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[Senate Report 114-353]
[From the U.S. Government Publishing Office]

                                                   Calendar No. 631
                                                      
114th Congress }                                           { Report
                                 SENATE
 2d Session    }                                           { 114-353

======================================================================
 
       WESTERN WATER SUPPLY AND PLANNING ENHANCEMENT ACT OF 2016

                                _______
                                

               September 15, 2016.--Ordered to be printed

                                _______
                                

  Ms. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2902]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2902) to provide for long-term water 
supplies, optimal use of existing water supply infrastructure, 
and protection of existing water rights, having considered the 
same, reports favorably thereon with amendments and recommends 
that the bill, as amended, do pass.
    The amendments are as follows:
    1. Beginning on page 4, strike line 7 and all that follows 
through page 13, line 5, and insert the following:

SEC. 101. RESERVOIR OPERATION IMPROVEMENT.

    (a) Definitions.--In this section:
          (1) Operational document.--The term ``operational 
        document'' includes a water control plan, water control 
        manual, water control diagram, release schedule, rule 
        curve, operational agreement with a non-Federal entity, 
        and any associated environmental documentation.
          (2) Reserved works.--The term ``reserved works'' 
        means any Bureau of Reclamation project facility at 
        which the Secretary of the Interior carries out the 
        operation and maintenance of the project facility.
          (3) Secretary.--The term ``Secretary'' means the 
        Secretary of the Army.
          (4) Transferred works.--The term ``transferred 
        works'' means a Bureau of Reclamation project facility, 
        the operation and maintenance of which is carried out 
        by a non-Federal entity, under the provisions of a 
        formal operation and maintenance transfer contract.
          (5) Transferred works operating entity.--The term 
        ``transferred works operating entity'' means the 
        organization that is contractually responsible for 
        operation and maintenance of transferred works.
    (b) Report.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to the 
Committee on Environment and Public Works of the Senate and the 
Committee on Transportation and Infrastructure of the House of 
Representatives a report including, for any State in which a 
county designated by the Secretary of Agriculture as a drought 
disaster area during water year 2015 is located, a list of 
projects, including Corps of Engineers projects, and those non-
Federal projects and transferred works that are operated for 
flood control in accordance with rules prescribed by the 
Secretary pursuant to section 7 of the Act of December 22, 1944 
(commonly known as the ``Flood Control Act of 1944'') (58 Stat. 
890, chapter 665), including, as applicable--
          (1) the year the original operational documents were 
        approved;
          (2) the year for any subsequent revisions to the 
        operational documents;
          (3) a list of projects for which--
                  (A) operational deviations for drought 
                contingency have been requested;
                  (B) the status of the request; and
                  (C) a description of how water conservation 
                and water quality improvements were addressed; 
                and
          (4) a list of projects for which permanent or 
        seasonal changes to flood control capacity have been 
        requested, and the status of the request.
    (c) Identification of Eligible Projects.--Not later than 60 
days after the date of completion of the report under 
subsection (b), the Secretary shall identify any projects 
described in the report--
          (1) for which the modification of the operational 
        document, including flood control rule curve, would be 
        likely to enhance existing authorized project purposes;
          (2) for which the operational documents and 
        hydrometeorological information establishing the flood 
        control rule curves of the project have not been 
        substantially revised during the 15-year period ending 
        on the date of review by the Secretary; and
          (3) for which individuals or entities responsible for 
        operations and maintenance costs or that have storage 
        entitlements or contracts at a Corps of Engineers 
        project, the owner of a non-Federal project, or the 
        non-Federal transferred works operating entity, as 
        applicable, has submitted to the Secretary a written 
        request to revise operational documents, including 
        flood control rule curves, based on the use of improved 
        weather forecasting or run-off forecasting methods, new 
        watershed data, changes to project operations, or 
        structural improvements.
    (d) Pilot Projects.--
          (1) In general.--Not later than 1 year after the date 
        of identification of projects under subsection (c), if 
        any, the Secretary shall carry out not less than 15 
        pilot projects, which shall include not less than 6 
        non-Federal projects, to implement revisions of 
        operational documents, including flood control rule 
        curves, based on the best available science, which may 
        include--
                  (A) forecast-informed operations;
                  (B) new watershed data, including data 
                submitted by a non-Federal applicant; and
                  (C) if applicable, in the case of non-Federal 
                projects, structural improvements.
          (2) Consultation.--In implementing a pilot project 
        under this subsection, the Secretary shall consult with 
        all affected interests, including--
                  (A) entities responsible for operations and 
                maintenance costs of a Federal facility;
                  (B) individuals and entities with storage 
                entitlements;
                  (C) a Federal power management agency that 
                markets power produced by a facility; and
                  (D) local agencies with flood control 
                responsibilities downstream of a facility.
    (e) Coordination With Non-Federal Project Entities.--If a 
project identified under subsection (c) is--
          (1) A Non-Federal Project, the Secretary, prior to 
        carrying out an activity under this section, shall--
                  (A) consult with the non-Federal project 
                owner; and
                  (B) enter into a cooperative agreement, 
                memorandum of understanding, or other agreement 
                with the non-Federal project owner describing 
                the scope and goals of the activity and the 
                coordination among the parties; and
          (2) A Federal Project, the Secretary, prior to 
        carrying out an activity under this section, shall--
                  (A) consult with each Federal and non-Federal 
                entity (including a municipal water district, 
                irrigation district, joint powers authority, 
                transferred works operating entity, or other 
                local governmental entity) that currently--
                          (i) manages (in whole or in part) the 
                        Federal dam or reservoir; or
                          (ii) is responsible for operations 
                        and maintenance costs; and
                  (B) enter into a cooperative agreement, 
                memorandum of understanding, or other agreement 
                with each such entity describing the scope and 
                goals of the activity and the coordination 
                among the parties.
    (f) Consideration.--In designing and implementing a 
forecast-informed reservoir operations plan under subsection 
(d) or subsection (g), the Secretary may consult with the 
appropriate agencies within the Department of the Interior and 
the Department of Commerce with expertise in atmospheric, 
meteorological, and hydrologic science to consider--
          (1) the relationship between ocean and atmospheric 
        conditions, including--
                  (A) the El Nino and La Nina cycles; and
                  (B) the potential for above-normal, normal, 
                and below-normal rainfall for the coming water 
                year, including consideration of atmospheric 
                river forecasts;
          (2) the precipitation and runoff index specific to 
        the basin and watershed of the relevant dam or 
        reservoir, including incorporating knowledge of 
        hydrological and meteorological conditions that 
        influence the timing and quantity of runoff;
          (3) improved hydrologic forecasting for 
        precipitation, snowpack, and soil moisture conditions;
          (4) an adjustment of operational flood control rule 
        curves to optimize authorized project purposes, without 
        a reduction in flood safety; and
          (5) proactive management in response to changes in 
        forecasts.
    (g) Funding.--
          (1) In general.--The Secretary may accept and expend 
        amounts from entities described in subsection (d)(2), 
        the owners of non-Federal projects regulated for flood 
        control by the Secretary, and public or private 
        entities holding contracts with the Federal Government 
        for water storage or water supply at Federal projects 
        to fund all or a portion of the cost of carrying out a 
        review or revision of operational documents for--
                  (A) a Corps of Engineers project;
                  (B) a non-Federal project regulated for flood 
                control by the Secretary; or
                  (C) a Bureau of Reclamation facility 
                regulated for flood control by the Secretary.
          (2) Inclusion.--Funds received from entities under 
        paragraph (1) may include amounts provided by non-
        Federal entities through agreements, partnerships, or 
        joint ventures with public or private nonprofit 
        entities or Indian tribes.
          (3) In-kind contributions.--The Secretary may accept 
        and use materials and services contributed by an entity 
        under this paragraph and credit the value of the 
        materials and services toward the cost of carrying out 
        a review or revisions of operational documents.
    (h) Effect.--
          (1) Manual revisions.--A revision of an operational 
        document shall not reduce the water supply available 
        for any authorized purposes of a Federal project or the 
        existing purposes of a non-Federal project regulated 
        for flood control by the Secretary.
          (2) Effect of Section.--
                  (A) Nothing in this section authorizes the 
                Secretary to carry out, at a Federal dam or 
                reservoir, any project or activity for a 
                purpose not otherwise authorized as of the date 
                of enactment of this Act.
                  (B) Nothing in this section affects or 
                modifies any obligation of the Secretary under 
                State law.
                  (C) Nothing in this section affects or 
                modifies any obligation to comply with any 
                applicable Federal law.
          (3) Application.--
                  (A) Certain facilities.--This section applies 
                only to a facility located in a State in which 
                a Bureau of Reclamation project is located.
                  (B) Certain projects excluded.--This section 
                shall not apply to--
                          (i) any project authorized by the Act 
                        of December 31, 1928 (43 U.S.C. 617 et 
                        seq.) (commonly known as the ``Boulder 
                        Canyon Project Act''); or
                          (ii) the initial units of the 
                        Colorado River Storage Project, as 
                        authorized by the first section of the 
                        Act of April 11, 1956 (43 U.S.C. 620) 
                        (commonly known as the ``Colorado River 
                        Storage Project Act'').
                  (C) Bureau of reclamation reserved works 
                excluded.--This section--
                          (i) shall not apply to any dam or 
                        reservoir operated by the Bureau of 
                        Reclamation as a reserved work, unless 
                        all non-Federal project sponsors of a 
                        reserved work jointly provide to the 
                        Secretary a written request for 
                        application of this section to the 
                        project; and
                          (ii) shall apply only to Bureau of 
                        Reclamation transferred works at the 
                        written request of the transferred 
                        works operating entity.
    (i) Prior Studies.--In carrying out subsections (b), (c), 
and (d), to the maximum extent practicable, the Secretary 
shall--
          (1) coordinate with the efforts of the Secretary to 
        complete the reports required under subparagraphs 
        (A)(iii) and (B) of subsection (a)(2) of section 1046 
        of the Water Resources Reform and Development Act of 
        2014 (33 U.S.C. 2319 note, 128 Stat. 1251); and
          (2) consider the findings of the reports described in 
        paragraph (1) if the reports are available prior to 
        carrying out subsections (b), (c), and (d).
    (j) Modifications to Manuals and Curves.--Not later than 
180 days after the date of completion of a modification to an 
operational document, the Secretary shall submit to the 
Committees on Environment and Public Works and Energy and 
Natural Resources of the Senate and the Committees on 
Transportation and Infrastructure and Natural Resources of the 
House of Representatives a report regarding the components of 
the forecast-based reservoir operations plan incorporated into 
the change.

    2. Beginning on page 19, line 24, strike ``shall--'' and 
all that follows through ``(1) fund'' on page 20, line 1, and 
insert ``shall fund''.
    3. On page 20, line 7, strike the semicolon at the end and 
insert a period.
    4. Beginning on page 20, strike line 8 and all that follows 
through page 21, line 3.
    5. On page 22, line 7, strike ``$10,000,000'' and insert 
``$8,000,000''.
    6. Beginning on page 102, strike line 22 and all that 
follows through page 103, line 5, and insert the following:

water right beyond any applicable limitations under State water 
law; or
    (4) the modification of the terms and conditions

    7. On page 107, line 15, strike ``$35,000,000'' and insert 
``$30,900,000''.
    8. On page 108, line 3, strike ``$35,000,000'' and insert 
``$30,900,000''.
    9. On page 108, line 6, strike ``$35,000,000'' and insert 
``$30,900,000''.
    10. On page 110, line 1, strike ``$35,000,000'' and insert 
``$30,900,000''.
    11. On page 124, line 7, strike ``75'' and insert ``65''.
    12. On page 124, line 15, strike ``75'' and insert ``65''.

                                Purpose

    The purpose of S. 2902 is to provide for long-term water 
supplies, optimal use of existing water supply infrastructure, 
and protection of existing water rights.

                          Background and Need

    Across the West, federal agencies, farmers, American Indian 
tribes, irrigation districts, and a broad array of others face 
a wide range of water-related challenges including drought, 
aging infrastructure, limited supply and competing uses, and 
lengthy permitting processes. In the face of prolonged drought, 
the Colorado River Basin states have joined together in a 
``system conservation program'' that includes water 
conservation projects designed to reduce the demands on Lake 
Mead's water supply. Despite the program's success, there is 
continuing risk that water elevations in the Colorado River 
system could drop to levels that would trigger shortages. In 
addition, the federal water storage permitting process for 
analyzing the feasibility, cost effectiveness, and 
environmental impacts of dams and other infrastructure is often 
lengthy, complex, and costly as multiple agencies are involved. 
While cost efficiencies and feasibility are the major barriers 
to developing new storage, addressing the length of reviews and 
number of agencies involved is often cited by proponents as 
further hindering the opportunities to develop needed storage. 
The maintenance backlog at Bureau of Reclamation facilities is 
significantly hindering the agency's ability to ensure the 
upkeep of existing infrastructure and completion of needed 
rural water projects. Similarly, challenges at the Bureau of 
Indian Affairs hamper the agency's ability to complete water 
related projects and improvements in a timely fashion.

                          Legislative History

    S. 2902 was introduced on May 9, 2016, by Senator Flake. 
Original cosponsors include Senators Barrasso, McCain, Risch, 
Heller, and Daines. The Water and Power Subcommittee held a 
hearing on May 17, 2016.
    The Committee on Energy and Natural Resources met in open 
business session on July 13, 2016, and ordered S. 2902 
favorably reported as amended.

            Committee Recommendation and Tabulation of Votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on July 13, 2016, by a recorded vote of 
12-10, with a quorum present, ordered S. 2902 as amended 
reported S. 2902 and recommends that the Senate pass the bill 
if amended as described herein.
    The roll call vote on reporting the measure was 12 yeas and 
10 nays, as follows:

        YEAS                          NAYS
Ms. Murkowski                       Ms. Cantwell
Mr. Barrasso                        Mr. Wyden
Mr. Risch                           Mr. Sanders *
Mr. Lee                             Ms. Stabenow
Mr. Flake                           Mr. Franken *
Mr. Cassidy                         Mr. Manchin *
Mr. Gardner                         Mr. Heinrich
Mr. Daines                          Ms. Hirono *
Mr. Portman                         Mr. King
Mr. Hoeven                          Ms. Warren
Mr. Alexander
Ms. Capito

*Indicates vote by proxy.

                          Committee Amendments

    During its consideration of S. 2902, the Committee adopted 
12 amendments that would: (1) modify the reservoir operations 
provisions to ensure affected interests are consulted by 
federal agencies implementing a pilot project and provided for 
contributions of non-Federal funds by public or private non-
profit entities or Indian tribes through agreements 
partnerships or joint-ventures; (2) strike language regarding 
the release or delivery of surplus water in Lake Mead; and, (3) 
reduce the total authorization funding levels in the bill by 
$89 million; and (4) strike redundant language regarding 
applicability of state water law in the water rights protection 
provision.

                           Section-by-Section

 TITLE I--LONG-TERM IMPROVEMENTS FOR WESTERN STATES SUBJECT TO DROUGHT

                 SUBTITLE A--WATER SUPPLY IMPROVEMENTS

Section 101. Reservoir operations

    Section 101 provides the authority for not less than 15 
pilot projects to be carried out to update flood control 
operations (USACE, USBR, or non-federal) in order to ensure 
application of the best available science, including up-to-date 
forecasting methods and hydrology, to enhance water supply and 
other benefits.

Section 102. Authority to make the entire active capacity of Fontenelle 
        Reservoir available for use

    Section 102 provides authority for the Secretary of 
Interior to enter into cooperative agreements with the state of 
Wyoming to make improvements to the Fontenelle Reservoir to use 
the entire active capacity of the Reservoir.

Section 103. Saltcedar control efforts

    Section 103 directs a study by the National Academy of 
Sciences on the effectiveness of tamarisk/salt cedar control 
efforts as well as specifying existing authorities that could 
be used to implement such controls and a list of Federal 
permits that would be required by such a program. It also 
requires a report on a plan to implement such a program.

Section 104. Colorado River system

    Section 104 directs the Secretary of the Interior to 
develop a voluntary program to increase water in Colorado River 
reservoirs and authorizes $8 million per year for 10 years to 
carry out this section.

        SUBTITLE B--PROTECTING CRITICAL WATER SUPPLY WATERSHEDS

Section 111. Definitions

    Section 111 provides definitions for this title.

Section 112. Analysis of only two alternatives in proposed 
        collaborative management activities

    Section 112 provides the agency with authority for limiting 
evaluation in permit processed for forest and wildland 
restoration activities on Federal Lands in critical water 
supply watersheds assuming certain criteria are met to only two 
alternatives: (1) the management activity as proposed; and (2) 
the alternative of no action.

Section 113. Categorical exclusion to expedite certain critical 
        response actions

    Section 113 provides authority to the Secretary concerned 
to use a categorical exclusion to carry out a management 
activity on National Forest System land or public land under 
certain conditions and within certain criteria.

Section 114. Compliance with land use plans

    Section 114 directs that a management activity covered by a 
categorical exclusion granted by this provision shall be 
conducted in a manner consistent with the applicable land use 
plan.

           SUBTITLE C--BUREAU OF RECLAMATION TRANSPARENCY ACT

Section 121. Short title

    Section 121 provides the title for the section.

Section 122. Findings

    Section 122 describes the findings for the subtitle.

Section 123. Definitions

    Section 123 provides the definitions for the subtitle.

Section 124. Asset management report enhancements for reserved works

    Section 124 requires the Secretary of the Interior to 
submit to Congress a report on the efforts of the Bureau of 
Reclamation to manage its infrastructure assets, including 
reserved works--facilities owned and operated by the Bureau of 
Reclamation--and a detailed assessment and ranking of major 
repair and rehabilitation needs for all reserved works.

Section 125. Asset management report enhancements for transferred works

    Section 125 requires the Secretary of the Interior to 
develop requirements for Asset Management Reports for 
transferred works--facilities owned by the Bureau of 
Reclamation but operated by others--and develop and implement a 
rating system to prioritize efforts to address major repair and 
rehabilitation needs for transferred works.

Section 126. Offset

    Section 126 provides a two million dollar reduction in 
authorizations to offset the estimated additional cost to carry 
out this section.

                SUBTITLE D--WATER SUPPLY PERMITTING ACT

Section 131. Short title

    Section 131 provides the short title of the subtitle.

Section 132. Definitions

    Section 132 provides the definitions used in the subtitle.

Section 133. Establishment of lead agency and cooperating agencies

    Section 133 establishes the Bureau of Reclamation as the 
lead agency for a wide range of activities related to 
coordinating new water supply projects. Agency action would 
include coordination of all reviews, analyses, opinions, 
statements, permits, licenses, or other approvals required 
under Federal law. It also directs that the Commissioner of 
Reclamation identify and notify, as early as practicable, any 
other federal agency that will have jurisdiction, and play a 
role in activities associated with a project.

Section 134. Bureau responsibilities

    Section 134 describes the principal responsibilities of the 
Bureau of Reclamation, including serving as the point of 
contact for applicants for projects, state agencies, and 
others. The Bureau would also provide direction and 
coordination of all federal agency reviews necessary for 
project development and construction of qualified project as 
well as preparation of unified environmental documentation that 
will serve as the basis for all federal decisions necessary to 
authorize the use of federal lands and construction of 
qualifying projects.

Section 135. Cooperating agency responsibilities

    Section 135 describes cooperating agency responsibilities, 
including the need for the head of each agency to submit a 
timeframe to the Bureau under which the cooperating agency will 
reasonably be able to complete its authorized responsibilities.

Section 136. Funding to process permits

    Section 136 authorizes the Secretary of Interior to accept 
and expend funds contributed by a non-federal public entity to 
expedite the evaluation of a permit related to a qualifying 
project.

       SUBTITLE E--BUREAU OF RECLAMATION PROJECT STREAMLINING ACT

Section 141. Short title

    Section 141 provides the short title of the subtitle.

Section 142. Definitions

    Section 142 provides the definitions used in the subtitle.

Section 143. Acceleration of studies

    Section 143 directs that, to the extent practicable, a 
project study initiated by the Secretary of Interior shall 
result in the completion of a final feasibility report not 
later than three years after the date of initiation, have a 
maximum Federal cost of $3 million, and ensure personnel from 
the local project, region, and headquarters concurrently 
conduct the required reviews. The section also prescribes other 
guidance regarding the acceleration of studies and requires 
reports to Congress on the implementation of the required 
reforms.

Section 144. Expedited completion of reports

    Section 144 requires the Secretary of Interior to expedite 
the completion of any ongoing project study initiated before 
the date of enactment of the Act, and if the Secretary 
determines the project is justified in a completed report, 
proceed directly to preconstruction planning, engineering, and 
design of the project.

Section 145. Project acceleration

    Section 145 establishes process reforms to promote timely 
completion of project studies and environmental reviews for 
project studies. Among other steps, the section requires the 
Secretary to develop a coordinated environmental review process 
for the development of project studies. The Section also 
imposes financial penalties on the agency for failure to render 
a decision relating to applicable project studies.

Section 146. Annual report to Congress

    Section 146 requires that by February 1 of each year, the 
Secretary shall submit to relevant committees of Congress a 
report that, among other things, provides a description of the 
status, benefits, and costs of Bureau of Reclamation projects, 
reports, and studies that require specific congressional 
authorization, proposed project studies, and proposed 
modifications to authorized projects.

               TITLE II--PROTECTING EXISTING WATER RIGHTS

Section 201. Short title

    Section 201 establishes the short title for the title.

Section 202. Definitions

    Section 202 establishes definitions for title

Section 203. Applicability

    Section 203 makes clear that this title applies to each 
action by the Secretary of Agriculture and Secretary of the 
Interior to, among other actions, issue, renew, amend, or 
extend any permit, approval, license, allotment, or easement.

Section 204. Prohibitions

    Section 204 prohibits the Secretary from conditioning or 
withholding action, in whole or in part, on-- (1) the transfer 
of any State water right to the United States or any other 
designee; or (2) the acquisition of a State water right in the 
name of the United States. This Section also prohibits the 
Secretary from (1) limiting the date, time, quantity, location 
of diversion or pumping, or place of use of a State water right 
beyond any applicable limitation under State water law; or (2) 
the modification of the terms and conditions of groundwater 
withdrawal, guidance and reporting procedures, and conservation 
and source protection measures established by a State.

Section 205. Policy development

    Section 205 requires that in developing a rule, policy, 
directive or other similar federal action, the Secretary shall 
recognize the authority of States to evaluate, protect, and 
regulate groundwater and shall coordinate with states to ensure 
any federal action, such as a rule or directive, is consistent 
with, and imposes no greater restriction or regulatory 
requirement than applicable state law.

Section 206. Effect of title

    Section 206 includes seven savings provisions clarifying 
that nothing in the title limits or expands and reserved water 
right of the Federal Government on land administered by the 
Secretary, affects implementation of the Endangered Species 
Act, or limits or expands the Federal Power Act.

TITLE III--COMPLETING AND MAINTAINING RURAL WATER SUPPLY INFRASTRUCTURE 
                     AND INDIAN IRRIGATION PROJECTS

  SUBTITLE A--THE IRRIGATION REHABILITATION AND RENOVATION FOR INDIAN 
         TRIBAL GOVERNMENTS AND THEIR ECONOMIES (IRRIGATE) ACT

Section 301. Short title

    Section 301 establishes the short title for the title.

Section 302. Definitions

    Section 302 establishes definitions for title.

                     PART I--INDIAN IRRIGATION FUND

Section 311. Establishment

    Section 311 establishes an Indian Irrigation Fund that will 
consist of amounts deposited in the Fund plus interest earned 
on investment of the Fund.

Section 312. Deposits to Fund

    Section 312 authorizes deposits of $30.9 million annually 
into the Indian Irrigation Fund (Fund) each year from Fiscal 
Year 2017 to 2038 of funds that would otherwise be deposited 
into the Reclamation Fund.

Section 313. Expenditures from Fund

    Section 313 establishes that the Secretary of the Interior 
may expend not more than $30.9 million and interest accrued for 
each of Fiscal Years 2017 through 2038, subject to 
appropriations. The Secretary may expend more than $30.9 
million if additional funds are available in the Fund as a 
result of a failure of the Secretary to expend all the amounts 
available in 1 or more prior years.

Section 314. Investments of amounts

    Section 314 establishes that the Secretary of the Treasury 
shall invest excess amounts from the Fund if there is enough 
money to meet current withdrawals. Interest accrued and any 
sales from such investments shall be credited to and become a 
part of the Fund.

Section 315. Transfers of amounts

    Section 315 provides that amounts to be transferred in the 
Indian Irrigation Fund shall be transferred at least monthly 
from the general fund on the basis of estimates by the 
Secretary of the Interior.

Section 316. Termination

    Section 316 provides that at the end of Fiscal Year 2038, 
the Indian Irrigation Fund shall terminate and the unexpended 
and unobligated balances of the funds shall be returned to the 
reclamation fund.

    PART II--REPAIR, REPLACEMENT, AND MAINTENANCE OF CERTAIN INDIAN 
                          IRRIGATION PROJECTS

Section 321. Repair, replacement, and maintenance of certain Indian 
        irrigation projects

    Section 321 requires the Secretary of the Interior to 
establish a program to address the deferred maintenance needs 
of Indian irrigation projects that: pose risks to public or 
employee safety or natural or cultural resources or impede 
management and efficiency. The section also requires that the 
Secretary of the Interior shall transfer $30.9 million, plus 
any accrued interest, from the Fund to the Bureau of Indian 
Affairs (BIA) every year from 2017 to 2038 to carry out the 
program to address the deferred maintenance needs of Indian 
irrigation projects. This section also ensures that the funds 
expended shall not be subject to reimbursement or assessment as 
debt against landowners that are served by the BIA irrigation 
systems, consistent with the Federal Government's 
responsibility for these systems.

Section 322. Eligible projects

    Section 322 establishes that projects eligible for funds 
from the Indian Irrigation Fund, are specific Indian irrigation 
projects in the western United States and are owned by the 
Federal Government, managed and operated by the BIA (or Indian 
tribes through Indian Self Determination and Education 
Assistance Act contracts or compacts), and have documented 
deferred maintenance.

Section 323. Requirements and conditions

    Section 323 requires that within 120 days after enactment 
the Secretary, in consultation with the Assistant Secretary for 
Indian Affairs and representatives of affected Indian tribes, 
shall develop and submit to Congress (1) programmatic goals to 
carry out the new Indian irrigation program and (2) funding 
prioritization criteria to serve as a methodology for 
distributing the funds.

Section 324. Study of Indian irrigation program and project management

    Section 324 establishes that within 2 years, the Secretary, 
acting through the Assistant Secretary for Indian Affairs, 
shall complete a study that evaluates options for improving 
programmatic and project management of BIA-managed Indian 
irrigation projects. The study report, to be submitted to 
Congress, will also include recommendations for improvement in 
each qualifying project area. Prior to conducting the study, 
the Secretary is required to consult with Indian tribes with 
jurisdiction over the land on which an eligible project is 
located and consider input of landowners served by the project. 
This section also requires the Secretary of the Interior to 
report not less frequently than every two years to Congress on 
the progress being made to improve the irrigation systems with 
the fund.

Section 325. Tribal consultation and user input

    Section 325 establishes that, within 120 days of enactment 
and prior to spending any funds on a project, the Secretary 
shall consult with impacted Indian tribes and consider the 
input of landowners.

Section 326. Allocation among projects

    Section 326 establishes that, for every year funding is 
available through 2038, each eligible project with critical 
maintenance needs qualifies for at least some funding. This 
section establishes additional considerations for prioritizing 
funding for Indian irrigation projects.
    The section also limits the total allocation for any 
individual project to no more than $15 million during any 
consecutive three year period. Notwithstanding the cap, if the 
full amount of $30.9 million cannot be allocated because the 
costs of the remaining maintenance activities exceed the cap, 
the Secretary may allocate funds in accordance with this title. 
This section authorizes the Indian Self Determination and 
Education Assistance Act to apply to activities under this 
section.

         SUBTITLE B--THE CLEAN WATER FOR RURAL COMMUNITIES ACT

Section 331. Short title

    Section 331 provides the short title for subtitle.

Section 332. Purpose

    Section 332 establishes that the purpose of the title is to 
ensure a safe and adequate water supply for municipal, rural, 
and industrial customers in several counties in Montana and 
North Dakota.

Sec. 333. Definitions

    Section 333 provides definitions for terms in the subtitle.

Section 334. Dry-Redwater Regional Water Authority System and 
        Musselshell-Judith Rural Water System

    Section 334 authorizes the Secretary of the Interior to 
carry out the Dry-Redwater Regional Water Authority System and 
the Musselshell-Judith Rural Water System rural water projects, 
consistent with the applicable feasibility studies for each 
project. The section also authorizes cooperative agreements and 
cost sharing arrangements between the Federal government and 
the applicable water system authorities.

Section 335. Use of power from Pick-Sloan program by Dry-Redwater 
        Regional Water Authority System

    Section 335 authorizes the Western Area Power Administrator 
to provide electric power--up to 1.5 megawatts--to the Dry-
Redwater Regional Water System under certain conditions 
(including rates to be set by the Administrator) to meet the 
systems' needs regarding pumping stations, water treatment 
facilities and storage tanks among others. The cost of 
additional power if needed, would be reimbursed to the Western 
Area Power Administration by the Dry-Redwater Regional Water 
Authority.

Section 336. Water rights

    Section 336 makes clear that nothing in the subtitle 
preempts or affects any state water law or state authority to 
manage water resources within that state.

Section 337. Authorization of appropriations

    Section 337 authorizes to be appropriated such sums as are 
necessary to carry out the planning, design, and construction 
of the Water Systems, substantially in accordance with the 
applicable cost estimates.

                            TITLE VI--OFFSET

Sec. 401. Accelerated revenue, repayment, and surface water storage 
        enhancement

    Section 401 directs the Department of the Interior to 
convert any existing water service contracts between the United 
States and water users' associations to repayment contracts to 
allow for prepayment of such contracts, upon the request of the 
water users association.

                   Cost and Budgetary Considerations

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 12, 2016.
Hon. Lisa Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2902, the Western 
Water Supply and Planning Enhancement Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Aurora 
Swanson.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

S. 2902--Western Water Supply and Planning Enhancement Act of 2016

    Summary: S. 2902 would direct the Bureau of Reclamation 
(BOR) to convert water service contracts with water districts 
in 17 western states to repayment contracts if a contractor 
requests it, which would allow contractors to repay their share 
of capital costs to the federal government earlier than would 
otherwise occur under current law. CBO estimates that 
accelerating those payments would, on net, increase offsetting 
receipts, which are treated as reductions in direct spending, 
by $635 million over the next 10 years. Additionally, the staff 
of the Joint Committee on Taxation (JCT) expects that some 
nonfederal water contractors would finance those accelerated 
payments to the government with bonds that are exempt from 
federal taxation. JCT estimates that enacting the legislation 
would decrease revenues by $77 million over the 2017-2026 
period.
    On net, CBO estimates that those changes in direct spending 
and revenues would decrease budget deficits over that 10-year 
period by $558 million. Because enacting the bill would affect 
direct spending and revenues, pay-as-you-go procedures apply.
    S. 2902 also would authorize multiple water projects. Based 
on information from BOR and the Bureau of Indian Affairs (BIA), 
CBO estimates that implementing those provisions would cost 
$319 million over the next five years and $669 million over the 
2017-2026 period, assuming appropriation of the authorized and 
estimated amounts.
    CBO estimates that enacting the bill would not increase net 
direct spending or on-budget deficits by more than $5 billion 
in any of the four consecutive 10-year periods beginning in 
2027.
    S. 2902 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 2902 is shown in table 1. The costs of 
this legislation fall within budget function 300 (natural 
resources and environment).

                                                  TABLE 1.--SUMMARY OF BUDGETARY EFFECTS UNDER S. 2902
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            By fiscal year, in millions of dollars--
                                       -----------------------------------------------------------------------------------------------------------------
                                          2017      2018      2019      2020     2021    2022    2023    2024    2025    2026    2017-2021    2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Estimated Budget Authoritya...........      -170      -350      -396      -165      39      83      82      81      81      80       -1,042         -635
Estimated Outlays.....................      -170      -350      -396      -165      39      83      82      81      81      80       -1,042         -635
 
                                                                  DECREASES IN REVENUES
 
Estimated Revenuesb...................         *        -2        -4        -7      -9     -11     -11     -11     -11     -11          -22          -77
 
                                NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
 
Effect on Deficit.....................      -170      -348      -392      -158      48      94      93      92      92      91       -1,020         -558
 
                                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level.........        50        75        90        77      78      78      65      66      67      68          370          714
Estimated Outlays.....................        27        54        81        80      77      78      70      68      67      67          319          669
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding. * = between zero and -$500,000.
aCBO estimates that offsetting receipts would decline by $1.1 billion in years after 2026 for a net loss of about $470 million over the next 30 years.
bEstimates prepared by the staff of the Joint Committee on Taxation.

    Basis of estimate: For this estimate, CBO assumes that S. 
2902 will be enacted near the end of 2016.

Direct spending

    BOR delivers water under 860 water service and repayment 
contracts in 17 western states. In addition to paying for the 
water, contractors also pay for a portion of the estimated 
capital costs of constructing the reservoirs and conveyance 
systems that store and deliver that water. CBO estimates that 
in each of the next several years, those contractors will pay 
about $245 million annually for their share of construction 
costs (including interest) to the federal government. 
Collectively those water contractors have an outstanding 
obligation to the government of about $5.5 billion (including 
principal and interest) over the next 30 years.
    Generally, BOR contractors receive water under service 
contracts until construction of an entire project is complete. 
At that time, new contracts are negotiated (known as repayment 
contracts) with annual payments adjusted to reflect the final 
capital costs. The repayment period under those contracts 
cannot exceed 40 years and water contractors typically cannot 
pay their share of the construction costs on an accelerated 
schedule.\1\
---------------------------------------------------------------------------
    \1\Agreements between the federal government and water contractors 
for delivering water for irrigation, municipal, and industrial purposes 
from federally built projects are generally governed by either water 
service contracts or repayment contracts. Water service contracts are 
used when construction of a project is still in progress and the final 
costs--including the contractors' share of those costs--are not yet 
known. They are also used when a contractor does not want a permanent 
contract. Repayment contracts are available to contractors when final 
construction costs and the contractor's share of those costs are known.
---------------------------------------------------------------------------
    S. 2902 would require BOR to convert any water service 
contract to a repayment contract if the contractor requests it. 
Amounts due under such a repayment contract would be based on 
an estimate of final costs if construction of the project is 
not yet complete. Under the bill, contractors that choose to 
convert would be required to repay their share of the capital 
costs of the project on an accelerated schedule. Those 
contractors that are already operating under repayment 
contracts would have the option to repay the government on an 
accelerated schedule.
    Under the bill irrigation contractors would pay, either in 
one lump sum or in equal installments over three years, the 
present value of their future contract payments discounted at 
one-half of the 20-year maturity rate for Treasury securities. 
Municipal and industrial contractors would be required to 
prepay their entire outstanding principal balance in a lump 
sum.
    Based on information from BOR about the terms of current 
water contracts, CBO expects that about 35 percent of the 
current contractors would choose to convert to repayment 
contracts in the first few years after the bill's enactment. 
CBO estimates the receipts from those accelerated payments 
would total $1.4 billion over the 2017-2026 period. During the 
same period there would be a corresponding loss of annual 
repayments (including applicable interest costs) that would 
otherwise occur totaling $807 million. On net, under S. 2902, 
CBO estimates that offsetting receipts would increase by $635 
million over the 2017-2026 period. However, the reduction in 
offsetting receipts after 2026 would be greater than the net 
increase in receipts that would occur over the 2017-2026 
period. CBO estimates that the net loss in offsetting receipts 
from enacting this provision would total about $470 million 
over the next 30 years.

Revenues

    JCT estimates that some of the accelerated payments from 
water districts to the federal government would be financed 
with bonds that are exempt from federal taxation and that 
issuing those bonds would lead to a revenue loss of $77 million 
over the next 10 years.

Spending subject to appropriation

    As shown in Table 2, CBO estimates that implementing the 
discretionary components of the bill would cost $319 million 
over the 2017-2021 period and $669 million over the 2017-2026 
period, assuming appropriation of the authorized and estimated 
amounts.

                                          TABLE 2.--INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER S. 2902
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 By fiscal year, in millions of dollars----
                                                   -----------------------------------------------------------------------------------------------------
                                                     2017    2018    2019    2020    2021    2022    2023    2024    2025    2026   2017-2021  2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Indian Irrigation Projects:
    Estimated Authorization Level.................      31      31      32      32      32      32      32      32      32      32       158        320
    Estimated Outlays.............................      15      23      30      32      32      32      32      32      32      32       133        294
Rural Water Projects:
    Estimated Authorization Level.................       3      14      30      31      32      33      20      21      22      22       110        229
    Estimated Outlays.............................       2       9      22      28      31      32      25      23      21      22        93        216
Colorado River Basin Projects:
    Authorization Level...........................       8       8       8       8       8       8       8       8       8       8        40         80
    Estimated Outlays.............................       5       7       8       8       8       8       8       8       8       8        36         76
Accelerating Project Reviews:
    Estimated Authorization Level.................       6       6       6       6       5       5       5       5       5       5        29         54
    Estimated Outlays.............................       4       5       6       6       5       5       5       5       5       5        26         51
Other Provisions:
    Estimated Authorization Level.................       2      15      15       0       0       0       0       0       0       0        32         32
    Estimated Outlays.............................       1      10      15       6       0       0       0       0       0       0        32         32
    Total Increases:
        Estimated Authorization Level.............      50      75      90      77      78      78      65      66      67      68       370        714
        Estimated Outlays.........................      27      54      81      80      77      78      70      68      67      67       319        669
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:Components may not sum to totals because of rounding.

    Indian Irrigation Projects. S. 2902 would establish a new 
Indian Irrigation Fund and transfer $31 million from the 
existing Reclamation Fund into the proposed fund each year over 
the 2017-2038 period. The bill would authorize the 
appropriation of those annual deposits (plus any interest 
credited to the fund) to maintain irrigation projects owned by 
the federal government and operated by BIA. According to BIA, 
the agency operates 18 Indian irrigation projects that would be 
eligible to receive appropriated funds under the bill, CBO 
estimates that implementing those provisions would cost $294 
million over the 2017-2026 period and about $390 million 
thereafter.
    Rural Water Projects. S. 2902 would authorize the 
construction of two water projects for treatment, storage and 
delivery of water to rural communities in Montana and North 
Dakota. Based on information from BOR, CBO estimates that the 
federal share (65 percent) of costs for constructing those 
projects would total $216 million over the 2017-2026 period. 
Those projects and their respective costs are described below:
           The Dry-Redwater Rural Water Project in 
        Montana would construct water treatment and 
        distribution facilities to deliver water to existing 
        storage tanks in rural communities in eastern Montana 
        and a small area in northwestern North Dakota. Based on 
        information from BOR, including adjustments for 
        anticipated inflation as specified by the bill, CBO 
        estimates that the federal share of costs for 
        constructing this project would total $151 million over 
        the 2017-2026 period and about $57 million after 2026.
           The Musselshell-Judith Rural Water Project 
        located in Montana would construct groundwater wells 
        and distribution facilities to deliver water to rural 
        communities in central Montana. Based on information 
        from BOR, including adjustments for anticipated 
        inflation as specified by the bill, CBO estimates that 
        the federal share of costs for constructing the project 
        would total $65 million over the 2017-2026 period.
    Colorado River Basin Projects. S. 2902 would permanently 
authorize a pilot program to construct water storage projects 
on some reservoirs in the Colorado River Basin that is 
scheduled to expire in 2018. The bill would authorize the 
appropriation of $8 million a year to provide grants to certain 
public entities for projects that would increase water storage 
capacity. The bill also would authorize BOR to provide grants 
for renewing or implementing existing agreements with 
nonfederal public entities that focus on conserving water to 
mitigate drought conditions. Based on historical spending 
patterns for similar projects, CBO estimates that implementing 
those provisions would cost $76 million over the 2017-2026 
period.
    Accelerating Project Reviews. S. 2902 would establish BOR 
as the lead federal agency to coordinate with states, other 
federal agencies, and the public to:
           Expedite environmental reviews and 
        evaluations of permit applications,
           Facilitate early detection and resolution of 
        environmental issues, and
           Construct a publicly accessible database 
        that would include a list of requirements for the study 
        for each project and information on the progress toward 
        completing each requirement.
    S. 2902 also would require BOR to identify water projects 
across the United States that were excluded from environmental 
reviews because they were determined to have no significant 
effect on the environment. The agency would be tasked with 
developing guidelines for new exclusions based on the 
characteristics of those projects.
    S. 2902 would limit BOR to spending $3 million or less on 
studies conducted as part of its reviews; those studies would 
have to be completed within three years. If a study could not 
be completed within that period for $3 million or less, BOR 
would be required to provide written notice to the Congress and 
any other agencies involved. Finally, the bill would direct BOR 
to annually solicit proposals to build water projects through 
the Federal Register and to report to the Congress on the 
preliminary costs and benefits of each of those proposals.
    Based on information from BOR and other federal agencies, 
CBO estimates that the additional activities required to 
implement those provisions would cost $51 million over the 
2017-2026 period for additional staff to coordinate agency 
reviews, consolidate project data and documentation, and 
conduct reviews.
    Other Provisions. Other costs under S. 2902 would stem from 
provisions that would direct the Corps, in coordination with 
BOR, to identify 15 federal and nonfederal projects designed to 
control the risk of flooding in states that were declared 
federal disaster areas in 2015 because of drought. Based on 
information from the BOR and the Army Corps of Engineers, CBO 
estimates that implementing those provisions would cost $31 
million over the 2017-2026 period.
    Finally, the bill would direct BOR to contract with the 
National Academy of Sciences (NAS) to conduct a study to 
evaluate the efforts to control saltcedar in combination with 
increasing water supplies and improving riparian habitats.\2\ 
S. 2902 would direct BOR to use the results of the NAS study 
and develop a plan to control the spread of saltcedar. Based on 
information from BOR, CBO estimates that implementing those 
provisions would cost $1 million over the 2017-2026 period.
---------------------------------------------------------------------------
    \2\Saltcedar (also called tamarisk) is considered an invasive 
species in the western United States. It is a small shrub that 
displaces native plants and harms riparian ecosystems.
---------------------------------------------------------------------------
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in Table 3.

                                                    TABLE 3.--PAY AS YOU GO CONSIDERATIONS FOR S. 2902
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            By fiscal year, in millions of dollars----
                                         ---------------------------------------------------------------------------------------------------------------
                                                                                                                                                  2016
                                           2016    2017     2018     2019     2020    2021    2022    2023    2024    2025    2026   2016 2021    2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact..........      0     -170     -348     -392     -158      48      94      93      92      92      91     -1,020      -558
Memorandum:
    Changes in Outlays..................      0     -170     -350     -396     -165      39      83      82      81      81      80     -1,042      -635
    Changes in Revenues.................      0        0       -2       -4       -7      -9     -11     -11     -11     -11     -11        -22       -77
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 2902 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. State, local, and tribal governments, as well 
as other public entities that manage water infrastructure, 
would benefit from greater flexibility provided in the bill to 
study, permit, manage, and finance water projects supported by 
federal agencies. Any costs incurred by those entities under 
agreements with federal agencies, including cost-sharing 
contributions, would result from complying with conditions of 
federal assistance. The bill also would benefit water user 
associations by allowing them to prepay what they own in 
remaining capital obligations to the federal government for 
their use of federal water infrastructure.
    Increase in long-term net direct spending and deficits: CBO 
estimates that enacting the bill would not increase net direct 
spending or on-budget deficits by more than $5 billion in any 
of the four consecutive 10-year periods beginning in 2027.
    Previous CBO estimate: On July 14, 2015, CBO transmitted a 
cost estimate for H.R. 2898, the Western Water and American 
Food Security Act of 2015, as ordered reported by the House 
Committee on Natural Resources on July 9, 2015. Some of the 
provisions of H.R. 2898 are similar to those in S. 2902--
including those regarding the accelerated repayment of debt and 
expediting project reviews. CBO's estimate of the cost of those 
provisions reflects current and new information about the 
status of debt repayments.
    On March 30, 2015, CBO transmitted a cost estimate for S. 
438, the IRRIGATE Act, as ordered reported by the Senate 
Committee on Indian Affairs on March 30, 2015. S. 438 and S. 
2902 have similar provisions that would establish a new Indian 
Irrigation Fund.
    Estimate prepared by: Federal spending: Aurora Swanson; 
Federal revenues: Staff of the Joint Committee on Taxation; 
Impact on state, local, and tribal governments: Jon Sperl; 
Impact on the private sector: Amy Petz.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 2902. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 2902, as ordered reported.

                   Congressionally Directed Spending

    S. 2902, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        Executive Communications

    The testimony provided by the Bureau of Reclamation of the 
U.S. Department of the Interior and the U.S. Forest Service of 
Department of Agriculture before the Water and Power 
Subcommittee on May 17, 2016, follows:

 Statement of Estevan Lopez, Commissioner, Bureau of Reclamation, U.S. 
                       Department of the Interior

    Chairman Lee, Ranking Member Hirono and Members of the 
Subcommittee, I am Estevan Lopez, Commissioner of the Bureau of 
Reclamation. Thank you for the opportunity to provide the views 
of the Department on S. 2902, the Western Water Supply and 
Planning Enhancement Act. Several provisions of S. 2902 include 
distinct and targeted provisions that touch on operational, 
environmental, planning and budget functions, many of which the 
Department has previously testified on. For this reason, much 
of my statement will summarize the Department's previously 
expressed views on the proposals in those provisions rather 
than the bill as a whole.

             title i, subtitle a--water supply improvements

    Section 101 of S. 2902 contains language of interest to the 
Bureau of Reclamation (Reclamation) and Army Corps of 
Engineers. Section 101, dealing with Reservoir Operation 
Improvement, would direct the creation of pilot projects to 
implement revisions of water operations manuals. The Department 
notes that the directives of Section 101 fall on the U.S. Army 
Corps of Engineers (Corps), and that, pursuant to subparagraph 
101(h)(3) the activities referenced would exclude Bureau of 
Reclamation (Reclamation) facilities except under certain 
conditions.
    Reclamation believes that maintaining operations standards 
that reflect both the current state of science as well as 
changes in climate and hydrology to be an important part of 
supporting water resource management. In Fiscal Year 2015 
Reclamation began a Reservoir Operations Pilot Initiative as 
part of the WaterSMART program. Historically, uncertainties in 
weather prediction and assumptions of an unchanging climate 
have resulted in conservative federal operating criteria for 
reservoir management. It is expected that in some locations 
these criteria will have to be updated with consideration for 
weather forecast technology and shifts in climate conditions. 
In 2015 Reclamation selected five pilot studies, one within 
each of Reclamation's regions, to initiate work that is 
expected to be completed in FY 2018 as part of the 
Administration's Federal Drought Action Plan. The Reservoir 
Operations Pilot Initiative is a high priority action under 
Reclamation's Climate Change Adaptation Strategy with a goal to 
increase water management flexibility in light of changing 
conditions. These activities are critical to understanding 
where flexibilities may be increased through identifying trends 
in historic and projected climate, hydrology, sedimentation, 
and conjunctive groundwater management.
    Section 102 would amend the Colorado River Storage Project 
Act (Public Law 84-485) to authorize Reclamation to increase 
the active capacity and, as a result, the amount of water 
developed by Fontenelle Reservoir in Wyoming. Reclamation 
appreciates the efforts of Senator Barrasso and his staff to 
work with Reclamation to address ours concerns identified in 
our June 18, 2015 testimony on similar legislation (S. 1305) 
before this Committee. With the subsequent amendment to S. 
1305, the Department can now support this provision.
    Section 103 would require the Department and the U.S. 
Department of Agriculture to enter into an arrangement with 
National Academy of Sciences to conduct a study on the impact 
of salt cedar control efforts in increasing water supply and 
improving riparian habitat. The Departments of the Interior and 
Agriculture would then have 180 days to submit a report to 
Congress that describes a feasible plan to implement a tamarisk 
control plan, including a description of applicable timelines 
and costs.
    The U.S. Geological Survey conducted an authoritative study 
on the effectiveness of the removal of salt cedar, which found 
that the removal of salt cedar from floodplain areas along 
rivers leads can lead to replacement by other vegetation that 
consumes roughly equal amounts of water. The study found that 
removing salt cedar from these areas is unlikely to produce 
measurable water savings once replacement vegetation becomes 
established. We look forward to working with the bill sponsor 
and the Committee to ensure that the previous report's 
conclusions are considered, and any new reporting requirements 
add value to our current understanding of salt cedar impacts.
    Section 104 would amend Section 206 of the 2015 
Appropriations Act and provide additional statutory direction 
on Colorado River operations. The Department fully recognizes 
the severity of the ongoing historic drought in the Colorado 
River basin and the importance of proactive, consensus-based 
efforts to conserve the limited, and declining, water resources 
of the Colorado River Basin. Subsection 206(a)(1), as amended, 
would continue Congressional direction to fund or participate 
in projects to increase storage of Colorado River water in Lake 
Mead and upstream reservoirs constructed under the 1956 
Colorado River Storage Project Act. The Department supports 
these continued efforts.
    Subsection (a)(2) would add a new provision that would 
preclude release of Colorado River water from Lake Mead 
pursuant to a 2014 Memorandum of Understanding and the ongoing 
efforts pursuant to the Pilot System Conservation program. 
While the Department recognizes that the provisions of 
subsection (a)(2) are narrow in scope, the Department does not 
believe this section is necessary for the successful 
implementation of these efforts and is duplicative of currently 
applicable provisions of Departmental policies and agreements 
already in force. Additionally, the language of this subsection 
does not appear to currently have consensus support among all 
seven Colorado River Basin States. We recognize that interstate 
cooperation is particularly essential in a time of increased 
risk of shortages on the Colorado River. We are currently 
investing significant effort to find solutions that will 
generate consensus support in the Basin, and suggest that 
subsection (a)(2) may distract from the ongoing efforts to 
identify consensus tools and mechanisms to contribute to 
conservation of water in the Colorado River system with broad 
stakeholder support.
    We believe Subsections (b) through (e) are intended to 
enhance the Department's efforts to conserve additional water 
in the Colorado River system in a manner consistent with 
current efforts. The Department supports the goals of 
addressing ongoing drought in portions of the western United 
States and the reservoir elevations in Lakes Powell and Mead. 
The Department continues to monitor the situation and has taken 
a number of steps to address these issues. The Administration 
is still reviewing the full implications that these sections 
would have and does not have a position on these sections at 
this time.

    title i, subtitle b--protecting critical water supply watersheds

    Title I, Subtitle B of S. 2902 contains provisions of 
interest to the Bureau of Land Management (BLM). (We defer to 
the U.S. Forest Service on provisions of this Subtitle 
affecting National Forest System lands.) This subtitle seeks to 
exclude certain vegetation treatments conducted for specific 
purposes from the environmental analysis and public involvement 
requirements in the National Environmental Policy Act (NEPA). 
These treatments may range from hazardous fuels reduction and 
treatment for invasive species to timber harvest, and the bill 
sets out specific purposes (e.g., increase water yield) and 
administrative criteria (e.g., treatment proposed by a Resource 
Advisory Council) for these treatments. Under the bill, if the 
BLM's proposed activity is for one of the enumerated purposes, 
the agency could remove vegetation under an exclusion from 
NEPA, on up to 5,000 acres. If the proposed activity also meets 
the administrative criteria of the bill, the BLM would be 
authorized to remove vegetation, under an exclusion from NEPA, 
on up to 15,000 acres. The Department opposes this provision 
because of the scale of these treatments without environmental 
analysis and public involvement as required in NEPA.
    Title I, Subtitle B also would limit public input through 
the NEPA process by requiring the BLM to analyze only the 
proposed action and a ``no-action'' alternative when a BLM 
proposed vegetation treatment project meets the administrative 
criteria set out in the bill. This provision would limit the 
breadth and value of NEPA analysis to decision-makers.
    The Department shares the sponsor's goals of efficient and 
effective procedures. Indeed, one of the priorities under 
Secretarial Order 3336 on Rangeland Fire Prevention, 
Management, and Restoration (Jan 5, 2015) is to encourage 
efforts to expedite processes, streamline procedures and 
promote innovations that can improve overall rangeland fire 
prevention, suppression and restoration efficiency and 
effectiveness. We would be glad to discuss these objectives 
further with the bill's sponsor.

      title i, subtitle c--bureau of reclamation transparency act

    Subtitle C, the Bureau of Reclamation Transparency Act, 
requires the Secretary of the Interior to submit to Congress a 
report on the efforts of Reclamation to manage its 
infrastructure assets. As stated in our June 18, 2015, 
testimony on similar legislation (S. 593), Reclamation 
recognizes the value in obtaining additional information on the 
status of our infrastructure. The Bureau of Reclamation 
Transparency Act is consistent with a draft Infrastructure 
Investment Strategy and process Reclamation has initiated 
proactively; therefore, the Department supports this provision.

            title i, subtitle d--water supply permitting act

    Subtitle D mirrors language in HR 2898 (Title VII), which 
with some modifications, largely consists of language from S. 
1533 (114th), the Water Supply Permitting Coordination Act. 
Reclamation expressed concern in our October 8, 2015, testimony 
on HR 2898 before this Committee that there is already ample 
basis for review of projects and coordination among federal 
agencies involved in water supply planning, remain regarding 
the language in this current bill.

  title i, subtitle e--bureau of reclamation project streamlining act

    Subtitle E aims to facilitate and streamline Reclamation's 
process for creating or expanding surface water storage under 
Reclamation law. As we testified on Title VIII of HR 2898 
before this Committee, this provision would restrict the time 
available to establish the merits of a surface water storage 
project and to consider a project's potential environmental 
effects. Constraining or circumventing project environmental 
reviews and permits impedes the opportunity to consider 
alternatives with potential impacts on communities and the 
environment which may be less adverse. Such constraints could 
make favorable recommendations for project construction less 
likely and increase the potential for delay as a result of 
litigation, which, I would note, would have the opposite effect 
of the provisions' intentions. The Department does not support 
this provision.

               title ii--protecting existing water rights

    Title II of S. 2902 resembles S. 982 (Barrasso), for which 
the Department provided testimony before this Subcommittee in 
June of 2015. While we are still analyzing the new language in 
view of the recent introduction of S. 2902, in the Department's 
June statement, we continue expressed concern that the Water 
Rights Protection Act legislation as drafted was overly broad, 
drafted in ambiguous terms, and would if enacted likely have 
numerous unintended consequences that would have adverse 
effects on existing law, tribal water rights, and voluntary 
agreements. We are working to ascertain the extent to which the 
Department's previously stated concerns may or may not apply to 
Title II of S. 2902.

title iii--completing and maintaining rural water supply infrastructure

    Title III of S. 2902 incorporates S. 438, the Irrigation 
Rehabilitation and Renovation for Indian Tribal Governments and 
Their Economies Act, which creates a steady stream of funding 
to repair, replace and maintain certain Indian irrigation 
projects. As stated before the Senate Committee on Indian 
Affairs' March 4, 2015, hearing on S. 438, the Department 
supports the goals of working with tribes to address the 
maintenance of irrigation projects, and we look forward to 
working with you to address the best means of doing so given 
current budget constraints and the ability of irrigation 
projects to financially sustain themselves in the long run.
    Subtitle B incorporates S. 1552, the Clean Water for Rural 
Communities Act, which would authorize construction of the Dry-
Redwater Regional Water Authority System and the Musselshell-
Judith Rural Water System in the States of Montana and North 
Dakota. As stated in our June 18, 2015, testimony before this 
Committee, the Department cannot support this language at this 
time, based on constraints on program resources and other rural 
water project commitments.

                            title iv--offset

    Title IV includes language from Title IX of HR 2898, the 
Accelerated Revenue, Repayment and Surface Water Storage 
Enhancement Act on which Reclamation testified before this 
Committee on October 8, 2015. The bill contains provisions to 
enable the conversion of any water service contract to a 
repayment contract, with allowance for pre-payment. While 
Reclamation's October 2015 testimony identified several 
programmatic concerns about the bill, it is also noteworthy 
that current CVP water service contracts already contain 
language for their eventual conversion to repayment contracts 
at such time that it is determined that the remaining 
construction costs of the CVP can be repaid within a specified 
repayment term and without adversely affecting the operations 
of the CVP. Additionally, the bill proposes a one-year 
timeframe to convert existing contracts, which may not be 
reasonable given the realities of CVP operations and repayment 
status.

                               conclusion

    We stand ready to work with this Committee and bill 
sponsors to find common ground on legislation that can 
complement the Administration's efforts to assist communities 
impacted by drought. This concludes my written statement. I am 
pleased to answer questions at the appropriate time.
                              ----------                              

Statement of Leslie Weldon, Deputy Chief, National Forest System, U.S. 
             Forest Service, U.S. Department of Agriculture

    Mr. Chairman and members of the Subcommittee, thank you for 
the opportunity to present the views of the U.S. Department of 
Agriculture (USDA) regarding S. 2902, Western Water Supply and 
Planning Enhancement Act and S. 2524, Bolts Ditch Access and 
Use Act. I am Leslie Weldon, Deputy Chief for the National 
Forest System (NFS), USDA Forest Service.

          s. 2902, title ii--protecting existing water rights

    Water on National Forest System (NFS) lands is important 
for many reasons, including fish and wildlife habitat, public 
recreation, and providing a clean and plentiful supply of water 
for downstream beneficial uses. Today, water from national 
forests and grasslands contributes to the economic and 
ecological vitality of rural and urban communities across the 
nation, and those lands supply more than 60 million Americans 
with clean drinking water.\1\
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    \1\http://www.fs.fed.us/publications/policy-analysis/water.pdf.
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    The purposes of the NFS were established by Congress in 
1897 and were primarily focused on the protection of water and 
watersheds and securing a continuous supply of timber. National 
forests in the arid West typically occupy the very top of 
critical watersheds, where water is stored in winter snow packs 
and underground and slowly released through the spring and into 
the summer. National forests in the East also occupy critical 
watersheds, preserving water quality for downstream users and 
moderating floods to protect downstream landowners. 
Communities, farmers and ranchers, Native American Tribes, and 
the general public depend on delivery of clean water from the 
national forests and grasslands. Careful consideration of 
activities that can have an adverse impact on waters and 
watersheds on NFS lands is critical to downstream water users 
and other inhabitants that can be impacted if these watersheds 
are not protected.
    USDA has not had time to fully analyze the effect of this 
bill. USDA recognizes the fundamental role of States to 
adjudicate water rights under state law. However, based on an 
initial review, the bill appears to restrict USDA's ability to 
protect water resources. USDA maintains its opposition to 
provisions in any bill that would prohibit the Secretary of 
Agriculture from regulating uses of NFS lands, or denying 
authorizations for uses of NFS lands, because these 
prohibitions have potential to adversely affect water resources 
on those lands. It is USDA's position that the existing 
statutory framework protects privately-held water rights in 
balance with the ability of the Forest Service to protect water 
resources. An example of the Forest Service work with 
stakeholders within this framework is the recent publication of 
final directives for ski areas operating on NFS lands under 
term special use permits.
    For the last 30 years, the Forest Service has required 
ownership by the United States, either solely or in narrow 
circumstances jointly with the permit holder, of water rights 
developed on NFS lands to support operation of ski areas in 
prior appropriation doctrine states. This policy was motivated 
by the concern that if water rights used to support ski area 
operations are severed from a ski area--for example, are sold 
for other purposes--the Forest Service would lose the ability 
to offer the area to the public for skiing.
    On June 23, 2014, the Forest Service published a notice of 
a proposed directive in the Federal Register to add riparian 
and prior appropriation doctrine water clauses for ski area 
permits to the Forest Service's Directive System. The final 
clauses, published in the Federal Register on December 30, 
2015, were the result of extensive public input, including 
input from the ski industry and a wide range of other water 
rights holders.
    The final directive contains two ski area water clauses, 
one for eastern States that follow the riparian doctrine for 
water rights and one for western States that follow the prior 
appropriation doctrine for water rights. Under a riparian 
doctrine system, water rights are appurtenant to the land, 
whereas under a prior appropriation doctrine system, water 
rights may be severed from the land. Most ski areas on NFS 
lands are in western states that adhere to the prior 
appropriation doctrine.
    The final directive does not require that ski area water 
rights be acquired in the name of the United States. Instead, 
the final directive focuses on assuring sufficiency of water to 
operate ski areas on NFS lands. This modified approach for ski 
area permits was determined to be appropriate given the 
characteristics of ski area water rights and ski areas. Unlike 
water rights diverted and used on NFS lands by holders of other 
types of authorizations, ski area water rights may involve 
long-term capital expenditures. In western States like Colorado 
and New Mexico, holders of ski area permits may have to 
purchase senior water rights at considerable expense to meet 
current requirements for snowmaking to maintain viability. 
Holders of ski area permits need to show the value of these 
water rights as business assets, particularly during 
refinancing or sale of a ski area. The value of these water 
rights is commensurate with the significant investment in 
privately owned improvements at ski areas. These investments 
were recognized by Congress in enactment of the National Forest 
Ski Area Permit Act, which authorizes permit terms of up to 40 
years. 16 U.S.C. 497b(b)(1).
    In addition to these financial issues, the land ownership 
patterns at ski areas--particularly the larger ones--often 
involve a mix of NFS and private lands inside and outside the 
ski area permit boundary, which makes it difficult to implement 
a policy of sole Federal ownership for ski area water rights. 
Much of the development at ski areas is on private land at the 
base of the mountains. As a result, water diverted and used on 
NFS lands in the ski area permit boundary is sometimes used on 
private land, either inside or outside the permit boundary.
    With respect to sufficiency of water for ski area 
operations, the final directive includes a definition for the 
phrase, ``sufficient quantity of water to operate the ski 
area,'' and clarifies when and how the holder must demonstrate 
sufficiency of water to operate the permitted ski area and new 
ski area water facilities; addresses availability of Federally 
owned ski area water rights during the permit term; and 
addresses availability of holder-owned ski area water rights 
during the permit term and upon permit revocation or 
termination.
    At this time, ski industry representatives have indicated 
support for the final directive, and members of Congress have 
indicated appreciation for the agency's efforts to work 
collaboratively on this solution. It is USDA's position that 
additional legislation is not necessary to ensure protection of 
privately-owned water rights.
    USDA has not had adequate time to analyze the effects of 
the bill on Forest Service groundwater policies. However, since 
the Forest Service published its proposed groundwater directive 
for notice and comment on May 6, 2014, the Agency has heard 
from several States and other parties who are concerned about 
the intent of and language in the proposal. By the end of the 
comment period, the Agency had received 260 comments from 
elected officials, States, Tribes, organizations, and 
individuals from across the country. The House Natural 
Resources Committee, as well as several States, asked the 
Agency not to proceed with the proposed draft and to consult 
with them before moving forward. The Forest Service has heard 
these concerns and stopped work on the proposed groundwater 
directive, and the Agency will not move forward with our 
original proposal. Rather, we have committed to engaging with 
States, Tribes, and citizens to fully understand concerns and 
work collaboratively to address them before any future actions 
or proposals would result. Should the Forest Service choose to 
move forward with a new proposed directive in the future, it 
would only be after engaging with States and making sure that 
the Agency thoroughly understands their concerns in order to 
address them. The Forest Service continues to consider 
improvements to direction to Agency staff on groundwater to 
maintain its stewardship responsibilities in a consistent, 
credible, and transparent manner.

     s. 2902, title i subtitle b--protecting critical water supply 
                               watersheds

    USDA has not had adequate time to analyze the effects of 
this subtitle but upon initial review opposes NEPA provisions 
that are beyond the scope of Farm Bill and HFRA authorities. As 
a general matter, the Forest Service welcomes legislation that 
incentivizes collaboration and expands the toolset we can use 
to complete critical work on our nation's forests, without 
overriding environmental laws.
    While we support efforts to provide tools to support 
improved forest management, capacity constraints due to the 
present approach to budgeting for wildfire continue to hinder 
further efforts to improve the health and resiliency of the 
nation's forests. In fiscal year 1995, the Forest Service spent 
16 percent of its budget on firefighting. Today the agency 
spends more than half of its budget in fire management 
activities and has seen a corresponding decline in non-fire 
staffing of 39 percent since 1998. Notwithstanding these 
challenges, through collaboration, the Forest Service has 
consistently increased both the number of acres treated 
annually to improve watershed resilience and timber 
production--increasing timber harvest by 18 percent since 2008.
    The frequency and intensity of wildfire, the rising cost of 
assets needed to deploy against the spread of wildfire, and the 
way that fire suppression is paid for constrain the agency's 
capacity to realize additional gains through efficiencies and 
partnerships alone. The most important action Congress can make 
now in advancing the pace and scale of forest restoration is to 
fix the fire funding problem.
    The health of the national forests and the communities we 
serve are our shared priority. The Forest Service is 
accelerating restoration and management of the national forests 
through innovative approaches and increased collaboration, 
though it is clear that more work needs to be done, and we 
welcome practical legislation that provides for expedient and 
responsible efficiencies in the execution of that work. USDA 
defers to the Department of the Interior on provisions that 
most directly affect their agencies.
    This concludes my remarks. I would be happy to answer any 
questions. Thank you for the opportunity to testify.

                        Changes in Existing Law

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

CONSOLIDATED AND FURTHER CONTINUING APPROPRIATIONS ACT, 2015

           *       *       *       *       *       *       *

    [Sec. 206. (a) In General.--The Secretary of the Interior 
may fund or participate in pilot projects to increase Colorado 
River System water in Lake Mead and the initial units of 
Colorado River Storage Project reservoirs, as authorized by the 
first section of the Act of April 11, 1956 (43 U.S.C. 620), to 
address the effects of historic drought conditions.
    [(b) Administration.--Pilot projects under this section are 
authorized to be funded through--
          [(1) grants by the Secretary to public entities that 
        use water from the Colorado River Basin for municipal 
        purposes for projects that are implemented by 1 or more 
        non-Federal entities; or
          [(2) grants or other appropriate financial agreements 
        to provide additional funds for renewing or 
        implementing water conservation agreements that are in 
        existence on the date of enactment of this Act.
    [(c) Limitations.--
          [(1) Funds in the Upper Colorado River Basin Fund 
        established by section 5 of the Colorado River Storage 
        Project Act (43 U.S.C. 620d) and the Lower Colorado 
        River Basin Development Fund established by section 403 
        of the Colorado River Basin Project Act (43 U.S.C. 
        1543) shall not be used to carry out this section; and
          [(2) the authority to fund these pilot projects 
        through grants shall terminate on September 30, 2018.
    [(d) Report and Recommendation.--Not later than September 
30, 2018, the Secretary shall submit to the Committees on 
Appropriations and Natural Resources of the House of 
Representatives and the Committees on Appropriations and Energy 
and Natural Resources of the Senate a report evaluating the 
effectiveness of the pilot projects described in subsection (a) 
and a recommendation to Congress whether the activities 
undertaken by the pilot projects should be continued.]

SEC. 206. COLORADO RIVER SYSTEM.

    (a) In General.--Notwithstanding any other provision of 
law, as soon as practicable after the date of enactment of the 
Western Water Supply and Planning Enhancement Act of 2016, the 
Secretary of the Interior (referred to in this section as the 
`Secretary') shall fund or participate in projects to increase 
Colorado River System water in Lake Mead and the initial units 
of Colorado River Storage Project reservoirs, as authorized by 
the first section of the Act of April 11, 1956 (commonly known 
as the `Colorado River Storage Project Act') (43 U.S.C. 620), 
to address the effects of historic drought conditions.
    (b) Administration.--Projects under this section may be 
funded through--
          (1) grants by the Secretary to public entities that 
        use water from the Colorado River Basin for municipal 
        purposes for projects that are implemented by one or 
        more non-Federal entities; or
          (2) grants or other appropriate financial agreements 
        to provide additional funds for renewing or 
        implementing water conservation agreements that are in 
        existence on the date of enactment of the Western Water 
        Supply and Planning Enhancement Act of 2016.
    (c) Limitation.--Funds in the Upper Colorado River Basin 
Fund established by section 5 of the Act of April 11, 1956 
(commonly known as the `Colorado River Storage Project Act') 
(43 U.S.C. 620d), and the Lower Colorado River Basin 
Development Fund established by section 403 of the Colorado 
River Basin Project Act (43 U.S.C. 1543) shall not be used to 
carry out this section.
    (d) Report and Recommendation.--Not later than September 
30, 2026, the Secretary shall submit to the Committees on 
Appropriations and Natural Resources of the House of 
Representatives and the Committees on Appropriations and Energy 
and Natural Resources of the Senate a report evaluating the 
effectiveness of the projects described in subsection (a).
    (e) Appropriations.--There is authorized to be appropriated 
to the Bureau of Reclamation to carry out this section 
$8,000,000 for each of fiscal years 2017 through 2027, to 
remain available until expended.

                                  [all]
```