19 of the 25 authorized projects under title 16. In addition,

under the general authority of title 16, funding has been provided

to identify and investigate, at the appraisal or feasibility level,

eight potential water recycling projects and to conduct three research and demonstration projects.

While we recognize the value of wastewater reuse efforts and

how it can assist States and local communities in solving temporary water-supply problems, the Department opposes authorizing

an additional construction project without requiring feasibility

studies to determine whether these particular projects warrant

Federal funding.

In general, reclamation places priority on funding new projects

that are economically justified and environmentally acceptable in a

watershed are not eligible for funding under another Federal program and directly address administrative priorities for reclamation

programs, such as reducing the demand on existing Federal watersupply facilities.

The Department also imposes enactment of this legislation because authorizing new construction projects is likely to place an additional burden on Reclamation’s already tight budget. Today, Reclamation has been able to provide full funding for only four of the

reclamation and reuse projects presently authorized under title 16.

At current funding levels, Reclamation will be able to complete

funding for the 25 currently authorized projects in 10 years.

Finally, the Department opposes enactment of provisions in the

bills that authorize land acquisition prior to the completion of the

feasibility study. In the Department’s view, Federal contributions

for a land acquisition should await the outcome of such a study.

For these reasons, the Department cannot support authorizing the

new construction request.

This concludes my testimony on those bills, sir.

Mr. Chairman, the next bills are S. 1824 and H.R. 2828 concerning the Klamath Project O&M reimbursement. The bill authorizes

refunds of amounts collected from Klamath Project irrigation and

drainage districts for operation and maintenance of the projects

transferred and reserved works for the year—water year of 2001,

and also authorizes the Secretary to waive requirements that the

districts pay additional O&M charges for 2001. Inasmuch as S.

1824 and H.R. 2828 are nearly identical, my comments will address

both bills.

19

The troublesome series of events that occurred last year in the

Klamath Basin were a reminder of the cyclical nature of droughts

in the West and the increasing demands for a finite amount of

water. Reclamation has worked hard to counter the financial difficulties suffered by the irrigators, their families, and the community as a whole.

The Department of the Interior responded quickly last year and

continues to play an integral role in finding workable, long-term solutions for that region. In fact, this past March, the President established the Klamath River Basin Federal Working Group, which

is chaired by Secretary of the Interior, Gail Norton. The working

group has since undertaken immediate and long-term actions to address complex, economic, and natural resource issues in the Basin.

In addition to the administration’s efforts, the region’s congressional delegation, including Senators Ron Wyden, Senator Gordon

Smith, along with Congressman Greg Walden, were instrumental

in the passage of legislation authorizing financial assistance to

Klamath Basin water usage.

While we all hope this situation will never repeat itself, cyclical

drought conditions pose a considerable challenge in the arid West,

where we must manage water for endangered species, fulfill our

Native American trust responsibilities, and meet the needs of

irrigators and other water users. The Department recognizes the

unfortunate plight of the water-supply contract holders of the

Klamath Project, however we do have some concerns about the

long-term policy and cost ramifications these bills may unintentionally set.

The fundamental principles of reclamation have always included

fulfilling our commitments and delivering water to our contractors.

The corresponding commitment of the water users to help maintain

this infrastructure, in good times and in bad, is essential to the

success of our programs, and we do not want to minimize that obligation.

Regardless of how much water is delivered to our projects in the

West, maintenance of facilities must continue if they are to remain

functional for future deliveries over the long term, such as with the

Klamath Project today. I have no doubt the administration and

Congress will, where appropriate, treat others affected by droughts

and endangered-species issues with the same passion as they have

with the Klamath contractors. The Department values its working

relationship with our Klamath Project water users and is committed to working through the complex issues all of us face in that region.

Reclamation and the Department stands ready to work with Senator Wyden, Senator Smith, and other members of this subcommittee to find mutually acceptable solutions to Klamath Basin problems.

This concludes my testimony on that bill.

The next bill, S. 1883, Wallowa Lake Dam. While we believe

there are merits to the proposed program, the Wallowa Lake Dam

Rehabilitation and Water Management Program in Oregon, the Department does not support S. 1883.

Wallowa Lake Dam is a privately-owned dam constructed in

1918 and raised in 1929 and is owned and operated by the AssociVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
20

ated Ditch Companies, Inc., or ADC. The U.S. Army Corps of Engineers and the Oregon Resource Department have identified the

dam-safety deficiencies of the Wallowa Lake Dam. ADC, in conjunction with the Grand Ronde Model Watershed Council, and

working with Reclamation and other local, State, and Federal

agencies, developed the Wallowa Lake Dam Rehabilitation and

Water Management Program to address these dam-safety deficiencies.

Reclamation itself has an inventory of aging dams and the responsibility to ensure the safety and reliability of Reclamation

dams to protect the downstream public. Dam safety is one of Reclamation’s highest priorities.

I would like to give you a sense of the scope of our dam-safety

responsibilities. The Bureau has reservoirs impounded by 457

dams and dikes. Of these structures, 362 dams located at 252 different project facilities would likely cause loss of life if they were

to fail. Approximately 50 percent of Reclamation’s dams were built

between 1900 and 1950, and about 90 percent of the dams were

built before currently-used state-of-the-art design-and-construction

practices. Aging Reclamation-owned dams, which lack state-of-theart structural-reliability features, require Reclamation to conduct

extensive ongoing risk-management activities to assure safety and

performance of these dams and protect the public from unreasonable risks.

While we fully understand the importance of ensuring the safety

of Wallowa Lake Dam, the dam is not a Federal project. It is privately owned and operated and falls under the Dam Safety Program of the Oregon Department of Water Resources. Reclamation

believes that the Wallowa Lake Dam and Rehabilitation and Water

Management Program is worthwhile, with potentially numerous

benefits; however, we are concerned about the proposed Federal

role in this project. Despite the very high Federal cost share for the

project, there is no—currently no Federal interest in the dam, and

none provided by the bill. Moreover, there is no provision for repayment by project beneficiaries, in accordance with existing Reclamation law.

We are also concerned that Reclamation participation in this

project would adversely impact ongoing projects and operations.

Reclamation funds should be targeted to perform essential functions at our own Federal projects, including security at BOR dams

and reservoirs, facility operations and maintenance, resource management, Reclamation dam-safety activities, and authorized construction activities.

This concludes my testimony on S. 1883.

My next testimony is on S. 1999 concerning the authorization of

the Mni Wiconi Rural Water Supply Project. S. 1999 would increase the authorization ceilings for the project and extend the

time period for which appropriations are authorized. Since the

project cannot be completed unless these changes are made, the

Department supports enactment of S. 1999.

The Mni Wiconi Rural Water Supply Project was authorized in

1988 and was expanded in 1994. The authorizations intended construction to be completed within 10 years, and appropriations were

authorized through 2003. However, annual appropriations have

21

1The statements have been retained in subcommittee files.

2Sec. (b)(1)(A) of H.R. 1870 (RFS), concerning the appraisal of the property, adds the phrase

‘‘and paid for by the city of Fallon, Nevada’’.

been insufficient to complete construction on the project within the

time frame originally planned in the final engineering report.

Mr. Chairman and members of the subcommittee, the administration is firmly committed to completing the Mni Wiconi Rural

Water Supply Project, and supports the passage of S. 1999.

Finally, Mr. Chairman, I’d like to provide comments on H.R. 706,

the transfer of Elephant Butte Lease Lot Conveyance Act. H.R. 706

provides for the transfer and disposal of 403 residential lease lots

located on Federal properties at Elephant Butte and Caballo Reservoirs near Truth or Consequences, New Mexico.

In the late 1940’s, small quarter-acre and half-acre lots along the

shoreline of these reservoirs were made available for the public to

lease and occupy on a short-term basis. Over time, permanent

structures and other improvements have replaced initial short-term

recreational facilities, and many of the structures now are used as

full-time residences.

The Department supports efforts to convey certain Reclamation

lands and facilities to private entities; in particular, those that are

no longer necessary for managing either the dam or the recreation

areas and supports H.R. 706, as passed by the House of Representatives in March 19, 2002, and referred to the Senate.

Mr. Chairman, members of the subcommittee, thank you very

much for the time. I conclude my time on the six bills that we had

before us today, and I’d certainly stand for any questions you may

have.

[The prepared statements of Mr. Limbaugh on the preceding bills

follow:]

PREPARED STATEMENTS OF MARK A. LIMBAUGH, DIRECTOR, EXTERNAL AND

INTERGOVERNMENTAL AFFAIRS, BUREAU OF RECLAMATION

S. 1310/H.R. 1870

I am Mark A. Limbaugh, Director of External and Intergovernmental Affairs for

the Bureau of Reclamation (Reclamation). I am pleased to present the views of the

Department of the Interior on S. 1310 and H.R. 1870, concerning the Fallon Rail

Freight Loading Facility Transfer. H.R. 1870, as passed by the House and referred

in the Senate, is nearly identical to S. 1310. Both bills provide for the sale of about

6.3 acres of real property within the Newlands Project, Nevada (acquired in 1920

by the United States government), to the city of Fallon, Nevada. The Department

supports the proposed conveyance, and would support S. 1310 with the amendment

suggested below. The Department supports H.R. 1870, as passed by the House and

referred in the Senate.

The House Resources Subcommittee on Water and Power held a hearing on H.R.

1870, as introduced, on December 10, 2001 (a copy of our statement is attached for

the record).1 The Department did not support the bill as introduced, and recommended specific amendments to provisions on credit of sale proceeds, appraisal,

and liability. Subsequently, the House subcommittee adopted these amendments. An

important provision in H.R. 1870, suggested by the Department, requires the city

of Fallon to pay for the appraisal of the property.2 We encourage the Committee to

amend S. 1310 to adopt this language, which appears in Sec. (b)(1)(A) of H.R. 1870,

as passed by the House of March 2, 2002, and referred to the Senate.

S. 1385/H.R. 2115

I am pleased to present the views of the Department of the Interior (Department)

on S. 1385 and H.R. 2115, concerning the Lakehaven water reclamation project in

the state of Washington. Although there are a few drafting differences between S.

22

1385 and H.R. 2115, the bills are effectively identical, and therefore, my statement

is applicable to both bills. The Department previously submitted its views on H.R.

2115 to the House Resources Committee, by letter of October 22, 2001 (a copy of

which is attached for the record). The Department opposes both bills.

S. 1385 and H.R. 2115 both authorize the Secretary of the Interior (Secretary) to

participate in the design, planning, and construction of, and land acquisition for, the

Lakehaven water reclamation project in the state of Washington. S. 1385 and H.R.

2115 limit the Federal share of project costs to 25 percent of the total costs and restrict the Secretary from providing funding for the operation and maintenance of

this project. While the Department strongly encourages local water recycling efforts,

we must oppose authorizing this additional Federal recycling project for the reasons

described below.

In 1992, Congress adopted, and the President signed, the Reclamation Projects

Authorization and Adjustment Act (Public Law 102-575). Title XVI of this Act, the

Reclamation Wastewater and Groundwater Study and Facilities Act, authorized the

construction of five water reclamation and reuse projects. Four of these projects are

in California and the fifth is in Arizona. The Secretary also was 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. In addition, the

Secretary was authorized to conduct research and to construct, operate, and maintain demonstration projects. The Bureau of Reclamation has been administering a

grant program to fund these Title XVI activities since FY 1994.

In 1996, Public Law 104-266, the Reclamation Recycling and Water Conservation

Act, was enacted. 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. These new projects are distributed within five states, including California, Nevada, Utah, Texas, and New Mexico.

Title XVI of P.L. 102-575 was further amended in 1998 by Public Law 105-321, to

authorize a project in Salem, Oregon. Finally, Title XVI was amended twice in 2000,

first by Public Law 106-544, to authorize a project in Sparks, Nevada, and then by

Public Law 106-566, which provided the Secretary with general authority to conduct

planning studies in the State of Hawaii. To date, Congress has provided funding to

plan or construct 19 of these 25 specifically authorized projects. In addition, under

the general authority of Title XVI, funding has been provided to identify and investigate, at the appraisal or feasibility level, eight potential water recycling projects,

and to conduct three research and demonstration projects.

Municipal, industrial, domestic, and agricultural wastewater reuse efforts can assist states and local communities in solving contemporary water supply problems.

However, the Department opposes authorizing additional construction projects in

the absence of feasibility studies to determine whether these particular projects

warrant Federal funding. In general, Reclamation places priority on funding new

projects that: (1) are economically justified and environmentally acceptable in a watershed context; (2) are not eligible for funding under another Federal program; and

(3) directly address Administration priorities for the Reclamation program, such as

reducing the demand on existing Federal water supply facilities.

The Department also opposes enactment of this legislation because authorizing

new construction projects is likely to place an additional burden on Reclamation’s

already tight budget. To date, Reclamation has been unable to provide the full authorized funding amounts for all but four of the water reclamation and reuse

projects presently authorized by Title XVI. At current funding levels, it will take

Reclamation more than 10 years to complete funding of the 25 currently authorized

projects.

Finally, the Department opposes enactment of the provision in S. 1385 and H.R.

2115 authorizing land acquisition prior to completion of a feasibility study. Federal

contributions for land acquisition should await the outcome of a feasibility study.

For these reasons, the Department cannot support authorizing this new construction request.

S. 1824/ H.R. 2828

I am pleased to present the views of the Department of Interior (Department) on

S. 1824 and H.R. 2828, concerning refunds of amounts collected from Klamath

Project irrigation and drainage districts for operation and maintenance of the

Project’s transferred and reserved works for water year 2001. The bill also authorizes the Secretary of the Interior to waive requirements that the districts pay additional operation and maintenance (O&M) charges for the remainder of 2001. In as

much as the bills are nearly identical, my comments will address both bills.

23

As much as the Department can sympathize with the unfortunate plight of the

water supply contract holders in the Klamath Project, we do have some concerns

about the long-term policy and cost ramifications these bills may unintentionally

set.

The troublesome series of events that occurred last year in the Klamath Basin

were a reminder of the cyclical nature of droughts in the West and the increasing

demands for a finite amount of water. The financial difficulties suffered by the

irrigators, their families, and the community as a whole is something Reclamation

has worked hard to counter. The Department responded quickly last year and continues to play an integral role in finding workable long-term solutions for that region.

In March 2002, the President established the Klamath River Basin Federal Working Group, which is chaired by Interior Secretary Norton and includes Commerce

Secretary Evans, Agriculture Secretary Veneman and CEQ Chairman Connaughton.

The Working Group has since undertaken immediate and long-term actions to address the complex economic and natural resource issues in the basin. For instance,

the Working Group announced $1.6 million from the Department of Agriculture

(USDA) to accelerate assistance for water management and water quality actions

on Forest Service land. The Department accelerated the construction schedule on

screening of the A canal, and anticipates finishing construction in April 2003. Reclamation announced two significant restoration projects that will add water to a

water bank. These projects involved partnerships with The Nature Conservancy and

The Rangeland Trust. The Administration is considering additional water quality

and water quantity measures and is considering reprogramming of Reclamation

funds to accelerate water conservation and habitat restoration projects in the Klamath River Basin. Also, the USDA provided $20 million to help affected farming families.

In addition to these Administration efforts, the region’s congressional delegation,

including Senator Gordon Smith and Congressman Greg Walden, were instrumental

in passing a potent conservation title in the Farm Bill, also strongly supported by

the Administration, which included $50 million specifically for Klamath farmers and

ranchers to pursue conservation measures. The Klamath community may also be

able to qualify for some of the large funding increases for the Environmental Quality Incentives Program (EQIP), Wetlands Reserve Program (WRP), and Conservation Reserve Program (CRP) authorized in the Farm Bill.

While we all hope that this situation will never repeat itself, cyclical drought conditions pose a considerable challenge in the arid West, where we must manage

water for endangered species, fulfill our trust responsibilities to Native Americans,

and meet the needs of irrigators and other water users. Although what happened

in the Klamath Basin was an extraordinary example of drought and Endangered

Species Act (ESA) conditions hampering water deliveries for contract customers, this

is not the first example, nor will it be the last. Over the years, there have been

countless examples of when contractors were unable to get their full contract allotment of water due to drought or environmental demands. Nonetheless, O&M costs

were incurred and the contractors paid their share.

Regardless of how much water is delivered, maintenance of facilities must continue if they are to remain functional. As Reclamation enters the dawn of its second

century, it is important that we not shed the tenets of our success from our first

100 years. The fundamental principles of Reclamation have always included fulfilling our contractual commitments and delivering water to our contractors in the arid

West. The corresponding contractual commitment of the water users to help maintain this infrastructure, in good times and bad, is essential to the success of the program.

The Department recognizes the hardships experienced by Klamath area residents.

It is also keenly aware of the severe drought conditions playing out across the West.

Reclamation also recognizes it will have additional water management challenges

in the future. I have no doubt that the Administration and Congress will act with

the same passion with other affected parties, where appropriate, as they did with

Klamath customers. What we must not do is give cause to those persistent critics

of Reclamation programs that allege the beneficiaries of our programs do not pay

their fair share, even in the most difficult of times. That is why the Department

has some serious concerns about the long-term policy and cost ramifications that

these bills may unintentionally set. For example, applying the logic of these bills

to all such situations could cost Federal taxpayers many millions of dollars per year

in lost O&M payments. Every year there are water contractors who do not receive

the full amount of water for which they have contracted, due to drought, ESA concerns, or over-allocation of scarce water. Nevertheless, if those contractors want to

24

ensure future deliveries, they must help maintain the facilities that make those deliveries possible.

The Department values its working relationship with our Klamath Project customers and is committed to working through the complex issues all of us face in

that region. Reclamation stands ready to work with Senator Smith and other members of this Subcommittee to find a mutually acceptable solution for the Klamath

Project customers.

I appreciate the opportunity to comment on S. 1824 and H.R. 2828 and I would

be happy to stand for questions.

S. 1883

I am pleased to present the views of the Department of the Interior on S. 1883,

a bill that would authorize Reclamation to participate in the Wallowa Lake Dam

Rehabilitation and Water Management Program in Oregon.

While we believe there are merits to the proposed program, the Department does

not support S. 1883.

Wallowa Lake Dam is a privately-owned dam constructed in 1918 and raised in

1929, and is owned and operated by the Associated Ditch Companies, Inc. (ADC).

Dam safety deficiencies have been identified by the U.S. Army Corps of Engineers

and Oregon Water Resources Department. ADC, in conjunction with the Grande

Ronde Model Watershed Council, Reclamation, and other local, state, and Federal

agencies, developed the Wallowa Lake Dam Rehabilitation and Water Management

Program to address dam safety deficiencies and to tie correction of those deficiencies

to larger environmental issues in the Wallowa River Basin.

The Wallowa Lake Dam Rehabilitation and Water Management Program is proposed to begin in FY 2002 and continue through FY 2007, at an estimated total cost

of $38,800,000. S. 1883 sets out an 80/20 cost share for this Program, under which

the federal government would pay $32 million funded through the Bureau of Reclamation.

Reclamation itself has an inventory of aging dams—and the responsibility to ensure the safety and reliability of Reclamation dams to protect the downstream public. Dam safety is one of Reclamation’s highest priorities. I would like to give you

a sense of the scope of our dam safety responsibilities: the Bureau has reservoirs

impounded by 457 dams and dikes. Of these structures, 362 dams and dikes, located

at 252 different project facilities, would likely cause loss of life if they were to fail.

Approximately 50 percent of Reclamation’s dams were built between 1900 and 1950,

and about 90 percent of the dams were built before currently-used state of the art

design and construction practices. Aging Reclamation-owned dams, which lack stateof-the-art structural reliability features, require Reclamation to conduct extensive

ongoing risk management activities to assure safe dam performance and protect the

public from unreasonable risk.

While we fully understand the importance of ensuring the safety of Wallowa Lake

Dam, this dam is not a federal project. It is privately owned and operated, and falls

under a dam safety program of the Oregon Department of Water Resources. Reclamation believes the Wallowa Lake Dam Rehabilitation and Water Management

Program is worthwhile, with potentially numerous benefits; however we are concerned about the proposed federal role in this project. Despite the very high federal

cost share for the project, under S. 1883 there is currently no federal interest in the

dam, and none is provided by the bill; moreover, there is no provision for repayment

by project beneficiaries in accordance with reclamation law.

We are also concerned that Reclamation’s participation in this program would adversely impact ongoing projects and operations. S. 1883 would authorize the use of

Reclamation funds for a non-Federal purpose. Reclamation funds must be targeted

to perform essential functions at our federal projects, such as security at BOR dams

and reservoirs, operations and maintenance (O&M), resource management, dam

safety, or construction. The Department cannot, therefore, support S. 1883.

S. 1999

I am pleased to present the views of the Department of the Interior on S. 1999,

concerning authorization of the Mni Wiconi Rural Water Supply Project. This

Project serves the Pine Ridge, Rosebud, and Lower Brule Indian Reservations and

seven counties in southwestern South Dakota. S. 1999 would increase the authorization ceiling for the Project and extend by five (5) years the time period for which

appropriations are authorized. Since the Project cannot be completed unless these

changes are made, the Department supports enactment of S. 1999.

The Mni Wiconi Rural Water Supply Project was authorized in 1988 (P.L. 100-

516) and included the Oglala Sioux Rural Water System, the Oglala Sioux Core SysVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6621 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
25

tem, the West River Rural Water System, and the Lyman-Jones Rural Water System. The Mni Wiconi Project was expanded in 1994 (P.L. 103-434, Title VIII) to include the Rosebud Sioux and Lower Brule Sioux Rural Water Systems.

The authorizations intended construction to be completed within 10 years, and appropriations were authorized through 2003. However, annual appropriations have

been insufficient to complete construction on the Project within the time-frame originally planned in the Final Engineering Report.

S. 1999 extends to the year 2008 the authorization for appropriations to complete

the project. The bill also increases the authorized ceiling by $58.8 million to cover

expenses that were not identified until after the sponsors (the Oglala, Rosebud and

Lower Brule Sioux Tribes and West River/Lyman-Jones Rural Water Systems) released their Final Engineering Report, plus estimated administrative costs related

to the extension from 2003 to 2008.

Mr. Chairman, the Administration is firmly committed to completing the Mni

Wiconi Rural Water Supply Project. If S. 1999 is not enacted, the authority for appropriations will expire in 2003; Project construction would be shut down and the

full benefits of the Project would not be realized. Only a portion of the Project population would be served water. If the expiration date is extended without a corresponding increase in the cost ceiling, the project would have to be redesigned to

determine which features could be constructed within the available ceiling. This unfortunate prospect may be averted if S. 1999 is enacted, and I reiterate the Department’s support for the bill.

H.R. 706

I am pleased to present the views of the Department of the Interior on H.R. 706,

the Elephant Butte Lease Lot Conveyance Act, as passed by the House of Representatives and referred to the Senate (RFS). The Department has no objections

to H.R. 706 as passed by the House of Representatives and referred to the Senate

(RFS).

H.R. 706 provides for the transfer and disposal of 403 residential leased lots located on federal properties at Elephant Butte and Caballo Reservoirs near Truth

or Consequences, New Mexico. In the late 1940s, small quarter-acre and half-acre

lots along the shoreline of Elephant Butte and Caballo Reservoirs were made available for the public to lease and occupy on a short-term basis. Individuals were permitted to place tents, campers, or construct temporary structures on the site for the

duration of their stay. Although the original intent of the lease lot program was to

provide lots for part-time recreational use, over time permanent structures and

other improvements have replaced initial recreational facilities with many of the

structures now used as full-time residences.

The Department supports efforts to convey certain Reclamation lands and facilities to private entities—in particular, those that are no longer necessary for managing either the dam or the recreation areas. However, the Department did not support H.R. 706 as introduced. In testimony before the House Resources Committee

on December 10, 2001 (a copy of which is attached for the record), we raised several

concerns with H.R. 706 as introduced: for example, the method by which fair market

value would be determined, disposition of proceeds from the sale of the leased lots,

and compliance with applicable laws prerequisite to conveyance.

Reclamation staff subsequently worked with the House Resources Committee to

develop acceptable legislative language. The resulting Amendment in the Nature of

a Substitute, offered by Representative Calvert, addressed our most significant concerns. Ultimately, those changes were adopted and passed by the House of Representatives on March 19, 2002, and are reflected in H.R. 706 (RFS).

Thank you for the opportunity to comment on H.R. 706 as passed by the House

of Representatives and referred to the Senate (RFS).

This concludes my statements. I would be happy to answer any questions.

Senator JOHNSON. Thank you, Mr. Limbaugh. I’m advised that

Chairman Dorgan may have several questions to submit for your

response, and that will be forthcoming.

Senator Domenici.

Senator DOMENICI. I have no questions. I just wanted to know

if you know, how long did the lessees, the Government and other

interests, negotiate and work on the issues in the last bill you testified about on Caballo Lake and Elephant Butte? Do you know how

26

many years? I’m sure that Mr. Stagner knows, and he’ll tell us, but

I’m just——

Mr. LIMBAUGH. Senator—Mr. Chairman and Senator Domenici, I

don’t have any information on the length of time this has been ongoing, but I can get back to you on that, if you desire.

Senator DOMENICI. It’s not that important. We’ll get it for the

record.

Mr. LIMBAUGH. Okay, thank you, sir.

Senator JOHNSON. Senator Wyden, any questions?

Senator WYDEN. Yes, I wanted to ask a couple of questions. Particularly, let me begin, if I might, on the Klamath Basin legislation,

because it seems to me that this is a perfect example of folks being

penalized. I mean, here you’ve got a situation where they’re not

getting the product, and they’re not going to get a remedy under

existing contracts.

And we want to work with you. You all have been very cooperative in this whole effort. But my sense is that if they don’t have

a legislative remedy, literally we are going to set a precedent that

says they have no remedy under existing law when they get no

product. In other words, you’re talking about setting a precedent

the other way. I’m talking about setting an anti-agriculture, antienvironmental precedent that’s extraordinarily dangerous. It would

be one thing if they had a remedy under an existing contract. But

they don’t, and I’m just wondering what can we do to work this out

with you, because I think that, absent the Smith-Walden-Wyden

legislation here, we’re going to be setting an anti-agriculture precedent.

Mr. LIMBAUGH. Well, Mr. Chairman, Mr. Wyden, I can appreciate your concerns. I believe the Department has shown that they

are very sensitive to the farmers of the Klamath Basin and to agriculture, in general, in Oregon there in that part. I certainly think

that the concerns that we have are about Reclamation-wide actions

that—on collecting these O&M costs that would basically set a different expectation, in terms of folks that don’t get all of their

water. There are other areas of the country that, while not precluded from getting water, do not receive a hundred percent of

their supply every single year.

Senator WYDEN. How about zero percent?

Mr. LIMBAUGH. Yeah. Well, and that—zero is an extreme example. So, quite possibly, we could work with you to look at the extenuating circumstances that are——

Senator WYDEN. We’d like to do that. I understand your concern

about the precedent, and certainly I can conceive of scenarios

where it could be used as a boondoggle to go out and exploit the

Treasury. But here, we have a situation where, as my colleague

said, our folks didn’t get anything. You have been working closely

with us. This is not a question of that. You have been cooperating

fully with us. I just think, to say, after people get nothing, and

there’s no remedy under contract law—I think we’d be setting a

precedent that’s certainly not what the administration wants to do,

and it would really be an anti-agriculture one.

The only other point on the other bill, with respect to Wallowas—

as you know, the administration has stressed collaborative approaches. And I credit you for it. I credit the Secretary for it. It

27

doesn’t get any more collaborative than the effort that we have

seen in the Wallowa. I mean, these folks have been at the table

doing everything that the President and the Secretary, to their

credit, have been saying is what natural resources policy is all

about.

And it seems to me, if we—again, in the same spirit as the first

piece of legislation—if we can’t work this one out with you, it sends

a really horrendous message throughout our part of the world that,

if you do the heavy lifting, if you do all this collaborative work,

well, shoot, somebody in Washington is just going to come up with

some other reason why you can’t do it.

So I make the same plea on the second bill that I did on the first

bill—that is, just work with us. We know you are sympathetic to

the collaborative effort. It doesn’t get any more collaborative than

this one. And just, by way of your response, as long as you indicate

you’ll work with us, you don’t have to get mauled here as a witness

on this point today. Is that something we can agree on, to work

with you on it some more?

Mr. LIMBAUGH. Mr. Chairman—or Mr. Wyden, yes, we would appreciate the opportunity to work with you on this.

Senator WYDEN. Right, thank you.

Thank you, Mr. Chairman.

Senator JOHNSON. Senator Smith.

Senator SMITH. Thank you, Mr. Chairman.

Mr. Limbaugh, yesterday in this committee, we passed out a bill

on the Cal-Fed Program of $1.6 billion. It had to do with a lot of

non-Federal projects. And I guess I’m wondering—if endangeredspecies issues and larger Federal programs can create a nexus for

that, surely it can for a little dam in Wallowa County.

Mr. LIMBAUGH. Mr. Chairman and Mr. Smith, the Cal-Fed legislation is a different piece of legislation, and——

Senator SMITH. No doubt about it. There’s a lot of non-Federal

property in that. And I’m wondering if you support that, the CalFed Program?

Mr. LIMBAUGH. Mr. Chairman and Senator Smith, I’m not prepared to give the administration’s position on the Cal-Fed Program

at this point. I think it’s been given in several testimonies in the

past, and I’m just not prepared at this point to give you that position.

Senator SMITH. Well, we need to work with you on this Wallowa

Dam, because this is something we need to do, because if we need

to help find a Federal nexus, it’s not going to be hard to do that.

If we need to make some provisional changes about doing that.

But, the bottom line, there are tribal issues, there are endangeredspecies issues, there’s a whole range of overlay of Federal interests

having to do with Wallowa Dam, and we’ve got to work it out with

you.

So we’ll look forward to doing that, and I did owe the comments

of my colleague on Klamath.

Senator JOHNSON. Thank you, Senator. Thank you, Mr.

Limbaugh, and we will——

Senator SMITH. Thank you very much.

28

Mr. LIMBAUGH. Thank you. Mr. Chairman, if Mr. Dorgan has

questions, do you want me to remain in the audience, or do you

want to submit the——

Senator JOHNSON. We will submit the question to you, and we

appreciate your expeditious review of those questions.

Mr. LIMBAUGH. Okay, no problem. Thank you, Mr. Chairman.

Senator JOHNSON. Thank you.

The next panel consists of Mr. Dan Keppen, executive director of

the Klamath Water Users Association of Klamath Falls, Oregon;

John Steele, president of the Oglala Sioux Tribe, Pine Ridge, South

Dakota; Jerry Stagner, board member of Elephant Butte/Caballo

Leaseholders Association of El Paso, Texas; Jeff Oveson, director of

the Grande Ronde Model Watershed Program, La Grande, Oregon;

and Don A. Christiansen, general manager of Central Utah Water

Conservancy District, Orem, Utah. If each of these gentlemen

would come to the witness table——

I’m advised that there is a 15-minute roll-call vote that was

called for just recently. What I want to do is get as much of this

in as possible. And there may even be some juggling that we can

do to not lose any testimony at all, but we do want to be expeditious.

I want to thank each of you. We would encourage each of you to

summarize your statements, if at all possible. Your statements will

be received, in full, in the record.

I will turn first to John Steele, who is president of the Oglala

Sioux Tribe. John has been an extraordinary leader for the Oglala

Sioux and is very well-versed with one of the most important water

projects in all of the Great Plains, and that is the Mni Wiconi

Water Project. Welcome, President Steele.

STATEMENT OF JOHN STEELE, PRESIDENT, OGLALA SIOUX

TRIBE, PINE RIDGE INDIAN RESERVATION

Mr. STEELE. Thank you very much, Senator. I would like to

thank the committee for the hearing on S. 1999. My name is John

Yellowroot Steele. I’m the president of the great Oglala Sioux

Tribe, the land of Red Cloud and Crazy Horse, in the great State

of South Dakota.

I’ve filed a written formal statement, and I request that be entered into the record.

Senator JOHNSON. Without objection.

Mr. STEELE. The written statement was developed in cooperation

with all four sponsors of the Mni Wiconi Project.

My presence here today is to represent all of the Mni Wiconi

sponsors, all four in South Dakota. These sponsors are the Oglala

Sioux Tribe, West River/Lyman-Jones, Rosebud Sioux Tribe, and

the Lower Brule Sioux Tribe. All four sponsors have contributed to

the written testimony filed with the subcommittee and have joined

us in the audience for this hearing. I would like to acknowledge at

this time Mr. Mike Hurley of the West River/Lyman-Jones sponsorship, and Mr. Jim McCauley of the Lower Brule Sioux Tribe, who

are all seated behind me, and also Mr. Paul Little of the Oglala

Sioux Tribe, legislative liaison for the Mni Wiconi Project.

I would like to thank the chairman and the subcommittee for giving this matter attention and for providing an opportunity for this

29

hearing. I would like to thank the Bureau of Reclamation for their

support for S. 1999. I think it’s a very important bill, and it’s going

to add $58.8 million to the project construction ceiling, bringing the

Federal share to $391 million. It also extends the project completion date from 2003 to 2008.

I would like to bring to the subcommittee’s attention some of the

important points in the written testimony. First, you should know

that this project has brought the Oglala Lakota people in western

South Dakota together with non-Indian farmers and ranchers in an

endeavor for the common good of our respective peoples. This is the

most significant step toward a better understanding amongst us

since 1889. This was when the Great Sioux Reservation created by

the Treaty of 1868, was divided into smaller reservations to make

room for non-Indian settlers. The Lakota leaders and membership

have gained respect for the people served by the West River/

Lyman-Jones, and we feel that they have gained respect for our capabilities and desire to improve the quality of life in this part of

South Dakota for everyone. I’d like to thank Mr. Hurley, of West

River/Lyman-Jones, for his efforts in this respect.

The subcommittee should also know that the improvement in the

quality of life on Pine Ridge Reservations and other reservations

over the project is a necessity. On my reservation, the per-capita

income is the lowest in the Nation, less than $4,000 annually. A

large majority of the population falls below the poverty level. This

poverty is reflected in the quality of our infrastructure and the opportunity for future economic development. Opportunities are limited or nonexistent. This project is one of several building blocks

that must be placed before our people can progress. This is an essential building block.

In this building, in this city, and across the Nation, most people

take for granted the availability of good water. This is not the case

in Pine Ridge until this project began, and it will not be the case

in Pine Ridge until this project is completed.

I can show you that most housing on Pine Ridge is well below

standard. I can also show you plastic containers of all types around

and inside these homes that are used to haul water and store

water for drinking, cooking, and bathing. This project is changing

the circumstances. Many people can now use the plumbing in their

homes to deliver safe, clean water.

The consequences of poverty and the historic absence of safe

water on Pine Ridge are deep. Water-related diseases have been a

significant problem. Impetigo, shigellosis, hepatitis, gastroenteritis,

and others are not as prevalent in our population because water

from the project is being delivered. There has not been a hepatitis

outbreak since the project was initiated on the reservation. These

are very significant.

I’m deeply concerned about other diseases associated with poverty. Our staff has examined mortality rates for heart disease, cancer, and diabetes. The findings are deplorable. I am informed that

the discounted future health care costs for these three prominent

diseases will be between $.8 and $1.6 billion above the costs typical

of the population with normal incidents of these diseases over the

next 50 years. These are extra costs, not total costs.

30

1Figure 1 has been retained in subcommittee files.

I relate these findings to inform the subcommittee that, while the

Mni Wiconi Project cannot provide a full answer to these diseases

and that the excessive Federal costs for health care associated with

these diseases, the Mni Wiconi Project is a step in the right direction. It will provide an essential foundation for improved earnings

and employment, which, in turn, will lower the rate of the incidents and mortality associated with these diseases.

In closing the support of the subcommittee for S. 1999 will be

greatly appreciate by all the sponsors in this invaluable project.

I thank you. And I apologize, as I have a plane to catch, Honorable Senators. I’ll be happy to answer any questions.

[The prepared statement of Mr. Steele follows:]

PREPARED STATEMENT OF JOHN STEELE, PRESIDENT, OGLALA SIOUX TRIBE, PINE RIDGE INDIAN RESERVATION

This testimony has been developed conjunctively and is offered on behalf of the

Oglala Sioux Tribe, West River/Lyman-Jones, Inc., the Rosebud Sioux Tribe and the

Lower Brule Sioux Tribe, the four beneficiaries and sponsors of the Mni Wiconi

Rural Water Supply System in southwestern South Dakota. S. 1999, a re-authorization of the Mni Wiconi Project, will increase project funding by $58.8 million (October 1997 dollars) and extend the completion of the project to 2008. The sponsors,

individually and collectively, support S. 1999 and seek support by the Subcommittee.

BACKGROUND

The Mni Wiconi Project Act of 1988 (Public Law 100-516) authorized and directed

the Secretary of the Interior to construct the Mni Wiconi Rural Water Supply

Project to provide a safe and adequate municipal, rural, and industrial water supply

to both Indian and non-Indian residents of South Dakota. Initially, the Project included the Oglala Sioux Rural Water Supply System (OSRWSS), the West River

Rural Water System, and the Lyman-Jones Rural Water System. In 1994, the West

River and the Lyman-Jones Systems were merged into one system, known as the

West River/Lyman-Jones Rural Water System. The Mni Wiconi Act Amendments of

1994 (Public Law 103-434, Title 8) added construction of the Rosebud Sioux and the

Lower Brule Sioux Rural Water Systems to serve the respective reservations, thereby increasing the number of Project ‘‘sponsors’’ to four. The amendments also raised

the authorized appropriation ceiling for the Project from $87.5 to $263.2 million,

subject to cost indexing, and provided that the systems would generally be constructed in accordance with the Project’s Final Engineering Report, dated May 1993.

The overall Project includes a water treatment plant, 4,500 miles of pipeline, 60

booster pump stations, and 35 water storage reservoirs. The Project will ultimately

serve more than 52,000 people, including more than 40,000 on the three Indian reservations.

CURRENT STATUS OF CONSTRUCTION AND FUNDING

The following is the average federal funding need to complete the project in FY

2008. Figure 1 1 shows the location of the project and the current status of construction.

Total Federal Required ................................................................... $391,091,000

Federal Spent Through FY 2002 .................................................... $213,384,726

% Spent ............................................................................................ 54.56%

Amount Remaining ......................................................................... $177,706,275

Average Required for FY 2008 Finish ........................................... $ 29,617,712

The Project has a total estimated cost (October 2001 dollars) of $411 million. Federal funding requirements for the project are $391 million, including the $58.8 million proposed by S. 1999. The total amount spent from federal funds is $213.4 million, 54.56% of the total federal requirement. Most non-federal funds for the project

have already been expended. The amount remaining in federal funds to complete

the project is $177.7 million, which will require an average annual appropriation

31

through FY 2008 of $29.6 million. If cost indexing at 3% is taken into account between FY 2002 and FY 2008, the average indexed funding requirement is $34.9 million annually.

The sponsors are extremely pleased to report to the Subcommittee that the

OSRWSS water treatment plant on the Missouri River near Fort Pierre, South Dakota, is fully operational and will deliver treated water on a sustained and dependable basis during FY 2002 and thereafter. Large diameter OSRWSS core pipelines

(24 inch) will have been constructed by the end calendar year 2002 to Vivian and

Murdo, over a distance of 100 miles. The completion of these critical segments of

the core pipeline permits the Lower Brule Sioux Tribe to interconnect at Vivian and

deliver water immediately to large areas of West River/Lyman-Jones. Over a period

of several years, Lower Brule will complete its core system into the Reservation. The

completion of the OSRWSS core pipeline to Murdo permits the Rosebud Sioux Tribe

and other parts of West River/Lyman-Jones to interconnect at that location. Over

50% of the design population will have access to Missouri River water from the

OSRWSS core pipelines at the 2002 level of completion.

The project now has the most significant project components completed and can

conclude the project in a timely manner given amendment of the project ceiling as

proposed by S. 1999 and adequate appropriations in fiscal years 2003 through 2008.

The degree of poverty and need for improvement of drinking water are set forth in

greater detail in section 3 of this statement and underscore the importance of this

project.

Attention is directed to the fact that the Pine Ridge Indian Reservation and the

western portion of the West River/Lyman-Jones service areas are the furthest from

the water treatment plant on the Missouri River. These areas will be served last,

and it is crucial that the project is funded adequately and timely to serve the remaining 50% of the project design population over the next six years (Figure 1).

UNIQUE NEEDS OF THIS PROJECT

This project covers much of the area of western South Dakota that was formerly

the Great Sioux Reservation established by the Treaty of 1868. Since the separation

of the Reservation in 1889 into smaller, more isolated reservations, including Pine

Ridge, Rosebud and Lower Brule, tensions between the Indian population and the

non-Indian settlers on former Great Sioux lands has been high with little easing by

successive generations. The Mni Wiconi Project is perhaps the most significant opportunity in more than a century to bring the sharply diverse cultures of the two

societies together for a common good. Much progress has been made due to the good

faith and genuine efforts of both the Indian and non-Indian sponsors. The project

is an historic basis for renewed hope, dignity and improvement in quality of life

among the Indian people. It has been a basis for substantive improvement in relationships.

The project beneficiaries, particularly the three Indian Reservations, have the

lowest income levels in the Nation. The health risks to the Indian people from

drinking unsafe water are compounded by reductions in health programs. It is respectfully submitted that the project is unique and that no other project in the Nation has greater human needs. Poverty in the Indian service areas is consistently

deeper than elsewhere in the Nation. Health effects of water borne diseases are consistently more prevalent than elsewhere in the Nation, due in part to (1) lack of

adequate water in the home and (2) poor water quality where water is available.

Higher incidences of impetigo, gastroenteritis, shigellosis, scabies and hepatitis-A

are well documented on the Indian reservations of the Mni Wiconi Project area although improvements have been noted since the initial delivery of good water beginning in 1994. At the beginning of the third millennium one cannot find a region in

our Nation in which social and economic conditions are as deplorable. These circumstances are summarized in Table 1. Mni Wiconi builds the dignity of many, not

only through improvement of drinking water, but also through direct employment

and increased earnings during planning, construction, operation and maintenance

and from economic enterprises supplied with project water. The Subcommittee is

urged to consider the need for creating jobs and improving the quality of life on the

Pine Ridge and other Indian reservations of the project area.

32

Table 1.—1990 BUREAU OF CENSUS ECONOMIC STATISTICS *

Indian Reservation/State

Per Capita Families

Below Poverty Level

Income Percent Unemployment

(%)

Pine Ridge (Shannon County) ......................... $ 3,029 59.6 32.7

Rosebud (Todd County) .................................... 4,005 54.4 27.3

Lower Brule (Lyman County) .......................... 4,679 45.0 15.7

State of South Dakota ...................................... 10,661 11.6 4.2

National ............................................................. 14,420 10.0 6.3

* 2000 census data are not yet available for income and poverty. Preliminary estimates

based on 1997 census information indicate that conditions have not changed significantly.

Employment and earnings among the Indian people of the project area are expected to positively impact the high costs of health-care borne by the United States

and the Tribes. OSRWSS data suggest clear relationships between income levels

and federal costs for heart disease, cancer and diabetes.

It is believed that the Subcommittee will share the shock of the sponsors with respect to future health care costs associated with poverty and the extremely high

mortality rates of Indian people in the Great Plains. OSRWSS has found that an

extra $0.8 to $1.6 billion (present value of 50 years of future health-care) will be

required for the 24,000 member Indian population in the Mni Wiconi Project (relative to the non-Indian population). This is not total costs of health care, it is the

extra cost of health care. A task force to thoroughly study this matter with the objective of taking corrective action is needed.

The Oglala Sioux Rural Water Supply System is a part of the solution. It brings

much needed employment, which, in turn, engages part of our unemployed and

brings about some measurable improvement in the health of the Lakota Nation,

thereby reducing federal health-care costs and, most of all, the tragedy in the families affected. Support for the additional funds needed for completion of the project

and acceleration of the Project in the Administration’s budget will be invaluable.

Financial support for the Indian membership has already been subjected to drastic cuts in funding programs through the Bureau of Indian Affairs. This project is

a source of strong hope that helps off-set the loss of employment and income in

other programs and provide for an improvement in health and welfare. Tribal leaders have seen that Welfare Reform legislation and other budget cuts nation-wide

have created a crisis for tribal government because tribal members have moved back

to the reservations in order to survive. Recent Census Bureau data indicate that the

population of Shannon County (Pine Ridge Indian Reservation) increased over 24%

between 1990 and 2000. The populations of the Rosebud and Lower Brule Indian

Reservations have also continued to grow. Economic conditions have resulted in accelerated population growth on the reservations. The Mni Wiconi Project Act declares that the United States will work with us under the circumstances:

. . . the United States has a trust responsibility to ensure that adequate and

safe water supplies are available to meet the economic, environmental, water

supply and public health needs of the Pine Ridge, Rosebud and Lower Brule Indian Reservations . . .

Indian support for this project has not come easily because the historical experience of broken commitments to the Indian people by the Federal Government is difficult to overcome. The argument was that there is no reason to trust and that the

Sioux Tribes are being used to build the non-Indian segments of the project and the

Indian segments will linger to completion. These arguments have been overcome by

better planning, an amended authorization and solid agreements and relationships

among the parties. The Subcommittee is respectfully requested to take cognizance

of the need to complete the project to maintain the faith of the Indian people.

The Mni Wiconi sponsors have worked especially hard to implement cost controls

and to minimize the increase in the authorization required to finish this valuable

project. There has been every effort to comply with cost reduction measures, and

the sponsors trust that others will find that actions and decisions have been genuine, comprehensive and effective.

COMPONENTS OF ADDITIONAL COST

Before fully reviewing the components of the increase of $58.8 million in the

project ceiling, the sponsors are in complete agreement that the Bureau of ReclamaVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
33

tion has worked with us in a thoroughly cooperative and effective manner throughout the project. In preparation of the cost estimates for HR 4368, the Bureau of Reclamation worked closely with the sponsors. Agreement was reached on the causes

of the cost increases and the steps to be taken to control and limit future costs and

to reconfigure the OSRWSS core system. Table 2 summarizes the factors requiring

amendment of the project ceiling and the amounts of additional costs.

Factors contributing to increases in cost include items not originally contemplated

in the Final Engineering Report (FER), upon which the project costs were based,

including extension of the project completion date from 2003 to 2008 and the associated costs of administration. Operation and maintenance buildings were required

that were not originally included in the project costs. Moreover, facilities were approved and constructed that were not part of the original plan formulation, but were

subsequently determined necessary due to change in circumstances.

Bid prices, particularly on the OSRWSS core and distribution system on the Pine

Ridge Indian Reservation, were received at higher prices than contemplated in the

Final Engineering Report (FER). The Reservation is the most remote area in the

project, the number of bids received was generally low (whether for the OSRWSS

core or distribution system) and bid prices by contractors reflected a higher level

of risk. Moreover, criteria used in common by all sponsors for estimating minor construction items, did not adequately reflect the requirements for the OSRWSS core

(Table 2).

OSRWSS and the other sponsors agreed to a reconfiguration of the OSRWSS core

that resulted in an estimated savings of $5.5 million. Federal procurement processes

were improved but with less impact on savings than the reconfiguration of the

OSRWSS core. Important is a review of the project design criteria based on the 1990

Census of Population in the FER and the subsequent population count by the Bureau of Census for 2000. An accelerated growth rate was a factor in the cost of additional construction on the Pine Ridge Indian Reservation. Population on Pine Ridge

has grown at an estimated annual rate of 2.18% as contrasted with the design rate

of growth of 1.65%, an increase of 32% in the growth rate. By year 2020, little more

than a decade after project completion, the design population on Pine Ridge will

have reached 24,560 persons, 17% greater than the 21,000 persons projected in the

Final Engineering Report by the same date. Stated differently, if current growth

rates are sustained, the design capacities for Pine Ridge will be exceeded in years

2011 and 2012, respectively, 3 to 4 years after the scheduled completion of construction. The population of other service areas is growing but more in accord with original projections. The increase in population on Pine Ridge is believed to stem in large

part from the availability of a new source of safe and adequate water as well as

new opportunity for earnings and employment in the Project.

On each of the Indian Reservations in the project: Pine Ridge, Rosebud and Lower

Brule, population estimates prepared by the Bureau of Indian Affairs argue for

higher population than estimated by the Bureau of Census. Therefore, numbers of

persons residing on the reservations may significantly exceed the numbers presented here, and the ability of the project to serve a future population may be more

important than currently found.

Reconfiguration, as agreed-upon by the sponsors and the Bureau of Reclamation,

provides for a northern and southern pipeline in the OSRWSS core with pipe sizes

meeting FER design requirements but with some excess capacity for the following

reasons: (1) along the northern route, a pipe size between 10′′ and 12′′ is required

between the water treatment plant and Philip Junction, and 12 inches would be provided; and (2) along the southern route, a pipeline between 20′′ and 24′′ would be

required from the water treatment plant to Murdo, and 24′′ would be provided. The

Oglala Sioux Tribe needs a core transmission system with capability to deliver

water through the southern and northern OSRWSS core as defined in the Final Engineering Report. Reconfiguration supports the projections of project population

based on the 2000 Census.

SICANGU MNI WICONI (ROSEBUD INDIAN RESERVATION)

The Sicangu Mni Wiconi-Rosebud Sioux Rural Water System was not included in

the original Mni Wiconi Act. Nine years ago an amendment was introduced to add

Rosebud and Lower Brule to the Project and make other modifications to the legislation. That amendment, enacted as part of P.L. 103-434, and the amendment introduced this year illustrates the commitment of the project sponsors, the Congress

and Administration to improving the quality of life for thousands of South Dakotans

on three Indian Reservations and beyond.

34

Table 2.—DETAILS OF INCREASE IN PROJECT CEILING

(October 1997 $)

Item

OSRWSS

WR/LJ Rosebud Lower Brule Total

Core Distribution

Not Included in FER

Added Years Administration ...... $ 2,458,000 $ 2,675,000 $1,549,000 $2,443,000 $1,016,000 $10,141,000Operation and Maintenance

Buildings ................................... ——— 6,681,000 988,000 1,098,000 1,044,000 9,811,000

Other Construction ...................... ——— 4,723,000 ——— 433,000 4,845,000 10,001,000

Features Bid Higher Than FER Estimates 23,506,000 8,920,000 ——— ——— 1,199,000 33,625,000Savings Proposed by Sponsors

Federal Procurement ................... (140,000) (110,000) ——— (60,000) (10,000) (320,000)Reconfiguration ............................ (5,502,000) ——— ——— ——— ——— (5,502,000)

Total Costs $20,322,000 $22,889,000 $2,537,000 $3,914,000 $8,094,000 $57,756,000

35

While the population of project area still endures with some of the poorest water

quality and lowest income levels in the Nation, Mni Wiconi has made a big difference to their life. In 1997 and 1998 the Rosebud Sioux Tribe worked with West

River/Lyman-Jones to bring high quality water to Horse Creek, Swift Bear and

White River. Indians and non-Indians alike now have a reliable source of high quality water and schools in White River no longer have to close because of a lack of

water. Other success stories abound in the area served by the Mni Wiconi.

For Rosebud the present amendment is needed primarily to extend the sunset

date and address facilities not contemplated in the Final Engineering Report. For

other project sponsors the amendment is more critical. The amendment is needed

to construct the reservation distribution system for Lower Brule and the north loop

of OSRWSS. These facilities are needed to meet critical needs at Lower Brule and

in the WR/LJ service areas. On behalf of the thousands of people who have yet to

benefit from Mni Wiconi and who will not benefit without passage of this amendment, the Rosebud Sioux Tribe seeks your support. It is also urged that the Subcommittee bear in mind that legislation is seldom complete and perfect and one cannot rule out additional modifications that may be needed to meet our objective of

providing equal benefits to all of the Sicangu Oyate in our Primary and Secondary

Service Areas.

LOWER BRULE

The Lower Brule Rural Water System has demonstrated its ability to manage and

maintain their portion of the project with the tremendous amount of progress accomplished over the last few years. A state of the art microfiltration water treatment plant was constructed and placed into operation in December 1999. The completion of this plant has not only benefited the users of the LBRWS but also allowed

the provision of high quality water to a significant number of users of the West

River/Lyman Jones (WR/LJ) Rural Water System from Oacoma to Draper.

The provision of water to WR/LJ RWS and its users has been a very rewarding

experience. The cooperation and communication between the two systems, especially

the operation and maintenance personnel, has been exceptional and has thus led to

the successful delivery of high quality water to users on both systems. As a result,

much of the apprehension that was felt prior to this supply of water has turned to

praise.

LBRWS has committed current funding for the construction of the last segment

of LBRWS core pipeline between Kennebec and Reliance during the 2002 construction season. This will result in the core pipeline from Vivian to Reliance serving

WR/LJ service areas along the pipeline and the cities of Vivian, Presho and Kennebec.

The major items affecting the cost increase for Lower Brule are the pipe sizes and

unit costs for the core pipeline; pipe sizes, quantities (The current total footage includes 510,200 feet for pasture taps. Much of this quantity may not have been in

the FER cost estimate) and unit costs for the distribution system; there is a decrease in the estimated cost of pump stations; costs for reservoirs are substantially

higher; and the costs the water treatment plant and administration building were

not included in the FER.

Another factor affecting Lower Brule’s cost was the initial distribution of the appropriated funds. During the first years the project received funds, the funds were

distributed on a percentage of sponsors overall portion of the project. As such, the

amount of money received by Lower Brule on a yearly basis ($500,000-$700,000)

was not sufficient to fund a worthwhile segment of the project. The funds needed

to be accumulated over a period of years. This not only affected construction costs

but also significantly increased the cost of administration as a percentage of the construction costs.

Primarily, as a result of the underestimated cost in the Final Engineering Report,

the LBRWS has received the extent of the funding designated for its portion of the

project with the receipt of the 2001 funds. The LBRWS with the support of the other

sponsors is proceeding with the optimism that the amendment will be approved in

a time frame that will not impact the progress currently being made. To that extent,

LBRWS has received $1,450,000 in FY 2002 funds for the Kennebec to Reliance segment of core pipeline. If the amendment is not passed, the continued support of the

other sponsors to designate funds for Lower Brule’s portion cannot be expected.

Therefore, it is crucial to the continued success of Lower Brule and the Mni Wiconi

Project as a whole that the proposed amendment is passed.

36

Senator JOHNSON. Thank you, President Steele. It’s an excellent

statement. And unless Senator Domenici has any questions, we

would be pleased to allow you to catch your plane.

Mr. STEELE. Thank you.

Senator JOHNSON. Very good.

I know, with other time constraints, Mr. Jerry Stagner, we would

appreciate any testimony that you might have at this time, and I

would——

Mr. STAGNER. Thank you very much, Mr. Chairman.

Senator JOHNSON. Very good.

STATEMENT OF JERRY STAGNER, BOARD MEMBER,

ELEPHANT BUTTE CABALLO ASSOCIATION, EL PASO, TX

Mr. STAGNER. Thank you, Mr. Chairman. Mr. Chairman, distinguished committee members, my name is Jerry Stagner. I’m president of State National Bank in Truth or Consequences, New Mexico. I am on the Leaseholders Board, although I do not have an interest in a lease lot. With me, is board member Mike Mowles.

We’re here today representing the Leaseholders of Elephant

Butte and Caballo Reservoirs. Thank you for allowing us the opportunity to address your committee on behalf of the association.

The association is a nonprofit organization whose purpose is the

purchase of lease lots at Elephant Butte and Caballo Reservoirs.

On behalf of the association, we want to thank Representative

Skeen and his support of the passing of H.R. 706, the Lease Lot

Conveyance Act. We also want to thank Senator Domenici and Senator Bingaman for their support.

These lease lots are in the State of New Mexico, near the shores

of the Elephant Butte and Caballo Reservoirs. Elephant Butte was

dedicated in 1916. Caballo was built around 1930. The reservoirs

are approximately 2 hours south of Albuquerque, New Mexico, and

about 2 hours north of El Paso.

These lease lots first became available in 1940 at a cost of about

$10 a year. It took about 40 years for these lots to be leased up.

They were—the lease lot holders were told to do improvements to

their lots, or they would revert back to the government. The lease

owners got busy, established roads, poured lot foundations for their

cabins, brought in electricity, either had water piped in or drilled

wells, drainage and retaining walls were built, septic tanks were

installed, and other upgrades were made. All of these improvements were the result of the sweat and labor and equity of the

leaseholders.

It is important to note that all improvements were approved by

the Government. And so far as we know, no funds have been expended by the State of New Mexico, nor the Federal Government,

for the benefit of the leaseholders. However, State Park does maintain some major roads for access to the beaches.

Collectively, the leaseholders now feel threatened, because the

leases have been increased substantially over the last 30 or 40

years. As time progresses, they feel like they’re going to be priced

out of their homes.

Senator DOMENICI. Mr. Stagner, I wonder if we might interrupt

for a moment?

Mr. STAGNER. Yes.

37

Senator DOMENICI. Could you summarize your statement so we

could have a couple of questions, and it will be made a part of the

record.

Mr. STAGNER. Sure. I think the record will show that the legislation is very, very much supported, and we just thank you for the

support for H.R. 706.

[The prepared statement of Mr. Stagner follows:]

PREPARED STATEMENT OF JERRY STAGNER, BOARD MEMBER, ELEPHANT BUTTE/

CABALLO ASSOCIATION, EL PASO, TX

Mr. Chairman and distinguished committee members, my name is Jerry Stagner.

I am the president of State National Bank in T or C, a member of the Economic

Development Committee and a member of the Work Force Development Board. I am

on the lease lot holders board although I do not have an interest in a lease lot. With

me is board member Mike Mowles.

We are here today representing the lease lot holders of Elephant Butte and

Caballo Reservoirs. Thank you for allowing us the opportunity to address your committee on behalf of the association. Our association is a non-profit organization

whose purpose is the purchase of the lease lots at Elephant Butte and Caballo Reservoirs.

On behalf of the association, I would like to thank the House of Representatives

and Joe Skeen for their support in their unanimous passing of H.R. 706, the Lease

Lot Conveyance Act, which allows for the privatization of the lease lots. Senators

Bingaman and Domenici have also, assured us of their support of this bill before

you today.

Our association supports H.R. 706, passed by the House of Representatives, which

provides for the privatization of 403 lease lots.

These lease lots are in the state of New Mexico, near the shores of Elephant Butte

and Caballo Reservoirs. Elephant Butte Reservoir was dedicated in 1916. Caballo

Reservoir was built around 1930 as a flood control and holding area.

The reservoirs are about two hours to the south of Albuquerque, New Mexico and

about two hours north of El Paso, Texas, which are the closest large cities to our

area.

The first lease lots became available in the 1940’s. In spite of $10 a year lease

fee, it took a good 40 years before all of the lots were leased. Lease holders were

told unless improvements were made to the lots, the leases would revert back to

the government. Leaseholders got busy and established roads, poured foundations

for their cabins brought in electricity and either had water piped in or drilled wells.

Drainage and retaining walls were built, septic tanks were installed and other upgrades were made. All of these improvements were a result of the sweat, labor and

equity of the lease holders.

It is important to note all improvements were approved by the government, and,

insofar as we know, no funds whatsoever have been expended by the state of New

Mexico nor the federal government for the benefit of the lease lots. However, state

parks does maintain some major roads for public access to the beaches.

Collectively, we now feel threatened as lease fees have increased substantially. As

time progresses, we must anticipate even more increases. Leaseholders fear they

will be ‘‘priced out’’ of their homes.

These are the people who moved here because of afford ability; many of who are

considered to be at poverty level or below. More than 75 percent of the lease lot

holders are over age 55, and about 70 percent of these are over age 65. The majority

of these senior citizens are on fixed incomes. Most are retired, and having an affordable place to live, on land they themselves have worked and nurtured, is an opportunity in which they should be secure in.

There are 403 lots, but far more people will be affected by the outcome of this

legislation. Every lease lot has a family associated with it and is often used by several generations. There are many families in which the father acquired the lot. He

raised his kids with ‘‘the lake’’ as an integral part of their upbringing. That tradition continues today in the lives of his grandkids and great grandkids. Every lot

touches the lives of a family. Many hundreds of people call these lots home.

Elephant Butte and Caballo Reservoir’s boundaries, including the lakes, encompass approximately 78,000 acres. The lease lots occupy only 250 acres, or 0.3 percent of the land within this area. Therefore, more than 99.5 percent, or 77,750 acres

of the area are, and will be, available for full public utilization. The lease lots are

not an issue with regard to public recreation.

38

Currently, the majority of leaseholders are reluctant to make major improvements

on their lease lots due to the land title questions. Private ownership of lease lots

will not only sustain existing economic conditions, but will also provide owners the

security to invest in permanent structures and improvements. It will add needed

jobs to the community, increase economic stability, increase revenue to the county

through property taxes and to the surrounding community through gross receipts

taxes.

The important point I want to make today is our association, the state of New

Mexico, its congressional delegation and the surrounding communities, believes all

the lease lots should be privatized. We believe all the lots are equally important to

those currently leasing them. There is no effect to the public by allowing the lots

to be purchased by their lease holders. In the past 4 to 5 decades these lots have

been leased, there has been no conflict with public users and no loss of use by the

public. Therefore, we encourage you to pass H.R. 706, as written, to include privatization of 403 lease lots.

Our process has been long and arduous. We have been working for more than 2

decades toward the purchase of our lots. It is impossible to condense into a five

minute presentation lifetime experiences such as a kid’s first fish or a widow living

on a fixed income.

We are thankful to finally be before you today, and thank you for your time, and

for your support of H.R. 706. Again, we would like to thank Senator Bingaman and

Senator Domenici for their support. Please feel free to ask Mr. Mowles or me any

questions you might have. We would be happy to answer your questions.

Senator DOMENICI. Thank you.

And on behalf of both of Senator Bingaman and myself, we’d like

you to carry back to our friends at the two lakes where this problem is finally going to be resolved, commend the leadership that

came from all of you locally, including you. You have no monetary

interests, but you served on the board and from what I understand,

were a major catalyst in getting this program, which is complicated, with a lot of people having different views and ideas, getting it put together.

We want you to also share with them the fact that we got a clean

bill of health from the Federal Government and its agencies, that

that’s why it can go through so rapidly. It shouldn’t take very long

now—with this being the last stumbling block, it’ll go to the floor

some afternoon late, since there will be no objection, and I’m not

even sure that we’ll be able to tell you in advance when that is.

We’ll probably have to tell you the next day.

Mr. STAGNER. Thank you.

Senator DOMENICI. We thank both of you for coming all this way.

In particular, I want to thank Senator Bingaman, who chairs the

committee, for pursuing this at an early date. He’s the one that

sets the dates, and we’re here very early.

Mr. STAGNER. By the way, Senator Bingaman—or Senator

Domenici, I’ll answer your question. It’s been going on for about 20

years.

Senator DOMENICI. Twenty years.

Mr. STAGNER. Twenty years.

Senator DOMENICI. Well, I know I’ve been here two or three

times.

Mr. STAGNER. And we thank you for your support.

Senator DOMENICI. You’re welcome. Can we proceed to the next

one, or do you want to let me go vote and just hold it open? What’s

your pleasure?

We’re going to be in recess until the chair returns. Thank you.

[Recess.]

39

Senator SMITH. Ladies and gentlemen, we will reconvene this

hearing, and we welcome you all here. I don’t know that there is

a particular order, so why don’t we start, Don, with you? And let’s

talk Central Utah.

Mr. CHRISTIANSEN. Very good, thank you.

Senator SMITH. Do you cover BYU?

[Laughter.]

Senator SMITH. If so, I’m with you.

Mr. CHRISTIANSEN. They are within our district.

Senator SMITH. Okay, I’m for you, then.

[Laughter.]

Mr. CHRISTIANSEN. They survive on a little bit of our water,

that’s true.

STATEMENT OF DON A. CHRISTIANSEN, GENERAL MANAGER,

CENTRAL UTAH WATER CONSERVANCY DISTRICT, OREM, UT

Mr. CHRISTIANSEN. Mr. Chairman and members of the committee, I appreciate the opportunity to be here today to testify on the

bill to amend the Central Utah Project Completion Act. I have submitted a written testimony, and I would appreciate it if that testimony would be entered into the record, and I’ll just summarize

very quickly.

Senator SMITH. Without objection.

Mr. CHRISTIANSEN. It’s been 10 years since that piece of legislation has passed. We’ve had a tremendous opportunity and a tremendous working relationship with the Federal Government in

working to complete the Central Utah Project. And it’s been a

learning experience for us, an experience that has taught us many

things.

What you have before you is a bill that will do some fine tuning,

as Senator Bennett explained in his testimony very ably, and will

allow us to move forward to the completion of this project, placing

emphasis on conservation, reuse, conjunctive use of surface and

groundwater, and improved water quality. And I just want to also

emphasize that we’re not asking for any increased authorization,

and we’re just looking to rescue some stranded authorizations.

And that will complete any testimony I have. And if there are

any questions, I’d be happy to answer them now, Mr. Chairman.

[The prepared statement of Mr. Christiansen follows:]

PREPARED STATEMENT OF DON A. CHRISTIANSEN, GENERAL MANAGER, CENTRAL

UTAH WATER CONSERVANCY DISTRICT, OREM, UT

Mr. Chairman, thank you for the opportunity to testify today on a bill to amend

the Central Utah Project Completion Act (CUPCA), which originally passed Congress as part of the Reclamation Projects Authorization And Adjustment Act of

1992, (P.L. 102-575). During the ten years since CUPCA became law, the Central

Utah Water Conservancy District has exercised the unique opportunity to step into

the shoes of the Bureau of Reclamation and complete the planning, design and construction of the Central Utah Project (CUP).

This one-of-a-kind experiment has forced the State of Utah and the water users

within the ten counties served by the District to examine very closely exactly what

type of project we needed. After all, under the reforms of CUPCA, the Utah taxpayers are paying 35% of the construction costs to complete the project. We have

learned much. We have tried to be creative and innovative in how we planned the

features to complete the transbasin diversion of Utah’s share of Colorado River

water to the populous Wasatch front. While we have made progress, we are not yet

complete. Simply put, the bill you have before you provides some fine tuning to the

40

original CUPCA authorization to reflect the contemporaneous changes to CUP reflecting the current needs of Utah’s water users.

Chairman Hansen once told me that the Central Utah Project is the closest thing

to eternal life on earth. Well, we hope Mr. Chairman, the amendments we are proposing will enable us to complete a project which not only creates more supply, but

one which also places greater emphasis on water conservation, wastewater reuse,

conjunctive use of surface water supplies with groundwater resources and improved

water quality through desalination and reverse osmosis technologies.

S. 2475 amends CUPCA to provide flexibility allowing for the transfer of unused

spending authority between CUPCA programs. CUPCA originally authorized the expenditure of over $900 million to complete the Central Utah Project (CUP). This authorization was broken down into numerous feature or program specific authorizations. These features or program specific authorization levels were based upon original estimates from the Bureau of Reclamation, some of which were first made in

the draft 1964 Definite Plan Report. I am sure it will come as no surprise that the

project we are building has changed substantially from the one planned by Reclamation in 1964. In fact, CUPCA itself deauthorized a list of certain project features;

however, the Act did nothing to dispose of Reclamation’s investigation costs for

those de-authorized projects. S. 2475 will clean up the books, so-to-speak, by making

them non-reimbursable.

Since 1992, the District has reformulated the CUP in a number of significant

ways. Several project features including the irrigation and drainage system have

been eliminated and other programs have been redesigned to be more cost effective.

In addition, CUPCA’s water conservation program has met with great acceptance

and is expected to fully utilize its program specific authorization. The District’s program to purchase water rights to meet minimum stream flow needs is also in need

of additional funding. Further, certain water delivery features such as the Diamond

Fork System have been redesigned to eliminate the controversial Monks Hollow

dam. Because of underground tunnel construction problems, this redesign has increased the overall cost of the Diamond Fork System beyond the authorization limit

contained in CUPCA.

S. 2475 amends the authority given to the Secretary of the Interior in Section

202(c) of CUPCA to redirect unexpended budget authority for water conservation

projects, water rights acquisition, and other specifically authorized project features

in title II of CUPCA. I want to emphasize that S. 2475 does not increase the total

authorization for the Central Utah Project.

As I indicated previously, CUPCA also transferred construction responsibility for

CUP from the Bureau of Reclamation to the Central Utah Water Conservancy District, the state sponsoring agency for the project. Oversight of the District’s planning

and construction activities is provided by the Department of the Interior.

The legislation would clarify the responsibilities of the Secretary of the Interior

with respect to the Central Utah Project. This language would ensure that the highly effective administrative arrangement now in place would be allowed to continue.

In addition, because from time to time the District has, over the past ten years,

asked for assistance from the Bureau of Reclamation, the legislation would authorize a pilot program to be developed between Reclamation and the District to enable

increased opportunity for Reclamation to assist the District and the Assistant Secretary in carrying out completion of the project.

Finally, S. 2475 would provide for prepayment of repayment contracts for municipal and industrial water delivery facilities, and eliminate a 2002 deadline for such

prepayment. This small change would allow the water districts to pay off their contracts more quickly. Thank you.

Senator SMITH. I’ll turn it back to the great Senator.

Senator DORGAN. Senator Smith, thank you very much.

Senator SMITH. You bet.

Senator DORGAN. Mr. Christiansen, thank you very much. As

Senator Smith has no doubt indicated, we were just finishing a

vote on the floor of the Senate, so we appreciate your indulgence.

Next, we will hear from Mr. Jeff Oveson, director of the Watershed Program in—is it La Grande, Oregon?

Mr. OVESON. La Grande.

Senator DORGAN. La Grande, Oregon. And that would be, then,

the Grand Ronde Model. Is that right?

Mr. OVESON. Correct.

41

Senator DORGAN. Mr. Oveson, thank you very much for being

with us. Your entire statement will be made a part of the record,

and you may summarize. Why don’t you proceed?

STATEMENT OF JEFF OVESON, EXECUTIVE DIRECTOR,

GRANDE RONDE MODEL WATERSHED PROGRAM, LA

GRANDE, OR

Mr. OVESON. Thank you, Mr. Chairman. I have submitted testimony that I would rather than you include as part of the record.

As you said, I’m Jeff Oveson. I’m executive director of the Grande

Ronde Model Watershed Program. The Model Watershed Program

is grassroots watershed council supported by the Northwest Power

Planning Council, numerous Federal and State agencies, the Nez

Perce Tribe, the Confederated Tribes of the Umatilla Indian Reservation, and private landowners. We have facilitated implemented

of over 300 habitat and watershed restoration projects since 1992.

It’s my honor to testify before you on behalf of steering committee of the Wallowa Lake Dam Rehabilitation and Water Management Plan. It is my pleasure to bring to your attention a locally

developed plan that has demonstrable environmental, economic,

and social benefits. I particularly want to thank Senator Smith,

Senator Wyden, and their staffs for their help and support in formulating this plan and bringing forward legislation to authorize

Reclamation’s participation in its implementation.

The immediate objectives of the plan are to provide extra water

to the Lusting River for ESA-listed fish species to rehabilitate the

Wallowa Lake Dam and to provide passage to the dam for the reintroduction of sockeye and coho salmon.

I will discuss two watersheds briefly in Wallowa County. The

first, the Lusting River, that originates in the Eagle Cap Wilderness, then flows through 20 miles of wild and scenic corridor and,

finally, through 10 miles of irrigated agricultural land before its

confluence with the Wallowa. Numerous studies funded and conducted by the Bureau of Reclamation, the Bonneville Power Administration, Oregon Department of Fish and Wildlife, Nez Perce Tribe

Fisheries, and the Model Watershed, amongst others, have identified time after time after time that low flow is the single-largest

inhibiting factor of fish production in the Lusting River.

Over the last 10 years, cooperation between those landowners on

the Lusting, the Nez Perce Tribe Fisheries Program, the Oregon

Department of Fish and Wildlife Program, has resulted in coordinated flushing flows to ease the upstream migration of adult salmon returning to their spawning beds, have provided access for the

fisheries people to conduct their ongoing activities, and they have

participated in numerous water-conservation projects, and continue

to this day to participate in water-conservation projects. The fact

remains that in-stream flows are still insufficient.

Twenty miles up the Wallowa River from the confluence with the

Lusting River is Wallowa Lake, a natural lake whose capacity was

augmented with construction of the Wallowa Lake Dam in 1918.

The water behind the dam serves a wide range of purposes, including water for irrigation of over 16,000 acres with a direct effect on

over 40,000 acres, drinking water for the city of Joseph, recreational use for over 80,000 visitors per year, flood control for the

42

downstream cities of Joseph, Enterprise, and Wallowa, and stable

base flows for riparian habitat, fish stock, and waterfowl.

In 1996, the dam, as you heard earlier, was recorded a high hazard by the Oregon Water Resources Department of Dam Safety. A

sudden failure of the structure would obviously endanger human

lives and cause extensive property damage and do long-term damage to fish and riparian habitat.

Subsequent to that declaration, the amount of water that can legally be stored in the pool behind the dam has been lowered considerably. Associated Ditch Company owners and builders of the dam

began planning and design of improvements, and realized that they

were not the only beneficiaries of a functional dam.

So, quite simply, several of us got together, made out a list of the

people that we needed to work with, and invited the participation

of 41 agency, tribal, and private entities to help design the project

that would eventually establish this mission statement, to rehabilitate the Wallowa Lake Dam and implement the Water Management Program for the Wallowa Valley, serving the needs of agriculture, fish and wildlife enhancement, recreation, flood control,

municipal water supply, and hydropower generation.

ADC has agreed to help make this mission come true by supporting Nez Perce Tribe efforts to restore historic coho and sockeye

salmon runs by providing fish passage, by storing and delivering

4500-acre feet of water annually to the Lusting River to replace irrigation withdrawals, and by installing fish screens on diversions.

This plan addresses Endangered Species Act issues, community economics, tribal trust responsibilities, the Clean Water Act, the

Northwest Power Planning Council Columbia Basin Fish and Wildlife Program, the Oregon Plan for Salmon Watersheds, the Wallowa

County Nez Perce Tribes Salmon Habitat Recovery Plan, and the

Grande Ronde Model Watershed Action Plan.

The risks of not implementing this plan include continued decline of stocks of ESA-listed fish species, the failure to meet Tribal

Treaty right obligations, a loss of economic structure and property

value, a loss of municipal drinking-water supply, and the risk of

flood danger.

This bill is not just about dam safety, nor is it about restoring

fish populations, nor just about irrigation. This bill is about the

needs and opportunities to stabilize the environmental, economic,

and social structures of natural-resource-based communities, communities that have clearly demonstrated their willingness to work

together to preserve all three.

I will take any questions.

[The prepared statement of Mr. Oveson follows:]

PREPARED STATEMENT OF JEFF OVESON, EXECUTIVE DIRECTOR, GRANDE RONDE

MODEL WATERSHED PROGRAM, LA GRANDE, OR

I’m Jeff Oveson, Executive Director of the Grande Ronde Model Watershed Program (GRMWP or Model Watershed), a program built on the premise that natural

resource management should begin at home, and embedded in the county governments of Wallowa and Union Counties. The political boundaries of these two counties basically encompass the Grande Ronde Basin, a tributary of the Snake River,

in Northeastern Oregon. The Model Watershed Program, since its inception in 1992,

has been a collaborative organization directed by Board Members from both counties

representing County Government, federal and state natural resource agencies, the

Nez Perce Tribe, the Confederated Tribes of the Umatilla Indian Reservation, Soil

43

& Water Conservation Districts, environmental interests, and private landowners.

The organization, founded with and through the support of the Bureau of Reclamation (Reclamation), Bonneville Power Administration (BPA), and the Governor’s Watershed Enhancement Board (GWEB, now OWEB) supports activities principally in

watershed restoration and species recovery on both federal and private lands and

are funded primarily through BPA’s Fish and Wildlife Program, the OWEB, and

Reclamation. To date, we have facilitated the investment of over $17,000,000 in restoration projects throughout the 5200 square mile basin.

I appreciate the opportunity to testify before you on behalf of the steering committee of the Wallowa Lake Dam Rehabilitation and Water Management Plan regarding Senate Bill 1883 or the Wallowa Lake Dam Rehabilitation and Water Management Plan. This bill could appropriately be titled ‘‘Lostine River Salmon Restoration

Plan’’, or ‘‘Community Sustainability Plan’’, or a number of other things that accurately portray its real virtues. It really is an honor to bring to your attention a locally developed plan that has such demonstrable environmental, economic, and social merits. I particularly want to thank Senator Smith and Senator Wyden and

their staffs for the support in formulating this plan and bringing the proposed legislation forward.

This project will accomplish these objectives:

• rehabilitate the Wallowa Lake Dam

• provide passage at the dam for the reintroduction of sockeye and coho salmon

• provide extra water to the Lostine River for ESA listed fish

I will discuss with you two watersheds in Wallowa County: the Lostine River, and

the Wallowa River, in an attempt to make clear their interconnectivity, and the reliance of each on the other in providing water for Threatened and Endangered fish

species, irrigation, urban consumption, recreation, and overall ecosystem balance.

The Lostine River begins in the Eagle Cap Wilderness Area, flows through a designated Scenic Area, and on through agricultural lands for 10 miles before its point

of confluence with the Wallowa River. The middle portion of the Lostine is home

to a number of irrigation diversions that tend reduce flow in the river in the late

summer to the point that passage by adult salmon migrating to their historic

spawning grounds is impossible, and rearing habitat for is severely diminished.

Hankin and Reeves Surveys in 1991 (Nez Perce Tribe and Oregon Dept. of Fish

& Wildlife), the Lostine River Instream Flow Study in 1998 (R2 Resource Consultants, Nez Perce Tribe, and Oregon Dept. of Fish & Wildlife, Bonneville Power Administration, and Bureau of Reclamation), and the Lostine River Salmonid Passage

Enhancement Study of 2001 (Harza, GRMWP, and Natural Resources Conservation

Service), all collaborative efforts to accurately assess conditions in the Lostine, all

funded and completed by partners in fish restoration, identified instream flow as the

primary limiting factor in the spawning, rearing, and migration of chinook salmon,

summer steelhead, and bull trout, all three of which are ESA listed fish. This condition is especially onerous during the months of August and September. Low flow

also impacts free migration and rearing of juvenile stages of all three species.

Over the past decade, irrigators on the Lostine have cooperated with Nez Perce

Tribal Fisheries and Oregon Department of Fish & Wildlife in efforts to overcome

passage and rearing challenges by conserving on water diversion, coordinating

flushing flows to facilitate upstream migration, and providing access to tribal and

agency personnel for management activities. Even now, they are collectively and individually working with Natural Resources Conservation Service and Soil & Water

Conservation District personnel designing and implementing water quantity and

quality improvement projects that will affect the Lostine. The recently passed Farm

Bill will support this effort a great deal.

INSTREAM FLOWS ARE STILL INSUFFICIENT ON A REGULAR ANNUAL BASIS

Approximately 20 river miles up the Wallowa River from its confluence with the

Lostine is Wallowa Lake, a natural holding facility for water whose capacity was

augmented by the construction of a dam in 1918, later to be increased in size in

1929 when hydropower capabilities were added.

The extra water behind the dam serves a wide range of purposes, among them:

• water for irrigation of over 15,000 acres of the county’s prime agricultural lands

(management of the dam directly affects over 40,000 irrigated acres)

• drinking water for the city of Joseph

• recreational use by over 80,000 users per year for fishing, boating, water skiing,

and sight seeing

• flood control-active storage is managed to provide flood protection to the downstream cities of Joseph, Enterprise, and Wallowa

44

• stable base flows for the Wallowa and Grande Ronde rivers, preserving and enhancing riparian habitat, fish stocks, water fowl, and water quality

In 1996, Oregon Water Resources Department Division of Dam Safety listed the

Wallowa Lake Dam as a ‘‘high hazard’’ structure. The sudden failure of the dam

would likely result in loss of life as well as millions of dollars in property damage,

and would have a devastating long term impact on the downstream ecology.

Associated Ditch Company (ADC), builders and owners of the dam, began planning and design of improvements. This assessment fostered the realization that

ADC and the irrigators were not the only ones reliant on the integrity of the structure, nor would they be the only beneficiaries of the rehabilitation of the dam. This

recognition of need and opportunity led ADC to invite input from a wide variety of

agencies, interests, and the Nez Perce Tribe (41 such entities attended the first organizational meeting). The goal was to design a project that would address all needs

and opportunities and be a lasting positive landmark in Wallowa County, environmentally, economically, and socially. With that in mind, a mission statement was

developed:

‘‘To rehabilitate Wallowa Lake Dam and implement a water management program for the Wallowa Valley serving the needs of agriculture, salmon recovery,

fish and wildlife enhancement, recreation, flood control, municipal water supply,

and hydropower generation.’’

To assure that this mission statement comes to fruition, the irrigators of the ADC

have agreed to:

• support the Nez Perce Tribal Fisheries in providing fish passage above the dam

to restore historic sockeye and coho salmon runs • store and deliver 4,500 acre feet of water to the Lostine to replace irrigation

withdrawals (thereby assuring a minimum flow of 30 cubic feet per second in

the Lostine) • screen diversions to avoid luring and trapping juvenile bull trout in irrigation

canals

The Endangered Species Act clearly supports this project. It also overtly threatens

the livelihood of irrigators and economy of Wallowa County if action is not taken.

The Clean Water Act does the same. The Tribal Trust nexus is addressed by this

proposed project, as are the action plans associated with Bonneville Power Administration Fish & Wildlife Program Mitigation, the Wallowa County/Nez Perce Tribe

Salmon Habitat Recovery Plan, The Oregon Plan for Salmon and Watersheds, The

Northwest Power Planning Council’s Salmon and Steelhead Production Plan, The

GRMWP Action Plan, and others.

There are some clearly identified issues, and risks of not implementing this

project:

• consistent late season low flows in the Lostine put at risk

—irrigators (third party or regulatory intervention)

—salmon, steelhead, and bull trout, as well as less prominent species associated with them

—Tribal Treaty rights

—local economic structure and land values

—the social fabric of small communities

• the loss of maximum function of the Wallowa Lake Dam jeopardizes

—thousands of acres of irrigated land

—loss of significant income county wide from tourism associated with the

water resources of Wallowa County

—the continuing decline in populations of ESA threatened and endangered

fish

—municipal drinking water supply

—success of the Nez Perce Tribal/ODFW fish hatchery program funded by

BPA, scheduled for construction beginning this year

A fully functioning dam at Wallowa Lake will address these issues and more:

• Nez Perce Tribal Fisheries will have the opportunity to restore the historic runs

of sockeye and coho salmon to the Wallowa Basin • over 40,000 acres of irrigated lands will stay in production with reduced risk

to ESA fish. Likelihood of litigation, such as occurred in the Klamath Falls

Basin, is also reduced

• the cities of Joseph, Enterprise, and Wallowa will be protected from floods

• the viable population of chinook salmon, summer steelhead, and bull trout in

the Lostine can be maintained and enhanced the city of Joseph will have a safe

and reliable water supply

45

This bill is not only about dam safety, or restoring fish populations, or irrigation.

It is about needs and opportunities to stabilize the environmental, economic, and

social fabric of a natural resource based community that has clearly demonstrated

its willingness to preserve all three.

Senator DORGAN. Mr. Oveson, thank you very much for your testimony.

And, finally, we will hear from Mr. Dan Keppen. And Mr.

Keppen is the executive director of the Klamath Water Users Association, Klamath Falls, Oregon. And, Mr. Keppen, your statement,

too, will be made a part of the permanent record in its entirely,

and you may proceed to summarize.

STATEMENT OF DAN KEPPEN, EXECUTIVE DIRECTOR,

KLAMATH WATER USERS ASSOCIATION, KLAMATH FALLS, OR

Mr. KEPPEN. Thank you, Mr. Chairman, members of the subcommittee. I appreciate the opportunity to testify before you today

on S. 1824 and H.R. 2828.

I have developed a written statement that also includes recent

articles and other information I refer to in this testimony. I ask

that they be included in the record, Mr. Chairman.

Senator DORGAN. Without objection.

Mr. KEPPEN. And my name is Dan Keppen. I’ve been executive

director of the Klamath Water Users Association since November

2001. We’re a nonprofit corporation that represented the Klamath

Irrigation Project farmers and ranchers. We have represented them

since 1953. Our members include rural irrigation districts, other

public agencies, as well as private concerns that beneficially use

water on both sides of the California-Oregon State line in Klamath

Basin.

Today, I would like to provide you with reasons to support S.

1824 and H.R. 2828. And at this time, I would also like to thank

Senator Smith and Senator Wyden for their leadership in moving

this legislation forward. I would also like to thank Congressman

Greg Walden for cosponsoring a companion bill on the House side

this year.

Before I specifically address this bill, I think it is important to

provide you with a sense of additional background on how Klamath

Project irrigators are faring this year, 14 months after their water

supplies were cut off from Upper Klamath Lake to meet the alleged

needs of suckers in the lake and coho salmon downstream of Iron

Gate Dam.

The 2001 water cutoff imposed impacts to the local community

that were immediate and far reaching. We’re still feeling those impacts today. The loss of irrigation supplies devastated farmers and

imparted an estimated $200 million economic ripple effect through

the broader community. This year, we are starting to see the farreaching impacts of such a dramatic action. In fact, the economic

woes facing the local community are intensifying as we move into

the new year, as evidenced by several things that we’ve seen.

One is a dramatic devaluation of both land and machinery assets

in the Basin. Two, land debt-free retirements are having to borrow

against deflated land values to finance tax or living expenses.

Loaning institutions are discontinuing service to financially viable

and low-risk farm operations. Farm operations that successfully reVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6602 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
46

structured debt in 2001 are now facing bankruptcy. And infrastructure expenditures to increase water and energy conservation actions have been postponed or abandoned.

The attached Oregonian article, which Congressman Walden referred to earlier, is included in your testimony, and it reflects the

struggles of one of our local families dealing with this issue right

now.

Last year’s cutoff also tragically underscored the vital linkage

that exists between irrigated farmland and wildlife. Water that

would normally flow through farmland habitat was directed instead towards three species protected under the Endangered Species Act. The vitality of over 430 other wildlife species was threatened when they were subjected to the same fate as farmers. The

attached briefing paper included in the written testimony describes

this very unique relationship that exists in Klamath Basin between

irrigated agriculture and the environment.

Now, here we are in 2002, the water is flowing, and that’s a very

good thing. But still, local water users, I believe, are gun shy because of last year’s unexpected cutoff and, really, right now, expect

at any time that another cutoff could occur. And this is, in large

part, due to the uncertainty imbedded in the current biological

opinions released last week by the fisheries agencies for the 19-

year operations plan developed for the project. Despite findings the

National Academy of Sciences that demonstrate the lack of scientific data supporting higher lake levels for suckers and increased

flows for coho salmon in the Klamath Basin, the final biological

documents prepared by U.S. Fish and Wildlife Service and National Marine Fisheries Service instead perpetuate the same theories that surfaced in prior biological opinions.

And this year, we’re not alone in criticizing the opinions. The action agency in this matter, which is the U.S. Bureau of Reclamation, on June 3 also sharply criticized the efforts of both fishery

agencies, as outlined in an article that’s attached to the testimony

that you have. Significantly, Reclamation disagreed that the agencies’ determination that Klamath Project operations will jeopardize

the continued existence of both species. And while Reclamation has

agreed to operate the project this year consistent with those opinions, it intends to reinitiate consultation later this year to address

the serious concerns it has with those documents.

So this year, we’ve got full project deliveries expected. We think

that they will stay there. There’s findings from the National Academy of Sciences that offer the opportunity to steer Basin species recovery into a new direction. This could provide a setting where historic adversaries can come together to identify mutually-beneficial

actions that truly help the environment, like our neighbors to the

north.

Sadly, with continued resistance by Federal fishery biologists to

consider new information and ideas, the conflict intensifies, and the

potential for cooperation diminishes. It is, therefore, refreshing to

discuss with you today this proposal that will truly help Klamath

irrigators and may implicitly encourage further productive actions

that will help move our community towards detente in the Klamath Basin.

47

This bill before you, S. 1824, provides both a measure of fairness

and a measure of emergency relief. It authorizes the Bureau of

Reclamation to return or waive fees paid by irrigation districts and

ultimately by their patrons this year. The bill would refund money

spent by water districts in the Klamath Basin meant for operations

and maintenance of the canals that would normally deliver water

to farmers. The legislation requires reimbursement of these costs

and, in turn, requires irrigation districts to return the savings to

their members. The bill also creates a waiver for individuals that

fall under the Warren Act. These are folks that are not within districts, but have their own contracts with the Government.

In essence, the districts and these farmers last year paid fees to

run a system that never delivered the water that they were promised. They paid for something they never received, and they are

asking for a refund. And that’s precisely what this measure does.

More importantly, it puts money back in the hands of the farmers

who so desperately need it.

And, in closing, again, thank you.

I would like to at least respond to Mark Limbaugh’s comment

earlier regarding the concern about precedent-setting here relative

to Reclamation policy and cost. I mean, we need to take a look at

the fact that this is a pretty unique situation. I’ve got a letter from

Oregon Water Resources Department dated last week that acknowledges, you know, no agricultural committee in our Nation’s

history has faced this kind of crisis, and the legislation, therefore,

I believe, is intended uniquely to address that crisis. And using it

as precedent, I think, is kind of a flawed argument, in our view.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Keppen follows:]

PREPARED STATEMENT OF DAN KEPPEN, EXECUTIVE DIRECTOR, KLAMATH WATER

USERS ASSOCIATION, KLAMATH FALLS, OR

Thank you for inviting me to testify today. I have developed a written statement

that also includes recent articles and other information I refer to herein.

My name is Dan Keppen. I have been Executive Director of the Klamath Water

Users Association (KWUA) since November 2001. KWUA is a non-profit corporation

that has represented Klamath Irrigation Project farmers and ranchers since 1953.

KWUA members include rural irrigation districts and other public agencies, as well

as private concerns that beneficially use water on both sides of the California-Oregon border. KWUA focuses on issues that affect thousands of people dependent on

the Project, including farm and ranch families, local businesses, and our rural communities. Local water users also play an important role in Klamath Basin wildlife

conservation activities, including efforts to provide environmental water to two national wildlife refuges. We are also actively engaged in environmental restoration

activities undertaken in other forums, as further discussed in the attachment to this

testimony.

Today, I would like to provide you with reasons to support S. 1824—‘‘The Klamath Basin Emergency Operations and Maintenance Refund Act of 2001’’. At this

time, I would like to thank Senator Smith and Senator Wyden (D-OR) for their leadership in moving this legislation forward in the Senate. I would also like to thank

Congressman Greg Walden for sponsoring a companion bill on the House side last

year.

Before I specifically address this bill, I think it is important to provide you with

additional background on how Klamath Project irrigators are faring this year, 14

months after water supplies from Upper Klamath Lake were cut off to meet the alleged needs of suckers in the lake and coho salmon downstream of Iron Gate Dam.

48

IMPACTS ASSOCIATED WITH THE 2001 WATER CUT OFF

The 2001 water cutoff imposed impacts to the local community that were immediate and far-reaching. Loss of irrigation supplies devastated farmers and imparted

an estimated $200 million economic ‘‘ripple’’ effect through the broader community.

This year, we are starting to see the far-reaching impacts of such a dramatic action.

In fact, the economic woes facing the local community are intensifying as we move

into the new year, as evidenced by the following:

• Dramatic devaluation of both land and machinery assets; • Land debt-free retirees having to borrow against deflated land values to finance

tax or living expenses; • Loaning institutions discontinuing service to financially viable and low risk

farm operations; • Farm operations that successfully restructured debt in 2001 are now facing

bankruptcy; and • Infrastructure expenditures to increase water and energy conservation actions

have been postponed or abandoned.

The attached Oregonian article accurately reflects the struggles of one Klamath

Basin farming family impacted by last year’s water crisis.

Last year’s cutoff also tragically underscored the vital linkage that exists between

irrigated farmland and wildlife. Water that would normally flow through farmland

habitat was directed instead towards three species protected under the ESA. The

vitality of over 430 other wildlife species was threatened when they were subjected

to the same fate as farmers. The attached briefing paper describes the unique relationship that exists between agriculture and the environment in the Klamath Basin.

2002—THE WATER IS FLOWING, BUT FEARS ARE GROWING

This year, water is coursing through the Klamath Project, but local water users—

still gun shy from last year’s unexpected cutoff—expect at any minute that another

cutoff could occur. This is in large part due to the uncertainty embedded in the current biological opinions released last week by U.S. Fish and Wildlife Service

(USFWS) and National Marine Fisheries Service (NMFS) for the 10-year operations

plan developed for the Klamath Project. Despite findings by the National Academy

of Sciences that demonstrate the lack of scientific data supporting higher lake levels

for suckers and increased flows for coho salmon in the Klamath Basin, the final biological documents prepared by USFWS and NMFS instead perpetuate the same

theories that surfaced in prior biological opinions.

This year, we are not alone in criticizing the opinions. The action agency in this

matter—the U.S. Bureau of Reclamation—on June 3rd also sharply criticized the efforts of both fishery agencies (see attached Oregonian article). Significantly, Reclamation disagreed that the agencies’ determination that Klamath Project operations will jeopardize the continued existence of both species. While Reclamation

has agreed to operate the Klamath Project this year consistent with the two biological opinions, it intends to reinitiate consultation later this year to address the serious concerns it has with those documents.

This year—with full Project deliveries expected, and with findings from the National Academy of Sciences that offer the opportunity to steer Basin species recovery

into a new direction—could provide a setting where historic adversaries can come

together to identify mutually beneficial actions that truly help the environment.

Sadly, with each new volley launched by critics of irrigated agriculture, and with

the continued resistance by federal fishery biologists to consider new information

and ideas, the conflict intensifies, and the potential for cooperation diminishes. It

is, therefore, refreshing to discuss with you today a proposal that will truly help

Klamath Basin irrigators and may implicitly encourage further productive actions

that will help move our community move towards detente in the Klamath Basin.

S. 1824 PROVIDES A TIMELY AND FAIR BOOST TO LOCAL IRRIGATORS

This bill provides both a measure of fairness and a measure of emergency relief.

It authorizes the Bureau of Reclamation to return or waive fees paid by irrigation

districts and ultimately by their patrons this year. The bill would refund money

spent by water districts in the Klamath Basin meant for operations and maintenance of the canals that would normally deliver water to farmers. The legislation

requires reimbursement for these costs and in turn requires the irrigation districts

to return this savings to their members. The bill also creates a waiver for individuals that fall under the ‘‘Warren Act.’’ These individuals would be reimbursed for

operations and maintenance payments they have made even though they may not

be within a district.

49

* These attachments can be found in subcommittee files.

In essence, the farmers and the irrigation districts last year paid fees to run a

system that never delivered the water they were promised. They paid for something

they never received, and they are asking for a refund. And that’s precisely what this

measure does. More importantly, it puts money back in the hands of the farmers

who so desperately need it.

In closing, I would like to restate a quote made by Representative Greg Walden

last November before the House Committee on Resources—‘‘This legislation gives

hope to those people whose livelihoods face ruin as a result of the Interior Department’s decision to shut off water to farmers for the first time in the nearly 100-year

history of the Klamath Project. These farmers and ranchers just want to survive

long enough to come to some solution that takes care of both fish and farmers. This

legislation provides the measured relief these farmers need.’’

Thank you.

Attachments: *

1. 6/4/02 Oregonian article

2. 5/28/02 Oregonian article

3. ‘‘The Klamath Project Agricultural Environment’’

Senator DORGAN. Mr. Keppen, thank you very much. Let me just

ask a quick question dealing with Senator Smith, if I might. The

cutoff of water occurred on what date in the Klamath area?

Mr. KEPPEN. April 6, 2001.

Senator DORGAN. Senator Smith, you offered an amendment on

the floor of the Senate on the subject. What was the date of that,

roughly? What period of the year?

Senator SMITH. I want to say June. I could stand corrected. In

the June framework.

Senator DORGAN. What is the growing season there? What kind

of crops are involved?

Mr. KEPPEN. Well, it’s grain—potatoes are pretty important, but

grain, alfalfa, barley, hay, mint, horseradish on the California side,

and irrigated pasture.

Senator DORGAN. Did you indicate that the losses were roughly

$200 million?

Mr. KEPPEN. Right. That’s according to local estimates.

Senator DORGAN. We did—we appropriated some money—roughly $20 million, was it? Didn’t we have an appropriation to try to

deal with some of the impact? I recognize that it was probably a

fraction of the loss, but how was that distributed, and did the farmers receive it?

Mr. KEPPEN. Yes, they did. And I believe, in overall, that was a

success. It was $20 million that was distributed through USDA

programs, and that definitely did help. What we’re talking about

in this legislation is, again, kind of a refund to the folks that paid

O&M. And it’s interesting, because, on the California side, the

State government actually took care of that. This is for the Oregon

portion of the Basin, which didn’t receive those reimbursements

this year.

Senator DORGAN. I understand the O&M issue, and I should say

that Senator Wyden and Senator Smith have really served you all

well. The reason I asked the question is I did not vote—I believe

I voted to table the amendment.

Senator SMITH. That was a mistake, Senator, but we’ll forgive

you.

[Laughter.]

50

Senator DORGAN. Well, I don’t know that it was a mistake, but

I regretted the fact that it set up a Hobson’s Choice with respect

to the ESA and some other—and the water needs. And I guess

what I was unclear about, and I asked several questions at the

time, was whether the crops had already largely been destroyed.

And then the question then was simply remuneration for that period.

The point you’re making today is one I fully understand, that the

precedent here is awful, and you sit there now wondering whether

somebody’s going to cut off water again. If so, when, why, and how?

And so I have—this is not an easy issue, and I very much sympathize with the farmers who have lost their livelihood here.

I support this legislation. I think it makes a lot of sense. I think

your two Senators have worked hard to try to advance this. But I

remember the discussion we had at some length about this, because I understand the circumstances that these farmers have been

put in, and I don’t like it at all. And we need to find a way to deal

with it.

Mr. KEPPEN. Thank you for your comments. I appreciate that.

Senator DORGAN. I want to submit some questions for the record.

And before I call on Senator Smith, let me ask that the record of

this hearing include testimony from the Honorable Ken Thedford,

the mayor of the city of Fallon, Nevada, on the subject of S. 1310;

testimony from Samuel Penney, chairman of the Nez Perce Tribal

Executive Committee, the Nez Perce Tribe, in support of S. 1883;

testimony by Tom Jovanovich, president, board of commissioners,

Lakehaven Utility District, and it’s in support of S. 1385 and H.R.

2115; testimony by C. Booth Wallentine, chief executive officer,

Utah Farm Bureau, on S. 2475; and the statement of Robert McMillan, president of the Strawberry Water Users Association, on S.

2475. Without objection, they will be included in the record for this

hearing.

Senator DORGAN. Senator Smith.

Senator SMITH. Thank you, Mr. Chairman.

Just as a refresher to your recollection of that, and for this

record, it’s important, I think, to state exactly what my amendment

would have done. It was not a frontal attack on the Endangered

Species Act. All it said was that we would, as a matter of statute,

live with the 1993 biological opinion, and that opinion had a lake

level at which the sucker fish has long survived. And the new biological opinion put it at historic highs. And the National Academy

of Sciences, tragically, said, well after my amendment failed, that

there was no scientific basis for those higher levels. It was a political judgment to get rid of farmers in the refuge. That’s what it was,

and notwithstanding deeds personally signed by Franklin Roosevelt.

And I look back at this now, and Dan’s comment about the new

studies that have just come out, the new biological opinions, they’re

all predicated on what is known as the Harvey Report. And the

Harvey Report has never been subject to peer review. That’s what

the National Academy of Sciences specifically said had no scientific

basis for it.

I have every desire to live within the Endangered Species Act.

But all I’m saying is, for crying out loud, if we’re going to impose,

51

not $20 million, but $200 million damage on a community, by any

economic calculation, we ought to at least submit that science to

peer review. And if it’s good, it ought to withstand it.

And that’s my beef with all of this. This was a government-manufactured crisis, pure and simple, from beginning to end. And if it

can happen in Klamath, it can happen in North Dakota. If you’ve

got any dams and any farmers, look out, because the precedent is

horrible. And Klamath Falls has become a rallying cry to every irrigated agricultural community in the United States of America.

I feel vindicated, in part, by the National Academy of Sciences.

On the other hand, I don’t think the Damocles sword is gone, because they’re still relying upon this study that they refused submit

to any kind of community, like National Academy of Sciences. It’s

just really hard to take that kind of damage to your constituents,

when they just arrogantly say, ‘‘No, this is what it means, and

we’re not willing to change, and we’re not even willing to have any

outside group study it.’’ It makes no sense.

But anyway, that’s what happened. And that’s what my amendment would have done, and it tragically failed by a couple of votes.

Dan, one of the things that’s frustrating to you, probably, is that

everybody thinks nothing’s ever been done in terms of mitigation.

People feel like, you know, ‘‘You haven’t done anything.’’ You’ve

done quite a bit, haven’t you?

Mr. KEPPEN. I’ve only been onboard for 6 months, and—it feels

like 6 years, but in the last ten years, the water users in the Klamath Basin really have tried to do some constructive things. They’ve

supported and have worked directly on some wetland restoration

projects, sucker habitat projects. The water users——

Senator SMITH. Do you get credit for any of that?

Mr. KEPPEN. Well, they thought they were going to get credit

when they first started out.

Senator SMITH. So the goal posts keep moving, and however

much you put up, it’s never enough.

Mr. KEPPEN. The reliance on sucker recovery, in particular, has

been on project water, higher lake levels. And the association has

been pushing for 10 years to consider some of these other activities—restoration on the land and along riparian streams—and they

actually even put the first recovery plan together for the Basin 10

years ago, and they reiterated that last year in another plan. So

there’s a lot of things that have been done.

The ticket has been—our involvement in the past has been kind

of hinged upon the fact that there would be some sort of a credit

given back to the project, that, in exchange for these programs that

truly will help the suckers out, there needs to be a corresponding

decrease in the amount of reliance on lake levels for sucker recovery. And that hasn’t happened. In the last 10 years, there’s really

no credit given at all. There still is this real narrow focus on lake

levels for recovering suckers, and then higher stream flows for recovering coho salmon downstream.

As the Senator mentioned, the NAS report last year essentially

said, ‘‘No, that wasn’t justified’’—the way that was operated last

year wasn’t justified. And that’s just tragic. I mean, in the local

community, people view that as—I guess it would be like a guy

that comes out of a prison after being unjustly sentenced for 10

52

years, and all of a sudden somebody comes out of nowhere and lets

him go, and he walks out of that prison. And what’s the feeling inside of him? It’s like, ‘‘Hey, I’m free. There’s a new future. I’m moving in a new direction, but it just should not happen.’’. That’s

where we are.

Now we’ve got biological opinions out that are throwing the same

arguments out that we heard prior to the National Academy of

Science review. It’s——

Senator SMITH. And to make it even more bizarre, to increase the

stream flows for salmon downstream, what they do is they hold the

water upstream—don’t give it to the farmers or the fowl or the refuge, but they cook it up to a degree that’s lethal to salmon downstream, and they spill it on them in the fall. It is a story of manmade tragedy.

But, anyway, thank you, Dan.

Mr. KEPPEN. Thank you.

Senator SMITH. And, Jeff, you heard the administration’s response to Federal nexus. Have you got any suggestions? We’ve got

to work this thing out. We’ve got to get this dam saved, because

I can think of a whole bunch of Federal values to be served by that

dam operating and restoring some of these fish runs.

Mr. OVESON. Well, we would agree with you, Senator. There’s no

shortage of Federal nexus here, with the Endangered Species Act,

Tribal Trust responsibilities, the Clean Water Act. The Lusting

alone has three endangered fish in it. And we’ve had it mentioned

that this is a regional issue and not a Federal issue, and it’s really

quite a mistake. ESA, the last I checked, was a Federal law, and

we’re trying to act on it on a regional basis, but we need Federal

money to do it.

Senator SMITH. So if we don’t do anything like this, and the Federal Government says we can’t help the dam to bring it up to code

to bring it up to Federal standards, then eventually you get in

trouble for these other listings. Isn’t that potentially the problem?

Mr. OVESON. One of the real big potential problems is that we

have a lot of irrigators up there with their fannies hanging out a

mile right now in the Lusting and up in Prairie Creek out in

Wallowa Lake. And I asked Dan earlier, if I could make the reference, what we’re trying to avoid is ending up in a situation like

is going on in Klamath Falls.

Senator SMITH. Well, the truth is, Jeff, that had the Federal Government, beginning with the ’93 biological opinion, done anything

that it had recommended, instead of hiding behind the protection,

‘‘Well, this involves some private property, so we can’t help,’’ and

then they come along, and they turn it off because they say, ‘‘You

don’t meet the Federal standards.’’ I mean, I just think that is unacceptable, and I see that happening, and that’s why we have to

win this fight with the Bureau, and I predict we will.

I don’t think the dots are being connected between the overarching undergirding Federal policy behind all of these things that

are affecting private property dramatically. And so we’ve got some

convincing to do, but we’ll do it.

Mr. OVESON. Well, I don’t think it even has to be a fight with

Reclamation, because they’ve been a big partner of ours for a long

time.

53

Senator SMITH. Very, very much so. Thank you, Mr. Chairman.

Senator DORGAN. Thank you very much.

We want to thank all of you for testifying. We’re sorry that we

had to interrupt the hearing for a vote, but we very much appreciate your contribution.

This subcommittee hearing is adjourned.

[Whereupon, at 4:05 p.m., the hearing was adjourned.]

(55)

APPENDIXES

APPENDIX I

Responses to Additional Questions

DEPARTMENT OF THE INTERIOR,

BUREAU OF RECLAMATION,

OFFICE OF EXTERNAL AND INTERGOVERNMENTAL AFFAIRS,

Washington, DC, August 19, 2002.

Hon. BYRON L. DORGAN,

Chairman, Subcommittee on Water and Power, Committee on Energy and Natural

Resources, U.S. Senate, Washington, DC.

DEAR MR. CHAIRMAN: I have reviewed the additional question related to my June

6, 2002, appearance before the Subcommittee on Water and Power, Committee on

Energy and Natural Resources. Enclosed is the response to the follow-up question.

Sincerely,

MARK A. LIMBAUGH

Director

[Enclosure]

Question. (S. 1385) The Administration opposes the Lakehaven project in part because ‘‘authorizing new construction projects is likely to place an additional burden

on Reclamation’s already tight budget.’’ Given the unmet needs concerning water in

the West, the country’s fastest growing region, shouldn’t Reclamation be seeking an

increase in funding rather than simply opposing all new projects?

Answer. The Bureau of Reclamation undergoes a comprehensive budget review on

a fiscal year basis. This review includes a look at both short and long term budgetary needs on all our programs. That budget is submitted as part of an overall

package by the Department of the Interior and sent to the Office of Management

and Budget (OMB). The OMB balances this proposal and all of the other Departmental requests within the scope of revenue available and the President’s priorities

to establish the fiscal year’s budget.

Your question mentioned unmet needs concerning water in the West. Given the

multitude of authorized projects with little or no funds appropriated, Reclamation’s

priority is to address previously authorized projects prior to adding additional

projects to the list. Our budget request for FY03 reflects funding priorities set by

Reclamation, the Department, and OMB in moving toward the completion of these

previously authorized projects.

RESPONSES OF DON CHRISTIANSEN TO QUESTIONS FROM THE COMMITTEE

Question 1. Please give us your perspectives on how well the division of responsibilities provided for by the Central Utah Project Completion Act for the implementation of the CUP have worked.

Answer. The District is very pleased with the structure and nature of the working

relationship that has been developed and in place in 1992. The State of Utah and

the waterusers who are paying for 35% of the project feel that the planning and

construction of the project features are more in tune with its needs. Our working

relationship with the Office of the Assistant Secretary is excellent and in our opinion has assisted in making important decisions in a timely and constructive manner.

Question 2. Why should the Committee agree to make the expenditures for planning and developing certain features non-reimburseable?

Answer. S. 2475 does not change in any way the reimburseability of planning and

development for the water related features which are the responsibility of the DisVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00058 Fmt 6601 Sfmt 6621 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
56

trict. We assume your question goes to that provision relating to the Pump back

storage power features in the Diamond Fork System of the project which had been

evaluated at great cost and abandoned by the Bureau of Reclamation during the

1980’s. The Western Area Power Administration may be seeking to include these

costs in the rates charged to its power contractors, specifically the Colorado River

Electric Distributors Association (CREDA) and not the District or its water users.

These power features were never constructed and the investigation costs should not

be passed to power users. Perhaps your question should be more appropriately addressed to the CREDA representatives.

[Responses to the following questions submitted to Assistant Secretary Bennett Raley of the Department of the Interior were not received at the time the hearing went to press.]

QUESTIONS FOR ASSISTANT SECRETARY BENNETT RALEY,

DEPARTMENT OF THE INTERIOR

Question 1. (S. 2475) The Central Utah Project Completion Act, enacted in 1992,

provides that the Secretary of the Interior is to retain responsibility for the Project

and prohibits delegation to the Bureau of Reclamation. At the same time, that Act

provides an enhanced role for the Central Utah Water Conservancy District, including responsibility for construction of project features.

From your perspective, how has this worked out?

Question 2. (S. 2475) Please describe in more detail how you expect the pilot program provided by the bill to work.

Question 3. (S. 2475) You have testified in support of the prepayment provisions

in the bill. What do you see as the advantages of these provisions?

(57)

APPENDIX II

Additional Material Submitted for the Record

STATEMENT OF COLORADO RIVER ENERGY DISTRIBUTORS ASSOCIATION (CREDA)

Mr. Chairman, members of the Subcommittee, the Colorado River Energy Distributors Association (CREDA) appreciates the opportunity of providing a statement

in support of S. 2475. CREDA is a nonprofit organization representing 155 consumer-owned electric systems (CRSP power contractors) that purchase federal hydropower and resources of the CRSP. CREDA was established in 1978, and serves

as the ‘‘voice’’ of its members in dealing with CRSP resource availability and affordability issues. CREDA represents its members in dealing with the Bureau of Reclamation (Bureau), as the generating agency of the CRSP, and Western Area Power

Administration (WAPA), as the marketing agency of the CRSP. CREDA members

are all non-profit organizations, serving nearly 3 million electric consumers in the

six western states of Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming.

CREDA members purchase over 85% of the CRSP power resource. Attached is a listing of current CREDA members.

Our interest in this legislation stems from the fact that the Central Utah Project

is a participating project—an irrigation project—of the Colorado River Storage

Project (CRSP). The CRSP was authorized in the Colorado River Storage Project Act

of 1956 (P.L. 485, 84th Cong., 70 Stat. 50), as a multi-purpose federal project that

provides flood control; water storage for irrigation, municipal and industrial purposes; recreation and environmental mitigation and protection, in addition to the

generation of electricity. Repayment of the federal investment of the CRSP has been

the responsibility of CRSP power contractors for 30 years. This repayment is ensured by long-term contracts providing for the purchase of CRSP resources. The

rates charged to these power contractors repay all of the federal investment in generation and transmission facilities (with interest), all power-related operation and

maintenance costs, and environmental costs. In addition, the CRSP contractors are

paying over 95% of the cost of the irrigation features of the CRSP (those costs that

are beyond the ability of the irrigators to pay). In fact, in the current CRSP rate,

35% of the total annual revenue requirement is due to irrigation assistance. These

contracts are not fixed cost; they allow for rate adjustments in order to ensure repayment of the federal investment in the CRSP.

When the federal reclamation projects were begun, they were designed, constructed, operated, and maintained by the Bureau of Reclamation. The Bureau also

owned the transmission system and marketed the power from the projects. When

WAPA was formed under the Department of Energy Organization Act in 1977, the

design, construction, operation, and maintenance functions remained with the Bureau and the transmission system and marketing responsibilities were moved to

WAPA.

Construction and capital projects are funded through the federal Treasury at the

interest rate determined by Congress or at the time construction starts. These

projects go through a budgeting process associated with the federal budget, and

money is appropriated for these projects with Congressional approval. As revenues

are collected for the sale of federal power, there is a priority assigned to payment

of obligations. The priority of repayment of the projects is that O&M expenses for

WAPA and the Bureau are paid first and then repayment of the highest interest

capital investment is made to the federal Treasury. The components associated with

the power features are paid first, including the appropriate interest, and then the

power revenues are used to pay the irrigation projects at no interest.

Each year, WAPA compiles a ‘‘power repayment study’’ which estimates expenses

of both the Bureau and WAPA, and is the basis for the CRSP rate. After WAPA

has completed the power repayment study and if a rate adjustment is necessary,

a public process is begun. We are currently in the midst of this process, which could

result in a 30% rate increase. As the Subcommittee is aware, the western electricity

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market has been extremely volatile over the recent past couple of years. As a result,

CREDA members are scrutinizing every expenditure to keep costs as low as possible

for their consumers. CREDA, representing its members, works with the Bureau and

WAPA through a 1992 contractual arrangement regarding work program and rate

treatment issues, in an effort to mitigate rate increases.

CREDA’s support of S. 2475 focuses on two provisions of the bill. The first regards

treatment of costs that have been expended by the Bureau for studies of features

of the CUP that will not be constructed by the Federal government. As an example,

during the 1980’s, despite opposition from the CRSP power contractors, the Bureau

explored adding a large generation component to the Diamond Fork feature of the

CUP. Subsequently, the Bureau determined the Federal government would not construct the feature. CREDA believes costs such as these should be non-reimbursable

and non-returnable, meaning they would not be paid by the CRSP power contractors. Section 1(a) of S. 2475 provides that assurance.

Secondly, CREDA understands the Central Utah Water Conservancy District’s desire to continue its relationship with the Secretary. Likewise, CREDA has existing

working and contractual relationships with the Bureau, specifically regarding construction, operation and maintenance and rate treatment for the CRSP facilities.

CREDA felt it necessary to ensure that relationship is maintained. The language

of Section 1(b)(3) of S. 2475 provides that assurance.

In summary, CREDA’s specific interests in S. 2475 relate to the CRSP from a financial and ongoing implementation standpoint. We encourage timely passage of S.

2475. We thank the Subcommittee for considering CREDA’s statement.

STATEMENT OF TOM JOVANOVICH, PRESIDENT, BOARD OF COMMISSIONERS,

LAKEHAVEN UTILITY DISTRICT

Mr. Chairman and members of the Subcommittee, the Board of Commissioners for

the Lakehaven Utility District would like to introduce testimony in support of Senate Bill 1385 and its companion bill H.R. 2115. The Lakehaven Utility District

(‘‘Lakehaven’’) is one of Washington State’s largest water and sewer utilities providing service to over 100,000 residents. It is located in South King County and encompasses the City of Federal Way and portions of Des Moines, Kent, Auburn, Pacific,

Algona, Milton and unincorporated King and Pierce Counties. The Bill before you

would authorize the Secretary of the Interior to participate in the planning, design

and construction of the Lakehaven Water Reclamation Program by amending Title

XVI of the Reclamation Projects Authorization and Adjustment Act of 1992. The

Lakehaven Water Reclamation Program would be the first Title XVI authorization

in the State of Washington.

PROGRAM SUMMARY

Lakehaven Utility District is proposing a water reclamation program using innovative, yet proven, technologies to enhance the reliability of existing water supplies

and improve the quality of the environment. The proposed activities include the reduction or elimination of local secondary wastewater to the Puget Sound, conjunctive use of reclaimed water, groundwater and surface water, and enhancement of

existing wetlands and fish habitat.

The program would take advantage of recent regulatory procedures governing the

use of reclaimed water by constructing additional treatment systems at the District’s two Wastewater Treatment Plants (WWTP) to further purify all or a portion

of the plant’s secondary effluent; constructing a transmission and distribution pipeline system to transport this water to reuse areas; and developing facilities to direct

the water to the aquifer system through injection wells, sub-surface infiltration galleries and land applications. The cost for these facilities is estimated to be $38 million.

BACKGROUND AND HISTORY

Lakehaven utilizes groundwater sources that are recharged primarily from local

precipitation. While development has reduced the ability for these aquifers to naturally recharge, the demand for water from these sources has increased to exceed

their safe production limits and has resulted in a reduction in water levels in all

local aquifers with a corresponding reduction in well water production. To mitigate

declining groundwater levels, Lakehaven, together with Tacoma Water, Seattle Public Utilities, City of Kent, and Covington Water District are entering into an agreement to develop Tacoma’s second diversion water right on the Green River. However, water rights limitations, flood control functions of Howard Hansen Dam, habiVerDate 11-SEP-98 09:27 Jan 22, 2003 Jkt 000000 PO 00000 Frm 00061 Fmt 6601 Sfmt 6621 J:\DOCS\83-924 SENERGY3 PsN: SENERGY3
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tat maintenance, and concerns over future Endangered Species Act restrictions may

limit Lakehaven’s ability to utilize this water supply.

Lakehaven has two secondary wastewater treatment plants currently discharging

over 6 million gallons of water a day to Puget Sound. The ability to utilize reclaimed

water to manage groundwater levels has been proven to be successful in other

areas; however, it has not been applied in Washington State. Using reclaimed water

to supplement Lakehaven’s water supplies would provide needed water supply reliability not only for Lakehaven but also for the rapidly growing South King County

area. In the 2000 Washington State legislative session, Lakehaven sought and the State

legislature implemented legislation authorizing the recovery of water, including reclaimed water, stored in underground reservoirs. This legislation was signed by

Governor Locke in March of that year.

The stage is now set for implementing this important program.

BENEFITS OF THE PROGRAM

The benefits and opportunities related to this program, in addition to increasing

the reliability of water supply on a regional basis, are:

• Conjunctive use of reclaimed water, groundwater and surface water • Ability to help maintain river/stream levels during periods of drought—would

assist in maintaining fishery levels and rebuilding wetlands • Protection of natural recharge areas • Water conservation enhancements • Ability of neighboring water/sewer purveyors to partner in the program, enhancing reliability for their customers

This program will produce exceptional regional benefits and opportunities. It will

provide for the water supply needs of the community for many years to come, as

well as to enhance the environment. The local groundwater resources that have sustained the population for many, many years has been stressed in recent years by

development and periodic droughts to the extent that water tables have declined.

These water tables can be recovered by the use of water that now is discharged to

Puget Sound, without having to rely on additional surface water sources, such as

local rivers that provide for fish habitat. The technology associated with this proposed programs is proven and economically feasible. Recycling of this limited resource through reclamation is the viable alternative for the future.

REQUESTED ACTION

The benefits, both locally and regionally, are significant but the cost is also significant and we are requesting that the Federal government become one of our partners in the Lakehaven Water Reclamation Program.

Thank you very much for the opportunity to provide this testimony to the Subcommittee.

STATEMENT OF ROBERT W. MCMULLIN, PRESIDENT OF THE

STRAWBERRY WATER USERS ASSOCIATION

Mr. Chairman and members of the subcommittee, my name is Robert McMullin;

I serve as the President of the Strawberry Water Users Association (SWUA). I appreciate the opportunity to address you regarding a topic, which is very important

to SWUA and its shareholders.

Attached is a copy of my resume. My home, my friends and family, my orchards

and my heart are in south Utah County, Utah.

SWUA is a nonprofit corporation organized in 1922 primarily for the purpose of

contracting with the United States Bureau of Reclamation (Reclamation) to repay

to the United States the remaining unpaid construction costs of the Strawberry Valley Project (SVP), and to provide a water supply to approximately 2,800 SWUA

shareholders, including the south Utah County, Utah cities of Springville, Mapleton,

Genola, Spanish Fork, Salem, and Payson. SWUA repaid to the United States all

of the costs of construction of the SVP in 1974.

The SVP is a federal reclamation project constructed between 1906 and 1915. The

SVP provides approximately 70,000 acre-feet (AF) of water to approximately 41,000

acres of land in south Utah County, Utah. Most lands served by the SVP have insufficient water.

Because south Utah County has always been a dry spot in a desert state, SWUA

and its shareholders have been among the very first, and the very strongest, supporters of the Central Utah Project (CUP). The following quotes come from pages

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16 to 19 of the history of the CUP found in the Final Environmental Impact Statement for the Bonneville Unit of the CUP (BUEIS):

Investigation work on the Central Utah Project began soon after the turn of

the century under the Reclamation Act of 1902. The Strawberry Valley Project,

with Strawberry Reservoir as its key feature, was a forerunner of a larger central Utah development soon to be envisioned. Strawberry Reservoir was completed in 1913, and as early as 1919 local municipal and agricultural water

users and other leaders who recognized future water requirements in central

Utah began considering the possibility of expanding the existing Strawberry

Valley Project.

Investigations on obtaining additional water for the Strawberry Valley Project

were begun in the spring of 1945. During the course of these studies, the plan

was expanded to cover essentially the same area that was considered in the Colorado River-Great Basin Project, and the name Central Utah Project was given

to the Proposal.

The Central Utah Water Conservancy District (CUWCD) was formed in 1964 as

the local entity that would repay the local share of the CUP. Since the mid-1960s,

south Utah County residents began paying property taxes to CUWCD to support the

CUP. SWUA shareholders, many of them struggling family farmers, have been paying those taxes ever since. They have yet to see significant CUP benefits.

From the conception of the CUP it was intended that CUP facilities would replace

certain SVP facilities. The SVP’s Strawberry Dam was replaced by the CUP’s Soldier Creek Dam. The SVP’s Strawberry Reservoir was replaced by the CUP’s Enlarged Strawberry Reservoir. The SVP’s collection system was replaced by the CUP’s

Strawberry Collection System. The SVP’s Strawberry Tunnel was replaced in part

by the CUP’s Syar Tunnel.

From the very beginning it was clear that without the cooperation and support

of SWUA and its shareholders there could be no CUP. Again, I quote from page 549

of the BUEIS:

If the necessary operating agreements for storage, exchange, and use of some

existing facilities to convey the water to points of use could not be obtained, development of the Bonneville Unit would be terminated at the enlarged Strawberry Reservoir, with no water being exported to the Waseca Front.

SWUA gave its support to the CUP, and allowed SVP facilities to be replaced by

CUP facilities.

Prior to the enactment of the Central Utah Project Completion Act (CUPCA) (Titles II through VI of the Reclamation Projects Authorization and Adjustment Act

of 1992) it was anticipated that SWUA, CUWCD and the United States would be

required to enter into an agreement for the operation and maintenance of CUP facilities for the benefit of both the SVP and the CUP. Such an agreement was signed

by the United States, CUWCD and SWUA in 1991, Congress mandated one year

before the agreement. I refer you to section 209 of CUPCA.

From the beginning of the CUP it was anticipated that south Utah County and

east Juab County irrigators would be provided CUP water and water infrastructure.

Section 202 of CUPCA, one of the sections CUWCD seeks to amend, authorized

$150 Million for the construction of the Irrigation and Drainage System, or in the

alternative $125 Million for the construction of alternate features to deliver irrigation water to lands in the Utah Lake Drainage basin.

During the construction of Jordanelle Reservoir as part of the Municipal and Industrial System (M&I System), a feature of the Bonneville Unit of the CUP, south

Utah and east Juab County residents were asked to agree to wait to receive CUP

Bonneville Unit benefits dead last. A solemn promise was made by all levels of federal, state and local officials and leaders that the patience, cooperation, support and

sacrifice of the south Utah County and east Juab County people would never be betrayed. They would never be left out of the CUP.

CUWCD has now said that it will take most of the irrigation CUP water promised

to south Utah and east Juab Counties to Salt Lake County for M&I use, outside

the Utah Lake Drainage Basin. The small amount of water that will be provided

to south Utah County will be for M&I purposes only. Frankly, SWUA could and

would swallow a bitter pill and quietly accept the loss of the promised irrigation

water if the majority of the authorized $125 million were used to provide water conservation and efficiency infrastructure to help south Utah and east Juab Counties

make their very short water supply go farther. In the process, water quality, safety

and environmental concerns could be addressed as well.

CUWCD is instead before Congress seeking authorization to use all of the $125

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gation water to lands in the Utah Lake Drainage basin to deliver municipal water

to Salt Lake County, outside the Utah Lake Drainage Basin. The bill before the

Committee today (S. 2475), like its companion which passed the House Resources

Committee last week (H.R. 4129) is very artfully drafted. Yet, its provisions in reality would still completely exclude irrigators, and would in addition leave CUWCD

a discretionary loophole so large that it can and absent legislative changes, will exclude the farmers and urban residents of Utah Lake Drainage basin, that is, south

Utah and east Juab Counties.

There are five principal reasons why you should reject CUWCD’s efforts to deny

the Utah Lake Drainage Basin CUP irrigation water and CUP irrigation water infrastructure:

First, Solemn promises should be kept. Senator Hatch and former Senator Jake

Garn worked tirelessly to include an irrigation provision in CUPCA. We respectfully

submit that other men and women of their character require no further discussion

of this point.

Second, CUWCD and the Department of the Interior have proposed this legislation in violation of an important environmental statute. In 1992 Congress literally

kicked the Bureau of Reclamation out of any formal CUP management role and entrusted CUWCD, a state agency, with the responsibility of completing the CUP

under the direct supervision of the Department of the Interior. In return, CUWCD

agreed that it would be considered a federal agency for purposes of compliance with

the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et. seq. (NEPA). See

section 205(b) of CUPCA. Section 4332 of NEPA states:

The Congress authorizes and directs that, to the fullest extent possible:... all agencies of the Federal Government shall

(C) include in every recommendation or report on proposals for legislation and

other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on

(i) the environmental impact of the proposed action;

(ii) any adverse environmental effects which cannot be avoided should the

proposal be implemented;

(iii) alternatives to the proposed action;

(iv) the relationship between local short-term uses of mans environment

and the maintenance and enhancement of long-term productivity; and

(v) any irreversible and irretrievable commitments of resources which

would be involved in the proposed action should it be implemented.

In short, before proposing legislation which would have a significant impact on

mans environment, Strawberry believes the Department of the Interior and

CUWCD by law must draft an environmental impact statement. The bill’s modification of the authorization under section 202 of CUPCA, which will shift the use of

$125 million from providing irrigation water to the Utah Lake Drainage Basin to

providing M&I water outside the Utah Lake Drainage Basin, is indeed a major federal action which significantly affects the quality of the human environment. Congress should not ignore its own important environmental laws by considering legislation of such magnitude without the required environmental impact statement.

Third, section 206 of CUPCA contains a clear principal of equity that was intended to protect against unfair distributions of CUP benefits. Unfortunately, Congress was so certain that south Utah County would be provided CUP benefits that

south Utah County falls through a crack in section 206. While the technical language of section 206 does not apply to south Utah County, the principals of equity

embodied there should be applied to south Utah County.

Fourth, a key part of the CUP is the Strawberry/Jordanelle Exchange. Imported

water must be released from the Enlarged Strawberry Reservoir to Utah Lake to

satisfy priority water right holders who would otherwise be entitled to the waters

of the Provo River. This makes it possible for CUWCD to lawfully store waters of

the Provo River in Jordanelle Reservoir and deliver that water through the M&I

System. Most of the CUP water used in the Utah Lake Drainage Basin will not be

consumed, but rather will flow to Utah Lake, where it can be counted as satisfying

a portion of the required Strawberry/Jordanelle exchange. This conserves an equal

amount of water in the Enlarged Strawberry Reservoir which would otherwise have

to be released to Utah Lake for the exchange. Literally, the CUP water used in the

Utah Lake Drainage Basin can be used at least twice. By contrast, if that same

water is instead used in Salt Lake County, outside the Utah Lake Drainage Basin,

no portion of it returns to Utah Lake. It can be used only once. Use of the

unallocated CUP water in the Utah Lake Drainage Basin is literally more than

twice as efficient and productive, and results in a considerably greater CUP yield.

We know of no better water reuse and conservation program.

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Lastly, much of Salt Lake County is dense, urban or suburban sprawl. What is

not already developed on that model appears to be largely planned on that model.

More water means more of the same and greater endless densities. South Utah and

east Juab Counties have only begun to plan and grow. With CUP water, both municipal and agricultural, south Utah and east Juab Counties have the opportunity

to create small cities near preserved agricultural lands. We want a place for our

children to grow and prosper here, not in a larger, denser, Salt Lake Valley metropolis. We want to support and save some of south Utah County’s agricultural heritage as well. With improved infrastructure, the CUP can serve the interests of all

south Utah and east Juab County residents, farmer and city dweller alike. We ask

for that opportunity.

We respectfully ask that this Committee honor the promises made to the very earliest supporters of the Bonneville Unit of the CUP & who waited for its benefits,

for so many decades.

At a minimum, Strawberry urges Senators Hatch and Bennett to be certain that

the CUWCD and the Department of the Interior comply with NEPA and present

an environmental impact statement with proposed changes to section 202 of CUPCA

so that decision makers will have the benefit of understanding the impact of this

legislation’s proposal to convert large quantities of irrigation water to municipal, not

in Utah County, where it was promised to go, but in Salt Lake County.

Finally, Strawberry would respectfully ask that this Committee consider earmarking at least a viable portion of the $125 million authorization for irrigation water

delivery infrastructure for conservation so our farmers will conserve and more efficiently use their existing, very limited supply of water. Given the extreme nature

of this year’s drought, this is particularly important if those farmers are to be denied additional CUP irrigation water supplies.

Thank you very much for your time and careful consideration.

STATEMENT OF SAMUEL N. PENNEY, CHAIRMAN OF THE NEZ PERCE

TRIBAL EXECUTIVE COMMITTEE, NEZ PERCE TRIBE

On behalf of the Nez Perce Tribe, I would like to take this opportunity to express

the Tribe’s support of the Wallowa Lake Dam Rehabilitation and Water Management Act.

Since time immemorial, the Nez Perce Tribe lived, fished, hunted, gathered, and

practiced their religion in the area of northeastern Oregon now known as Wallowa

County. Salmon, steelhead, and other fish species have been and continue to be a

critical component of Nez Perce religion, culture, subsistence, and commercial endeavors.

The important dam rehabilitation project contemplated by this Act is integral to

the efforts of the. Nez Perce Tribe and others to reintroduce and restore sockeye

salmon to Wallowa Lake. Before 1900, approximately 24,000 to 30,000 sockeye returned to Wallowa Lake each year. In 1890, a small dam was built at the outlet

of Wallowa Lake to divert water for irrigation. When the Wallowa Lake Dam was

constructed, it did not include fish passage facilities and no such facilities have ever

been incorporated into the structure. The Dam, in conjunction with over-harvest and

other factors resulted in the extinction of sockeye from Wallowa Lake by 1904.

The Nez Perce Tribe has been pursuing restoration of sockeye as part of a comprehensive salmon restoration program in northeastern Oregon, which also involves

spring chinook, fall chinook, and steelhead through the Northeast Oregon Hatchery

program. It is our belief that rebuilding healthy fish populations and healthy communities are not mutually exclusive. In fact, these endeavors can not be accomplished in isolation of each other. It is said that proper fisheries management is

built on a triad that includes fish populations, habitat, and people.

Restoration of salmon to Wallowa Lake will not only be beneficial to the ecosystem and the Wallowa County citizens, but also to restoration of Snake River

sockeye salmon population, which are listed as endangered under the Endangered

Species Act.

Rehabilitation of the Dam will include construction of necessary fish passage facilities and further the efforts of the Tribe and others to restore imperiled species.

In addition to the fish passage and sockeye salmon restoration benefits, the rehabilitation of the Dam will provide multiple benefits including enhanced flood control,

improved water conservation and management of irrigation withdrawals, greater

stability of the City of Joseph water supply, increased flows in the Lostine River

for imperiled spring chinook salmon (a project in which the Tribe has invested a

tremendous amount of resources), as well as generally contributing to the economic

stability of the local community.

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Rehabilitation of the Wallowa Lake Dam ensures that the legal and trust obligations of the United States to protect and enhance treaty-reserved fishing rights is

honored. The Act further assists in efforts of tribal, local, state, and federal stakeholders to meet the requirements of the Clean Water Act and the Endangered Species Act.

This Act builds upon cooperative relationships between the Tribe and citizens of

local communities, along with both state and federal resource management agencies

to collaboratively and creatively develop a plan that benefits fish recovery along

with timber, cattle, and agricultural interests. This Act and the collaborative relationship that exists in Wallowa County serves as a great example of how to avoid

a volatile situation like the Klamath Basin catastrophe of last year.

The Tribe strongly supports the Wallowa Lake Dam Rehabilitation and Water

Management Act and believes that everyone in the community can benefit from its

passage.

STATEMENT OF THE HONORABLE KEN TEDFORD,

MAYOR OF THE CITY OF FALLON, NEVADA

Chairman Dorgan, Members of the subcommittee, my name is Ken Tedford and

I am the Mayor of the City of Fallon, Nevada. I am pleased to have this opportunity

to submit the following testimony to the subcommittee in favor of the passage of

S. 1310, The Fallon Rail Freight Loading Facility Transfer Act.

If enacted into law, S. 1310 will enable my City to acquire through purchase at

appraised value a six (6) acre parcel of federally owned land that the City currently

leases from the Bureau of Reclamation. This parcel is located inside the corporate

limits of the City. The City is aware that the United States government, through

the U.S. Reclamation Service, predecessor of the Bureau of Reclamation, acquired

the freight yard property in 1920. It appears that from 1920 until the mid-1980’s

the Bureau of Reclamation conducted operations thereon related to the Newlands

Project, including but not limited to the electric generation and distribution utility

operated by the Bureau of Reclamation and the Truckee-Carson Irrigation District.

Federal use of the property ended in the early 1980’s. The first agreement for the

City’s use of the property was a five (5) year lease in 1984 between the Bureau of

Reclamation and the City. That lease anticipated construction of the present railroad loading facility, which was accomplished pursuant to the 1990 lease between

the City and the Bureau of Reclamation.

Earlier this year, during negotiations to extend the City’s lease of the property,

the Bureau advised the City that it was their preference that the City assume fee

ownership of the property rather than continuing to lease it. This is the City’s desire

as well. As a result, we asked Senators Harry Reid and John Ensign to introduce

this legislation to authorize the Bureau to sell the parcel to the City. A companion

measure, that was sponsored by Congressman Jim Gibbons, has been passed in the

House of Representatives.

The City’s construction and operation of the freight yard facility under the existing lease has been financially encouraged and supported by the State of Nevada and

the Southern Pacific Railroad pursuant to an Operating Agreement dated July 5,

1990. The United States Department of Transportation also participated financially

through the Operation Agreement, funding certain grants designed to assist and

promote local railroad service. Accordingly there is, a significant financial investment in the freight yard facility by federal and state governments and private industry. The City of Fallon has expended approximately $150,000.00, the State of

Nevada has expended approximately $75,000.00, and the U.S. Department of Transportation has expended approximately $500,000.00 on the facility. Additionally,

Southern Pacific Railroad has funded capital improvements to upgrade and maintain approximately 20 miles of track necessary for the operation of the facility. Accordingly, the combined investment in this facility is well in excess of $1,000,000.00.

This cooperative funding demonstrates the importance to the community and the

State of Nevada for the continued viable operation of this facility by the City of

Fallon.

For more than ten years the freight yard facility has served as an anchor for the

railroad spur which extends through the City limits. The railroad spur would have

been discontinued and taken out of service were it not for this facility. The facility

serves as a railhead for a mining company located in the small town of Gabbs, seventy miles to the east and south of Fallon. Mining is that community’s only industry

and maintaining a railhead is essential to the economy of the town.

The revenue that the City receives from the freight yard facility and the rent that

it pays to the Bureau of Reclamation for the use of the property are insignificant

64

as compared to the regional economy that the facility and the railroad spur generate

and support.

Before concluding, Mr. Chairman, I would like to touch briefly on the environmental condition of the property. Because the property has been used for industrial

purposes for more than 75 years—for the bulk of that time as an electrical utility

maintenance, storage and operations area—we and the Bureau both believe that an

environmental assessment should be completed prior to a transfer. To that end, a

Phase I Environmental Site Assessment has been completed and a Phase II Environmental Site Assessment is currently underway. Soil samples have been taken

and laboratory analyses conducted. While things generally look good, some additional investigations will need to be completed before it can be determined if the

property is environmentally clean or whether some sort of remediation will be required.

Mr. Chairman, this concludes my statement. Thank you again for allowing ine to

submit this testimony in support of this legislation.

STATEMENT OF C. BOOTH WALLENTINE CHIEF EXECUTIVE OFFICER,

UTAH FARM BUREAU FEDERATION

Mr. Chairman. my name is Booth Wallentine. I am the CEO of the Utah Farm

Bureau Federation. which represents over 22,000 member families in Utah, a significant number of whom reside in Utah and Juab Counties in our state. I offer this

statement to express the Utah Farm Bureau’s concern about proposed changes to

the Central Utah Project Completion Act (CUPCA).

Our interest has been to improve the efficiency and productivity of agriculture

production in Utah. Agriculture is a critically important industry to the economy of

Utah and Juab counties. In 2000, cash receipts from agriculture for these two counties exceeded $117 million. The Governor’s Office of Planning and Budget economic

multiplier data would indicate these farm-gate receipts are the economic engines

generating at least $350 million in our state’s economy.

Irrigation water is the lifeblood of agriculture. U.S. Department of Agriculture

data shows that future expansion of American agriculture will depend largely upon

improved and/or expanded irrigation.

From the beginning of the CUP it was anticipated that south Utah County and

east Juab County farmers would be provided CUP water and water infrastructure.

Section 202 of CUPCA, one of the sections the Central Utah Water Conservancy

District (CUWCD) seeks to amend, authorized $150 Million for the construction of

the Irrigation and Drainage System, or in the alternative $125 million for the construction of alternate features to deliver irrigation water to lands in the Utah Lake

Drainage basin.

The CUWCD is again before Congress seeking authorization to redirect all of that

$125 million outside the Utah Lake drainage. By adding the words ‘‘municipal and

industrial’’ as new eligible uses of this money and absent any constraints, the net

result is the all-but-certain transfer of water to the urban areas of Salt Lake County.

There are a number of reasons why Utah Farm Bureau believes this committee

should reject CUWCD’s efforts to deny the Utah Lake Drainage Basin CUP irrigation water and infrastructure:

First, the promises to the Utah Lake Drainage Basin farm families that by paying

taxes to CUWCD since 1964 they would receive irrigation water should be kept.

Second, the CUWCD’s proposal to change one of the primary CUP purposes by

removing water from one area of the project to an entirely new area and for entirely

new M&I purposes, by any measure, constitutes a major Federal action under the

National Environmental Policy Act (NEPA). The CUWCD as a congressionally mandated quasi-Federal agency, cannot by executive fiat change the purpose of the Central Utah Project without first going through the NEPA process. In fact, by law,

CUWCD cannot legally do what it has already done which is to propose legislative

changes to Congress prior to preparing an Environmental Impact Statement.

Third, Farm Bureau has some very real concerns over the environmental soundness of transferring water originally intended for the farms of the Utah Lake Basin

to Salt Lake County. For example, most of the CUP water used in the Utah Lake

Drainage Basin will not be consumed, but rather will flow to Utah Lake, where it

can be counted as satisfying a portion of the required Strawberry/Jordanelle exchange. This conserves an equal amount of water in the Enlarged Strawberry Reservoir, which would otherwise have to be released to Utah Lake for the exchange.

Literally, the CUP water used in the Utah Lake Drainage Basin can be used at

least twice. By contrast, if that same water is instead used in Salt Lake County as

65

the CUWCD proposes, no portion of it returns to Utah Lake. It can be used only

once. Use of the unallocated CUP water in the Utah Lake Drainage Basin is literally more than twice as efficient and productive, and results in a considerably

greater CUP yield. We know of no better water reuse and conservation program.

Mr. Chairman, the Utah Farm Bureau urges members of this Committee and the

entire Senate to keep the promises made by government leaders to farmers. We respectfully request that this Committee direct the CUWCD and the Department of

Interior to comply with NEPA and present an environmental impact statement with

proposed changes to section 202 of CUPCA before acting on the proposed changes.

At a minimum, please consider earmarking a portion of the $125 million authorization for irrigation water delivery infrastructure, which is badly needed to allow Utah

Lake Drainage Basin farmers to conserve, and more efficiently use their limited

water supplies. This is particularly important if those farmers are to be left out of

additional CUP irrigation water supplies and could be accomplished by adding language the bill which requires only that a specific portion of such funds ‘‘shall’’ be

spent in the Utah Lake Drainage Basin. Thank you for this opportunity to offer this

testimony.

Æ