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94–937 PDF 2004

S. HRG. 108–539

RECLAMATION RURAL AND SMALL COMMUNITY WATER ENHANCEMENT

ACT; RECLAMATION SAFETY OF DAMS ACT; THE RECLAMATION

RURAL WATER SUPPLY ACT OF 2003; AMEND THE LEASE LOT

CONVEYANCE ACT OF 2002; AND THE RECLAMATION RURAL WATER

SUPPLY ACT OF 2004

HEARING

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER

OF THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

on 

S. 1085 S. 1727

S. 1732 S. 1791

S. 2218

MARCH 25, 2004

(

Printed for the use of the 

Committee on Energy and Natural Resources 

(II)

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

PETE V. DOMENICI, New Mexico, Chairman 

DON NICKLES, Oklahoma 

LARRY E. CRAIG, Idaho 

BEN NIGHTHORSE CAMPBELL, Colorado 

CRAIG THOMAS, Wyoming 

LAMAR ALEXANDER, Tennessee 

LISA MURKOWSKI, Alaska 

JAMES M. TALENT, Missouri 

CONRAD BURNS, Montana 

GORDON SMITH, Oregon 

JIM BUNNING, Kentucky 

JON KYL, Arizona 

JEFF BINGAMAN, New Mexico 

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

ALEX FLINT, Staff Director 

JUDITH K. PENSABENE, Chief Counsel 

ROBERT M. SIMON, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

SUBCOMMITTEE ON WATER AND POWER

LISA MURKOWSKI, Alaska, Chairman 

BEN NIGHTHORSE CAMPBELL, Colorado Vice Chairman 

GORDON SMITH, Oregon 

JON KYL, Arizona 

LARRY E. CRAIG, Idaho 

JAMES M. TALENT, Missouri 

JIM BUNNING, Kentucky 

CRAIG THOMAS, Wyoming 

BYRON L. DORGAN, North Carolina 

BOB GRAHAM, Florida 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

DIANNE FEINSTEIN, California 

CHARLES E. SCHUMER, New York 

MARIA CANTWELL, Washington

PETE V. DOMENICI and JEFF BINGAMAN are Ex Officio Members of the Subcommittee

SHELLY RANDEL, Counsel 

PATTY BENEKE, Democratic Senior Counsel 

(III)

C O N T E N T S 

STATEMENTS 

Page

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

Domenici, Hon. Pete V., U.S. Senator From New Mexico .................................... 2

Dorgan, Hon. Byron L., U.S. Senator From North Dakota .................................. 13

Keegan, Mike, Appearing on Behalf of Jim T. Dunlap, Board Member, the 

National Rural Water Association ...................................................................... 18

Keys, John W., III, Commissioner, Bureau of Reclamation, Department of 

the Interior ........................................................................................................... 3

Koland, David, Manager, Garrison Diversion Conservancy District, 

Carrington, ND ..................................................................................................... 25

Murkowski, Hon. Lisa, U.S. Senator From Alaska ............................................... 1

APPENDIX 

Additional material submitted for the record ........................................................ 39

(1)

RECLAMATION RURAL AND SMALL COMMUNITY WATER ENHANCEMENT ACT;

RECLAMATION SAFETY OF DAMS ACT; THE 

RECLAMATION RURAL WATER SUPPLY ACT 

OF 2003; AMEND THE LEASE LOT CONVEYANCE ACT OF 2002; AND THE RECLAMATION 

RURAL WATER SUPPLY ACT OF 2004

THURSDAY, MARCH 25, 2004

U.S. SENATE, 

SUBCOMMITTEE ON WATER AND POWER, 

COMMITTEE ON ENERGY AND NATURAL RESOURCES. 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:30 p.m. in room 

SD–366, Dirksen Senate Office Building, Hon. Lisa Murkowski presiding. 

OPENING STATEMENT OF HON. LISA MURKOWSKI,

U.S. SENATOR FROM ALASKA 

Senator MURKOWSKI. Good afternoon, and welcome to the Water 

and Power Subcommittee. It’s my pleasure to welcome all of you 

here this afternoon. 

There are five bills before the Subcommittee today. Three of the 

bills address the authority of the Bureau of Reclamation with respect to the planning, design, and construction of rural water supply systems. The fourth bill would raise the authorization ceiling 

on the Bureau of Reclamation’s Safety of Dams Program. And the 

final bill would amend the Lease Lot Conveyance Act of 2002, 

which would clarify the disposition of certain proceeds obtained 

pursuant to the act. 

We’ve got a relatively ambitious schedule before us this afternoon. We do have a vote that is scheduled to take place, to begin 

at 2:45, so we will try to get a little bit of the testimony, and take 

a break, as needed. 

But we do have several parties with different interests pertaining to rural water. We’d like to get through them as quickly as 

possible. 

I’d like to welcome Commissioner Keys, from the Bureau of Reclamation, who will be presenting the administration’s testimony on 

all five bills. Commissioner, we’re looking forward to hearing from 

you and the rest of our witnesses. 

2

1 EPA 1997 Estimate that small community (< 3,300 people) systems would require $37.2 billion for water supply through the year 2014 and small communities (< 10,000 people) would 

need $13.8 billion for waste water treatment. 

Before we hear from the Commissioner, are there any opening 

statements, Senator Bingaman, that you would like to make at this 

moment? 

[The prepared statement of Senator Domenici follows:]

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

FROM NEW MEXICO

Madam Chairman, thank you for holding this subcommittee hearing today. 

Rural Water is the main topic of today’s discussion and originally, Mr. Jim 

Dunlap from New Mexico was supposed to provide testimony with regard to the 

rural water bills on behalf of the National Rural Water Association. Unfortunately, 

his plane was cancelled this morning in Albuquerque and so he is not able to be 

here. However, Mike Keegan from the National Rural Water Association will be testifying on his behalf. 

I am excited by the prospect of providing clean and affordable water for our rural 

communities. The needs of these communities are astronomical and it is time for 

the Federal Government to step up its efforts. 

The State of New Mexico Finance Authority has provided me with a list of over 

100 rural communities in New Mexico that don’t have sufficient water supply and 

water treatment facilities. These communities are poor, they are dry and they are 

pleading with the Federal Government for help. I cannot stand by and let this deplorable situation continue. 

Every state in the west has the same desperate problem. The U.S. Census Bureau 

estimates that 27% of the US Population lives in rural communities. EPA surveys 

have estimated that the funding needed to bring these community water and waste 

disposal systems up to safe drinking water levels could be over $50 billion.1 There 

are estimates that over 700,000 households in the United States have insufficient 

water supplies and 370,000 rural households are forced to haul water. These communities are hardest hit by our current drought and often have the highest 

incidences of water contamination. The EPA has determined that, on average, over 

10% of rural communities in the 17 Reclamation states have contaminated water 

supplies. I challenge my colleagues to step up to this task How do we supply safe 

water for our rural communities? 

The U.S. Department of Agriculture, HUD, and the Environmental Protection 

Agency work to address these issues, I applaud their efforts, but they can’t do it 

alone. I am convinced that all agencies with responsibility to manage water resources must be engaged. 

There are two keys to the solution—better technology and appropriate funding. 

I am working to improve technology for such water treatment needs as arsenic, 

desalination and reuse . We will hold a hearing on these topics later this spring. 

Today is our chance to investigate ways for the Department of Interior to engage 

in solving rural water problems—to provide a program and the funding needed to 

help solve this national problem. 

My colleague Senator Bingaman has introduced rural water legislation (S. 1085). 

I have a separate version (S. 1732) and the administration has provided a third proposal (S. 2218). All of these bills would create a standing authority within the Bureau of Reclamation to address rural community water needs. There are, however, 

significant differences in the way each bill addresses actual construction, sharing 

costs, implementation of Tribal programs and the methods for prioritizing which 

communities get funded. 

Given that we are all anxious to improve the living and working conditions in 

rural communities in New Mexico and throughout the West, I am confident that we 

can work together to further develop legislation that takes the best of these three 

proposals. 

On another topic that will receive a bit less time, but which is equally important, 

I have introduced S. 1727 which authorizes additional appropriations for the Reclamation Safety of Dams Program. The Bureau of Reclamation has a very well documented need to maintain dams for their short and long-term safety. Reclamation 

has assessed the needs of our dams and I has found that the current authorization 

is not enough to meet the projected need. We must move quickly to authorize the 

additional $540 million dollars needed by this critical program. 

3

Finally, we will discuss S. 1791 which I jointly introduced with my colleague Senator Bingaman. We worked together on the original Lease Lot legislation last Congress, which I note passed the House and Senate unanimously. The Lease Lot Conveyance Act of 2002 directed-the Secretary of the Interior to convey property comprising 403 cabin sites (located along the western portion of the reservoirs in Elephant Butte State Park and Caballo State Park, New Mexico) under the administrative jurisdiction of the Bureau of Reclamation to the Elephant Butte/Caballo Leaseholders Association, Inc., for fair market value. The bill passed by Congress in 2002, 

however, was vague with regard to the disposition of proceeds collected from the 

sale of the lands. 

The purpose of S. 1791 is to amend the original act directing the Secretary of the 

Interior to deposit the proceeds into the Reclamation Fund for the benefit of the Elephant Butte Irrigation District. 

Madam Chairman, I thank you for holding this hearing which encompasses so 

many of the issues I care about.

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

FROM NEW MEXICO 

Senator BINGAMAN. Madam Chair, I would just thank you for 

having the hearing, and indicate my strong belief that this is an 

important issue. It’s critical that we do have an active Federal program to address these rural water needs throughout the West, and 

we’ve got three bills that aim in that direction. There are some differences we need to discuss and decide which course to follow, but 

I think this is an important piece of legislation. I hope we can move 

ahead on the profitable version of this, which, of course, I now believe is the one that I introduced. But it’s possible that I’ll be persuaded that we need to make changes there. 

So thank you for having the hearing. 

Senator MURKOWSKI. Thank you, Senator Bingaman. 

And with that, Commissioner Keys, we invite your testimony, 

please. 

STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, BUREAU 

OF RECLAMATION, DEPARTMENT OF THE INTERIOR 

Mr. KEYS. Madam Chairman, it’s my absolute pleasure to be 

here to talk with you about these current bills this afternoon. 

I am pleased to present the administration’s position on rural 

water issues in the Western United States. We must find a costeffective and innovative solution to unmet water-supply needs in 

rural communities throughout the West. Of all of the challenges 

that we have, that’s one of the greatest ones facing us right now. 

I would tell you that we absolutely have great appreciation for 

the work that we have been able to do with Senator Domenici and 

Senator Bingaman, for their leadership on the rural water issues. 

Their staffs have been a great help in us trying to put together this 

proposed legislation. And we appreciate the Committee’s help in focusing on this West-wide issue that’s before us all. 

Senator Domenici’s bill, S. 1732, Senator Bingaman’s bill, S. 

1085, and the administration’s bill, S. 2218, share the same goal, 

meeting Western rural water supply needs in a more systematic 

fashion. My comments today will focus on S. 2218, as this bill represents the administration’s views. 

S. 2218 contains the following elements that we think comprise 

a complete legislative package to address rural water. 

The first is the needs assessment. The bill requires the Secretary 

to develop programmatic criteria and guidelines to guide ReclamaVerDate 0ct 09 2002 15:06 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 P:\DOCS\94937.TXT SENERGY3 PsN: SENE3
4

tion in rural communities for a predictable and fair process for 

evaluating rural water needs. 

The second is project evaluation, because each rural water 

project has been authorized individually. And because of the lack 

of general programmatic authority for Reclamation, we’re limited 

in our ability to evaluate them against consistent criteria. As a result, rural water projects have not fared well during the budget 

process. S. 2218 will create more realistic expectations for project 

sponsors in this process. 

The third point is equity in cost sharing. S. 2218 would apply a 

well-established methodology identifying the capability to pay of 

rural communities to determine appropriate levels of local contribution with a 35 percent minimum non-Federal cost-share. Capability 

to pay applies to trial projects, as well. But S. 2218 recognizes their 

unique circumstances and trust relationship with the Secretary of 

the Interior. Therefore, S. 2218 allows the Secretary to reduce travel contributions for studies and project construction based upon an 

analysis, and to seek appropriations to assist tribes in paying for 

the difference between annual operation, maintenance and replacement costs, and their capability to pay those costs. As the projects 

generate economic benefits for tribes, the need for this Federal assistance with operation, maintenance and replacement costs should 

decline, facilitating greater self-sufficiency for the tribal communities. 

The fourth point is identifying best project options. In the past, 

projects authorized have not looked at the full range of options 

available to the individual communities. As a result, even though 

a better or more cost-efficient solution is identified after authorization, the project cannot be changed without subsequent legislation. 

S. 2218 propose that Reclamation get involved early in the process 

in appraisal and feasibility study phases, and look at a full range 

of options for each project. 

The fifth is realistic schedules and cost ceilings. Early involvement of Reclamation will yield more attainable completion schedules and cost ceilings, avoiding later legislative fixes. 

The sixth point is coordination with other Federal rural water 

programs. All of the agencies with formal rural water programs—

the Department of Agriculture, HUD, the Environmental Protection Agency—signed a joint memorandum to foster cooperation and 

encourage efficient use of funds. Due to our need for a formal program, Reclamation has not been able to formally participate, 

though we do work closely with these agencies at the field level. 

S. 2218 requires Reclamation to coordinate with Federal and State 

rural water programs to determine the most appropriate agency to 

undertake a given project and otherwise facilitate the development 

of the most efficient and effective solution to meeting the water 

needs of Western rural communities. 

Enactment of S. 2218 will provide authority to create a structured program that will enable Reclamation and the Department to 

establish criteria and make the process more consistent, equitable, 

and transparent. Establishment of a structured program will provide a desperately needed and demanded service to rural communities in the West that have previously been unserved. 

5

Again, I would like to thank Chairman Domenici for introducing 

S. 2218, and to Senator Bingaman for working very closely with us, 

and this committee for working with us on this legislation. Certainly, we would look forward to working with you as we go forward on these bills. 

The second bill that I would talk about today is S. 1727, our 

Safety of Dams Program. Madam Chairman, the administration 

strongly supports S. 1727, to increase the cost ceiling for the Safety 

of Dams Act by $540 million. This is needed because we anticipate 

that fiscal year 2004 and 2005 commitments will reach the currently-enacted ceiling. 

Madam Chairman, we can’t take dam safety for granted. Half of 

our dams were built between 1900 and 1950; and 90 percent before 

current state-of-the-art design and construction practices evolved. 

Monitoring, facility, review, analysis, investigations, and emergency management are critical parts of our dam safety program. 

We’re proud of our Safety of Dams Program. In 1997, the Association of Dams Safety officials reported that Reclamation has an 

effective dam safety program overseen by highly competent staff 

using state-of-the-art technology, standards, and expertise. Communication with water users is crucial to ensuring that any upgrades take into account economic impacts as safety-improvement 

alternatives are developed, selected, and implemented. Our policy 

and directives formalize this requirement, and we have enjoyed 

satisfactory results to date. 

Also, we support the legislation increasing the contract cost 

threshold from 750,000 to $1,250,000 for Reclamation to send a 

Safety of Dams Modification Report to Congress for review. This 

change is basically an adjustment for inflation since 1984. 

Madam Chairman, the last bill that I would talk about is S. 

1791, the Elephant Butte Lease Lot Conveyance bill. Madam 

Chairman, it is not possible for the Reclamation or the Department 

to support S. 1791. The issue is not new to Reclamation. When 

Congress enacted the Least Lot Conveyance Act of 2002, it considered, but wisely did not include, a provision to require proceeds 

from the lot sales to be deposited in the Reclamation fund on behalf 

of the Rio Grande Project, and made immediately available to the 

subject irrigation districts. Current law deposits proceeds from the 

sale of lands withdrawn from the public domain as a general credit 

to the Reclamation fund, and deposits sale proceeds from acquired 

lands as a credit to the project for which the lands were acquired. 

S. 1791 would instead transfer the funds directly to the irrigation 

districts, circumventing the appropriate process. 

This battle has been fought in court, and the Tenth Circuit has 

reinforced the Department’s position. The Department supported, 

and the President signed, the original Lease Lot Conveyance Act 

of 2002 because it did not include the language of S. 1791. 

Madam Chairman, that concludes my oral testimony. I would 

certainly try to answer any questions that you might have on any 

of these. 

[The prepared statements of Mr. Keys follow:]

6

PREPARED STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, BUREAU OF

RECLAMATION, DEPARTMENT OF THE INTERIOR, ON S. 1732, S. 1085, AND S. 2218

Madam Chairman, I am John W. Keys, III, Commissioner of the Bureau of Reclamation. It is my pleasure to present the Administration’s position on rural water 

issues in the Western United States and on the following bills pending before the 

Committee:

• S. 1732, the Reclamation Rural Water Supply Act of 2003; • S. 1085, the Reclamation Rural and Small Community Water Enhancement Act; 

and • S. 2218 the Reclamation Rural Water Supply Act of 2004, which was introduced 

by request on behalf of the Administration.

The three rural water bills before this Committee launch the discussion of designing a programmatic integrated approach to meeting needs for clean and healthy 

water supplies in rural communities in the Reclamation States. The Administration 

agrees that we must find cost-effective and innovative solutions to rural water 

needs. We applaud Chairman Domenici and Senator Bingaman for their leadership 

on this matter, and the whole Committee for focusing on this issue. 

The three bills have much in common. However, we think S. 2218, the legislation 

proposed by the Department, is the most comprehensive approach to addressing this 

issue. While S. 1732 establishes similar criteria and guidelines, it lacks important 

provisions related to the needs facing many Native American communities. S. 1085 

is limited to authorizing studies, does not appear to address the Secretary’s project 

development activities, and would seriously hamper Interiors ability to apply its 

professional expertise and oversight to project development. 

We appreciate Chairman Domenici’s courtesy in introducing S. 2218. I would like 

to focus the Committee’s attention today on S. 2218, first by describing the situation 

that Reclamation and the Department face with rural water issues, by explaining 

how S. 2218 addresses those issues. 

S. 2218 THE RECLAMATION RURAL WATER SUPPLY ACT OF 2004

S. 2218 would establish a rural water supply program within the Department of 

the Interior and authorize Reclamation to develop programmatic criteria and guidelines that would guide Reclamation and rural communities through a predictable 

and fair process for evaluating the water supply needs in rural communities. Further, S. 2218 establishes a programmatic framework for managing and prioritizing 

the development and construction of rural water supply projects for the benefit of 

communities, both Indian and non-Indian. 

HISTORICAL BACKGROUND

Since the early 1980’s, Congress has authorized thirteen separate single purpose 

Reclamation projects for municipal and industrial water supply in rural communities in Reclamation States. The total federal budget authorization for those 

projects is over $2.3 billion. These have all come at a time when security and law 

enforcement costs, operation and maintenance costs, dam safety costs, and other 

program obligations continue to grow, competing for scarce budget resources. 

NEED FOR RURAL WATER SUPPLY

Millions of Americans still live without safe drinking water, a basic necessity of 

life. A 1995 needs assessment conducted by the U. S. Department of Agriculture’s 

Rural Development State Offices estimated that over 1 million people in the United 

States had no water piped into their homes, and more than 2.4 million had critical 

drinking water needs. Recently released Environmental Protection Agency (EPA) 

data revealed $31 billion in total funding needs for small systems serving populations of 3,300 or less. Many rural residents carry heavy containers of water from 

cisterns, purchase bottled water at distant stores, or pay a water hauling service 

for these potable water needs. 

THE FEDERAL ROLE IN RURAL WATER SUPPLY PROJECT DEVELOPMENT

In 1995. the General Accounting Office reported that eight Federal agencies had 

17 programs designed specifically for rural areas to construct or improve water and 

wastewater facilities. These programs are managed in the Departments of Agriculture, Commerce, Health and Human Services, Interior and the Environmental 

Protection Agency. Of these programs, 11 are small grant programs, one is a loan 

program, 3 provide a combination of grants and loans, one provides ‘‘direct payment 

for specified uses’’ and one provides Federal surplus property and goods. 

7

In general, assistance through these programs is available based upon specific eligibility criteria relating to the missions and authorities of the agencies and programs. In contrast, Reclamation has had no structured program for developing or 

funding rural water projects and therefore has no established eligibility criteria. 

The other Federal rural water programs that exist today offer a combination of 

grants and loans for each project. The main difference between those projects and 

the ones Congress directs Reclamation to undertake is the scope of Federal involvement and the size of the projects. Projects that the other Federal programs support 

tend to be small. In contrast, the majority of the projects that Reclamation has been 

involved in tend to be large, often including more than one local entity, covering a 

large geographic area, and serving multiple local utilities. They cost from $20 million for the Perkins County Project in South Dakota to $417 million for the Mni 

Wiconi Project in South Dakota. Further, they tend to take five to ten years to plan, 

design, and construct and usually involve a significant amount of technical assistance from Reclamation employees and some longer-term design, construction, and 

contract management oversight. 

Over the past fifteen years, numerous rural communities have approached Reclamation either with a proposed project in hand or asking for assistance in developing a project, based upon the model of previous projects that have already been 

authorized for Reclamation’s involvement. What we have learned from these communities is that they do not seem to meet the criteria for the established Federal 

programs: their communities are too small or too large, too sparsely or too densely 

populated, or they cannot afford either the up-front local cost share requirements 

or the continuing operations, maintenance and replacement (OM&R) costs that are 

required. In some cases, they come to Reclamation because other Federal programs 

did not give their projects priority for funding. 

RECLAMATION’S DE FACTO RURAL WATER ‘‘PROGRAM’’

As I noted above, thirteen communities have secured legislation authorizing Reclamation projects. These represent a major Reclamation obligation for developing 

and providing rural water supplies without an integrated rural water program. 

Because Reclamation lacks generic authority to plan, design, and construct rural 

water projects, it has limited ability to set priorities and criteria for project development, and to budget accordingly. 

PROGRAM PERFORMANCE ASSESSMENTS (FY 2004)

In 2002, as part of the President’s budget and performance integration initiative. 

Reclamation’s rural water activities were assessed under two lenses: the Program 

Assessment Rating Tool (PART) and Common Measures. Under PART exercise our 

rural water program was rated ‘‘Results Not Demonstrated,’’ despite the fact that 

Reclamation’s rural water projects were meeting authorized project purposes. Further, the assessment concluded that stronger controls for project development were 

needed and ‘‘lack of agency involvement during project development mats result in 

a project that is not in the best Federal interest.’’

As a result of the PART exercise, the Administration suggested legislation should 

be developed to establish a Reclamation rural water program with adequate controls 

and guidelines. S. 2218 is our response to that good-government recommendation. 

The Administration urges its enactment. 

RECLAMATION’S RURAL WATER MANAGEMENT CHALLENGES

The process of evaluating our rural water activities, both for the PART analysis 

and in crafting S. 2218, has helped us identify the following challenges that restrain 

our ability to effectively serve our customers and help Western rural communities 

meet their water needs. Addressing these challenges is the purpose of S. 2218. 

Need for Quality Control 

Because each rural water project has been authorized individually, and because 

of a lack of general programmatic authority, Reclamation and the Department have 

been limited in their ability to budget for projects effectively or establish relative 

priorities either within our budget for rural water activities or within Reclamation’s 

overall budget. As a result, the rural water projects have not fared well during the 

budget process. Establishing an integrated rural water program as proposed in S. 

2218 will improve budgeting and other priorities. It will also allow for more realistic 

planning so that rural water projects are not proposed in a vacuum, but are, as part 

of the program’s budgeting and planning process, compared to a set of eligibility criteria as well as to other rural water related activities all within an overall cost ceiling established by the program. This approach will foster some competition, will 

8

allow for the development of priorities, and could create more realistic expectations 

when a project is authorized for construction that it will actually be developed. 

Cost Share Requirements Not Based Upon Capability to Pay 

The non-Federal cost shares for each of the currently authorized projects range 

from zero for the Indian portion of the Mni Wiconi Project in South Dakota to 25 

percent for the non-Indian Dry Prairie Rural Water System connected to the Fort 

Peck Reservation Rural Water System in Montana. Most recently, it appears that 

non-Federal cost share levels have been based upon the precedent created by previously authorized projects rather than by an actual assessment of the capability of 

the communities to pay for the capital costs. In the absence of a formal program, 

Reclamation has had limited input leading up to authorization of projects or to setting a reasonable cost share for local sponsors. 

In contrast, capital investment costs associated with traditional Reclamation 

projects or portions of projects authorized for municipal and industrial (M&I) use 

must be fully repaid with interest. Further, traditional Reclamation irrigation 

projects require that repayment of costs be based upon a project sponsor’s ability 

to pay, as determined through the study of both the projects sponsor’s financials 

(cash flow) and the project’s economic (cost/benefit) feasibility. 

For these reasons, S. 2218 includes a well-established Reclamation methodology 

identifying the ‘‘capability to pay’’ of rural communities for determining the appropriate level of their contribution for development and construction costs and would 

establish a 35% minimum non-Federal contribution. 

Mismatch Between Current Authority and Sponsors’ Expectations 

Current Reclamation law and policy do not satisfy expectations of rural water 

users. Current Reclamation law and policy requires project specific authority for feasibility studies and construction and that municipal water projects repay all allocated construction costs with interest. Although we can temper the impact of this 

requirement with long-term, low-interest-rate contracts, full repayment can be an 

unrealistic requirement in areas with low population densities and large construction costs. 

Over the past several years, Reclamation has opposed every piece of legislation 

authorizing rural water projects—citing inadequate repayment requirements. However, through 2003, Congress has authorized thirteen rural water projects for Reclamation’s involvement, each of which has included repayment terms proposed by 

the project proponents. This has resulted in relatively low non-Federal cost-share 

levels for authorized projects. 

The legislative template for authorizing individual rural water systems has come 

as a result of negotiations mostly between the sponsors and Congress, with limited 

Reclamation or Administration involvement. As a result, many of these projects do 

not meet basic planning guidelines and are treated as earmarks in the development 

of the President’s budget. 

In response, S. 2218 proposes to establish a new structure and method for consideration of rural water projects. The bill distinguishes these rural M&I projects from 

traditional M&I projects which require 100% repayment of construction costs plus 

interest. S. 2218 proposes to establish rural water-specific guidelines and criteria for 

evaluating prospective projects as well as the development of cost share requirements based upon a technical analysis of the capability of the non-Federal entities 

to pay the appropriate share of the costs. 

100% Reimbursability an Impediment For Tribes 

Traditional Reclamation M&I projects requiring 100% reimbursement of construction and operation and maintenance costs, with interest, have proven particularly 

difficult for Tribes. S. 2218 recognizes the distinct circumstances and conditions 

faced by many Tribes. First, the Administration bill would allow the Secretary to 

reduce the Tribal contribution for studies and project construction based upon a capability-to-pay analysis. Further, while the legislation makes OM&R the responsibility of the non-Federal project entities, S. 2218 would allow the Secretary to seek 

appropriations to assist Tribes in paying for the difference between the actual 

OM&R costs and the projected revenues from water sales to project beneficiaries. 

As the projects generate economic development, Tribes will have a greater capability 

to pay for their OM&R costs and the need for this assistance will decline, facilitating greater self-sufficiency for the Tribal communities. 

Project Design and Financial Precedent 

Following the precedent of the Mni Wiconi Project in South Dakota, most recent 

projects (both tribal and mixed tribal and non-tribal) have had similar design configurations and cost-share requirements. The usual approach has been to build 

9

pump stations, water treatment facilities and pipelines to dispersed communities. 

While this model works for many communities, Reclamation would like to use its 

expertise and knowledge to look at these and other alternatives to effectively and 

efficiently meet the water supply needs of other more rural communities. For example, local desalination or water reuse and recycling facilities could be more cost-effective approaches for some communities, especially as new technology is developed. 

Making institutional changes to facilitate the creation or expansion of water markets could also offer opportunities to address, in a more efficient and quick manner, 

the water supply challenges of some communities. 

This is a key reason why the Administration wants to establish a structured rural 

water program with a consistent process by which Reclamation and the other appropriate Federal and state agencies will work with the local communities to identify 

their water supply needs and develop a proposal that is both appropriate to those 

needs and cost effective. 

Current Studies May Not Fully Explore all the Options and are Completed Without 

Reclamation’s Involvement 

Because Reclamation does not have an integrated rural water program, communities in need of technical expertise do not have the ability to seek and receive assistance from Reclamation to identify their needs and explore all the alternatives. 

Instead, many follow the precedents of previously authorized projects and initiate 

studies that have been reviewed by Reclamation and are not prepared in accordance 

with current Federal planning and engineering standards. As a result, while these 

plans become the basis for legislation, some are not a good basis for decision-making, may not have explored all the options, and must be redeveloped once the project 

is authorized. Meanwhile, the basic project mandated by legislation cannot be 

changed without further legislation, even if it turns out not to be the most effective 

option. 

Reclamation’s current role is primarily as banker, administrator, and post-authorization overseer to monitor the Federal investment. In most cases, Reclamation has 

had no involvement in the early scoping or project evaluation process, despite its 

expertise in the planning, design, and construction of major civil works projects. 

Since most of the funds provided for rural water projects are Federal, it would be 

prudent to have early Federal involvement in their development and design as well 

as on-going administrative oversight sufficient to protect the Federal investment 

and to minimize escalating project costs. 

The rural water program proposed in S. 2218 will allow communities to approach 

Reclamation for assistance early in the process and, more importantly, will allow 

Reclamation to participate in the appraisal and feasibility study processes for rural 

water projects in the Western United States. This early involvement will allow Reclamation to engage in the early stages of scoping to evaluate the comprehensive 

needs of the Communities. 

Inadequate Cost Ceilings 

Because Reclamation was not involved in pre-authorization planning for most of 

the currently authorized rural water projects, the cost ceilings and completion 

schedules that we are asked to follow often do not meet Reclamation’s or the 

project’s needs. For example, in the 107th Congress, the completion sunset date for 

the Mni Wiconi Project had to be extended and the Federal cost ceiling had to be 

increased by an additional $58 million. 

Establishment of the rural water program proposed in S. 2218 allows Reclamation 

to be involved in the development of rural water systems from the very beginning, 

rather than after the project is already authorized. This will enable Reclamation to 

work with the non-Federal entities to prepare appropriate cost estimates as well as 

realistic completion schedules and hopefully avoid the need for such follow up legislation in the future. 

O&M Obligations for Native American Projects 

The legislation authorizing the Mni Wiconi Project and the Gamson Project each 

directed the Secretary to operate and maintain project facilities constructed to serve 

the Indian reservations. As construction of these Indian rural water projects are 

completed, the associated O&M costs consume an increasing percentage of Reclamation’s budget with no prospect of declining. If the trend toward non-reimbursable 

O&M costs for the tribal systems continues, current and future budget targets will 

become totally consumed by tribal O&M obligations to the exclusion of other budget 

priorities and activities. Further, these ongoing obligations will have increasingly 

significant budget impacts without any consideration for the improvements to the 

tribes’ financial situation or to their improved capability to pay for these O&M costs 

due to the improved water supply systems. 

10

S. 2218 proposes to address this issue by allowing Reclamation to assist Tribes 

in meeting their OM&R needs, but does so in such a manner as to recognize and 

account for the positive economic impacts that the rural water delivery projects will 

have in these communities. It will also encourage greater tribal self-sufficiency, conservation, and the development of the technical and financial expertise needed to 

efficiently manage these water systems themselves. In contrast to current practice 

of subsidizing all the OM&R costs associated with Indian rural water facilities, S. 

2218 allows the Secretary to seek appropriations to assist Tribes to pay for the difference between the actual OM&R costs and the projected revenues from water 

sales to project beneficiaries. We anticipate that as project benefits spur economic 

development, Tribes will have a greater capability to pay for their OM&R costs and 

the need for this assistance will decline. 

Lack of Coordination with Other Federal Rural Water Programs 

In an effort to expand coordination and cooperation, USDA, HUD, and EPA 

signed a Joint Memorandum to foster cooperation, encourage more efficient use of 

funds, and reduce administrative inefficiencies among the various organizations that 

administer water programs at the Federal, state, and local level. Lacking a formal 

rural water program, Reclamation has not been able to formally participate, though 

we do work closely with these agencies at the field level. 

By establishing a formal rural water program in Reclamation, S. 2218 would empower Reclamation to coordinate with other Federal and state rural water programs 

to determine the most appropriate agency to undertake a given project and otherwise facilitate the development of the most efficient and effective solution to meeting 

the water needs of western rural communities. Thus, S. 2218 will enable the rural 

water supply programs in the various Federal and state agencies to maximize the 

use of the limited Federal and state resources identified for this purpose. 

CONCLUSION

In conclusion, Madam Chairman, Reclamation has been involved in rural water 

projects for a long time. In fact we were founded as an agency to deal with rural 

water issues, primarily related to irrigation, in the Western United States. Enactment of S. 2218 will provide authority that is critically needed to create a structured 

program that will enable Reclamation and the Department to set priorities and 

make the process more equitable and transparent by establishing a consistent set 

of criteria and guidelines. In so doing, the establishment of this structured program 

will enable us to provide service to rural communities in the West that have previously been underserved. 

Madam Chairman, let me conclude by reiterating my appreciation to you, Chairman Domenici and Senator Bingaman for your leadership on this issue. We look forward to working closely with you and your staffs to make this program a reality. 

I am pleased to answer any questions. 

PREPARED STATEMENT OF JOHN W. KEYS, III, COMMISSIONER BUREAU OF

RECLAMATION, DEPARTMENT OF THE INTERIOR, ON S. 1727

Madam Chairman, I am John W. Keys, III, Commissioner of the Bureau of Reclamation. Thank you for the opportunity to provide the Department’s views on S. 

1727, to increase the authorized cost ceiling for the Reclamation Safety of Dams Act 

administered by the Bureau of Reclamation’s Dam Safety Program by $540 million, 

and adjust the reporting threshold for inflation. The Administration strongly supports this bill. 

Since the passage of the Reclamation Safety of Dams Act of 1978, the Bureau of 

Reclamation has developed a model dam safety program to implement the Federal 

Guidelines for Dam Safety and to modify dams in accordance with the, act. In 1996, 

an independent review team comprised of representatives from the Association of 

Dam Safety Officials was assembled to assess the Department of the Interior’s Dam 

Safety Program. It was the first outside review of Reclamation’s program in two decades. In 1997, the team released a comprehensive and independent report. The report found that the Bureau of Reclamation has ‘‘an effective Dam Safety Program’’ 

overseen by ‘‘highly competent’’ staff using ‘‘state-of-the-art technical standards and 

expertise.’’ Reclamation’s ability to respond to dam safety issues and to take preventative, corrective actions to reduce the public risks under the authority of the 

Reclamation Safety of Dams Act was a critical component of this favorable peer review. The team made a number of recommendations in Reclamation’s program, and 

we have taken steps to implement them. Among them, we now have an officer who 

audits and oversees the dam safety program, but is independent of the dam safety 

11

program staff. Outside experts annually review Reclamation’s dam safety activities 

to ensure that the program has adequate policies and procedures in place to address 

public safety issues. 

BACKGROUND

Public Law 95-578 and Public Law 98-404, along with Federal Guidelines for Dam 

Safety and the Department manual, guide Reclamation’s dam safety efforts. In this 

regard, Reclamation’s top priorities are to deliver water to and generate power for 

its customers without disruption, while protecting public safety. 

There are 369 high hazard dams and dikes located at 250 water projects in Reclamation’s inventory. The dam safety program helps to ensure the safety and reliability of these facilities. Approximately 50 percent of Reclamation’s dams were built 

between 1900 and 1950 and approximately 90 percent of the dams were built before 

current state-of-the-art design and construction practices. Considering the age of 

Reclamation dams, the ongoing monitoring, facility reviews, analysis, investigations, 

and emergency management are critical components of the dam safety program. We 

are proud of our dam safety work but we also realize we cannot take safety for 

granted. 

In its 100 year history, Reclamation has only had one dam failure—Teton Dam—

that resulted in loss of life and damage to property. Teton Dam toppled in 1976 during initial filling due to a design and construction deficiency. 

After Teton, Reclamation instituted a dam safety program. Congress enacted the 

Reclamation Safety of Dams Act in 1978 (Public Law 95-578) to preserve the structural safety of Reclamation dams and facilities. In 1984, Congress adopted amendments (Public Law 98-404) instituting a 15 percent non-Federal cost share requirement for modifications made as a result of new hydrologic or seismic information 

or changes in the state-of-the-art technology. Public Law 95-578 authorized $100 

million and Public Law 98-404 increased the authorized cost ceiling an additional 

$650 million, indexed for inflation. The 1984 Amendments also directed Reclamation 

to submit to Congress, prior to taking corrective actions, a report on any modifications expected to exceed $750,000 in actual construction costs. In Fiscal Years 2001 

and 2002, Congress adopted amendments to increase the authorized cost ceiling by 

$95 million (Public Law 106-377) and by $32 million (Public Law 107-117) respectively. 

Recognizing the importance of our relationships with the end users of the water 

and power from Reclamation projects, we have adopted a policy and directives that 

formalize requirements for communicating the need for modifications in a timely 

fashion. The policy and directives also require the development of a plan in cooperation with our water and power contractors to assure continued communication and 

involvement during the development of alternatives, selection of a preferred alternative, and implementation of the actions required to reduce risk. 

As of September 30, 2003, approximately $159 million remained in budget authority for the dam safety program. Reclamation anticipates that entire remaining authorization ceiling will be committed in fiscal years 2004 and 2005 to fund new and 

ongoing projects. 

EFFECT OF S. 1727

S. 1727 would make two primary changes in the existing program. 

First, the bill would increase by $540 million (indexed for inflation) the authorized 

cost ceiling for the Reclamation Safety of Dams Act. Reclamation anticipates that 

this funding level will provide Reclamation with authority to carry out safety of 

dams activities through approximately Fiscal Years 2012-2014, based on current 

projected funding needs for safety of dams modifications. If annual obligations are 

required at a faster rate to meet identified needs, the ceiling would be expended 

sooner. 

Second, the bill would increase from $750,000 to $1.25 million the contract cost 

threshold amount for the Bureau of Reclamation to send a safety of dams modification report to Congress for review. This change would adjust the threshold for inflation since 1984, and thus allow Reclamation to independently initiate the modifications of the size and scope contemplated in the 1984 amendments. 

CONCLUSION

Since 1978, when Congress first created the Safety of Dams program, we have 

carried out 64 risk reduction corrective actions and 4 more are currently underway. 

Reclamation has implemented these corrective actions to protect public safety at the 

lowest cost possible. 

12

S. 1727 would provide the additional budget authority for this effort to continue 

into the future. While the Administration supports the increase of appropriations 

ceiling, we will continue to evaluate this program for potential changes to improve 

planning and operations, better serve the taxpayer, and protect the safety of the 

people and businesses that rely on the soundness and integrity of Reclamation facilities. 

In conclusion, Madam Chairman, the Administration strongly supports S. 1727, 

and I would be pleased to answer any questions you may have. 

PREPARED STATEMENT OF JOHN W. KEYS, III, COMMISSIONER BUREAU OF

RECLAMATION, DEPARTMENT OF THE INTERIOR, ON S. 1791

Madam Chairman and Members of the Subcommittee, I am John W. Keys, III, 

Commissioner of the U.S. Bureau of Reclamation (Reclamation). I am pleased to be 

here today to present the views of the Department of the Interior on S. 1791, a bill 

to amend the Lease Lot Conveyance Act of 2002 to provide that the amounts received by the United States under that act shall be deposited in the Reclamation 

Fund. 

On December 16, 2002, the President signed into law the Lease Lot Conveyance 

Act of 2002 (P.L. 107-335) which provides for the conveyance of 403 lease lots at 

Elephant Butte and Caballo Reservoirs to the Elephant Butte/Caballo Leaseholders 

Association, Inc. (Association). Reclamation has been working closely with the Association to carry out the objectives of P.L. 107-335. 

Madam Chairman, the Department cannot support S. 1791. In previous testimony 

on H.R. 706, the Lease Lot Conveyance Act of 2002, I spoke in opposition to a similar provision in that legislation which would have required the proceeds derived 

from the sale of the lots to ‘‘be deposited in the Reclamation Fund on behalf of the 

Rio Grande Project and made immediately available to the subject Irrigation Districts under subsection I of the Fact Finders Act.’’ The bill was subsequently amended, remaining silent on the issue and leaving in place existing law as to the general 

disposition of the funds derived from the sale of the leased lots. 

Existing law provides that the proceeds from the sale of lands withdrawn from 

the public domain be deposited as a general credit to the Reclamation Fund and 

that proceeds from the sale of acquired lands be deposited into the Reclamation 

Fund as a credit to the project for which those lands were acquired. 

The proposed amendment would direct all funds, from both acquired lands and 

withdrawn public lands, to be deposited in the Reclamation Fund as a credit to the 

project and immediately made available to the irrigation districts. The Department 

believes the proceeds from the sale of the leased lots should be disposed of consistent with existing law. 

In continuing litigation during the past 13 years, Reclamation has contended that 

these revenues, as well as other similar project revenues, are not of the types of revenues covered by Subsection 4(i) of the Fact Finder’s Act. The 10th Circuit Court 

of appeals has ruled that Subsection 4(i), as amended by the Haden-O’Mahoney 

amendment (43 U.S.C. §§ 391a-1, 392a), provides credits for revenues derived from 

only two specific sources: leasing of project grazing and farm lands; and the sale or 

use of town sites. Revenue from the sale of these lots does not derive from either 

of these specific sources, insomuch as the lease lots are being sold not leased. and 

‘‘town sites’’ is a legal term of art applying only to town sites which were created 

under the Town Sites and Power Development Act of 1906 (34 Stat.116; 43 U.S.C. 

§ 561, et seq.). The Districts are not currently entitled to receive Subsection 4(i) benefits from any sources other than those two specific sources listed above. In addition 

to amending the Conveyance Act, Section 1(2)(B) of the proposed bill would amend 

Subsection 4(i) of the Fact Finders Act to provide these Districts with a unique benefit. We are concerned that the amendment would set a precedent and encourage 

other districts to seek benefits under the Fact Finders Act that are otherwise not 

provided. 

Also important to this case is that a small portion of the lease lots are located 

on public land that was withdrawn from the public domain for the project by Reclamation. As such, the Districts have never paid anything toward acquisition cost 

for these lands. The remainder of the lots are located on lands acquired out of private ownership by Reclamation for construction of the Project. Originally, the Districts cost of purchasing these lands was included in the Districts’ repayment obligation. However, in 1937 the Districts were relieved of their obligation to repay any 

portion of the cost of these acquired lands and the cost of constructing Elephant 

Butte Dam and Reservoir. All payments made by the Districts prior to that time 

were returned to them as credits toward their remaining repayment obligation. All 

13

costs of constructing Caballo Dam and Reservoir were deemed non-reimbursable by 

the Districts and charged to flood control. In light of this history, the proposed 

amendment would make available to the respective irrigation districts funds from 

the sale of lands to which they have no legal right, and where the federal government has borne all the associated costs. 

In summary, while the Department supported the original Lease Lot Conveyance 

Act of 2002 as it was passed and signed into law, we cannot support passage of S. 

1791 for the reasons stated above. 

That concludes my testimony, Madam Chairman. I would be happy to answer any 

questions the Subcommittee may have.

Senator MURKOWSKI. Thank you, Commissioner. 

Senator Dorgan, we’ve just heard the testimony from Commissioner Keys. I don’t know whether you had any comments you 

wanted to put into the record prior to us beginning our questions. 

I’ve indicated we’re probably going to take a break for a vote here 

pretty quickly, but if you wanted to make an opening statement, 

you could do that. 

STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR

FROM NORTH DAKOTA 

Senator DORGAN. Thank you, Madam Chairman. I’ve been in an 

Agriculture Appropriations Subcommittee hearing downstairs on 

the first floor, so I regret I was delayed, but I appreciate your 

starting the hearing. 

Senator MURKOWSKI. Thank you, Senator. 

Commissioner, you talked about the coordination with other 

agencies, and recognize that this is a substantial issue, and complementary efforts with these agencies are critical. It also seems 

logical to utilize, to the maximum extent practicable, existing infrastructure that could complement greater efforts in many of the 

smaller communities. Will connection to existing Bureau of Reclamation infrastructure aid in truly bringing water to the rural 

communities? 

Mr. KEYS. Madam Chairman, connection to existing Reclamation 

facilities would be possible under any of the alternatives that we 

consider for rural water. What we’re trying to do in the administration’s bill is make available, to those communities, the engineering 

expertise that we have and a programmatic approach to evaluating 

the needs, evaluating the proposed solutions, picking the best solution, and then implementing it, rather than it just being kind of 

a hit-or-miss-type operation now. 

But your question is, Would connection to Reclamation facilities 

be there? It would be there under any of those circumstances. 

Senator MURKOWSKI. We recognize, in Alaska, that when we’re 

talking about water, and clean, potable water, we’ve got some very, 

very serious issues. Our Indian Health Service estimates that approximately 20,000 households in American Indian communities 

and in Alaska native villages lack potable water supplies. Alaska 

and Hawaii clearly have some challenges, when it comes to their 

water supplies in rural areas, that I would suggest are equal to 

those in the Southwest. Given this need, why should we target 

water-supply development subsidies to only certain rural and small 

communities instead of opening up funding to other communities, 

such as those in Alaska and Hawaii? 

Mr. KEYS. Madam Chairman, the 1902 Reclamation Act only authorized Reclamation to work in the 17 Western States, and those 

14

other States that we have addressed with this legislation—certainly if your committee—subcommittee or the committee or Congress would like us to work with the other two States you mentioned, we would be more than happy to do that. 

Senator MURKOWSKI. I guess I would note that Alaska and Hawaii weren’t yet States when we had the Reclamation Act, but you 

wouldn’t be averse to considering such efforts in additional States 

if that was appropriate? 

Mr. KEYS. Madam Chairman, we would not. I would hasten to 

add that you would need to put that language in there to authorize 

us to do it, because currently we don’t have that authorization. 

Senator MURKOWSKI. I understand. Do you have a sense of the 

magnitude of the need for infrastructure rehabilitation, modernization, and development necessary to support the rural communities 

in the designated Reclamation States? 

Mr. KEYS. The only measure that I have right now are the number of projects that we are working on at the direction of Congress 

and those that have asked for help. Currently, we are working on 

16 of those projects—I’m sorry, 17—and we have had requests for 

aid in looking at others—from 33 or 34 other small communities. 

The large majority of those are Indian communities in the Western 

United States, so I think that’s an indication that there’s a large 

number of them out there that need that sort of help. 

Senator MURKOWSKI. So you just identify them by a specific 

project, then? 

Mr. KEYS. Yes. 

Senator MURKOWSKI. OK. As far as the dam safety issue, I understand that the administration recently made some policy decisions related to dam safety issues in an effort to provide for more 

local participation in the process, and I think we would all agree 

that local involvement in decision-making is a good thing. Can you 

explain the specific changes that were made with respect to allowing for local involvement? And can you address how these changes 

will allow for—just exactly that, for more local involvement and 

participation in the process? 

Mr. KEYS. Madam Chairman, in the past, it was almost like we 

had a black box, and we would go in there and decide what was 

the right thing to do with the dam, and come out and say, ‘‘This 

is what it is. And just give us your money, and we’ll build it.’’ Over 

the past year, we’ve developed a process so that the irrigation district or the entity that is involved in the repayment for that project 

is able to come in and attend the sessions where the different alternatives are discussed, and see different alternatives that could be 

implemented for the Safety of Dams fix. It does not mean that we 

give up the authority to decide which one is the right one to do, 

because ultimately the liability and responsibility is with Reclamation. But we can walk those project sponsors through the whole design and construction process so that they can see how much of 

their money it will take, how it will be used—in other words, how 

every penny of it will be spent, and then how the project will be 

operated after it’s done. 

I understand that Mr. Smith is going to propose an amendment, 

and we support that. There is a couple of issues that we’re trying 

to work through in trying to make this whole process transparent. 

15

The one issue is security. In other words, looking at some of the 

portions of those facilities that probably should not be in the public 

eye. The second part of it is trying to be sure that we don’t get into 

a dueling consultants situation where a district might hire a consultant to look at the fix, and come in and say, ‘‘We think it should 

be something different.’’ Those are two that we’re still trying to 

work through. 

But the ultimate goal in all that we’re doing there is to make 

that process transparent so that the project sponsors can see how 

the process operated, what is being proposed, what the alternatives 

are, and have the questions answered of why the final alternative 

was selected. 

Senator MURKOWSKI. Senator Bingaman. 

Senator BINGAMAN. Thank you very much. 

Commissioner, one of the key differences in the three bills that 

give the Bureau of Reclamation this new authority is that the bill 

Senator Dorgan and I and Senators Baucus and Daschle have proposed authorizes the Bureau to undertake appraisal level and feasibility studies. It does not, then, also say that the Bureau can go 

ahead and construct projects, absent a separate authorization by 

Congress. I think what we were trying to do was to follow what I 

understand has always been the practice, and that is that each individual rural water project would have to be authorized by legislation out of the Congress so that it wouldn’t be totally up to the appropriators which efforts were pursued. Is that a big difference between what we are proposing and what you believe ought to happen? If so, how do you explain your position on that? 

Mr. KEYS. Mr. Bingaman, that is not different than what we are 

proposing. We’re proposing the same thing, that we work with the 

local folks on appraisal-level studies and feasibility-level studies. 

And then once we have decided with them on what approach to 

take, we come back to this committee for—or to the Appropriations 

Committee—we come back here for authorization, and then we go 

to the Appropriations Committee for funding. 

Senator BINGAMAN. So you’re in agreement with what we are trying to accomplish on that particular issue. 

Mr. KEYS. On that particular issue, we absolutely agree. 

Senator BINGAMAN. OK, that’s very helpful. 

Madam Chairwoman, let me put in a statement that the Navajo 

Nation has provided to us, if we could just include that in the 

record related to this hearing. 

Senator MURKOWSKI. That will be included. 

Senator BINGAMAN. Let me also ask, very briefly, about another 

bill that you testified on here that is a subject of the hearing. This 

is more a statement than it is a question, but in your testimony 

on S. 1791, you referenced this ongoing litigation that exists between the Bureau of Reclamation and the Elephant Butte irrigation district. Your assessment of the decisions that have been rendered by the District Court and the Tenth Circuit Court differ from 

what my staff tells me we understand those opinions to hold. So 

what I’m going to do is to develop some questions that I can submit 

to you for the record, and maybe get clarification as to exactly how 

we do disagree on this, and see if there is a way to resolve that. 

16

Mr. KEYS. Mr. Bingaman, we would be more than happy to do 

that. I would tell you that it’s a long and complicated history there, 

and we would certainly try to work with your questions to work 

through that to answer them. 

Senator BINGAMAN. OK. Well, thank you very much. I think it 

is important that we try to clarify if we do have a real disagreement about what those decisions decided. 

Thank you very much, Madam Chairman. 

Senator MURKOWSKI. Senator Dorgan. 

Senator DORGAN. Commissioner, based on your answer to Senator Bingaman, I assume, then, you would not object to our adding 

to S. 2218 a provision of the type that exists in our legislation S. 

1085 requiring the Secretary to develop a plan to ensure that the 

already authorized projects are completed within the timeframe set 

forth in the authorizing legislation. The reason I ask that question 

is this. If we’re going to talk about new projects, we have eight 

rural water projects in North Dakota underway. The NAWS 

Project, for example, which scores 84 on the so-called ‘‘PART analysis,’’ has been recommended for no funding last year, not enough 

funding this year. You’ve got a crease in your loafers, I think, from 

the shovel that—didn’t you wield a shovel in Minot 1 day when we 

shoveled some dirt to have the groundbreaking for this wonderful 

NAWS Project? You did pretty well with a shovel, by the way, but 

we did the groundbreaking. It is a great project, by all accounts. 

Then we get no funding recommended last year. We had to add it 

here in Congress, and less-than-adequate funding this year. 

The proposition that Senator Bingaman asked you about is very 

important. Do you believe that we ought to proceed with the authorized projects that are good projects, and complete them? And 

if so, would you object to our putting a provision into S. 2218 that 

is similar to the provision we have in our bill, S. 1085? 

Mr. KEYS. Mr. Dorgan, S. 2218 does not affect those that are already authorized. This is a way for us to deal with the needs in 

the future. Those that are already authorized——

Senator DORGAN. I understand that. That’s not my question. 

Mr. KEYS. I understand. Those that are authorized, we are working diligently to get them done as quickly as possible with the 

funding and the means that we have. Certainly, we’re willing to 

work with you on this kind of provision. I could not speak—let me 

just say that we will work with you on a provision to do what 

you’re trying to get done. 

Senator DORGAN. Well, Mr. Commissioner, I would intend to 

offer an amendment when we mark up this legislation to do just 

that. The people in the city of Minot are paying a 1-percent sales 

tax for the purpose of developing the local cost-share for NAWS. 

We’ve got people paying up to a $750-per on a hookup charge, waiting for water from NAWS. And then, last year, we opened the 

President’s budget, and he says, ‘‘Oh, by the way, that project for 

which Commissioner Keys shoveled the dirt at the groundbreaking, 

we recommend zero funding.’’ And I asked why. Well, they’ve got 

this goofy thing called PART, and everyone understands that this 

project would pass every test—and, of course, it has—under PART. 

So you can understand my frustration and the frustration of the 

people of North Dakota. Mr. Koland is going to represent that in 

17

his testimony, and he has every right to be frustrated and upset 

by this spending pattern, or the pattern of underfunding that 

which we have been promised. 

So I really hope you will support our putting an amendment on 

S. 2218 that does exactly what we want to do in our bill. 

Mr. KEYS. Mr. Dorgan, we’d be glad to work with you. 

Senator DORGAN. Let me just mention briefly—you know that 

with the problem of both a drought and then also the mismanagement of the Missouri River by the Corps of Engineers, we’ve threatened to lose water for the city of Parshall in February. Your agency 

was very involved in extending the line. We actually lost water for 

8,000 people down in the Fort Yates area. And I introduced a piece 

of legislation that would take the management of the Missouri 

River system away from the Corps of Engineers and give it to the 

Bureau of Reclamation. And it had nothing to do with my abiding 

affection for the Bureau. I have plenty of problems with the Bureau. But I was just trying to send a message to the Corps of Engineers that, ‘‘If you continue this mismanagement, you ought not be 

managing this river system.’’

So that’s a long way of saying thank you for what you’ve done. 

I should say to you that your men and women of the Bureau, down 

in Fort Yates, did a heroic job. Working, incidentally, over the 

Thanksgiving break. I was down there. These are terrific employees, and they deserve, I’m sure you’ve probably given them, a real 

big pat on the back. But your agency did terrific work in Fort 

Yates, and you did terrific work to help get a water supply assured 

so that Parshall wouldn’t lose it in February. 

But that’s a mouthful simply to say we’ve got a lot of problems 

out there, and we really need your agency to work with us. We had 

this interminable delay on the studies on the Red River Valley 

water supply. I mean, we’re 3, 4 years late on that, as you know. 

So, Mr. Commissioner, thanks for being here. Work with us on 

these issues. Let’s get these water projects funded. If we’re going 

to authorize them, if they’re good projects, and if we’re going to 

shovel some dirt for the groundbreaking, let’s build them and get 

them done. 

Mr. KEYS. Mr. Dorgan, I absolutely agree with you, there’s a lot 

of problems out there. Those projects that are already authorized 

mount up to about $2.3 billion. And certainly we’ll work with you 

on a way to try to get there. The PART exercise again demonstrated the need for a systematic approach to those that need 

help in the future, and that is what S. 2218 is trying to address. 

Senator DORGAN. Madam Chairman, I guess we have 6 minutes 

left in this vote. If you intend to recess——

Senator MURKOWSKI. I think what we would like to do at this 

point—Commissioner, thank you for your testimony this afternoon, 

and for fielding the few questions. We will take a brief break here 

from the record, and will come back to the second panel. 

So give us a few minutes here, and we’ll be back to join you. 

Thank you. 

[Recess.] 

Senator MURKOWSKI. Let’s go back on the record, please. 

Our second panel this afternoon will be speaking about the three 

water bills, and presenting views on a comprehensive program. We 

18

were originally supposed to have Mr. Jim Dunlap, from New Mexico, who was representing the National Rural Water Association, 

but we were notified that his plane was canceled in Albuquerque 

this morning, so he’s not able to be with us today. But we have Mr. 

Mike Keegan, with the National Rural Water Association, presenting comments on behalf of Mr. Dunlap. And I would also like 

to welcome Mr. David Koland, manager of the Garrison Diversion 

Conservancy District, in North Dakota. 

So, gentlemen, welcome. And, Mr. Keegan, if you would like to 

begin with your testimony, please. 

STATEMENT OF MIKE KEEGAN, APPEARING ON BEHALF OF 

JIM DUNLAP, REPRESENTING THE NEW MEXICO RURAL 

WATER USERS, AND THE NATIONAL RURAL WATER ASSOCIATION 

Mr. KEEGAN. Thank you, Madam Chairwoman. 

My name is Mike Keegan. I’m an analyst with the National 

Rural Water Association, a nonprofit association with over 23,000 

small rural water suppliers. All of these communities join me in 

thanking you and the committee for the support you’ve given us 

and our efforts to improve and protect our drinking water. 

As you mentioned, I’m here because our past president of the association, Jim Dunlap, had his flight canceled in Albuquerque early 

this morning. Thank you for allowing me to pinch hit for Jim, and 

I’ll summarize the key points of Jim’s prepared testimony. 

Rural and small communities strongly support both bills S. 1085 

and S. 1732 and their objective of having the Bureau of Reclamation fund more rural water development. We believe the bills rightly expand the Bureau’s historical mission to accomplish more rural 

water development for drinking water supplies. The key points we 

would like to make today with regard to the bills are—there is a 

great need in the West. 

The nexus of the following three realities is resulting in a problem that merits additional Federal water development assistance. 

These realities include the fact that many U.S. rural households 

don’t have decent, if any, water service. This number is estimated 

from two to five million households. 

Second, unfunded mandates disproportionately impact rural 

households, and these mandates are increasing. I have handed out 

this map that shows this trend, with EPA’s recent Arsenic Drinking Water role. This map shows approximately 15 percent of the 

counties had water supplies that violate the EPA standard. The 

green counties have a medium household income above the national median. The red ones have incomes below the national median. The map indicates that most of these communities facing 

compliance costs will be rural for arsenic, most will be in the West, 

and most will be comparably lower-income counties. In the coming 

years, EPA will begin to enforce the arsenic rule, the uranium rule, 

the disinfection byproducts rule, the radon rule, the groundwater 

rule, and many others that will cause tremendous strain on local 

communities. 

The third reality is quantity, the fact that many rural areas in 

the West have never had adequate water supplies. With regard to 

funding, we believe that any enterprise needs adequate annual 

19

funding, and we are suggesting an annual amount similar to the 

Department of Agriculture or the EPA’s water funding appropriations, which are routinely funded at approximately $600 to $900 

million annually. Currently, these two efforts are not meeting demand. We can conclude this because only communities that meet 

a strict economic and public-health need assessment can qualify for 

a USDA grant. And even with this limited factor, USDA currently 

has over $2 billion backlog in eligible funding. 

I handed each of you a list of communities in your State—it’s the 

red-covered document—that received USDA water funding last 

year. And Alaska is on the front page. So you can see how far a 

$700 million national program goes when disbursed among the 

states. 

Our last key point on the bill is, we would like to acknowledge 

that water development under the Bureau is unique in nature. Bureau development has tended to be large and regional, allowing 

communities to share one central supply, treatment, and distribution system. No other Federal agency has this unique mission or 

the Bureau’s history and experience with western water issues. 

I will close and, once again, thank you, Madam Chair and the 

committee, for its continued assistance. It is appreciated. Thank 

you very much. 

[The prepared statement of Mr. Dunlap follows:]

PREPARED STATEMENT OF JIM DUNLAP, BOARD MEMBER, UPPER LA PLATA WATER

DISTRICT, NEW MEXICO RURAL WATER ASSOCIATION, AND THE NATIONAL RURAL

WATER ASSOCIATION

Mr. Chairman, my name is Jim Dunlap and I am a Board Member of the Upper 

La Plata Water District, the New Mexico Rural Water Association, and the National 

Rural Water Association. I am a rancher, a farm equipment store owner, and I am 

currently the Chairman of the Interstate Stream Commission for the State of New 

Mexico. All of these organizations and every state rural water association join me 

in thanking you and this Committee for the support you have given our rural and 

small communities in our efforts to improve and protect our drinking water. We also 

appreciate the opportunity to testify before the Committee on the Senate bills to assist rural families to enhance water supplies through the Bureau of Reclamation (S. 

1085 and S. 1732). 

I cannot tell you how happy I am to have two Senators, with separate party affiliations, each with original legislation, holding the chair and ranking positions on this 

committee—working to better rural America’s water—and looking at the Bureau as 

an agency to do it. I may be out of my league on how to successfully heap praise 

and appreciation on both of you simultaneously and just want to make it clear that 

if there are any disagreements between the Senators from New Mexico on how to 

craft this legislation—I agree with both of you. 

Mr. Chairman, I strongly support the objective of having the Bureau fund more 

rural water development. The six key points I want to make today with regards to 

S. 1732 and S. 1085 are:

1. There is a great need of public health, economic viability, and compliance for 

additional financial resources for rural water development. 

2. In certain circumstances, it is more cost-effective to develop large region water 

supplies as opposed to multiple local supplies. 

3. The Bureau of Reclamation should get into rural water development as they 

have a unique mission not accomplished by other federal agencies (namely the U.S. 

Department of Agriculture and the U.S. Environmental Protection Agency). 

4. The unique situation of rural communities should make them the priority for 

federal assistance for drinking water. 

5. Please consider a local or independent process that could determine cost, feasibility, coordination and planning in the legislation. 

6. Due to the unique federal mission proposed in the bills, any new water initiative within the Bureau of Reclamation should include significant annual appropriaVerDate 0ct 09 2002 15:06 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 P:\DOCS\94937.TXT SENERGY3 PsN: SENE3
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tions—comparable to EPA’s approximately $800 million state revolving fund and 

USDA’s approximately $700 million loan and grant effort.

There is a great need for public health, economic viability, and compliance for additional financial resources for rural water development. 

The nexus of federal unfunded mandates, the fact that many rural areas have 

never had adequate water supplies, the shortage of local water supplies in the west, 

and need for a reliable water supply to attract and maintain any rural economic 

health reflects a great need for additional rural water development. 

According to the USDA at least 2.2 million rural Americans live with critical quality and accessibility problems with their drinking water, including an estimated 

730,000 people who have no running water in their homes (USDA study available 

on the internet at www.ruralwater.org/water2000.pdf). About five million more 

rural residents are affected by less critical, but still significant, water problems, as 

defined by the federal Safe Drinking Water Act. These problems include undersized 

or poorly protected water sources, a lack of adequate storage facilities, and antiquated distribution systems. Today, many rural families are still hauling water to 

their homes and farms. In La Plata County, Colorado—an area near my home that 

we are trying to organize in to a rural water district, lack of water is forcing hundreds of families to haul water for their home use and their livestock. Their wells 

and springs are drying up due to the drought. 

Rural Americans have been living with inadequate water conditions that large 

communities could never imagine. For example: the Village of Hatch, New Mexico 

is located on the west side of the Rio Grande River in Don ̃ a Ana County. The County is in southern New Mexico borders both the State of Texas and the Republic of 

Mexico. Hatch is in northern Don ̃ a Ana County approximately 40 miles north of Las 

Cruces, the county seat and a community of over 130,000. The large metropolitan 

area of El Paso, TX—Juarez, Mexico lies 80 miles to the south. 

Hatch is an incorporated community with a population of 1 136 per the 1990 census, however, the current estimated 1997 Village population is 1550. Due to the seasonal nature of agriculture, the main economic base, the population fluctuates as 

migrant laborers move in and out. The Village operates a community water system 

serving the Village and outlying rural areas including approximately 799 residents 

residing in the two ‘‘Colonias’’ known as Rodey and Placitas. The total population 

served by the water system is estimated at 2500. Over 75% of the population consists of minorities, primarily Hispanics. Projected population in the service area by 

the year 2010 is 3570. 

There is one health clinic, funded by the former Farmers Home Administration, 

two grocery stores, seven restaurants, a post office, two bank branch offices, two 

convenience stores, one motel, one public laundry, and several other retail and service-related businesses. Average income is extremely low as the 1990 census shows 

a Median Household Income (MHI) of 512,975 well below the National Poverty Line 

of 516,050. The New Mexico Statewide Non-Metropolitan MHI is $21,656. 

Rural Utilities Service (RUS) recently funded a water system improvements 

project to add additional storage capacity and run transmission lines directly from 

the storage tanks site to Placitas and Rodev. Before this project. water ran from the 

tanks to Hatch’s distribution system, and then back uphill to the two Colonias. During summer peak usage, the Colonias experienced zero water pressure. The RUS 

project corrected this situation. Hatch, along with the Colonias, received the direct 

benefit of the additional storage. 

Small communities are often in the greatest need, lacking the technical resources 

to comply with federal mandates because of their limited economies of scale and 

lack of technical expertise. Of the approximately 54,000 community water systems 

in the country, more than 50,000 serve populations under 10,000.

U.S. COMMUNITY WATER SYSTEMS SIZE BY POPULATIONS 

[Source: U.S. EPA] 

500

or less 

501 to

3,300

3,301 to 

10,000

10,001 to 

100,000

Over

100,000 Total 

No. of systems .................. 31,262 14,241 4,498 3,432 350 53,783

Percentage of Systems .... 58 26 8 6 1 100

Due to a lack of economies of scale, small-town consumers often pay high water 

and sewer rates. Water bills of more than $50 per month are not uncommon in rural 

areas. At the same time, the rural areas have a greater percentage of poverty and 

21

lower median household income. This results in a very high compliance cost per 

household in rural systems coupled with an increased inability to pay. 

Each year the list of regulations grows and the burden increases on small communities. Next year, we are facing new regulations on arsenic (92 Federal Register 

pages), radon (134 Federal Register pages), and an expanded ground water treatment rule (82 Federal Register pages) in addition to the over 80 regulations (40 CFR 

parts 141-42) that are currently on the books. 

Drinking water regulatory requirements affecting small drinking water systems 

have steadily increased since enactment of the Safe Drinking Water Act (SDWA) in 

1974. Not only has the number of regulated contaminants increased, but also regulations have also increased in complexity. As each new regulation is implemented 

by EPA small water systems face a compounding effect. That is, compliance with 

one particular regulation may be much more difficult as a result of one or more 

prior regulations, or one or more future regulations. Currently, National Primary 

Drinking Water Regulations (NPDWRs) are set for 92 contaminants. These include 

turbidity, 8 microbials or indicator organisms, 4 radionuclides, 19 inorganic contaminants, and 60 organic contaminants. Maximum contaminant levels (MCLs) have 

been set for 83 contaminants and 9 contaminants have treatment technique requirements. USEPA’s Office of Ground Water and Drinking Water (OGWDW) is currently 

in the process of developing new regulations as required by the SDWA. Future rules 

intended to control microbial risks include:

• Long-Term 1 Enhanced Surface Water Treatment Rule (LT IESWTR) 

• Long-Term 2 ESWTR 

• Ground Water Rule (GWR)

Future rules intended to control chemical risks include:

• Arsenic 

• Radon 

• Stage 2 Disinfection Byproducts (DBPs) 

• NPDWR Revisions 

• Drinking Water Candidate Contaminant List (DWCCL)

The EPA list of communities that are likely to be out of compliance with the arsenic rule can be found on the internet at: www.ruralwater.org/arsenicus.xls. 

In certain circumstances, it is more cost-effective to develop large region water supplies as opposed to multiple local supplies. 

The reason—that over 9 out of every 10 U.S. water supplies serve populations 

under 10,000 people—it has historically been more economical to build smaller utilities than expand larger ones. The cost of running main lines a few miles can be 

cost prohibitive. However, in certain circumstances, it is more cost effective (especially over the long-term) to build larger or region water supplies. The factors that 

are used in making these complex discussions include future regulations which may 

require centralized treatment, the need to share one supply that may be far from 

many of the communities, the need for a distribution system to share water rights, 

projected growth, economic planning, etc. 

For example, the regional Rocky Boys rural water supply, authorized by Congress 

for Bureau construction will allow many smaller communities to comply with the 

EPA’s Surface Water Treatment Rule which they can’t afford on their own, it will 

ensure long-term supply to numerous communities that currently lack quality supplies, it: will provide an economy of scale for future regulations like disinfection byproducts, and it will ensure the need infrastructure for those local economies. 

Another example is the Navajo-Gallup pipeline project in New Mexico. This is a 

project to supply much needed drinking water to the Navajo Reservation, parts of 

the Jicarilla Apache Indian Reservation and to the city of Gallup. This will involve 

41 Chapters in New Mexico and two Chapters in Arizona (a Chapter is similar to 

county government). It will involve a population of some 98,000 people utilizing 

38,000 acre—feet of surface water and 4,000 acre feet of ground water. The project 

will start from Farmington, NM with a 48-inch pipeline and extend to the community called Yah Ta Hey, which is adjacent to the City of Gallup. This pipeline %will 

be approximately 520,000 feet with laterals to Window Rock, Arizona and 

Crownpoint, New Mexico, with lateral extensions of 388,000 feet. There will be a 

separate lateral extending from Cutter Dam to Pueblo Contado and Ojo Encino. 

This lateral will be approximately 400,000 feet in length. 

In my own experience, we are currently organizing a variety of regional interests 

with water supply problems that can only be solved through a regional system. This 

ad hoc effort is looking at a solution for:

• The City of Durango, Colorado, which has supply issues and is growing rapidly. 

22

• An unincorporated area in La Plata County, Colorado where families up on the 

Red Mesa are hauling water to their houses • The Animas La Plata Conservancy which includes homes that need domestic 

water and has domestic water rights they cannot use because of a lack of a distribution system • The Upper La Plata Rural Water District that has 564 homes and needs additional supply. • In New Mexico, the La Plata Conservancy District has M&I water that can only 

be used for that purpose.

Due to the complexity and variety of the problems in each of these communities—

the only real solution is a regional cooperative effort. In this example, it is critical 

to note that the unused municipal and industrial water rights held by the conservancy could be used by the other communities if there was a large distribution system to move the drinking water. 

The Bureau of Reclamation should get into rural water development as they have a 

unique mission not accomplished by other federal agencies (namely the U.S.

Department of Agriculture and the U.S. Environmental Protection Agency). 

In the New Mexico-Colorado example provided in the previous section, there is no 

federal or state agency with the mission of looking at this type of project. We are 

organizing the parties as an ad hoc project and using local funds to do the planning. 

This project includes two states, multiple communities, conservancy districts, and 

unincorporated areas. Such a project does not fall within the USDA’s rural water 

program guidelines for area and density of users. The list of communities funded 

last year by USDA is available on the internet at www.ruralwater.org/report2003. 

This program is truly the most successful rural public health and economic development program in the country. It was the reason piped water came to my community 

in 1966. It needs to be continued and funding needs to be increased, however, it 

has its own mission and it currently cannot meet the demands of the communities 

that fit into its guidelines. 

I believe your bills create a new federal agency mission to assess and fund the 

type of project needed in New Mexico-Colorado and the rest of the western states. 

If projects would better fit in the USDA program or the EPA program then they 

should be referred to those agencies. However, it is clear to us working in the western states that there currently is no program to meet many of these pressing water 

problems. 

The unique situation of rural communities should make them the priority for federal 

assistance for drinking water. 

Many water organizations have been petitioning Congress for additional water infrastructure funding through increased authorizations and appropriations in EPA 

and the Bureau. However, rural communities face greater economic and often greater public health need than most of these organizations. No large community consumer pays $100.00 a month for drinking water service. However, in the western 

states, this is not uncommon in rural districts. 

Also, compliance costs are typically much higher in smaller utilities. For example, 

Desert Sands water district in Anthony, New Mexico formed a water association 

more than two decades ago that finally provided clear water. However, to comply 

with the new arsenic rule, their estimates show customers’ monthly water bills 

would at least triple under the new standard. The average bill last July was $32.18 

per household. An Associated Press article (www.ruralwater.org/desartsands.htm) 

showed that one of the district’s wells contained arsenic at 10.4 ppb and that ‘‘many 

Desert Sands customers are factory or farm workers who live in wind-beaten mobile 

homes or modest frame houses on small, sandy, treeless lots separated by rickety 

metal fences. The sand that blows across the flat desert is deep enough in some of 

the area’s unpaved roads for cars to get stuck.’’ Affording a rate increase of three 

fold will be dramatic to say the least. 

We believe both bills recognize this unique situation of rural America and the cost 

of providing safe water service. We are grateful for this recognition and the bills’ 

attempt to ameliorate this situation. 

Please consider a local or independent process that could determine cost, feasibility, 

coordination and planning in the legislation. 

Both bills represent a significant step forward in addressing the enhancement of 

rural drinking water supplies. Both bills provide for a new authorization for the Bureau to study opportunities to construct rural water projects and report back to Congress on feasible projects for funding—through the Congressional appropriations 

process. We think this is the proper way to try to identity feasible projects. HowVerDate 0ct 09 2002 15:06 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6621 P:\DOCS\94937.TXT SENERGY3 PsN: SENE3
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ever, we would urge the Committee to include an additional process that would act 

as an incentive for the Bureau to develop cost-effective projects in a timely manner. 

Please consider allowing for the submission of studies and feasible projects to Congress (through the Bureau) published by the local organization to Congress at any 

time. This option for local advocacy would serve as an incentive for the Bureau to 

work cooperatively with the locals. If the local organizations and the Bureau had 

different options on which projects were feasible and how they should be designed, 

Congress would be provided both options—and the Bureau would be able to comment on any local plan/study submitted to Congress. This would also serve as an 

incentive to move projects through the process in a timely manner. It appears that 

there is no limit to the time the Bureau could take on studying and analyzing various projects. We would also urge you to allow for the option of having the local organizations do the up front work on planning, financing, cost sharing, and feasibility 

of projects. Perhaps small planning grants could be made to local organizations to 

plan and study projects to determine feasibility and submissions of projects back to 

Congress. Such grants could be made by the Bureau utilizing a discretionary 

amount of program money—or they could be made to individuals through the appropriations process. In such cases, the Bureau would be intimately involved in the 

studies through their oversight authorities, but the locals could control more of the 

scope and process of the studies to promote timeliness and economic consideration. 

Any new initiative within the Bureau of Reclamation should include significant

annual appropriations. 

Thank you Senator Domenici and Senator Bingaman for introducing these two 

bills. Rural America is grateful. I appreciate the details and thought that went into 

both bills that seek to find the best ways to divide up the intergovernmental responsibilities to plan, design, build, and fund public drinking water supplies under the 

federal umbrella. I have over 30 years experience dealing with the various levels 

of government and the various federal funding agencies. I have learned that it can 

be a long, complicated and bureaucratic process. Rural communities sincerely appreciate the thought that went into both bills to design the most efficient process, balanced with need for adequate oversight to ensure funds are well spent. We support 

the effort to craft legislation that will allow the Bureau to fund the water supplies 

that evolve from the studies and assessments. The main ingredient in a successful 

Bureau of Reclamation drinking water initiative will be a commitment from the federal government to a significant amount of annual appropriations. When communities see funding available to solve their compliance, supply, and rural public 

health needs—they will put it to sound use immediately. The agency will come to 

be known as a solution to immediate and long-term water challenges. We will see 

dramatic public health improvements; farm families receiving clean water for the 

first time, entire regions that have been out of compliance for years developing solutions, and intractable western water arguments being settle with communities moving forward. This has happen under the Bureau’s direction in ad hoc manners in 

some western states. We encourage the committee to change this and make the Bureau a permanent and recognized solution to some the county’s most challenging 

water issue by establishing an authorization for annual funding comparable to the 

USDA and EPA. 

BACKGROUND ON STATE RURAL WATER ASSOCIATIONS

Each state rural water association membership is comprised of small non-profit 

water systems and small towns. All members have water supply operation as their 

primary daily activity. Membership averages about 400-500 communities per state, 

with systems from all geographic areas of each state. These are active members—

who continuously participate in the training and technical assistance program in an 

effort to improve their drinking water. This program actively assists all small water 

systems whether they are members of the state association or not. With a significant turnover in water operators and board members—and the ever-increasing regulatory burden—the need for training and technical assistance remains constant. The 

problem with delivering safe drinking water is that improving drinking water in 

small communities is more of a RESOURCE problem than a REGULATORY problem. Every community wants to provide safe water and meet all drinking water 

standards. After all, local water systems are operated by people whose families 

drink the water every day, who are locally elected by their community, and who 

know, first-hand, how much their community can afford. Without the support of 

local people, regulations alone won’t protect drinking water. Many small communities rely on volunteers or part-time administrators to operate their local watersupplies. 

24

In my personal experience, two teachers, four farmers, one banker, and a group 

of kids from the Future Farmers of America acted locally to bring the first piped 

drinking water to my part of San Juan County in 1966. I was one of the two teachers. The community had been relying on ground water from individual shallow wells 

contaminated with minerals, oil, and methane gas for their farms and some household uses. Safe water used for drinking needed to be hauled in from town. We organized the 175 families in the area to incorporate a small rural water system and 

accept responsibility for repaying a 420 thousand-dollar start up loan from the U.S. 

Department of Agriculture’s Farmers’ Home Administration. At that time we did not 

have enough people to meet the threshold for population density to repay a loan, 

so a few of us accepted more than one water meter on our property. It was all the 

community could do to make the payments on the loans and the operations and 

maintenance of the systems was taken care of by community volunteers. Today, we 

have over 2,500 families on the system that has allowed for economic development 

in the area with over 100 new taxable businesses. 

MISCELLANEOUS COMMENTS: THE ARSENIC ISSUE

Please provide relief to small and rural communities and their low-income citizens 

from overly burdensome EPA drinking water regulations. Specifically, we urge you 

to include a prohibition on enforcement and implementation of EPA drinking water 

rules for naturally occurring substances regulated for long-term exposure for small 

communities (less than 10,000 population) until EPA identifies a reasonably affordable treatment process for small communities. This probation could be limited to 

only the communities that EPA is not providing the funding necessary to comply. 

EPA is authorized to allow small communities to utilize a special ‘‘affordable’’ technology to comply with EPA standards because they are determined by what is economically ‘‘feasible’’ for a large community. This use of a comparably affordable 

technology for small communities seems only fair for standards based on the feasibility of large communities. However, to date, EPA has not allowed any small community the opportunity to use affordable variance technology because EPA adopted 

a policy that rural and small community families can afford annual water rates of 

2.5% of median household income (MHI) or $1,000 per household. We do not think 

rural families, especially low-income populations, can afford up to 51,000 a year in 

water rates. Consumer advocates see such precipitous rate increases resulting in 

families being forced to choose between paying for medical care, food, heat or other 

necessities that directly impact public health. 

The 1996 Safe Drinking Water Act (SDWA) mandated that EPA start to regulate 

these naturally occurring chronic substances (including radon, radionuclides, uranium, arsenic, disinfection by-products, etc.). This was a new direction from EPA’s 

historical focus on contaminants that are introduced to drinking water supplies 

through pollution like manufacturing solvents and pesticides. EPA, either by questionable agencies decision or an unclear authorizing statue, is promulgating inflexible regulations for these substances that the communities do not support and believe result in a misallocation of their limited public health budgets. The way EPA 

wrote the arsenic rule, a small low-income community with an arsenic level just 

above the 10 parts per billion standard (i.e. 10.5 parts per billion) is treated the 

same as a large wealthy community with an arsenic level four times the standard 

(40 parts per billion). Treatment for small communities could triple water rates for 

an arsenic level that is not appreciably more risky than EPA’s standard. 

In the last few months, PBS, the New York Times, National Public Radio, and 

60 Minutes all did exposes on the plight of low-income populations in the U.S. These 

features covered the reality of the difficulty of these economically sensitive subpopulations to afford housing, food, medical care and obtaining employment. They 

also brought to light real people and families in dire economic situations. The documentaries highlighted increasing rates of unemployment in minority populations, 

housing expenses increasing at uncontrollable rates, and families avoiding medical 

care to pay for other expenses necessary for survival. 

The occurrence of these naturally occurring substances has been with us (and the 

populations regulated) since time immemorial. Many of the communities think these 

issues are local acceptable conditions and would never chose to spend the compliance cost if they were given the local choice. Also, no travelers among the states 

would be put at any increased risk for two very important reasons; (1) this has been 

the condition of the country for the eternity of all of our lives, and (2) these substances are only being regulated as a matter of chronic health effects which means 

the possible effects of massive daily ingestion of water over a 70-year period. The 

levels have no relationship to temporary ingestions that any traveler would experience. 

25

Many interest groups petition this Congress to authorize more and more, everstringent federal unfunded mandates on small communities with the intention of 

improving public health on the communities’ behalf. Unfortunately, this does not 

work and things are not that simple. The key to long-term improvement is local support, local education and available resources. We continually ask for the list of the 

small communities that need to improve their drinking water and are not willing 

to take the steps to do it. Such a list does not exist. The problem has been that 

small communities do not support most of these policies at the local level because 

they waste limited resources on non-priority projects. 

In addition to EPA’s lack of understanding to the realities of rural community economics, we are seeing a disturbing pattern in the evolution of science on the health 

effects of arsenic in drinking water. The NAS’s National Research Council study of 

arsenic health effects that EPA based its decision to regulate arsenic called for additional health effects studies to clear up the uncertainty of the health effects of lower 

levels of arsenic exposure in drinking water. Since that conclusion, the following 

four studies have been published in peer-reviewed scientific journals. All four studies reached conclusions contrary to the EPA’s determined health risk from arsenic 

in drinking water. All four rely on data from U.S. populations and low levels of arsenic exposure—similar to the levels found in U.S. drinking water supplies. Two of 

the studies seem to reject the conclusions in the two core studies (Argentina and 

SW Taiwan Studies) that EPA relied on to decided on the current standard. The 

study that seems to reject the original Argentina study, that EPA relied on to call 

for lowering the standard, is by the same author/scientists—Dr. Allan Smith. In his 

new recent study (No. 4 below), Dr. Smith, et al., found, ‘‘no evidence of association 

with exposure estimates based on arsenic concentrations in drinking water.’’

1. Bladder Cancer and Arsenic Exposure: Southwest Taiwan, Lamm, Byrd, Kruse, 

Feinleib, and Lai—Biomedical and Environmental Sciences (2003) 

2. Arsenic in Drinking Water and Bladder Cancer Mortality in the U.S., Lamm, 

Engel, Kruse, Feinleib, Byrd, Lai, Wilson, & Phil—Journal of Occupational and Environmental Medicine (2004) 

3. Case-Control Study of Bladder Cancer and Drinking Water Arsenic in the 

Western United States, Steinmaus, Yuan, Bates, and Smith—American Journal of 

Epidemiology (2003) 

4. Case-Control Study of Bladder Cancer and Exposure to Arsenic in Argentina, 

Bates, Rev, Biggs, Hopenhayn, Moore, Kalman, Steinmaus, and Smith—American 

Journal of Epidemiology

As a small community elected official in charge of leading the public health interests of my community, I find it hard to tell people they need to spend their limited 

dollars on risks that we are learning are not as dangerous as portrayed. How can 

we are responsible local leaders, morally let this happen?

Senator MURKOWSKI. Thank you, Mr. Keegan. 

Mr. Koland, your testimony, please? 

STATEMENT OF DAVID J. KOLAND, MANAGER, GARRISON 

DIVERSION CONSERVANCY DISTRICT, CARRINGTON, ND 

Mr. KOLAND. Madam Chairman, members of the subcommittee, 

thank you for the opportunity to testify on the rural water bills 

being considered by your committee. 

My name is Dave Koland. I’m the manager of Garrison Diversion 

Conservancy District, headquartered in Carrington, North Dakota. 

The provision of a high-quality reliable water supply has been 

changing the face or rural America. A reliable, safe drinking-water 

supply has helped stabilize the population of rural counties, afforded additional opportunities for economic development, and provided a better quality of life for our citizens. We have learned much 

during the last 30 years, as the concept of a rural water system has 

evolved, from providing safe drinking water for single-family rural 

households, to sophisticated regional water systems. 

A Federal policy that guides the orderly development and timely 

construction of this rural infrastructure will benefit all our citizens. 

That policy should provide that the currently authorized projects be 

26

completed without further costly delays. A sound Federal policy 

must honor the commitments that were made to the tribes and the 

States, such as North Dakota, that have endured a 50-year flood 

to provide flood protection to downstream States. That Federal policy should acknowledge that many projects and program have already undergone extensive study and review, and should not be required to duplicate those efforts or embark on additional studies. 

A Federal policy should also provide that the required reports can 

be developed by entities other than the Bureau of Reclamation, to 

aid in reducing the timeframe within which the project can meet 

the needs of the local sponsor. A sound Federal policy should be 

able to accommodate State policy when establishing eligibility criteria for developing a rural water infrastructure. A Federal policy 

should not encourage the displacement of agricultural use to the 

detriment of the economic base of rural communities by offering additional incentives for the conversion of water rights from irrigated 

agriculture to municipal water use. 

In my written testimony, I summarize the steps outlined that are 

practiced by the State of North Dakota in administering a statewide municipal, rural, and industrial program. This partnership 

between the Federal Government, State government, and the local 

sponsor has resulted in an astounding success story. Thousands of 

rural North Dakota citizens now have a reliable supply of safe 

drinking water. Every single rural water system built in North Dakota is still operating, paying their debts, maintaining their systems, and providing for additional growth with internally generated revenue. 

Let me direct your attention to some specific questions regarding 

the legislation being considered. 

What is the expectation of this new process for projects currently 

under construction? It is our view that North Dakota’s MR&I program is outside the new process that is being contemplated by Congress. Section 3 of S. 2218 makes no mention of currently authorized projects or how this legislation would impact the current rural 

water projects. In my view, the legislation should clearly state that 

the currently authorized projects should be completed, or a reasonable and prudent timetable for completion endorsed, before construction on any new projects is allowed to commence. Section 3 

should also reference the Federal trust responsibility to Indian 

tribes that were forced to move when the Pick-Sloan dams were 

constructed on the Missouri River. 

In section 5, what is the definition of an appropriate water conservation measure that would be applied to a family that is hauling 

every drop of water that is used for drinking, bathing, washing 

clothes, and other household uses? Section 5 of S. 2218 seems to 

preclude the blending the various forms of project financing that 

are available to communities now. 

Section 6 is also unclear, in that it establishes the responsibility 

of oversight by the Federal Government be paid by the local sponsor. Section 6 could be enhanced by providing that revenue from 

the sale of water off the reservation could be used for the operation 

and maintenance and replacement costs that are now borne by the 

Bureau. The challenge we jointly face is how to streamline the 

27

* Appendixes A and B have been retained in subcommittee files. 

process of providing water where it is needed before the people we 

intend to serve must move elsewhere. 

The North Dakota MR&I program is a successful model that has 

worked for North Dakota. The cost-effective partnership of local 

control, statewide guidance, and Federal support has combined to 

provide safe, clean water to hundreds of communities and thousands of homes all across North Dakota. 

Thank you. 

[The prepared statement of Mr. Koland follows:]

PREPARED STATEMENT OF DAVID J. KOLAND, MANAGER, GARRISON DIVERSION

CONSERVANCY DISTRICT, ON S. 1085, S. 1732, AND S. 2218

Madam Chairman, members of the subcommittee, thank you for the opportunity 

to testify on the rural water bills being considered by your committee. 

The provision of a high quality, reliable water supply has been changing the face 

of rural America. A reliable, safe drinking water supply has helped stabilize the 

population of rural counties, afforded additional opportunities for economic development, and provided a better quality of life for our citizens. 

We have accomplished much in constructing a rural infrastructure in America, 

but much remains to be done. Increasingly, state and Federal incentives are provided to direct the relocation of jobs to rural areas without any provisions for providing the basic necessities of a quality living environment for the expected workforce. 

We have learned much during the last 30 years as the concept of a rural water 

system has evolved from providing safe drinking water for single-family rural 

farmsteads to a sophisticated regional water supply system for multi-family rural 

communities. Complying with the increasingly complex Safe Drinking Water Act 

regulations is no longer possible or economically feasible for many small communities. A regional water system serving numerous communities can provide the benefits of safe drinking water to both urban and surrounding rural areas. 

The inclusion of a large community as a core component of the regional system 

is often necessary to make a regional system viable. The larger the community the 

further the penetration into the surrounding area and, hence, the greater attainment of the policy objective of providing service to the greatest number of people 

who would otherwise be unable to afford a reliable safe water supply. 

A Federal policy that guides the orderly development and timely construction of 

this rural infrastructure will benefit all our citizens. That Federal policy should provide that the currently authorized projects be completed without further costly 

delays. A provision that accomplishes that objective is found in section 4(b)(2) of S. 

1085. A provision addressing this issue needs to be added to S. 2218. Such a provision would greatly assist us in completing the Dakota Water Resources Act (DWRA). 

The present policy of denying adequate funding to currently authorized projects 

is a travesty. This treatment of people on the verge of realizing the dream of finally 

having a reliable water supply is not justified under any circumstances. A government policy that promises, authorizes, studies, designs, and begins construction 

with one hand and then blithely and blindly curtails construction with the other 

hand must not be perpetuated one day longer. 

A sound Federal policy must honor the commitments that were made to tribes 

and states, such as North Dakota, that have endured a 50-year flood to provide flood 

protection to downstream states. That unfulfilled Federal promise has been reformulated, reneged on and finally renewed in the Dakota Water Resources Act of 2000 

only to have the funding severely reduced in the budget on the faulty premise of 

an OMB Program Assessment Rating Tool (PART) analysis. 

When the PART is applied to the North Dakota MR&I program, it reveals a program with a weighted score of 84%. Where is the justice in reducing funding for 

such a highly rated program or for any authorized project while the Federal government attempts to set a policy for future projects? We are grateful that Congress 

stepped forward and provided funding for our projects in FY04. (Appendix A OMB 

PART as modified by North Dakota)* 

In North Dakota, we have eight MR&I projects under construction, including the 

Northwest Area Water Supply Project (NAWS) that are critical to meeting the water 

needs of our citizens. Nearly 1500 people have paid a ‘‘sign-up’’ fee as high as $750 

while they wait for the pipeline to reach their home. The people living in the NAWS 

28

service area, including the 36,567 citizens of Minot, are paying a 1% sales tax to 

finance the 35% local share of the NAWS project. 

The Federal policy should acknowledge, as section 6(e) of S. 1085 does, that many 

projects and programs have already undergone extensive study and review and 

should not be required to duplicate those efforts or embark on additional studies. 

A Federal policy should also provide that the required reports can be developed 

by entities other than the Bureau of Reclamation to aid in reducing the time frame 

within which the project can meet the needs of the local sponsor. Section 6(c) of S. 

1085 captures this concept. 

A sound Federal policy should be able to accommodate state policy when establishing eligibility criteria for developing a rural water infrastructure. The state 

water plan should play a significant role in developing the considerations outlined 

in section 3(b)(2) of S. 1732. 

A forward-looking Federal policy will focus efforts on providing access to rural 

water in areas that do not have a reliable supply of quality water now. The policy 

should encourage the inception of projects at the local level. Projects that are driven 

by a local need will be better able to sustain themselves through the already too 

long gestation period from the recognition of a need to the completion of construction. 

A Federal policy should not encourage the displacement of agricultural use to the 

detriment of the economic base of rural communities by offering additional incentives for the conversion of water rights from irrigated agriculture to municipal water 

use. In developing priorities, a Federal policy needs to look beyond economic considerations and examine if the project also meets environmental or social policy objectives. 

A Federal policy should deal with providing solutions for entire regions by directing Federal resources towards implementing projects that provide solutions dealing 

with both present and reasonable foreseeable future needs. 

When the transfer of water from one basin to another basin can best serve the 

national interest and be accomplished in a safe and prudent manner, it should be 

encouraged. 

Before I talk about specific issues, let me briefly describe a process and a program 

that has enjoyed tremendous success in providing high quality, affordable drinking 

water to thousands of North Dakota citizens who had been without a reliable supply 

of safe drinking water. 

The goal of the North Dakota Municipal, Rural and Industrial (MR&I) program 

is to provide a high quality, affordable supply of safe drinking water to people who 

do not have water now or have an unsafe supply of water. (Appendix B, Rural 

Water: A Program that works for North Dakota) 

We recognize the need for a process that focuses our efforts on providing water 

to the greatest number of people who would have no other way to obtain clean, safe 

drinking water without the assistance of our MR&I grant program. 

The process begins at the local level with the preparation of a Preliminary Engineering Report. Then a Feasibility Study is conducted by a professional engineering 

firm, followed by appropriate environmental studies performed by the Bureau of 

Reclamation. The Bureau of Reclamation also reviews the final design of the project 

before construction can begin. 

Projects are approved for funding by a joint committee of the State Water Commission and Garrison Diversion Conservancy District. Projects are prioritized based 

on the state water plan, inadequate current supply, the affordability of the water 

supply, quality of current supply, and local support. 

The MR&I program was authorized by Congress in 1986. In North Dakota, the 

program is jointly administered by the State Water Commission and the Garrison 

Diversion Conservancy District. A state-wide water plan is updated annually and 

works with a five-year projected project funding schedule. 

Step One is the submission of an application to the MR&I program. 

Step Two is the completion of a Preliminary Engineering Report. This report is 

normally paid for by the local sponsor of the project. The local sponsor may be a 

community or a rural water system. If the local sponsor is a rural water system, 

they have collected an ‘‘interest fee’’ from people interested in seeing if a system 

could be built in their area. The interest fee usually is from $50 to $100 and is used 

to hire an engineering firm to help design the project. 

Step Three is the Feasibility Study conducted by the engineer to determine who 

can be served and how the system would be constructed. In order to determine who 

is really willing to hook up to the water system, a sign-up campaign is conducted. 

The sign-up fee is from $300 to $800 and is used to fund the local share of the Feasibility Study. The MR&I program will provide a 65% cost share, . provided they 

feel funding will be available when the project is ready for construction. The firm 

29

hired to assist the local sponsor typically will not be able to recover all their costs 

unless the project goes to construction. 

Step Four involves the Bureau of Reclamation in the environmental studies and 

approval of the final design before construction can begin. Funding for construction 

is currently provided on a 70/30 matching basis. The local share of a project is usually borrowed from a Federal or state source such as, Rural Development, and repayment is funded by a monthly payment from each water service customer. The 

O&M expenses for the local system are funded in the same manner. The lender normally requires that reserve accounts be established to provide for both expected and 

unexpected future O&M expenses. 

This partnership between the Federal government, state government, and the 

local sponsor has resulted in an astounding success story. 

Thousands of rural North Dakota citizens now have a reliable supply of safe 

drinking water. Hundreds of communities can now provide affordable, safe drinking 

water to all their citizens. Every single rural water system built in North Dakota 

is still operating, paying their debts, maintaining their systems and providing for 

additional growth with internally generated revenue. North Dakota is building a 

strategic regional water supply system. And, most importantly, the Federal interest 

is served by compliance with the environmental laws, the natural selection of the 

most cost-effective solution, the built-in need to apply appropriate water conservation measures, and the provision for future O&M expenses by the local sponsor. 

Let me direct your attention to some specific questions regarding the legislation 

being considered. 

What is the expectation of this new process for projects currently under construction? Should we be viewed as models for this new process or outside the process? 

It is our view that North Dakota’s MR&I program is outside the new process that 

is being contemplated by Congress. 

Section 2(8) of S. 2218 addressing rural water infrastructure definitions should include closed storage structures such as water towers and/or underground reservoirs 

and canals that have been converted to water supply use. 

Section 3 of S. 2218 makes no mention of currently authorized projects or how 

this legislation would impact the current rural water projects. In my view the legislation should clearly state that the currently authorized projects should be completed or a reasonable and prudent timetable for completion endorsed before construction on any new projects is allowed to commence. A key element of this section 

should be the extent to which a project complements or enhances an existing State 

Water Plan. 

Section 3(d)(4) of S. 2218 does not clearly define what integrated resources management approach means or what type of entities are envisioned to be partners in 

a rural water supply project. Does this refer to military bases, urban areas, energy 

companies, tribal governments, counties, water resource districts, grazing authorities, Federal agencies, and State agencies? In North Dakota all of these entities 

have been partners in building rural water systems. 

Section 3(e)(1) of S. 2218 introduces a new term ‘‘capability-to-pay’’ that needs to 

be clearly defined. 

Section 3(e)(2) of S. 2218 should also reference the Federal trust responsibility to 

Indian tribes that were forced to move when the Pick Sloan dams were constructed 

on the Missouri River. 

Section 5(a) of S. 2218 should provide that feasibility reports from other sources 

such as professional engineering firms should be utilized to reduce the time spent 

in duplicating studies of proposed projects. What is the definition of ‘‘appropriate 

water conservation measures’’ that would be applied to a family that is hauling 

every drop of water that is used for drinking, bathing, washing clothes and other 

household uses? 

Line 18 and 19 speak to market-based mechanisms that imply that converting agricultural water to urban use is sound policy for all situations. In my view a sound 

policy would encourage the continued existence of a solid agricultural base coupled 

with the continued growth of the urban core. In North Dakota agriculture forms the 

core basis of a major portion of our economy. 

Section 5(c)(9) of S. 2218 seems to preclude blending various forms of project financing that are available now. We have built projects with combinations of different loans from various agencies which leverage the advantage of each to construct an affordable project. The net effect is to reduce the amount of grant money 

that is needed by the project. 

Section 5(d)(3) of S. 2218 raises some very troubling issues in my view. If a tribe 

has decided to provide water to its members and constructs a delivery system to do 

so should it pass by the house that has non-tribal members living in it only to have 

to return and add the house to the system if a tribal member moves or marries into 

30

that household? If non-tribal members are working in a hospital on tribal lands will 

the hospital be required to purchase water on a different rate structure for each 

class of employees and/or patients? 

Section 6(a)(4) of S. 2218 is unclear. We are only going to construct projects that 

can pay their own way in the future but we will always get to pay the Federal government a fee to provide oversight? Our experience in North Dakota has been that 

when projects are controlled at the local level they have prospered and grown. See 

Appendix B, Rural Water: A Program that works for North Dakota. 

Section 6(a)(5) of S. 2218 could provide that revenue from the sale of water off 

the reservation could be used for operation, maintenance, and replacement costs. 

Section 8(b) of S. 2218 seems to be more one-sided than it would need to be. There 

should be some requirement to consult, review or discuss with the non-Federal entity on these issues. 

Section 9 of S. 2218 does not address projects that are already authorized by Congress. By the time you go through the process outlined in this bill the people who 

need water will have moved. Is this a ‘‘competitive program’’ to submit project requests to Congress? 

Section 5(c)(2)(C) of S. 1732 seems to require that each proposed project must be 

authorized by Congress before construction can begin. Section 5(d) would appear to 

set priorities for funding the construction of proposed projects. 

The challenge we jointly face is how to streamline the process of providing water 

where it is needed before the people we intend to serve must move elsewhere. 

S. 1085, S. 1732 and S. 2218 are important steps in working towards a process 

for future rural water project authorizations. I would suggest that it is important 

that some thought be given first to having a National Rural Water policy. A National Policy would help drive the process and focus the program on whether you 

presently have water or not and further ensure that proposed projects are consistent 

with a state’s water plan for developing its water infrastructure. 

It is also important to have time frames for completion of the appraisal investigations and feasibility studies and be able to give the sponsor some realistic idea of 

how long it is going to take before the project is complete and the needs met. We 

can not tolerate a never-ending regimen of studies. 

The North Dakota MR&I program is a successful model that has worked for 

North Dakota. This cost-effective partnership of local control, state-wide guidance 

and federal support has combined to provide safe, clean, potable water to hundreds 

of communities and thousands of homes all across North Dakota. Garrison Diversion 

is committed to assisting you in whatever way we can as you move forward. 

Thank You.

Senator MURKOWSKI. Thank you. 

We appreciate the testimony from both of you this afternoon. 

I’m sure you heard the question that I posed to Commissioner 

Keys about perhaps some expansion to States, such as Alaska and 

Hawaii, that experience similar problems and issues, challenges, as 

it relates to their water. 

I would throw the same question out to both of you. Should we 

target water-supply development subsidies to certain rural and 

small communities instead of opening up funding to other communities with similar needs? What do you think? 

Mr. Keegan. 

Mr. KEEGAN. I’m not so sure you could stop it at Hawaii and 

Alaska if you opened it up, but I think the principle is exactly 

right. It should be based on need. And the one thing the Bureau 

of Reclamation does seem to have is a unique mission that satisfies 

western needs. And I think Alaska would probably be similar to 

that, too. And I’m sure some people would talk about the eastern 

states. But it does seem primarily targeted to the West and its 

unique problems. But I agree, if it’s going to be a Federal subsidy, 

it should be based on needs across all the states. 

Mr. KOLAND. Madam Chairman? 

Senator MURKOWSKI. Mr. Koland. 

31

Mr. KOLAND. I agree, the focus of the MR&I program in North 

Dakota has not been to spend all the money where we get the biggest bang for the buck, if you were to look at the program. It’s to 

provide water to people that could not afford to have water on their 

own, and that serves a broader economic policy issue for the state 

of North Dakota if we can shore up the rural communities and provide an infrastructure there so that people will live there, support 

the quality of life. And we’ve found that economic benefits follow, 

that the economic benefits follow a good water supply. 

Senator MURKOWSKI. Just talking about the challenges that 

rural communities face, they’ve got a smaller financial base from 

which to generate their funding for their capital projects, and essentially pay for them. They’ve also got few operation and maintenance resources, meaning basically the knowledgeable people and 

the equipment. In your experience, what are the typical water 

rates in—say, for instance, in western rural communities—in your 

part of the country, Mr. Koland—for both the community systems 

and wells? And are these, then, higher than what you would find 

in the larger municipalities? 

Mr. KOLAND. Madam Chairman, across North Dakota, we are 

trying to provide water, 6,000 gallons a month for a family household, at about $35 to $50 a month for that family, and we’re trying 

to keep that comparable to a lot of communities. Communities 

charge water on a different base because it’s part of their real estate taxes. Normally the infrastructure has been built. And we’ve 

found that the way that we can most efficiently do that is by building a regional water system, and that calls for some hard decisions 

for small communities. Small communities are reluctant to give up 

the water plant, to run the water plant themselves, even though 

they think they can do it. But in a regional system, we’ve been able 

to accomplish and build strong systems by providing water to these 

smaller communities at a reasonable rate and continue to increase 

that infrastructure. 

I could give you an example. A water system that started with 

700 members in the late 1970’s is—now has about 2,300 members 

that—they started with just chlorination and iron and manganese 

removal. They now operate a reverse-osmosis plant, one of the latest technologies, and they’re able to do that by generating funds internally and by growing in their community, without additional 

Federal help. 

Senator MURKOWSKI. So you don’t have the disparity, then, so 

much, between the rural communities and the larger urban centers 

that one would think, through this regional planning approach. 

Mr. KOLAND. Madam Chairman, what has happened is, our core 

communities—Bismark, North Dakota, is about 50,000 people—the 

rural water system that was started in the rural area around 

Bismark now buys all of its water from Bismark, North Dakota. 

They drink exactly the same water that that community drinks, 

very high-caliber Missouri River water, some of the finest in the 

country. And that is a social policy objective of the State of North 

Dakota, and it’s one of the reasons, I think, any policy or bill has 

to look to the State to set a policy of how they want to build this 

infrastructure and what policy objectives they want to meet with 

their water infrastructure plan. 

32

Senator MURKOWSKI. I’m assuming that we still have, in many, 

many areas, the model of the domestic wells, the local wells, local 

ownership of their rural water projects in these smaller community 

systems. Can this type of a model, can this type of a system, continue to work? Or do we move toward consolidation, of sorts, in 

order to find greater efficiencies? 

Mr. KOLAND. Madam Chairman, I think the movement will there 

internally. North Dakota water districts—they started out as cooperatives or nonprofit corporations—have moved to a water-district model, a governmental model. But the key is, the board of directors are users of the water system, and they make the best decisions. There are people that are using the water. When they raise 

the rates, they’re raising their own rates. When they make improvements, they’re improving the system for themselves. So it’s 

been an excellent model. 

They need to get larger, and they have. They’ve combined management of systems in the southeast part of our State. There are 

three separate systems. They have three boards right now, but 

they will eventually have one board of directors. They have one 

manager that oversees all of them, and they moved that way naturally. 

Senator MURKOWSKI. Mr. Keegan, did you want to add anything 

to what——

Mr. KEEGAN. Thanks. I agree with what Dave has to say. Consolidation is a very sensitive word in rural communities—and consolidation or regionalizing, you just have to look at it ad hoc and—

with the community’s consent. And they will do it when it makes 

sense, but it’s really a solution for certain problems. It is not a solution for small water supply. And as long as you can make that—

distinguish that before taking a look at any problems, things can 

work themselves out. 

The other thing I would mention to your previous question, is 

that there’s never been a really good study on comparing municipal 

or urban water rates, versus rural communities. No nationwide 

study I’m familiar with. I think, anecdotally, everybody kind of assumes that, and they’ve seen it, but there’s another trend, too, 

which is the ability to pay the water is often lower in the rural 

areas and small communities, too. So you have these things working, complementing each other, to make it more and more difficult. 

Senator MURKOWSKI. Thank you. 

Senator Bingaman. 

Senator BINGAMAN. Thank you very much. 

Mr. Keegan, in your testimony you site the USDA study which 

states that 730,000 people have no running water in their homes. 

This testimony that we received from the Navajo nation has a 

statement in it between 20 and 50 percent of Navajo households 

rely solely on water hauling to meet daily water needs. I guess I 

would ask you, first, whether you know if that is 730,000 homes, 

or 730,000 people, that you’re referring to in your testimony? Do 

we know where those people live? If we set out to solve that problem first, because that may be the most severe problem facing any 

of our citizens, would we know where to put the resources and how 

to do it? 

33

Mr. KEEGAN. I haven’t seen it accumulated so you have the list 

of 730,000 households, but what it is is a State-by-State assessment, and that was done by the Department of Agriculture. So they 

actually relatively looked, county-by-county, addressing needs. So I 

think within USDA there probably is a list. And there were some 

attempts—this was back in 2000 when they put this report together—to go after an initiative that would hook all those 730,000 

homes up to water. And they haven’t——

Senator BINGAMAN. You don’t know what happened to that? 

Mr. KEEGAN. Well, it’s incrementally been funded. There’s never 

been enough funding to actually satisfy that. 

Senator BINGAMAN. I see. 

Mr. KEEGAN. But it probably—I know if you asked USDA, they 

would have a list of communities that did make some improvements on that list. 

Senator BINGAMAN. One of the difficult issues involved if we’re 

trying to set up a Bureau of Reclamation rural water project, or 

legislation to fund rural water projects, is to funding rural water 

projects. In our bill, the one Senator Dorgan and I put in, we’ve 

said that that could include communities with populations up to 

40,000. Is that the right place to draw the line? Is that too big? Is 

that too small? Should there be prioritizing? I mean, are we really 

talking about dealing with rural communities? Are we talking 

about—a 40,000 person community in my state, is—you know, 

there aren’t that many of them. Do either of you have an idea as 

to what the right size is for rural? 

Mr. KOLAND. Well, Madam Chairman, Senator Bingaman, that is 

a difficult question. We have the same thing. We don’t have many 

communities that are that large. But, at the same time, one of the 

core things that we’ve found we can do is, if we can buy water from 

a large municipality, we can construct a lot more rural infrastructure around that community to provide—and sometimes that’s the 

most cost-effective solution. So I would hesitate to preclude Fargo, 

North Dakota, which is a population of 90,000, if that, in fact, 

would be our cheapest source of water. And certainly—Bismark, 

North Dakota, is 52,000 people; our rural water system that serves 

about 2500 customers, hook-ups, buys all its water from that community, and that’s a good partnership for both the municipality 

and the rural water system. 

Senator BINGAMAN. Let me ask either one of you if you have an 

opinion as to what the appropriate cost-share ought to be. That’s 

obviously another big issue in this legislation. To what extent 

should we settle on a particular cost-share and put that in law? Or 

should we remain flexible about that, depending upon the circumstances involved with each project? What do you think the 

right cost-share should be? 

Mr. KOLAND. Senator, I think—in North Dakota, we had the authority to do a 75 percent/25 percent cost-share for the program 

started in 1986. For 10, 11, 12 years, we looked at it, and said, let’s 

make the cost-share 65/35, and our Federal money will go farther. 

And we did that. But in the last few years, with the increasing cost 

of building water systems, we had to change that to 70/30 costshare in order to get as much penetration as we could into the 

rural area. I think you have to allow some flexibility, because as 

34

a system, as each one is individual designed, will more or less determine the water rate, it’s difficult to set it based on a top water 

rate, but the cost you’re going to pay for water decided by the local 

people, they’ll tell you when they’ve reached—how much they can 

afford to pay. And we have to design a system so that the widow 

living on social security can afford to hook up to the water. 

Now, that seems like a strange statement, but what we’ve found 

is, a home with rural water has greater value than one without, 

because that home can be resold or sold when it comes on the market. Someone will buy it and move into it. Young people will not 

tolerate the same water quality as an older person will tolerate. 

Senator BINGAMAN. Thank you very much. 

Senator MURKOWSKI. Senator Dorgan. 

Senator DORGAN. Madam Chairperson, thank you very much. 

Mr. Keegan, thank you for your testimony. And, Mr. Koland, 

thank you for being here. I was just sitting here thinking it may 

be good to mention Warren Jamison. This, as you know, my colleagues know, Warren Jamison was one who testified here on behalf of the Garrison Conservancy District and on behalf of the Garrison Project for many, many, many years. And he died of cancer 

some months ago. And when you talk about water policy in North 

Dakota, it would be hard to talk about achievements in water policy without giving recognition to his wonderful work, and I want 

to do that. 

Mr. Koland, your work is similarly extraordinarily beneficial to 

our State. I think it might be useful for me just to ask a couple 

of leading questions, if I might. And before I do, let me compliment 

you. I think in many ways what you’ve described, with respect to 

regional efforts, describes a model that we have created in North 

Dakota that would be very, very useful as we construct public policy here, because the regional approach to development, for the development of rural water systems, has, I think, been very attractive, cost effective, and very helpful to bring water to a larger number of people than otherwise might have been the case. 

But you, too, I believe, were at the groundbreaking in Minot of 

the NAWS Project, and the commissioner was there, and we all 

smiled. And all that was missing was suspenders and cigars for a 

bunch of politicians to, you know, break ground on a new project. 

And then last year it was zeroed out. This year, it’s funded at less 

than what it should be funded at. 

Describe to me what the impact of these projects are, including 

the NAWS Projects, when we have these fits and starts in funding. 

Mr. KOLAND. Madam Chairman, Senator, thank you so much for 

the kind comments, and I’m sure Warren—as I walked by The 

Dubliner, we all thought of him. 

It is, in a way, unconscionable that we would start a Federal 

project, promise people water—the people north of Minot, where 

this project is going to help with water, they’re out of water. When 

the drought hits, they go to water rationing, et cetera. But the 

money that we are wasting if we do not properly fund this project, 

we have no defense for. 

We have started a project that we should construct in 5 years. 

If we don’t do that, the warranties will expire. We won’t be able 

to test the water line to see if we can’t—the people north of Minot 

35

are convinced that we’re never going to go any further than Minot 

with this project. And as much as we promise them, they just look 

and see the news out of Washington, the fund levels that we’re 

achieving. We were averaging $10 million before the Dakota Water Resources Act appropriated to the MR&I Program in North Dakota 

and—not an unreasonable amount, given the slowness of it. We 

have $600 million more of authorization in the Dakota Water Resources Act. We met with the tribes. And as you well know, the relationship sometimes between Tribes and State is tenuous. But we 

struck an agreement to share the MR&I money 50/50, because we 

promised them that would be the best way that we could get their 

projects built. And we come to Congress, and we go home with $21⁄2

million each, and we can’t hardly design the project for $21⁄2 million, much less do any construction. 

Now, North Dakota, as you well know, will do all we can to keep 

these projects under construction, but it is a daunting task without 

the help of Congress. 

Senator DORGAN. Well, you know, we have very serious fiscal policy problems here in the Congress that we have to grapple with, 

but having said that, it really is a matter of making the right 

choices. And the question that I asked the commissioners about, 

Don’t we have an obligation to complete and move forward and finish projects that are underway before we begin trying to draw new 

ones in? I think that is a very important concept. 

One other question, because I think your regional model is really 

successful, and I’ve seen it in all parts of our State. Are there 

things that you believe we could do—incentives, perhaps, or other 

devices, or other policy approaches—that would enhance that regional approach in the rest of the country? 

Mr. KOLAND. Madam Chairman, Senator, I have to go back, that 

if you’re going to deal with the water-infrastructure problems of the 

State, it should be guided by State policy, and a State policy is 

driven by the local need. In North Dakota, it’s driven by the local 

need. We’re successful. The southwest pipeline that the State had 

the foresight to construct and size to meet the eventual needs of 

that State, has proven to be very successful. Every community—

communities that said no when we were planning the pipeline, 

have come and said, ‘‘Hey, we need that water.’’ We’ve had communities that said, ‘‘We’ll take half our water from there,’’ were on the 

water for but a short time and they said, ‘‘We want all our water 

from this pipeline.’’ So we have a lot of experience as to what happens when you build a project the correct way. 

Senator DORGAN. But, in many respects, that’s a function of what 

it ultimately cost to deliver that water, and that’s a function of 

what we fund and what the local match is. I know, having visited 

with people from communities, who have said, ‘‘You know, we know 

there’s a rural water system nearby, but we really think we ought 

to develop our own municipal water supply and dig a new well and 

create a new system.’’ As they think through that, however, cost 

becomes something that drives it—the citizens of that community, 

to take a look it and say, ‘‘Well, you know, if we have good, fresh 

water coming nearby in a pipeline, what does it cost for us to 

punch into that, as opposed to building and completing a new 

36

water system for our town?’’ So cost is very important. As you 

think of these incentives to help develop a more regional strategy 

nationally, let us know what you think good policy might be in 

those areas. 

Again, I always appreciate your testimony. I think this project, 

whose origin was mid-1940’s, and authorization in the mid-1960’s, 

and reauthorization or a change in authorization in the mid-1980’s, 

and then a final change just a couple of years ago. This is a long 

and tortured trail that we’ve been on, and the chairperson of this 

committee is new to this committee, and so she doesn’t know the 

history. But I will not take all afternoon to recite it, except to say 

this. We now have a one-half-million acre flood that came and 

stayed in our State, not because we asked for it, but because the 

Federal Government asked us to host a permanent flood, and they 

said, ‘‘If you do that, we’ll give you something return.’’ So we did 

it, we have the cost, but we haven’t gotten all the benefits. And 

that’s why we struggle. And I think Alaska, perhaps more than any 

other State, understands that struggle, the struggle to try to make 

things better and try to improve things in your State. 

So I want to thank you very much. Mr. Keegan, thank you for 

testifying. Dave Koland, thank you for your work. And thank the 

board, of course, for the work they have done. We’re going to keep 

working on these policies to see if we can’t continue to improve 

them. Thank you very much. 

Madam Chairman, thank you. 

Senator MURKOWSKI. Thank you. 

And you are correct, Senator Dorgan, I don’t have all of the history, but the more that I learn about the water situation in the 

various parts of the state, and compare them to the situations we 

have in Alaska, the battles that we have for our resources, there’s 

an awful lot of commonality, I think, that we do share. 

Gentlemen, I would just like to ask you one more question. And 

this follows on the comments from Senator Dorgan and Senator 

Bingaman, in terms of how much is enough. Every year, Congress 

is trying to provide a few billion dollars for rural community watersystem development. These are through EPA, State revolving 

funds, Department of Ag., the rural utility services, all of these 

other pots and programs. It’s apparent that we need a larger investment to really begin to meet the needs of the rural communities as it relates to the water. 

So the question to you is, How big? How much? What does it 

have to be? You know, in your particular areas, the needs. We 

heard from Commissioner Keys. He had identified the various 

projects out there. But what is it that we really need? 

Mr. KOLAND. Well, Madam Chairman, Senator Dorgan talked 

about the permanent flood. When we built the dams in North Dakota, the Federal Government said, ‘‘You can have a million acres 

of irrigation.’’ And through the reformulation, we don’t have that 

million acres of irrigation. Instead, as a State, we said we’d settle 

for the $600 million, plus the $200 million that was paid before, 

and we would call it square. So, in my view, the Federal Government owes the State of North Dakota that compensation. 

And the State of North Dakota decided that the best way we can 

spend that money is to spend it on a water infrastructure in our 

37

State for our tribes and for our communities. And that was a decision that the State made. And what I’m offering is that that model 

of regional construction, the partnership that we have with the Bureau of Reclamation that are involved in the design of the projects, 

they’re involved in their environmental studies of the project, from 

the very first step they’re involved in this. 

So there is a way that a Federal partnership and a State partnership and a local control can work. It works in our State; I believe it can work in other States. Maybe not all the States. 

The amount of money is contingent upon how much the Federal 

Government wants to ensure that there will be other places to live 

in this country, other than metropolitan, urban areas. And that’s 

a policy decision that they have to come to grips with. We can look 

at places in western North Dakota or Western United States, Los 

Angeles, Denver, Las Vegas. All of the metropolitan areas are going 

to reach some type of capacity, if not physical capacity, at least 

mental capacity, that not everyone wants to live in that type of environment. And I know we’re finding people come to our State and 

want to live there just to get away from that environment. And as 

our country grows and continues to grow, we have to do something 

to provide that people will naturally spread out to those areas, if 

you will, or we’re going to face some horrendous problems in those 

urban areas. 

So from a Federal policy area, it’s the matter of the will of what 

kind of quality of life are we going to provide for our people, what 

kind of environment are we going to have for people to leave those 

urban areas and come and visit or live? 

Senator MURKOWSKI. Closing comments, Mr. Keegan? 

Mr. KEEGAN. Thank you. In my testimony, I mentioned the fund 

levels and the other major Federal water efforts, EPA and USDA 

and, to some large extent, HUD. But I would take a look at those 

as maybe a floor rather than a ceiling. And all of those programs 

are funded at a fraction of their authorized level, and they have 

seemed to have, kind of, routinely been funded at right around the 

billion-dollar level per agency. USDA and EPA—and EPA actually 

has water and waste water, so—and they actually do contribute a 

lot to solutions out there every year. So I think that’s kind of a 

vague, rough idea of a place to start. 

Senator MURKOWSKI. That does give us a starting point. 

Well, I appreciate the testimony from both of you this afternoon. 

Thank you for joining the subcommittee and for helping us as we 

address these issues that are of great concern to our rural communities across the West. 

So thank you. And, with that, we stand adjourned. 

[Whereupon, at 3:50 p.m., the hearing was adjourned.] 

(39)

APPENDIX 

Additional Material Submitted for the Record 

FAMILY FARM ALLIANCE, 

Salem, OR, March 23, 2004. 

Hon. PETE V. DOMENICI,

Chairman, Committee on Energy and Natural Resources, U.S. Senate, Washington, 

DC. 

DEAR CHAIRMAN DOMENICI: I’m writing on behalf of the members of the Family 

Farm Alliance to strongly urge that the Committee support an amendment by Senator Gordon Smith of Oregon that would give the beneficiaries of Bureau of Reclamation projects a voice in the planning, construction and management of dam 

safety improvements at Bureau facilities. 

We believe that Senator Smith’s proposed amendment (S.A. 2218) to your Safety 

of Dams funding authorization bill (S. 1727) will ensure more efficient and effective 

dam safety projects while producing significant cost savings for the federal treasury 

and local irrigation and water districts. 

The Family Farm Alliance is a grass-roots organization representing irrigated 

farmers, ranchers, water managers and local agricultural groups in 16 Western 

states. We are the Bureau of Reclamation’s customers. 

The safety of Bureau dams is especially important to those of us who live in the 

shadow of these facilities and depend upon them for our livelihoods. The Alliance 

supports increasing the appropriation authorization for the Bureau’s Safety of Dams 

Program and we have no desire to delay the allocation of badly needed resources. 

However, the need to adjust the authorization ceiling presents Congress with an 

opportunity to improve how the Safety of Dams Program is implemented. Senator 

Smith’s amendment is an improvement that makes good sense for both the Bureau 

and its customers. 

In 1984, Congress amended the Safety of Dams Act of 1978 to require that 15 

percent of the costs of dam safety modifications must be allocated to the irrigation 

purposes of the project and repaid by the project beneficiaries. The requirement applies to modifications that are necessary as a result of new hydrologic or seismic 

data or changes in state-of-the-art safety criteria. 

The cost of individual modifications carried out under the Safety of Dams Act has 

ranged from a few hundred thousand dollars to hundreds of millions of dollars. 

Some larger irrigation districts have been able to shoulder their share of these costs, 

while some small districts are burdened with debt service that nearly exceeds their 

annual operating budgets. Other districts simply can’t afford to pay their share. 

In all cases, the local districts have a strong incentive to minimize the cost of dam 

safety improvements but only a few of them have a real opportunity to affect those 

costs. 

Project beneficiates have no formal role in designing or controlling the costs of Bureau dam safety modifications, for which the law requires them to help pay. In most 

cases, the Bureau alone determines the scope, design and cost of dam safety work. 

Some irrigation districts have received little more than a letter from the Bureau 

telling them what they owe for a safety modification they had no part in selecting. 

The practice of excluding local authorities from meaningful participation in dam 

safety design and management is contrary to both Bureau policy and experience. 

For more than a decade, the Bureau has followed a policy of encouraging beneficiaries to take on a larger role in the day-to-day operation and maintenance of its 

facilities. Some of Bureau’s biggest projects and project features are now operated 

entirely by local authorities. Further, working in partnership with local interests is 

one of the basic tenets of the Interior Department’s Water 2025 Initiative. 

Most importantly, experience demonstrates that when local authorities become actively involved the design, operation or maintenance of Bureau projects, costs virtually always go down. Examples can be readily found in the Central Valley Project 

40

in California, the Central Utah Project and at smaller facilities throughout the West 

where cost-conscience local stakeholders have helped the Bureau figure out better 

ways to spend their operation and maintenance fees. 

To involve local interests is in Safety of Dams projects is nothing new. The Bureau has successfully worked in partnership with several local authorities on dam 

safety modifications. 

One of the first and the largest dam safety projects in the history of the program 

was the modification of five dams in Arizona’s Salt River Project (SRP). Begun in 

the late 1980s and completed in 1996, this highly complex project cost hundreds of 

millions of dollars. The Bureau and SRP beneficiaries worked closely together on all 

aspects of the project, including estimating costs, designing the project and day-today construction management. 

The SRP-Bureau collaboration was very positive and productive. But it is not the 

norm in the Safety of Dams Program. The Family Farm Alliance believes that Senator Smith’s amendment would make the SRP experience the rule rather than the 

exception. 

SMITH AMENDMENT

The amendment requires the Bureau to invite project beneficiaries to participate 

in the ‘‘joint oversight’’ of a dam safety modification. This includes planning, design, 

value-engineering review, cost-containment, procurement, construction and management. 

If the project beneficiaries agree to participate in the joint oversight, they would 

enter into an agreement with the Bureau and any reasonable costs associated with 

local participation could be credited toward the non-federal repayment obligation. 

If a participating project beneficiary were to submit an alternative idea to the Bureau for implementing the safety modification, the Bureau would be obliged to consider the recommendation. If the Bureau rejected the local alternative, it would 

have to provide the local beneficiary with a written explanation for the rejection. 

The explanation also would become part of the Bureau’s final project report to Congress. 

The Bureau would not be obligated to consider or respond to recommendations 

made by project beneficiaries (or other parties) that had not elected to participate 

in the joint oversight of the dam safety modification. However, the Bureau would 

have to provide detailed status reports on the modification to all project beneficiaries regardless of whether they had elected to participate in the joint oversight 

of the project. 

A provision very similar to Senator Smith’s amendment was approved by the 

House in 2000 as part of a Safety of Dams Program authorization increase (H.R. 

3595). The measure also required the Bureau to give a formal role to local authorities in the management of dam safety modifications. It had strong bipartisan support. 

The Senate did not act on H.R. 3595, but held a hearing on the Safety of Dams 

program in May, 2000. A short-term increase in the programs’ appropriations authorization was approved later that year in the Energy and Water Development Appropriations bill. 

The Family Farm Alliance has worked closely and successfully with the Bureau 

on a number of issues, and we and other interest groups could assist the Bureau 

in developing a Safety of Dams joint oversight program that would cut costs, minimize conflicts and improve performance. However, we do not believe that can happen without statutory direction from Congress. Senator Smith’s amendment would 

provide that very necessary direction. 

Finally, a word on cost-sharing: The Alliance is adamantly opposed to increasing 

the current 15 percent non-federal cost-share for dam safety modification. Most irrigation districts can ill afford the current level of cost-sharing, and increasing it 

would only delay or impede work necessary to protect the public health and safety. 

A far more effective and sustainable approach to reducing federal dam safety expenditures is to give project beneficiaries a formal role in managing those expenditures. Their self-interest will lead them to work with the Bureau to cut costs. 

The Family Farm Alliance commends Senator Smith for introducing his amendment, and we urge you and Members of the Committee to give it your full support. 

Sincerely, 

WILLIAM D. KENNEDY, 

President. 

41

PREPARED STATEMENT OF CHARLES J. BAROCH, MAYOR,

CITY OF GOLDEN, CO, ON S. 2180

Chairman Craig & Members of the Subcommittee, my name is Charles J. Baroch, 

and I am the Mayor of the City of Golden, Colorado. I appear before you today to 

testify in favor of S. 2180, and to request that it be processed into law at the earliest 

possible date. I will explain why. 

As I’m sure all of you are aware, Colorado has been experiencing a very severe 

drought over the past few years, and although things improved in 2003, snowfall 

has been sparse this year, and the current snowpack in the South Platte River 

drainage, where most of Golden’s water supply is located, is right now at only 67% 

of normal. So, our City desperately needs to augment our water supply and storage 

capacity. 

To achieve that goal, in December the City of Golden completed construction of 

a new reservoir, called the Guanella Reservoir, which is shown in this photo taken 

in February. Unfortunately, as you can see, the reservoir is sitting almost empty!

Why? Because we need authority to complete a 140 foot stretch of pipeline across 

National Forest land to connect the new reservoir with the West * Fork of Clear 

Creek, where we have water withdrawal rights. Currently, the pipeline is complete 

up to the Forest boundary. 

Last year, when we approached the Forest Service about the pipeline, we were 

told that it could take several years to authorize the pipeline to cross the Forest 

Service land, and we agreed with the Forest Service to seek an expedited authority 

from Congress via a small legislated land exchange. Legislation to grant that authority passed the House last fall, but there was not time to take it up in the Senate. Thankfully, Senators Campbell and Allard have introduced S. 2180, and we 

hope it can be passed immediately. 

In the exchange set forth in S. 2180, the City of Golden would receive a 9.84 acre 

parcel of land from the Forest Service, where the pipeline would be completed, and 

where we already own a diversion dam and headgate. In return, we would give the 

Forest Service up to 80 acres of land which they desire to acquire in the Cub Creek 

drainage near Evergreen, Colorado. And, we would donate approximately 55 acres 

to the Forest Service along the Continental Divide in Clear Creek and Summit 

Counties. The 55 acres are traversed by the Continental Divide National Scenic 

Trail, and also include an access route to the Trail. Donating the land will save 

scarce trail acquisition funds for other portions of the Trail. 

If for some reason, the land exchange cannot be consummated, S. 2180 directs the 

Forest Service to sell us the 9.84 acre parcel at full fair market value. 

Finally—and this is the most critical provision for us right now—S. 2180 authorizes us to immediately construct the pipeline across the 140 feet of National Forest 

land upon the bill’s enactment. Mr. Chairman, I cannot emphasize enough how important it is to our City to see the pipeline completed as quickly as possible. We 

would have liked to start filling Guanella reservoir in January, and it is now already late March, and we need to have it filled before the peak summer demand 

season. 

Lastly, I note that the land exchange directed by S. 2180 has been endorsed by 

the Clear Creek County, Summit County and Park County Boards of County Commissioners, and by many others, including the non profit Continental Divide Trail 

Alliance, which is interested in seeing the land along the Trail acquired by the Forest Service. 

I would like to again thank Senators Campbell and Allard for introducing S. 2180, 

and especially applaud Senator Campbell for arranging to have this hearing so 

quickly. This land exchange is very important to the City of Golden, and we are 

deeply appreciative of your efforts to help us augment our municipal water supply. 

That concludes my testimony. I would be happy to answer any questions you or 

other members of the Subcommittee might have. 

MNI SOSE INTERTRIBAL WATER RIGHTS COALITION, 

Rapid City, SD, April 7, 2004. 

Hon. LISA MURKOWSKI, 

Chairperson, Subcommittee on Water and Power, Energy and Natural Resources 

Committee, U.S. Senate, Washington, DC. 

Re: S. 2218—The Reclamation Rural Water Supply Act of 2004

DEAR MADAM CHAIRWOMAN MURKOWSKI: The Mni Sose Intertribal Water Rights 

Coalition respectfully submits comments on Senate Bill 2218—The Reclamation 

Rural Water Supply Act of 2004, for the Committee’s review. The Mni Sose InterVerDate 0ct 09 2002 15:06 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00045 Fmt 6601 Sfmt 6621 P:\DOCS\94937.TXT SENERGY3 PsN: SENE3
42

tribal Water Rights Coalition, comprised of 24 Missouri River Basin Tribes, strongly 

recommends the passage of this legislation. 

The legislation addresses many of the issues confronting American Indian Tribes 

in building adequate, safe water supply infrastructures for Indian communities. 

Tribes have been hampered by inadequate, aging water treatment and distribution 

systems since the 1950s. Tribal leaders have been attempting to attract new businesses and building tribal enterprises on tribal lands without success since water 

and power sources are not available. The Act would assist Tribes by putting in place 

sound infrastructure for business development. 

The Act also addresses the need for expanded housing and community facilities 

in tribal communities. The construction of housing and community facilities has seriously been curtailed since utility infrastructures, including water systems, are not 

available to serve new homes. The development of water treatment and distribution 

systems with capabilities for expansion of housing will accommodate the inward migration of tribal members back to the reservations and will meet the population increases projected in the next 40 to 50 years. 

The Act also recognizes that Indian Tribes and communities are experiencing all 

aspects of poverty, with unemployment rates of over 50% common for most reservations. The ability to pay by these beneficiaries is very limited. Without special consideration, Indian Tribes are not able to participate in this program. 

Thank you for consideration of these comments. For additional comments, please 

contact Mr. Woody Corbine, Executive Director of Mni Sose, at the address listed 

below or call 1-800-243-9166. 

Sincerely, 

GARY COLLINS, 

President. 

PREPARED STATEMENT OF GARY COLLINS, PRESIDENT, MNI SOSE INTERTRIBAL

WATER RIGHTS COALITION, INC., ON S. 2218

The Mni Sose Intertribal Water Rights Coalition, comprised of 24 Missouri River 

Basin Tribes, submits the following comments for your consideration on Senate Bill 

2218, The Reclamation Rural Water Supply Act of 2004. The Reclamation Rural 

Water Supply Act of 2004 addresses an important barrier to American Indian Tribes 

for economic development on Tribal Homelands. 

Presently, a Federal process does not exist for American Indian Tribes to build 

new water infrastructures in tribal communities. Inadequate tribal water treatment 

and distribution systems have impeded the development of new businesses and enterprises on reservation lands. The systems, constructed in the 1950s and 1960s, 

were designed to serve the Indian population at that time and did not provide for 

increased capacity and expansion. 

American Indian communities are extremely poor, and reservation unemployment 

rates of 50% or more are common throughout the nation. The cost-share component 

of The Reclamation Rural Water Supply Act of 2004 is very fair. However, this requirement may prevent many Tribes from benefiting from the Act. The Coalition 

recommends the Bureau of Reclamation be given authority to utilize formulas and 

processes that take into account a Tribe’s ability to pay. Reclamation should be 

given authority to utilize ‘‘in-kind’’ contributions from Tribes to permit the Tribes 

to receive the full benefits of the Act. 

Due to the limited financial ability of Tribes to participate in the Act, the Mni 

Sose Coalition recommends the establishment, within the U.S. Treasury, of an interest-bearing account called ‘‘The Reclamation Rural Water Supply Act of 2004 Operation and Maintenance Account.’’ At the time funds are appropriated for construction of a project, appropriations in amounts necessary for the operation and maintenance of the project shall be deposited into such account and designated for the 

project. Such funds may be expended by the Secretary for the project’s operation 

and maintenance costs without further appropriations from Congress. 

The Mni Sose Coalition recommends The Reclamation Rural Water Supply Act of 

2004 include provisions of the Indian Self-Determination Act (Public Law 93-638; 

25 U.S.C. 450 et seq.) to aid in partnership building as required by the Act. The 

planning, design, construction, and operation of The Reclamation Rural Water Supply Act projects shall be subject to the provisions of the Indian Self-Determination 

Act. 

Thank you for your consideration of the Mni Sose Intertribal Water Rights Coalition’s recommendations to The Reclamation Rural Water Supply Act of 2004. 

43

PREPARED STATEMENT OF ELECTORS CONCERNED ABOUT ANIMAS WATER (CAW) 

While we are concerned that no witnesses with objections to the proposed Rural 

Water Supply Legislation, S. 1085, S. 1732, S. 2218 [‘‘Bills’’], were invited to appear 

before the Subcommittee to testify, ‘‘electors concerned about Animas Water’’—

CAW—intend to take full advantage of this opportunity to provide testimony to be 

entered into the public record 

The legislation proposed by Republican Chairman Domenici and Democratic 

Ranking Member Bingaman is essentially redundant in its intents and purpose—

as Bureau of Reclamation [‘‘BOR’’] Commissioner Keys has specifically pointed out 

in his testimony, eight Federal agencies already operate seventeen established programs offering generous Federal assistance to individuals choosing to live in areas 

of the dry and remote West, far removed from conventional domestic water supply 

systems. Discounts, credits, loans and direct grants are routinely made available to 

address the specific needs of those Americans who experience unique challenges providing safe drinking water for their families. 

Clcarly, Senator Campbell’s State of Colorado has no need for such duplicative 

legislation. The Colorado:) Water Resources and Power Development Authority 

[‘‘CWRPDA’’] has a hug: bank account, flush with Federal and State water development funds. The CWRPDA has authority to make loans of up to $500 million. without legislative oversight. 

The Colorado River Basin States are down to our last drops of water in the Colorado River. Therefore, it is of paramount importance that the Federal Government 

not intrude on or interfere with the rights of these States to determine the allocation, appropriation, adjudication and use of their most important and limited resource. The Bills will only encroach on the State’s sovereign powers to prioritize and 

manage future water use within their borders. Implicit in the Bills is a Federal intrusion into States’ rights matters running directly counter to) the McCarran 

Amendment. 

There is no escaping the reality that the BOR’s abysmal record of profligacy, 

project mismanagement, and deceptive construction cost estimation make it unworthy of any serious Congressional consideration for substantially increased funding 

or expanded authority. Just last month, the BOR revealed to witness Jim. Dunlap, 

Chairman of New Mexico’s Interstate Stream Commission, that the Navajo-Gallup 

pipeline project Dunlap touts in his testimony is expected to cost Federal taxpayers 

at least $150 million more than originally estimated. Similarly, the BOR recently 

confirmed costly mistakes characterized by Mr. Campbell as ‘‘malfeasance’’ in the 

Animas-La Plata Project [‘‘ALP Project’’]. These critical errors in the ALP Project 

(in effect lies told to Congress and the American people) have resulted in skyrocketing construction cost increases of more than $162 million. 

Last week, Chairman Domenici’s Appropriations Committee conducted an Oversight Hearing into the BOR’s bogus ALP Project cost estimates, but the testimony 

raised larger, more disturbing questions about circumstances surrounding the mistakes. The Senators from New Memo and Colorado would be well-advised to demand 

an independent GAO audit of the ALP Project—with an investigation into fraud, 

corruption, and malfeasance—before moving any further to push their Bills and solicit billions of dollars of additional appropriations for the purpose of extending the 

BOR’s reach. Senator Domenici should pause to carefully consider his own assessment of the BOR’s dismal performance reported last week in the Durum Herald as 

follows:

‘‘Domenici, whose subcommittee is an offshoot of the Senate Appropriations Committee, said he has been a longtime supporter of expanding the bureau to take 

on more duties, but is having second thoughts about supporting that expansion 

because of the A-LP cost overruns, ‘‘I am not very impressed, and I’m not going 

to continue down that path,’’ Domenici told [DOI Assistant Secretary Bennet] 

Raley. ‘‘I don’t know if the bureau is going to be growing. If they can’t do this, 

I’m going with the Corps of Engineers. I won’t look for projects of this magnitude 

going to the bureau for a while.’’

At the same time, Chairman Domenici said in a press release that Federal taxpayers will need to ante up ‘‘more than a few billion dollars in a revolving fund’’ 

for rural water supplies because ‘‘we can no longer get by with programs that are 

too miniscule to do any good.’’ Obviously, the Senator’s Bills would involve significant, long-term annual appropriations to the BOR for the planning construction., operation and maintenance of projects involving a substantial amount of infrastructure. Needless to spry, the Bills would only complicate the challenge of reducing the 

escalating Federal budget deficit. 

44

The Bills fly squarely in the face of the Senate’s laudable commitment to fiscal 

responsibility as evidenced by the brave and wise initiative known as ‘‘pay-as-yougo’’. We may once have had reason to believe that Chairman Domenici could exercise restraint in the expenditure of public funds, but no more. Efforts by the Federal 

Government—such as those in the Domenici Bills—to freely fund regional rural domestic water supply distribution systems in low density areas is idiocy that encourages rampant sprawl. The blight of sprawl is well-recognized as one of the most 

pressing public concerns in the Rocky Mountain States. Runaway growth, is jeopardizing quality of life, while posing a. dire threat to the environment. Provisions 

in the Bills would make it more difficult—not easier—to control sprawl and would 

inhibit the States’ powers to take necessary steps to regulate and limit growth within their borders. 

Language in the Bills opens wide a whole new arena of subsidy—namely Municipal & Industrial [‘‘M&I’’] water. Again, the ALP Project provides a case study in 

the costly, appalling pitfalls faced by Federal taxpayers when the Federal Government gets into the business of providing enormous subsidies for M&I water supplies. 

The Bills actually allow for the costs of planning and constructing projects for rural 

water treatment and distribution systems to be 100% non-reimbursable to the Federal Government. That is to say that, at the discretion of the Secretary of the Interior, project participants could be released from all, obligations to share in any costs 

associated with their benefits. 

In fact, the proposed legislation seems to us to be no more than a backdoor ploy 

to subsidize water to developers looking for the ways and means to underwrite rural 

water distribution systems and divvy up marginal, high-desert farmland in southwest Colorado and Northwest New Mexico into 35-acre subdivisions for trophy 

homes, McMansions, ranchettes, and the like, Unfortunately, the testimony which 

Mr. Dunlap’s presented to you does not speak directly to any personal interest he 

may have in the BOR’s spending $72 million to construe: an unauthorized, feature 

of the original ALP boondoggle with a water treatment plant in Colorado and hundreds of miles of Dry Side piping for the delivery of industrial-use water to the La 

Plata Conservancy District of New Mexico [LPCD]. That LPCD water, contrary to 

Mr. Dunlap’s assertion, is neither adjudicated nor under contract, 

Our Four Corners Area has been aptly characterized in the press as a National 

Sacrifice Area, and the Bills—if enacted—would only exacerbate this deteriorating 

situation.

STEVE CONE, 

For ‘‘electors concerned about Animas Water’’. 

PREPARED STATEMENT OF ANITA WINKLER, EXECUTIVE DIRECTOR, OREGON

WATER RESOURCES CONGRESS

Re: S. 2218, S. 1085, S. 1732 and S. 993—RURAL WATER DEVELOPMENT

As Executive Director for the Oregon Water Resources Congress (OWRC), I appreciate this opportunity to discuss rural water issues. The OWRC represents organized agricultural interests in the State of Oregon. Its members include irrigation 

districts, water control districts, drainage districts, ports, cities, individual farmers, 

and agribusiness associates. With our broad base of representation around the 

State, OWRC has the experience and expertise to comment on this issue. 

The Oregon Water Resources Congress supports Bureau of Reclamation involvement in issues that affect the Arid West. The Bureau of Reclamation has a proven 

ability to plan, construct and provide contract management for large scale projects 

serving multiple interests. 

While OWRC supports the Bureau’s efforts as evidenced in S. 2218 and S. 1085 

and the testimony of John W. Keys, III, Commissioner of the Bureau of Reclamation, we are concerned that a core component of rural water is left off the table by 

not addressing the needs of agricultural water. For a program to fully address rural 

water needs, it should include solutions to water issues that address the full range 

of concerns facing rural communities, agriculture, and tribes. For that reason, we 

ask the committee to consider S. 993, the Small Reclamation Loan Program, as a 

supporting piece of legislation to S. 2218, S. 1732 and S. 1085. 

As Oregon moves to address its rural water issues, we’ve done so in a comprehensive approach. Environmental issues, water quality issues, and water supply issues 

are all integrated management and delivery of rural water in Oregon whether it be 

for domestic use, agricultural use or a combination of uses. As most rural communities have an agricultural base, any effort to address rural water needs must include agricultural needs along with M&I needs. Safe drinking water issues are imVerDate 0ct 09 2002 15:06 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00048 Fmt 6601 Sfmt 6621 P:\DOCS\94937.TXT SENERGY3 PsN: SENE3
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portant, but agricultural interests have a need to access funding and development 

as well in order to assure the sustainability of the rural communities. 

OWRC sees S. 2218, S. 1085, S. 1732 and S. 993 as a real opportunity to link 

rural communities together in a partnership program if the concepts in each bill can 

be formulated into a more comprehensive program. Reclamation’s expertise can assist rural communities by addressing the full range of interests and facilitate a program that will have real benefit to the rural communities and tribes of Oregon. 

S. 993 is an amendment to the Small Reclamation Projects Act of 1956. OWRC 

strongly supports S. 993 as it assists our members with funding of the rehabilitation 

of aging infrastructure of existing water deliver systems, development and implementation of water conservation projects, and development of new projects to meet 

rural water needs. The bill will enable entities to construct water quality, drought, 

and ESA related projects as well as make improvements for public safety. 

Examples of partnership programs that can be developed are:

• Existing reservoirs providing wholesale untreated water to communities and 

tribes for multiple use:

• many reservoirs provide untreated water now 

• others have space as irrigation water is conserved

• Water conservation projects providing conserved water to communities. 

• Joint projects between agriculture, Tribes and communities addressing:

• water quality 

• water supply 

• fisheries needs 

• drought needs

OWRC agrees that cost to the benefiting entities should be apportioned on the 

ability to pay. This is an important component of any project being considered by 

a rural community. S. 2218 speaks to this issue quite adequately, with a 35% minimum. S. 993 has a 25% minimum with a 25-year payback. These terms will enable 

the benefactors to address their long-term problems and maintain their economic viability. 

For these reasons, OWRC supports S. 993 and certain concepts in S. 2218, S. 1732 

and S. 1085, when considered together as a package. The three bills jointly provide 

resources which will enable rural communities to meet water needs, allow the renovation of existing projects, and facilitate water improvement programs. S. 2218, S. 

1732 and S. 1085, on the merits of the individual bills, do not by themselves provide 

the necessary tools to encompass rural water development. 

S. 993 establishes a process and a timeframe for considering proposals, processes 

and timeframes for things to be considered that are left out of the other bills. This 

is part of a necessary framework that should be considered as the package of bills 

moves forward. Thank you for this opportunity to comment. 

PREPARED STATEMENT OF NATIONAL CONGRESS OF AMERICAN INDIANS

INTRODUCTION

Chairman Domenici, Senator Bingaman, and members of the Committee, please 

consider the following comments on two bills before your committee: S. 1085, the 

‘‘Reclamation Rural and Small Community Water Enhancement Act’’ and S. 1732, 

‘‘The Reclamation Rural Water Supply Act of 2003’’. 

WATER SUPPLY IN INDIAN COUNTRY

In Indian country, nearly 7% of tribal homes continue to lack running water, a 

figure that is 14 times higher than the national average. In EPA Region 9 alone, 

which encompasses the westernmost Indian tribes, an estimated 68,000 tribal 

homes lack access to safe drinking water (including 40% of the families on the Navajo Nation that must haul or otherwise obtain their drinking water from unregulated sources), and there is only a 50% certainty that a tap turned on in a tribal 

home will consistently produce water in compliance with bacteriological monitoring 

and testing requirements. Based on the EPA Needs Survey, it is estimated that 

drinking water system construction and rehabilitation and upgrade needs in Indian 

Country have been estimated to be approximately $350-$550 million. 

Lack of funding for operations and maintenance for the continuing health and 

welfare of the tribal public water system is also a major concern for Indian tribes. 

To make this problem worse, the western drought puts pressure on resources available to public water systems, thus implicating the funding for tribal water infraVerDate 0ct 09 2002 15:06 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00049 Fmt 6601 Sfmt 6621 P:\DOCS\94937.TXT SENERGY3 PsN: SENE3
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structure needs. Routine water quality monitoring and operation and maintenance 

activities are absolutely essential to ensure the continued safety of drinking water 

in Indian country. Additionally, the absence of financial, managerial, and technical 

capacity often results in violations of the Safe Drinking Water Act and puts the public health at risk. 

New federal requirements for drinking water protection, solid waste control, nonpoint source pollution abatement, and hazardous waste have affected Indian reservations. Tribes have been charged with implementing these legislative regulations 

and rules with inadequate federal funding. The tribes stand ready to take the lead 

in the development of these codes and regulations, but need the critical skills to 

carry out these programs pursuant to federal laws. Such skills include sound technical capabilities and administration, policy, and managerial skills. 

In short, we welcome bills such as S. 1085 and S. 1732 to provide for tribal water 

supply programs. Please consider the following comments and recommendations on 

each bill. 

SENATE BILL 1085: ‘‘RECLAMATION RURAL AND SMALL COMMUNITY WATER

ENHANCEMENT ACT’’

In the purposes section of the bill, we believe you should include ‘‘Indian tribes’’ 

among the entities that the program is designated to assist. 

In Section 5(b) and 6(b), the considerations for appraisal investigations and feasibility studies should include consideration of cultural and historic resources, such 

as Native American sacred rites. 

SENATE BILL 1732: ‘‘THE RECLAMATION RURAL WATER SUPPLY ACT OF 2003’’

In Section 3(c), we believe that the bill should provide a waiver for federally recognized Indian tribes for the cost-sharing requirements. Although tribes sometimes 

voluntarily agree to assist in the costs of water projects, the federal government has 

treaty and trust responsibilities to provide for the water needs of Indian tribes, and 

cost-sharing requirements are inappropriate. This combines with the fact that nearly all rural western tribes for whom this legislation is intended are not in a position 

to provide cost-sharing. We are concerned that the cost-sharing requirement could 

become a way of discriminating against tribal projects. 

In Section 5(b), considerations for feasibility studies should include consideration 

of impacts on cultural and historic resources, such as Native American sacred sites. 

In Section 5(c)(1), the Secretary’s report should describe how her recommendation 

takes into consideration the views expressed during consultation with appropriate 

Federal, state, tribal, regional, and local authorities during the conduct of the 

leasability study. 

CONCLUSION

Thank you for this opportunity to provide these comments and recommendations 

on the bills. Please feel free to contact the National Congress of American Indians 

if you need further information. We look forward to working with your Committee 

in the future.

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