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[Senate Hearing 109-138]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-138
 
                       MISCELLANEOUS WATER BILLS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   on
                                     

                           S. 49                                 S. 247

                           S. 648                                S. 819

                           S. 891                                S. 1338

                                     

                               __________

                             JULY 12, 2005

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                 ______

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD M. BURR, North Carolina,     TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               JON S. CORZINE, New Jersey
GORDON SMITH, Oregon                 KEN SALAZAR, Colorado
JIM BUNNING, Kentucky

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                    LISA MURKOWSKI, Alaska, Chairman
                  GORDON SMITH, Oregon, Vice Chairman

LARRY E. CRAIG, Idaho                TIM JOHNSON, South Dakota
RICHARD M. BURR, North Carolina      BYRON L. DORGAN, North Dakota
MEL MARTINEZ, Florida                RON WYDEN, Oregon
CONRAD BURNS, Montana                DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                MARIA CANTWELL, Washington
JAMES M. TALENT, Missouri            JON S. CORZINE, New Jersey
                                     KEN SALAZAR, Colorado

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                        Kellie Donnelly, Counsel
                Patty Beneke, Democratic Senior Counsel
                    Mike Connor, Democratic Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Blatchford, Edgar, Commissioner, Alaska Department of Community 
  and Economic Development, Anchorage, AK........................    20
Holland-Bartels, Dr. Leslie, Director, U.S. Geological Survey, 
  Alaska Science Center, Anchorage, AK...........................     9
Johnson, Hon. Tim, U.S. Senator From South Dakota................     3
Keys, John, W., III, Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................     5
McDaniels, Elmer, Manager, Tumalo, Irrigation Water District, 
  Bend, OR.......................................................    23
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     1
Smith, Hon. Gordon, U.S. Senator From Oregon.....................     3
Wyden, Hon. Ron, U.S. Senator From Oregon........................     5

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    31

                              Appendix II

Additional material submitted for the record.....................    35

                       MISCELLANEOUS WATER BILLS

                              ----------                              

                         TUESDAY, JULY 12, 2005

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3 p.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Lisa Murkowski 
presiding.

         OPENING STATEMENT OF THE HON. LISA MURKOWSKI, 
                    U.S. SENATOR FROM ALASKA

    Senator Murkowski. Okay, we are on record. Good afternoon. 
I'd like to welcome everyone to the Water and Power 
Subcommittee. We have a somewhat full agenda this afternoon. 
We've got six bills before the subcommittee. We have S. 49, the 
Alaska Floodplain and Erosion Mitigation Commission Act of 
2005--this was a bill that was sponsored by Senator Stevens, 
and I'm pleased to join him as a co-sponsor in that 
legislation; S. 247, the Tumalo Water Conservation Project Act 
of 2005, sponsored by Senators Smith and Wyden; S. 648, An 
Extension of the Reclamation States Emergency Drought Relief 
Act of 1991, also sponsored by Senator Smith; S. 819, the 
Pactola Reservoir Reallocation Authorization Act, sponsored by 
Senator Johnson; S. 891, a Water Service Contract Extension for 
the Ainsworth Unit--this is the Sandhills Division, Pick-Sloan 
Missouri Basin Program in Nebraska, and this is sponsored by 
Senator Hagel; as well as S. 1338, the Alaska Water Resources 
Act of 2005, which I have co-sponsored.
    We'll have two panels appearing before the subcommittee 
this afternoon. The first panel is comprised of administration 
witnesses from the Bureau of Reclamation and the USGS. I'd like 
to thank you, Commissioner Keys, for joining us here this 
afternoon. And Dr. Leslie Holland-Bartels, the USGS Deputy 
Regional Director in Alaska--we shared the airplane coming back 
tonight, we were on the same time zone here--I thank you for 
making a long trip.
    On panel 2, we are pleased to welcome Mr. Edgar Blatchford, 
the commissioner of community and economic development from 
Alaska. He will testify on S. 49 and S. 1338. Also, Mr. Elmer 
McDaniels, the manager of the Tumalo Irrigation Water District 
in Oregon, will be testifying on S. 247.
    As either the sponsor or the co-sponsor of the two Alaska 
bills, I will just offer a few brief comments this afternoon. 
S. 49, which is the Joint Federal-State Floodplain and Erosion 
Mitigation Commission Act, is a response to recent increases in 
flooding and coastal and river erosion in rural Alaska. 
According to a 2003 study by the GAO, 184 out of 213 Alaskan 
native villages have experienced flooding or erosion problems. 
This is 84 percent of Alaska's villages. When you think about 
84 percent of your villages, your communities in your State 
being subject to flooding or erosion, it's a pretty tough 
figure.
    Erosion, whether it's intensified by climate change or just 
the fact that most rural communities are built along the coast 
of Alaska's river banks, has already forced an effort to 
relocate the southwest village of Newtok to more stable ground. 
There's eight other villages that have been mentioned as 
needing significant assistance. These are the communities of 
Shishmaref, Kivalina, Koyukuk--and these are for possible 
relocation aid--as well as the communities of Kaktovik, Point 
Hope, Veral, Unalakleet and Bethel, where other actions have 
been taken to reduce the erosion and flood threats.
    There are a couple of charts that we have here that 
demonstrate the problem. One shows the storm surges that 
frequently impact Alaska's coastline. We've got another one 
that shows the village of Unalakleet and the erosion along the 
bluff there. As you can see, the damage is pretty striking.
    The bill, sponsored by my fellow Alaska colleague, Senator 
Ted Stevens, will establish a seven-member, joint Federal-State 
commission to study floodplain and erosion issues and develop 
feasible alternatives for flooding or erosion assistance. The 
commission will also develop policy to guide infrastructure 
investments in Alaska native villages. This is especially 
important, because solutions to Alaska erosion issues often 
entail a decision to simply move the impacted village to more 
stable grounds. This, as we have learned, can cost hundreds of 
millions of dollars to do these relocations.
    So, clearly, Congress needs better information and more 
unified policy recommendations, which this Commission will 
hopefully provide before we tackle the expensive and unusually 
complex decisions that may face us.
    The other legislation, S. 1338, the Alaska Water Resources 
Act--since becoming chairman of this subcommittee, I've learned 
that Alaska increasingly faces the threat of future potable 
water shortages. And this may seem as almost ironic to some, 
because we hold one-third of the fresh water in all of America. 
But it's because we know little, or in many cases nothing, 
about our State's aquifers, and not much more is known about 
the water contained in our 3 million lakes, our 12,000 major 
rivers and thousands of streams, creeks and other ponds.
    We've got 10 rivers that flow for more than 300 miles, and 
yet we have fewer than 100 stream gaging stations. We've got 
about one working gage for each 10,000 square miles. Now you 
contrast this to the situation in the lower 48, and the 
Pacific-Northwest in particular, where you have one stream gage 
for each 365 square miles. So for Alaska to equal that level of 
gage activity--and these gages are very important to help with 
flood predictions, to determine the water available to fight 
wildfires--we estimate that the State would need a total of 
about 1,600 gages. And this could cost the USGS nearly a half 
billion dollars to collect that much data for a decade, the 
length of time needed for the data to be truly meaningful to 
aid in resource decisions. And while our legislation is not 
seeking anywhere near such a commitment, it will help to 
improve gage information for flood forecasting, and should 
result in studies of aquifers in the Railbelt Area, southeast, 
where Alaskans are increasingly getting their water from wells.
    I hope to hear from the administration in support of the 
study measure since the population in the south central area 
and on the Kenai Peninsula is growing. It's time that we have 
an understanding as to how the aquifers in the area function.
    Before we move on to our witnesses, I would ask if any of 
my colleagues have opening statements that they would like to 
make. Senator Johnson, you've got comments, I understand, on 
the Pactola Dam, and Senator Smith, you would like to make 
comments as well.

          STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR 
                       FROM SOUTH DAKOTA

    Senator Johnson. Well, thank you, Senator Murkowski. I 
appreciate your leadership on this subcommittee and your work 
on a whole array of important bills that are before the 
committee. I would, in particular, like to express my views on 
S. 819, the Pactola Reservoir Reallocation Authorization Act. 
It's one of the bills on today's subcommittee agenda.
    I appreciate the appearance of Commissioner Keys before the 
subcommittee. It's good to see you again, Commissioner. We 
would love to have you out to South Dakota, where we're making 
good progress on some of the world's largest and most ambitious 
rural water supply projects.
    I want to point toward a bill I introduced earlier this 
year that is on today's subcommittee agenda, S. 819, the 
Pactola Reservoir bill. It's a straightforward solution to an 
agreement reached in 2000 between the Bureau, the city of Rapid 
City, South Dakota, and the Rapid Valley Irrigation District to 
reallocate the construction costs from the Pactola Dam and 
Reservoir. Enacting this bill will ensure that Rapid City and 
other water users retain a reliable supply of water for 
municipal, irrigation, as well as fish and wildlife purposes.
    In negotiating a new repayment contract with Rapid City, 
the Bureau understands the changing realities of Western water 
uses for municipal and industrial demands now outstrip 
traditional irrigation requirements. The passage of this bill 
provides the Bureau with the authority to execute the new 
contract while ensuring Rapid City with a reliable and secure 
water supply for decades to come. So, again, welcome 
Commissioner Keys and Dr. Holland-Bartels. I appreciate the 
Bureau's support of the bill, and I look forward to the 
testimony from witnesses.
    Senator Murkowski. Thank you, Senator Johnson.
    Senator Smith.

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

    Senator Smith. Thank you, Madam Chairman, for conducting 
this hearing today. I have two bills before the subcommittee, 
and I want to extend a special welcome to Mr. Elmer McDaniels, 
the manager of the Tumalo Irrigation Water District who has 
traveled here from Oregon to provide testimony on S. 247. I 
look forward to his testimony, and all of the other witnesses 
today.
    S. 247 would authorize the Secretary of the Interior to 
assist in the planning, design, and construction of the Tumalo 
Irrigation District Water Conservation Project in Deschutes 
County, Oregon. This project involved piping about 6 miles of 
open canals. This will enable the District, in accordance with 
State water law, to return an estimated 20 cubic feet per 
second of conserved water to in-stream flows in the Tumalo 
Creek and the Deschutes River.
    In recent years, sections of the Deschutes River below 
diversions by the Federal Reclamation Projects in the Basin 
have dropped as low as 30 cubic feet per second during certain 
times of the year. The Deschutes Basin is in arid central 
Oregon, and there are several federally listed fish species in 
the river. The water return to in-stream flows under this 
conservation project would be significant, and could also help 
Reclamation mitigate the impact of its Federal project 
operations. This project will also enhance public safety in the 
region by eliminating the concerns related to open canals. By 
replacing these open canals with pressurized pipelines, it will 
also improve the delivery of irrigation water to farmers in the 
Tumalo Irrigation Service Area.
    The bill, as introduced, provides for the District to 
receive credit for the value of water return to in-stream 
flows. As stated above, the enhanced flows will relieve 
pressure on Federal project operations, enhance fish habitat 
for ESA listed species, and help meet environmental restoration 
goals of this important tributary of the Columbia River.
    There's precedent for calculating the value of water 
against the non-Federal cost-share obligations. Implementation 
of the 1997 cooperative agreement between the States of 
Nebraska, Wyoming and Colorado, and the Department of the 
Interior, relating to the Platte River, recognized that the 
conserved water added significant economic value to the 
restoration program. The agreement gave respective States 
credit for the water contributed. If we're going to meet the 
Federal goals for recovery of fish species in the arid West, we 
simply have to begin recognizing the economic value of water 
conserved by non-Federal partners, such as the Tumalo 
Irrigation District.
    The second bill I sponsored that will be heard today is S. 
648, which would re-authorize the Bureau of Reclamation's 
authority under title I of the Reclamation States Emergency 
Drought Relief Act to 2010. These authorities are currently set 
to expire at the end of the year. The activities covered under 
this important program include construction, management and 
conservation activities to minimize losses and damage from 
drought conditions. The bill extends the authority to make 
loans to water users for these activities and for the purchase 
and conveyance of water. Reclamation would be able to purchase 
water from willing sellers in accordance with State water law, 
for re-sale on a temporary basis to participate in State water 
banks. It also provides greater flexibility in the use of 
reclamation facilities for the storage and conveyance of water. 
The Governors of affected States, or the governing bodies of 
affected tribes must request temporary drought assistance for 
the program to be operable in the respective State or 
reservation. As much as we all wish that the droughts 
experienced throughout the recent years are going to end, it's 
unrealistic to think that droughts will cease on September 30, 
2005. These authorities are important tools that help 
Reclamation respond to the emergency drought needs of Western 
communities and reservations, and I would urge the expeditious 
consideration of this bill as well. Again, I thank our 
witnesses today, and look forward to their testimony. Thank 
you, Madam Chair.
    Senator Murkowski. Thank you.
    Senator Wyden.

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

    Senator Wyden. Madam Chair, thank you very much. I'm not 
going to be able to stay, I just want to make a quick comment 
about S. 247, and also commend my colleague, Senator Smith, for 
both of his bills. S. 247, in particular, is a project we feel 
strongly about because of its importance in central Oregon and 
the Deschutes River, specifically. My sense is that S. 247 will 
save water and will help the farmers and fish, but I think it's 
also going to save lives. There was a horrible tragedy with a 
youngster drowning in that part of our State. That's why 
Senator Smith and I have legislation that we think is going to 
achieve multiple benefits for our part of the country. And we 
thank you, Madam Chair, for scheduling this hearing. As we've 
tried to do in our State, make it thoroughly bipartisan, and 
hopefully we can move quick.
    Senator Murkowski. Thank you.
    With that, let's turn to our first panel. Commissioner 
Keys, if you would like to lead off, please.

    STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, BUREAU OF 
            RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Keys. Madam Chairman, it's always a pleasure to be 
here. We have submitted four formal testimonies, and would ask 
that they be made part of the record, please.
    Senator Murkowski. Each will be made part of the record.
    Mr. Keys. The first bill, S. 648, would extend until 2010 
title I of the Reclamation States Emergency Drought Relief Act 
of 1991. Title I provides authority for construction, 
management and conservation measures to alleviate drought 
impacts across the Western United States. Except for wells, all 
title I work must be temporary. S. 648 would simply extend the 
expiration. The $90 million ceiling in the law, we think, is 
sufficient to carry us through that period.
    Title I authorizes Reclamation to participate in water 
banks established under State law, facilitate water 
acquisitions between willing buyers and willing sellers, 
acquire conserved water for use under temporary contracts, make 
facilities available for storage and conveyance of project and 
non-project water, make project and non-project water available 
for non-project uses, and acquire water for fish and wildlife 
purposes on a non-reimbursable basis.
    Title I often helps smaller, financially-strapped 
communities deal with the drought. Reclamation is often the 
last resort for those small communities, that's one of the 
reasons we highly support S. 648.
    Now, Madam Chairman, the administration also supports S. 
819, to authorize the Secretary of the Interior to allocate 
construction costs of the Pactola Dam and Reservoir through 
municipal, industrial, fish and wildlife purposes. This 
reallocation reflects the increasing water demands from Pactola 
Reservoir for municipal and industrial purposes, specifically 
within Rapid City and throughout the surrounding areas, for 
fish and wildlife purposes in and along Rapid Creek.
    Because current law prevents us from reallocating multi-
purpose construction costs, Reclamation's new repayment 
contract with Rapid City is contingent on legislation. That's 
why S. 819 will help us secure a reliable water supply for the 
city and the surrounding area to support expected growth well 
into the future.
    The administration also supports S. 891, to extend the 
water service contract to the Ainsworth Unit in Nebraska. In 
2002, the Ainsworth Irrigation District undertook the process 
to transfer title of Ainsworth Unit from Reclamation to the 
District. Consequently, the District did not anticipate needing 
to also go through the extensive contract process. However, 
Ainsworth District recently concluded that due to unique 
circumstances, title transfer was no longer its preference. So 
it asked Reclamation to discontinue the title transfer process, 
and instead start work on renewal of its existing water service 
contract.
    Throughout this process, Ainsworth has acted in good faith, 
and worked closely with us to meet the needs of its water 
users. S. 891 would extend the existing water service contract 
for an additional 4 years, so that the current water service 
contract renewal process can be completed. Reclamation law 
requires us to have a contract in place in order to deliver 
water. That's why we support S. 891.
    Finally, Madam Chairman, let me share our views on S. 247, 
a bill to authorize conversion of 6 miles of open canal in the 
Tumalo Irrigation District into a pipeline. This District is 
not part of a Reclamation project, but it did have a repayment 
contract for rehabilitation of Crescent Lake Dam, and holds 
title to all of its project facilities. While the 
administration supports conserving water to improve in-stream 
flows without diminishing water for agriculture, as this 
pipeline would do, we cannot support S. 247 as written.
    S. 247 would create credits to offset the non-Federal cost 
share, including credits for water left in-stream after project 
completion, and credits for foregone revenue from reduced 
district assessments and headgate fees. Project sponsors value 
the total credits at $7.4 million to the project, including 
$5.4 million for the value of conserved water, $1.7 million for 
reduced assessments and headgate fees, and $300,000 for in-kind 
services. Established Federal policy only allows credit for the 
actual costs of certain in-kind services, and calculating the 
cost-share requirement for water conservation projects. The 
credit system proposed in S. 247 does not meet these 
requirements.
    The sponsors estimate that the total cost of the project is 
$14 million, and their contribution is 50 percent. However, S. 
247 authorizes $14 million of Federal money to construct the 
Project. This gap explains why the administration cannot 
support S. 247 as currently written.
    Madam Secretary, I'm pleased to answer any questions. That 
ends my oral testimony.
    [The prepared statement of Mr. Keys follows:]

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

                               ON S. 247

    Madam Chairman, I am John W. Keys, Commissioner of the Bureau of 
Reclamation. Thank you for the opportunity to testify on S. 247, the 
Tumalo Water Conservation Project Act of 2005.
    S. 247 would authorize a project that would convert approximately 6 
miles of open canal in the Tumalo Irrigation District (TID) into a 
pipeline. TID is not part of a Reclamation project, but it did have a 
repayment contract for rehabilitation of Crescent Lake Dam. The 
District satisfied its repayment obligation to the United States in 
1998 and holds title to all project facilities. The Tumalo Water 
Conservation Project, known locally as the Tumalo Feed Canal pipeline, 
would conserve up to 21 cubic feet per second (cfs) of water for both 
agricultural and instream uses in Tumalo Creek in Central Oregon. While 
the Administration supports the aim of the TID to conserve water and to 
improve instream flows while not diminishing the amount of water 
available for agricultural uses, we cannot support the legislation as 
written.
    S. 247 creates a system of credits for offsetting the required 50% 
non-Federal cost share. Credits would be given for TID expenses in 
project design, planning and construction, for water left instream 
after completion of the project, and for foregone revenue from reduced 
District assessments and head gate fees. Project sponsors have 
calculated that the credit system amounts to approximately $7.4 million 
of ``contribution'' to the project, including $5.4 million for the 
value of the conserved water, and $300,000 for the value of in-kind 
services. Federal guidelines found in the Code of Federal Regulations 
and OMB circulars only allow credit for the actual costs of certain in-
kind services in calculating the cost share requirement for water 
conservation projects. These include items such as development of 
project designs, survey work, NEPA, ESA and cultural resource 
compliance costs, use of construction equipment and labor, and other 
activities that directly relate to project completion. The credit 
system proposed in S. 247, section 3(b)(2)(B) does not meet these 
requirements.
    The sponsors estimate that the total cost of the project is $14 
million, and thus characterize their ``contribution'' as 50%. However, 
the U.S. is being asked to pay up to $14 million to construct the 
project, even though the legislation states that the Federal cost-share 
shall be 50%.
    This concludes my written statement. I am pleased to answer any 
questions.
                                 ______
                                 
                               ON S. 648

    Madam Chairman, I am John W. Keys, Commissioner of the Bureau of 
Reclamation (Reclamation). I am pleased to appear for the Department in 
support of S. 648 which extends Title I of the Reclamation States 
Emergency Drought Relief Act of 1991 until the year 2010.
    Title I provides authority for construction, management, and 
conservation measures to alleviate the adverse impacts of drought, 
including mitigation of fish and wildlife impacts. However, wells are 
the only permanent construction authorized under the Act. All other 
Title I work must be of a temporary nature. No new Reclamation projects 
are authorized under Title I; Reclamation does not own, operate, or 
maintain projects funded under it. S. 648 would simply extend the 
expiration date. The $90 million ceiling in the law, initially 
authorized in 1991, is adequate for the foreseeable future.
    Title I also provides Reclamation with the flexibility to meet 
contractual water deliveries by allowing acquisition of water to meet 
requirements under the Endangered Species Act, benefiting contractors 
at a time when they are financially challenged. Additionally, Title I 
authorizes Reclamation to participate in water banks established under 
state law; facilitate water acquisitions between willing buyers and 
willing sellers; acquire conserved water for use under temporary 
contracts; make facilities available for storage and conveyance of 
project and nonproject water; make project and nonproject water 
available for nonproject uses; and, acquire water for fish and wildlife 
purposes on a nonreimbursable basis.
    Title I often helps smaller, financially-strapped entities (towns, 
counties, tribes) that do not have the financial capability to deal 
with the impacts of drought. In many cases, Reclamation is the ``last 
resort'' for these communities.
    The Bureau of Reclamation has a long history of effective and 
responsive water management in good times and bad. While we consider 
ideas to make drought relief even more effective through improved 
interagency cooperation and other changes, we recognize that the 
reauthorization of Title I is necessary. S. 648 allows Reclamation the 
flexibility to continue delivering water to meet authorized project 
purposes, meet environmental requirements, respect state water rights, 
work with all stakeholders, and to provide leadership, innovation, and 
assistance. This is why Reclamation supports S. 648.
    This concludes my statement. I am pleased to answer any questions.
                                 ______
                                 
                               ON S. 819

    My name is John Keys. As Commissioner of the Bureau of Reclamation, 
I am pleased to appear today in support of S. 819, the Pactola 
Reservoir Reallocation Authorization Act of 2005.
    Mr. Chairman, S. 819 would authorize the Secretary of the Interior 
to reallocate construction costs of Pactola Dam and Reservoir, Rapid 
Valley Unit, and the Pick-Sloan Missouri Basin Program, South Dakota, 
to municipal, industrial, and fish and wildlife purposes. This 
reallocation reflects the increasing water demands from Pactola 
Reservoir for municipal and industrial purposes, specifically within 
Rapid City and throughout the surrounding areas, and for fish and 
wildlife purposes in and along Rapid Creek.
Background
    Rapid Valley Unit is served, in part, by the Pactola Reservoir. 
Located on Rapid Creek in the Black Hills of South Dakota approximately 
15 miles west of Rapid City, Pactola was constructed between 1952 and 
1956. The Rapid Valley Irrigation District (District) consists of 8,900 
acres of privately developed land and associated irrigation diversion 
and supply works. The irrigable land is situated along Rapid Creek 
immediately downstream of the City. Pactola Reservoir supplemented the 
Districts' 8,000 acre-foot water supply from Deerfield Dam. The Rapid 
Valley Unit provides a full water supply for Rapid City (including 
Ellsworth Air Force Base), flood protection, recreation, and fish and 
wildlife.
    On October 20, 1952, the City entered into a 40-year water service 
contract for municipal and industrial water supply from Pactola 
Reservoir. Since the contract's expiration in 1992, annual water 
service contracts have been issued to provide water to the City until a 
replacement contract can be executed. The District also executed a 40-
year water service contract with the U.S. on January 6, 1961, for a 
supplemental irrigation water supply from Pactola Reservoir. This 
contract expired in 2001 and the District decided to not renew it. The 
District will rely on its natural flow rights, return flows from the 
City's water treatment plant, water purchased from the City, and water 
from the Deerfield Dam and Reservoir.
    Reclamation has negotiated a new repayment contract with Rapid 
City. However, the McGovern Amendment to the Department of Energy 
Organization Act prohibits Reclamation from reallocating multipurpose 
construction costs without specific
    Congressional approval. Therefore, execution of the negotiated 
contract is contingent on authority from Congress to reallocate the 
construction costs of Pactola Dam and Reservoir currently allocated to 
irrigation purposes to municipal, industrial, and fish and wildlife 
purposes.
Conclusion
    Passage of this Act will provide Reclamation with authority to 
enter into a new long-term contract with Rapid City to provide a water 
storage right of 49,000 acre-feet in Pactola Reservoir. This contract 
will secure a reliable water supply for the city and the surrounding 
area to support expected growth well into the future. Reclamation will 
retain 6,000 acre feet of storage in the reservoir to be used for fish 
and wildlife, and other authorized beneficial purposes.
    I am pleased to answer any questions.
                                 ______
                                 
                               ON S. 891

    Madam Chairman, I am John W. Keys, III, Commissioner of the Bureau 
of Reclamation. I am pleased to present the views of the Department of 
the Interior in support of S. 891.
    The Ainsworth Unit, a part of the Pick-Sloan Missouri Basin 
Program, is operated and maintained by the Ainsworth Irrigation 
District, Ainsworth, Nebraska. The District receives its project water 
from Merritt Dam and Reservoir, located on the Snake River, which has 
its confluence with the Niobrara River just southwest of Valentine, 
Nebraska. The Ainsworth Irrigation District and Reclamation have an 
existing water service contract that will expire on December 31, 2006.
    In November, 2002, the Ainsworth Irrigation District Board of 
Directors adopted a resolution to request title transfer of the 
Ainsworth project facilities from Federal ownership to the District. 
The District worked with Reclamation following the process outlined in 
the Title Transfer Framework document. However, on February 16, 2005, 
the District adopted a subsequent additional resolution requesting 
renewal of its existing water service contract and discontinuation of 
the title transfer process.
    Reclamation encourages water districts to explore title transfer as 
the Ainsworth Irrigation district did. However, due to the unique 
circumstances that it faces, the District determined after a 
comprehensive analysis that title transfer was not the appropriate 
action for it at this time. Because the District anticipated title 
transfer for more than two years it was not, at the same time, 
preparing for contract renewal. This legislation would extend the 
existing water service contract for an additional 4 years to provide 
time for the current water service contract renewal process to be 
completed. Reclamation law requires us to have a contract in place in 
order to deliver water. That is why we support S. 891.
    I am happy to answer any questions.

    Senator Murkowski. Thank you.
    Dr. Bartels.

    STATEMENT OF DR. LESLIE HOLLAND-BARTELS, DIRECTOR, U.S. 
           GEOLOGICAL SURVEY, ALASKA SCIENCE CENTER, 
                         ANCHORAGE, AK

    Dr. Holland-Bartels. I'm Leslie Holland-Bartels, Director 
of the U.S. Geological Survey's Alaska Science Center, located 
in Anchorage, Alaska. I thank you for the opportunity to 
provide the views of the Department of the Interior on S. 1338, 
the Alaska Water Resources Act of 2005 and on S. 49, the Alaska 
Floodplain and Erosion Mitigation Commission Act of 2005.
    The Department agrees that the goals of each bill are 
commendable and the needs that could be addressed are real. I 
will address each of these bills separately.
    S. 1338 directs the Secretary of the Interior, acting 
through the Bureau of Reclamation, BOR, and the Director of the 
U.S. Geological Survey, to conduct a series of ground-water 
resource studies in Alaska, and a review of the need for an 
enhancement of the stream-flow information collected by the 
USGS and the State.
    The role identified for the Department in this bill is 
consistent with both BOR and USGS leadership roles in 
monitoring and assessing water resources. The USGS has a long 
history of conducting water resource assessments; however, 
Alaska has not been covered in these studies. Basic ground-
water information is still needed in Alaska so that specific 
resource management questions can be addressed. For example, 
many Alaska citizens depend on good, quality ground-water for 
domestic consumption and other uses; however, reliable 
assessments of ground-water availability and quality are 
limited for expanding population areas where individual wells 
often supply homes and businesses with drinking water, and 
waste water is posited through onsite septic systems.
    Specific knowledge of aquifer properties will support 
community planning to protect the ground-water, and to ensure 
adequate supplies for both domestic and industry-related 
consumption. Recent observations have been made of elevated 
nitrate and arsenic concentrations in some shallow aquifers in 
municipal areas of the State. The information collected under 
this legislation would allow for identification of conditions 
that may contribute to these elevated concentrations, and more 
importantly, provide for a basis for mitigation.
    Alaska has abundant energy resources which may require the 
use or disposal of large amounts of ground-water. Recent 
interests in the development of coalbed methane, for example, 
in the Matanuska-Susitna and Kenai Peninsula Boroughs 
highlights the need for detailed knowledge about ground-water 
resources as resource managers work to understand the 
connections among aquifers, to assess consequences of large-
scale de-watering of the coal aquifers. S. 1338 also requests a 
view for the need for enhancement of streamflow information 
collected by the USGS in Alaska related to critical water 
needs.
    The USGS has a program in place that can assist in 
developing data for this task. The National Streamflow 
Information Program, NSIP, is currently 18 nationally 
prioritized gages to provide surface water information in 
Alaska. They also support State priorities. For example, last 
year some 6 million acres of land were consumed by fire in 
Alaska. Our four NSIP streamgages within the burn area provided 
critical information for local land managers. However, fire 
managers now realize that they require additional, similar 
kinds of data to assess watershed effects of fire on hydrologic 
response and recovery.
    In addition to the 18 fully federally-funded gaging 
stations, the USGS in Alaska also works closely with a broad 
spectrum of partners to increase its monitoring and studies 
programs through cost sharing.
    Finally, also within the Department, the U.S. Bureau of 
Reclamation's Science and Technology Program finds solutions to 
complex management challenges through research and development 
of state-of-the-art technology, such as those used by the 
Bureau's Pacific Northwest Hydromet remote data collection 
platforms. The expertise of these two Department Bureaus is 
highly relevant to the tasks contemplated by this legislation.
    I also appreciate the opportunity to provide the 
Department's view on S. 49, the Alaska Floodplain and Erosion 
Mitigation Commission Act. We believe that the Department 
should be a part of any process intended to develop solutions 
to coastal and river erosion and sustainability of Alaska 
native communities. In addition, USGS has science capabilities 
which may be key inputs in provisions envisioned in S. 49.
    However, the Department has a number of concerns. Federal 
programs that address flooding generally require satisfaction 
of a cost-benefit analysis to qualify for Federal funding. 
Therefore, the administration objects to those provisions that 
would potentially require or authorize the Secretary to 
implement solutions if the costs are greater than the benefits. 
We also have concerns about the costs of implementing this 
legislation.
    We do believe that our agencies have a role to play in this 
process, however, and offer to work with the subcommittee to 
develop mutually acceptable legislation.
    In conclusion, Alaska is a State experiencing significant 
challenges in its water patterns, both in quantity and timing 
of flow, challenging Alaska native, State, and Federal agency 
management efforts. Such water changes can and do affect 
infrastructure stability, fish reproduction and accelerated 
river erosion and flood patterns. Establishing a viable and 
reliable core of federally funded stream gages and funding 
support for ground-water research monitoring assessment would 
allow the public and resource managers to make science-based 
decisions on allocation of water for competing uses. We also 
support a process for evaluating the options for those Alaskan 
native villages that are most subject to a risk of flood 
damage. However, funding for the activities of these two bills 
would remain subject to availability of resources within the 
administration priorities. In addition, for the reasons 
discussed above, we cannot support S. 49 in current form, but 
offer to work with the subcommittee to develop mutually 
acceptable legislation.
    Thank you, Madam Chairman, for the opportunity to present 
this testimony, and I'm pleased to answer any questions.
    [The prepared statement of Dr. Holland-Bartels follows:]

 Prepared Statement of Leslie Holland-Bartels, U.S. Geological Survey, 
            Department of the Interior, on S. 49 and S. 1338

    Madam Chairman and Members of the Subcommittee, I am Dr. Leslie 
Holland-Bartels, Director of the U.S. Geological Survey's (USGS) Alaska 
Science Center, located in Anchorage, Alaska. I thank you for the 
opportunity to provide the views of the Department of the Interior 
(Department) on S. 1338, the ``Alaska Water Resources Act of 2005'' and 
on S. 49, the ``Alaska Floodplain and Erosion Mitigation Commission Act 
of 2005.''
    The Department agrees that the goals of each bill are commendable 
and the needs that could be addressed are real; however, we have 
concerns with these bills, including the availability of funding for 
the work proposed in the context of overall funding for the 
Administration's priorities. I will address each bill independently in 
my statement and will begin with S. 1338, the ``Alaska Water Resources 
Act of 2005.''

          S. 1338, THE ``ALASKA WATER RESOURCES ACT OF 2005''

    S. 1338 directs the Secretary of the Interior, acting through the 
Bureau of Reclamation (BOR) and the Director of the U.S. Geological 
Survey, to conduct a study on ground-water resources in the State of 
Alaska. The role identified for the Department in this bill is 
consistent with BOR and USGS's leadership role in monitoring and 
assessing ground-water resources.
    The bill requires a study that includes a survey of accessible 
water supplies (including aquifers on the Kenai Peninsula, in the 
municipality of Anchorage and the Matanuska-Susitna Borough), and a 
review of the need for enhancement of the streamflow information 
collected by the USGS in Alaska relating to critical water needs.
    The USGS has a long history of conducting ground-water assessments 
on both a local and regional scale. In the 1950s and 1960s studies were 
conducted across the nation to provide a basic understanding of 
geohydrologic conditions at a county-level scale and, in the 1980s, 25 
regional aquifer systems were studied in detail. However, Alaska was 
not covered in these studies. As a result, basic geohydrologic 
information is needed in Alaska so that specific resource management 
questions can be addressed. Congress directed the USGS in their fiscal 
year 2002 appropriation to ``. . . prepare a report to describe the 
scope and magnitude of the efforts needed to provide periodic 
assessments of the status and trends in the availability and use of 
freshwater resources.'' That report, USGS Circular 1223, states that 
ground-water levels should be based on repeated observations at 
relatively large numbers of observation wells in a wide range of 
representative hydrogeologic environments, and we continue to work 
toward that goal.
    Many Alaska citizens depend on good quality ground water for 
domestic consumption and other uses. However, reliable assessments of 
ground-water availability and quality are limited for expanding 
population areas such as the Municipality of Anchorage, the Kenai 
Peninsula Borough, Fairbanks-North Star Borough, and the Matanuska-
Susitna Borough. In many of these areas, individual wells supply homes 
and businesses with drinking water, and wastewater is disposed of 
through onsite septic systems. As populations and development 
activities on the surrounding landscape increase in these areas, 
additional consumption and demand on these aquifers is coupled with an 
increased risk of ground-water contamination. Specific knowledge of the 
aquifer properties will support proper planning to protect the ground 
water from potential contamination and to ensure there is an adequate 
supply and recharge needed for both domestic and industry related 
consumption.
    For example, recent observations have been made of elevated nitrate 
concentrations in drinking water in parts of the Municipality of 
Anchorage and the Fairbanks-North Star Borough. Arsenic concentrations 
in some shallow aquifers in the Fairbanks-North Star and Kenai 
Peninsula Boroughs exceed the new EPA maximum contaminant level 
standards. The information collected under this legislation would allow 
for the determination of sources of water to these wells, and for the 
identification of geochemical conditions that may contribute to these 
elevated concentrations and provide a basis for mitigation.
    Ground water is also important to sustaining streamflow during 
times of low precipitation and surface runoff. Alaska's world-renowned 
salmon fisheries are economically important to the State and to local 
communities. Salmon that spawn in streams throughout the State incubate 
eggs in the streambed gravels where infiltrating ground water sustains 
eggs during dry periods. Activities that disrupt the interaction 
between ground water and streams may have adverse effects on these 
fisheries. For example, increased withdrawals of ground water may lower 
water tables sufficiently that the connection to the streambed is lost. 
A lowered ground-water table in Juneau through natural geologic 
processes is likely responsible for the dewatering of some small 
streams that formerly supported significant runs of salmon. Current 
information on the interaction between ground water and streams is 
lacking for important salmon spawning areas in the Kenai Peninsula and 
Matanuska-Susitna Boroughs.
    Moreover, Alaska has abundant energy resources, including oil, 
natural gas, coal, and coalbed methane, the development of which may 
require the use or disposal of large amounts of ground water. Recent 
interest in the development of coalbed methane in the Matanuska-Susitna 
and Kenai Peninsula Boroughs highlights the need for detailed knowledge 
about ground-water resources. Resource managers need to understand the 
connections among aquifers to assess consequences of large scale 
dewatering of the coal aquifers. The USGS has conducted detailed 
studies related to development of coalbed methane in Wyoming and 
Montana, but not yet in Alaska.
    Infrastructure expansion is also necessary to support expanding 
populations. Gravel used in construction material may be available 
locally, but removal of gravels may alter ground-water flow patterns in 
shallow aquifers. Gravel extraction and its potential effect on ground 
water has been a focus of attention for citizens in the Municipality of 
Anchorage, in the Homer/Anchor Point area of the Kenai Peninsula 
Borough, and in the Fairbanks-North Star Borough. Shallow gravel 
deposits are often the aquifers that provide drinking water for 
individual residents and small communities, yet little information 
exists on the extent of these aquifers or alternative water supplies.
    Other types of resource extraction, such as development of world-
class mineral deposits are ongoing or planned in Alaska. Newly 
discovered deposits, such as the Pebble gold-copper project near 
Iliamna, Alaska are in areas where minimal information exists on water 
resources. The Pebble gold-copper project is in the headwaters of 
salmon and trout fisheries important to subsistence users. An 
assessment of water resources that results in predictive models 
describing interactions between ground water and surface water will 
allow developers and regulators to evaluate alternative designs for 
development and operation of the project. The USGS has extensive 
experience in conducting detailed studies of hydrologic and water-
quality conditions on such a scale. The National Water-Quality 
Assessment (NAWQA) Program has provided valuable information on major 
river basins and aquifer system in the nation. One NAWQA study area was 
located in Alaska and included the Municipality of Anchorage and parts 
of the Kenai Peninsula and Matanuska-Susitna Boroughs.
    S. 1338 also requests ``a review of the need for enhancement of the 
streamflow information collected by the USGS in Alaska relating to 
critical water needs.'' The USGS's program review process focuses on 
program relevancy, quality, and performance.
    The USGS has a program in place that can assist in developing data 
for this task. National Streamflow Information Program (NSIP) is 
currently operating 18 gages to provide surface water information. In 
2004, 6.4 million acres of land, an area about the size of New 
Hampshire, were consumed by fire. While the four streamgages operated 
by the USGS within the bum area provided critical information, local 
land managers realized that they lacked sufficient credible stream data 
to assess watershed effects of fire on hydrologic response and 
recovery. This information will also assist in protecting life and 
property from flooding events caused, for example, by outburst floods 
on glacier-dammed lakes, and would allow the National Weather Service 
to do river and flood forecasting statewide with an appropriate level 
of certainty.
    The USGS in Alaska also works closely with a broad spectrum of 
partners, including other federal agencies, State and local agencies, 
and Alaska Native villages. Over $1.2 million dollars in federal cost 
share funds were used to partner with State and local agencies in 
jointly funding critical hydrologic information for their specific 
agency needs in 2005. For example, the USGS has a long-term 
relationship with most of these partners such as the Alaska Department 
of Transportation and Public Facilities, Alaska Department of Fish and 
Game, and the Kenai Peninsula Borough. We expect these relationships to 
continue.
    Finally, also within the Department, the U.S. Bureau of 
Reclamation's Science and Technology Program finds solutions to complex 
water management challenges through research and development of state-
of-the-art technology. Reclamation operates a network of automated 
hydrologic and meteorologic monitoring stations located throughout the 
Pacific Northwest. This network and its associated communications and 
computer systems are collectively called Hydromet. Remote data 
collection platforms transmit water and environmental data via radio 
and satellite to provide cost-effective, near-real-time water 
management capability.
    The expertise of these two Departmental bureaus is highly relevant 
to the tasks contemplated by the legislation. However, the Department 
is concerned with the funding requirements that accompany S. 1338. We 
note that there are no funds in the Department's FY 2006 budget to 
implement the legislation, and any future funding would have to compete 
with other priority projects for funds.

S. 49, THE ``ALASKA FLOODPLAIN AND EROSION MITIGATION COMMISSION ACT OF 
                                 2005''

    I also appreciate the opportunity to provide the Department's views 
on S. 49, the ``Alaska Floodplain and Erosion Mitigation Commission 
Act.'' We have concerns about the proposed commission and the potential 
cost of the legislation. As a result, we cannot support the legislation 
in its current form, but offer to work with the Subcommittee to develop 
mutually acceptable legislation.
Background
    In December 2003, the then-General Accounting Office, now known as 
the Government Accountability Office, issued a report (GAO-04-142, 
December 12, 2003) titled ``Alaska Native Villages: Most Are Affected 
by Flooding and Erosion, but Few Qualify for Federal Assistance.'' That 
report provides background on the problems associated with flooding and 
erosion in Alaska Native Villages and recommended, among other things, 
that Congress direct the relevant federal agencies (the Department was 
not listed as such) and the Denali Commission, a federal-state 
partnership designed to provide critical utilities, infrastructure, and 
economic support throughout Alaska, to assess the feasibility of 
alternatives for responding to flooding and erosion. We assume that 
this legislation is a response to that report.
    In sum, the GAO report found that 6,600 miles of the State of 
Alaska's coastline, and many of the low-lying areas along the State's 
rivers, the areas where most of the Alaska Native villages are located, 
are subject to severe flooding and erosion. The GAO also found that 
approximately 86 percent of Alaska Native villages experience some 
level of flooding and erosion, and identified four villages--Kivalina, 
Koyukuk, Newtok, and Shishmaref--that were in imminent danger from 
flooding and erosion and were making plans to relocate. The report also 
indicated that small and remote Alaska Native villages often fail to 
qualify for assistance under federal programs addressing these issues 
because they often do not meet program eligibility criteria.
    As noted above, the GAO recommended that Congress direct the 
relevant federal agencies and the Denali Commission to assess the 
feasibility of alternatives for responding to flooding and erosion, and 
listed a number of possible alternatives, including expanding the role 
of the Denali Commission; directing federal agencies to consider social 
and environmental factors in analyzing project costs and benefits; 
waiving the federal cost-sharing requirement for such projects; and 
authorizing the ``bundling'' of funds from various federal agencies.
The Alaska Floodplain and Erosion Mitigation Commission Act of 2005
    Presumably in response to this recommendation, this legislation 
would establish a seven-member federal-State commission co-chaired by 
the Governor of Alaska and an appointee of the Secretary of the 
Interior. Additional provisions allow the commission to hire staff. The 
commission is tasked with, among other things, studying flood and 
erosion processes and the planning needs associated with those 
processes and the establishment of procedures to obtain the views of 
the public on land use planning needs. The commission is also to 
develop recommendations on control and mitigation solutions; budgets 
and programs of federal and State agencies responsible for 
administering floodplain management authorities; changes in law and 
policy necessary or desirable to provide integrated erosion and flood 
management authority; and other measures designed to ensure 
coordination, cooperation, the achievement of sustainable Alaska Native 
communities.
    The legislation further directs the Secretary to evaluate and 
prioritize specific flood and erosion circumstances that affect life 
and property in Alaska and examine the most cost-effective ways of 
carrying out flood and erosion control and mitigation solutions devised 
by the commission for the 9 Alaska Native villages specified in the GAO 
report--including the 4 villages previously mentioned. The Secretary is 
authorized to make grants to the State or local governments using the 
remainder of funds appropriated for flood and erosion control and 
mitigation solutions, and may take any action necessary to mitigate the 
loss of structures and infrastructure from flood and erosion using the 
most cost-effective means practicable to provide the longest-term 
benefit.
    Given the Department's role in Alaska land management and its 
relationship with Alaska Natives through the various Alaska-specific 
land management laws, we believe that the Department and its bureaus 
should be a part of any process intended to develop solutions to these 
problems. In addition, the U.S. Geological Survey's existing science 
efforts and capabilities have the potential to be key inputs in some of 
the processes envisioned in S. 49. The USGS carries out coastal and 
river erosion modeling and assessment, various land form imagery and 
mapping projects, provides integrated geospatial information access, 
and offers critical datasets, such as the National Hydrologic Dataset.
    However, the Department has a number of concerns with S. 49. 
Several officials representing federal agencies would be members of the 
commission. Therefore, any recommendations by the commission could be 
misconstrued as representing the views of the Executive branch. In this 
regard, we are particularly concerned by subsections 102(d)(2), 
102(d)(4), 102(d)(7), and 105(b)(2), which involve budgetary and 
legislative recommendations, and recommend deleting these provisions.
    Federal programs that address flooding generally require the 
satisfaction of a cost-benefit analysis to qualify for federal funding, 
therefore the Administration objects to those provisions of title II 
that would potentially require or authorize the Secretary to implement 
solutions if the costs are greater than the benefits, albeit using the 
``most cost-effective'' technology or means. We also have concerns 
about the costs of implementing this legislation. There are no funds 
contained in the Department's fiscal year 2006 budget to fund the 
commission, and future funding for such a commission or to implement 
its recommendations would have to compete with potentially higher 
priority programs. As a result, we cannot support S. 49 in its current 
form. We do believe that our agencies have a role to play in this 
process, however, and offer to work with the Subcommittee to develop 
mutually acceptable legislation.

Conclusion
    In conclusion, Alaska is a state experiencing significant changes 
in its water patterns both in quantity and timing of flow, challenging 
both Alaska Native and state and federal agency management efforts. 
Such water changes can and do affect infrastructure stability (e.g. 
road bridge scour), fishery productivity, and accelerated river erosion 
and flood patterns.
    Establishing a viable and reliable core of federally funded 
streamgages and enhanced funding to support ground-water research, 
monitoring and assessment would allow the public and resource managers 
to make science-based decisions on allocation of water for the 
competing interests. We also support a process for evaluating the 
options for those Alaska Native villages that are most subject to a 
risk of flood damage.
    However, funding for the activities in S. 1338 and S. 49 would 
remain subject to available resources within the Administration's 
priorities. In addition, for the reasons discussed above, we cannot 
support S. 49 in its current form, but offer to work with the 
Subcommittee to develop mutually acceptable legislation.
    Thank you, Madam Chairman, for the opportunity to present this 
testimony. I will be pleased to answer questions you and other Members 
of the Subcommittee may have.

    Senator Murkowski. Thank you. I appreciate the testimony 
from both of you. I've got a couple of quick questions for you, 
Commissioner Keys, and then I'll turn to the Alaska issues.
    On the first bill that you referenced--this is the 
Reclamation States Emergency Drought Relief Act, which you do 
support--the extension, I guess, is now 5 years in this 
legislation. Should we extend the Drought Act any further than 
that? Any merit to that?
    Mr. Keys. Madam Chairman, I think you could extend it as 
long as you wanted to. Five years seems to be a figure that 
works well with the amount, with the cost ceiling that we 
have--in other words, that would make them coincide fairly 
well--otherwise I think you could do it for as long as you saw 
fit.
    Senator Murkowski. Just tying it in with the funding 
aspect.
    Mr. Keys. Yes, ma'am.
    Senator Murkowski. With regards to S. 819, the Pactola 
Reservoir Reallocation, is there any opposition to this 
proposed reallocation of costs?
    Mr. Keys. Senator, I have heard of no opposition. It is a 
good bill, it is the right thing to do, it helps that portion 
of South Dakota address its water needs into the future. The 
irrigation district there has other water that they are using 
now, it did not want to renew its contracts for that storage 
space, and it's a great use of that water for the area.
    Senator Murkowski. And then S. 891--this is the Water 
Service Contract Extension in Nebraska, you referenced in your 
testimony--I think you used the terms ``unique circumstances'' 
where title was not transferred there; what happened there? 
What were these circumstances?
    Mr. Keys. Madam Chairman, I think when Ainsworth started 
looking at title transfer, they had just seen the successful 
title transfer of the North Loop Unit in Nebraska. The North 
Loop Unit took almost 10 years to get transferred, with all of 
the environmental studies, the other work that had to be done. 
I think they thought it was going to be a fairly easy process. 
It turned out that there was extensive environmental work that 
had to be done, and while we didn't think it was going to take 
10 years, it took more than 1 or 2 years for them to get done. 
Their whole objective in this thing is so they didn't have to 
renew the contract that's coming due next year. They saw that 
they couldn't get that done, so they just dropped the title 
transfer action and went to extension of the contract.
    Senator Murkowski. And this extension to 4 years, is this a 
typical extension, then?
    Mr. Keys. It is a little longer than usual, but we wanted 
to give ourselves and the District plenty of time to be able to 
negotiate a good contract.
    Senator Murkowski. And then last, on S. 247, the Tumalo 
Water Conservation Project Act, what is the difference between 
the method of crediting and accounting for water proposed in 
this water conservation project?
    Mr. Keys. Senator, I'm not sure that I quite understand the 
question.
    Senator Murkowski. Well, you've got a method of crediting 
and accounting. So, you've got this proposed for the water 
conservation project there in Deschutes, and the Platte River 
Basin; how does that work?
    Mr. Keys. In the Platte River Basin, that is an effort 
that's been underway for several years. When it first started, 
it appeared that the cost of doing the Endangered Species Act 
work in the Platte River was going to be about $75 million, and 
it was supposed to be 50/50, cost shared between the States, 
the three States--Nebraska, Wyoming and Colorado--and the 
Federal Government. Part of the investment of that project was 
to go into the river and purchase water and land to make the 
Endangered Species Act solution work, but it was part of the 
project, and that cost was included in the cost of the project. 
As they got further along in the plan, the States said, ``Why 
would you go buy the water?'' In other words, ``We give you the 
money, and you go buy the water, we will supply the water for 
that much money that you were going to spend on purchasing 
water.''
    So the cost of purchased water and its benefits were inside 
of the project plan. That's not true in Tumalo. In Tumalo, you 
have a $14 million project cost estimate, and the legislation 
says 50 percent can only come from the Government, which is $7 
million. That leaves $7 million that nobody's there to pay, 
because there is an outside water source that they're saying 
has a benefit, but it's not part of the project, so it was not 
included in the original project cost.
    Senator Murkowski. Would the administration then support 
this legislation if the cost-share amounts were amended to 
reflect the credit for the actual costs?
    Mr. Keys. Madam Chairman, if it were corrected, that would 
mean that the project cost would be almost $20 million. Fifty 
percent would mean the districts would have to come up with $3 
or $4 million. So that being said, it is still a $10 million 
drain on the Reclamation budget for a non-Reclamation project. 
To fund work on a non-Reclamation project takes money away from 
the operation and maintenance moneys that we depend on for 
Reclamation facilities. I would have to ask the administration 
again what their position would be on that bill.
    Senator Murkowski. Dr. Bartels, let's go to you for a 
couple of questions on the Alaska bills here. First, on the 
Alaska Water Resources Act, in your written testimony--quite 
honestly, I thought your testimony was terrific, because it was 
very inclusive in terms of why we need to move forward with 
this legislation--you had the one sentence at the end that 
says, ``We've got a problem with the cost.''
    Because I'm trying to determine where the administration is 
on this legislation and whether or not they support it. Is it 
just the cost that has raised the concern? And, essentially, 
where does the administration come down on S. 1338?
    Dr. Holland-Bartels. I believe the administration supports 
S. 1338, it's just a matter of setting this within the other 
competing priorities.
    Senator Murkowski. Fair enough. We have both discussed the 
number of stream gages in the State, and essentially the 
inadequacy that is out there. Is it correct to state that the 
numbers that we are looking at right now, the 100 that we know 
are there, we have to assume that we may be talking about 85 of 
them that are actually working? Is it correct to say that this 
is the bare minimum needed for flood forecasting in a State as 
big as ours, and it's almost a matter of health and safety that 
we look at getting more stream gages in place?
    Dr. Holland-Bartels. I guess I would have to support that 
statement. The number that's provided is the basic number to 
fit in within the national framework of the National Streamflow 
Information Program. So in that sense, the number that we have 
provided fits in in that national program. Those things that 
are specific to the uniqueness of Alaska are not reflected in 
that effort.
    Senator Murkowski. Are there any technologies that are out 
there that Alaska could benefit from in terms of--those 
technologies that could help us develop more potable water, 
what's out there, and are we constrained at all because of 
either the climate or geography?
    Dr. Holland-Bartels. That's a question that is outside of 
my area of expertise, and I would be happy to provide more 
information.
    Senator Murkowski. We're always looking for the better 
mousetrap when it comes to how we're going to provide the 
water, particularly out in those north villages.
    With regards to S. 49, the Floodplain and Erosion 
Mitigation, you have indicated in your statement that USGS 
wants to be part of any of this process in terms of 
identifying--is it fair to say that the Department agrees that 
some kind of a commission is appropriate or is needed to 
coordinate and to really work on developing a policy with 
regard to how we deal with erosion and flooding in Alaska?
    Dr. Holland-Bartels. I think there are two points, two 
answers to this question. One, the Department has concerns 
about the cost as this relates to other administration 
priorities. It does support, sort of, the underpinning issues 
that exist for the native communities in Alaska, and also 
believes that the Department can bring talent to the table. We 
don't necessarily believe that, as outlined in the legislation, 
either the Bureau of Reclamation or the U.S. Geological Survey 
are the appropriate things for that.
    Senator Murkowski. Would the Department prefer to be left 
out of it altogether?
    Dr. Holland-Bartels. I don't think so. I think we would 
like to be able to provide the science that we're known for in 
support of those activities.
    Senator Murkowski. Do you think that the administration 
would support an Alaska State government-led commission within 
the bipartisan authorization that was authorized to recommend 
Federal program, budget and performance-based accountability 
charges?
    Dr. Holland-Bartels. I can't answer that question, but I'd 
like to reiterate our commitment to working with the 
subcommittee on language----
    Senator Murkowski. And I think that's where we would like 
to be able to take this from here. I know that Senator Stevens 
still will be working on this issue, but we'd like to know that 
we've got that level of cooperation. And it sounds like we're 
in alignment in terms of the goals out there, it's just a 
question of how we might best form these commissions to make it 
do what we all hope it could do.
    Senator Johnson.
    Senator Johnson. For Commissioner Keys, relative to S. 819, 
the Pactola Reservoir Reallocation Authorization Act, are you 
familiar with similar legislation, either proposed or 
ultimately enacted, that reallocated costs from one authorized 
use to another authorized use? Is this something that has been 
done before?
    Mr. Keys. Senator Johnson, it has been done before. In this 
case, with the nature of the contract and the language in it 
and so forth, it does need Senate approval to do it, but we've 
done that before.
    Senator Johnson. Very good. Relative to S. 648 and drought 
relief, your testimony indicated that Reclamation is 
considering ideas to make drought relief more effective. Could 
you share with us a few of the ideas that we are just thinking 
about relative to greater efficiencies or effectiveness of 
drought relief?
    Mr. Keys. Senator Johnson, I think the one that we are 
practicing, even as we speak, is to try to involve Reclamation 
with other agencies that have resources available to work with 
drought-challenged areas. Today or tomorrow we will see a press 
announcement on drought action teams that have been established 
for the States of Washington and Idaho, trying to bring the 
work that we can do, the planning that we can make available 
under title I of this Act, together with some resources from 
the Department of Agriculture, the FAS, the NRCS and other 
resources that they have, to bear on problems. In our case, it 
also lets us try some new technologies--new technologies such 
as desalination facilities--to get some future planning 
involved in--one of the things that we found in working with 
this Act in other areas is the worst time to plan for a drought 
is when you're in one. And it lets us do some of that forward 
thinking at times that we can do it, when we're not right under 
the gun of the drought.
    Senator Johnson. Your testimony indicated that the original 
Drought Relief Act included a ceiling of $90 million in 
expenditures; can you share with us how close Reclamation is to 
exceeding that cap? How adequate has that cap been?
    Mr. Keys. Mr. Johnson, over the past 5 years that I've been 
involved in the budgets from this end, our annual expenditures 
have been--our annual appropriations have been to the tune of 
$2 to $5 million. The remaining portion of that $91 million is 
adequate to carry us the next 5 years.
    Senator Johnson. Relative to S. 247, which my Oregon 
colleagues are sponsoring, your testimony mentioned that the 
Code of Federal Regulations and OMB circulars contained Federal 
guidelines which specified the types of activities that qualify 
as in-kind services to satisfy cost-share requirements for 
water conservation projects. I wonder if you could share with 
the committee copies of these regulations and circulars for the 
record?
    Mr. Keys. Mr. Johnson, we would be happy to supply those 
for the record.
    Senator Johnson. Very good. Again, Mr. Keys, I'm very 
appreciative of your working closely with the committee, and 
also appreciative of your support for S. 819. Thank you.
    Mr. Keys. Sure.
    Senator Murkowski. Senator Smith.
    Senator Smith. Thank you, Madam Chairman.
    Commissioner Keys, it's good to see you. And I want to join 
my colleague, Senator Johnson, in acknowledging all of the good 
work you do all over the West. It is a pleasure to work with 
you, and I am very grateful for your willingness on so many 
issues to work with us to find solutions. I'm hoping to find a 
way to get your support for S. 247. I think it is a fact that 
in the Deschutes Basin there are ESA-listed species that do 
affect your project and your work; is that a fair statement?
    Mr. Keys. Senator Smith, that is a fair statement.
    Senator Smith. I understand your concern in terms of the 
economics and how this is being proposed, but clearly if we 
could provide the 20 cubic feet per second of water that this 
project would put back in the Deschutes, I imagine it would be 
very helpful to your responsibilities to these species in your 
other projects.
    Mr. Keys. Senator Smith, 20 cubic feet per second on top of 
the existing 25 to 30 cubic feet per second already there would 
do wonders in that place.
    Senator Smith. Okay. It does seem that we do have a Federal 
stake in this. The bill certainly does provide for some real 
help to the species in dry times of the year. It certainly 
helps farmers, and certainly advances public safety. I guess 
all I'm asking is that you'll work with us to find the right 
financing formula to make this happen, because it does seem to 
me the Federal stake is very real, the fish and wildlife 
concerns are very real, and obviously, the irrigation aspects 
really ought to be achieved. So my hope is that you'll work 
with us, as you have in the past, and figure out how to make 
this so it wins the administration's support.
    Mr. Keys. Senator Smith, we will work with you. I certainly 
will go back to the administration and show them different ways 
to consider this bill. And then, if the committee and the 
Senate decided to do that, we would certainly work very closely 
with you to implement it.
    Senator Smith. It's really just a matter of money, isn't 
it? Or is it something in the calculation of credits for water 
that just violates one of the procedures that you have to 
follow?
    Mr. Keys. Senator Smith, the way the bill sets out the cost 
share, it doesn't work.
    Senator Smith. Okay.
    Mr. Keys. We would certainly work with you to make that 
work.
    Senator Smith. Okay.
    Mr. Keys. And then, as you've said, it's a matter of money.
    Senator Smith. It always comes down to that, doesn't it?
    Mr. Keys. Yes, it does.
    Senator Smith. Well, thank you, Mr. Commissioner, for all 
that you do.
    Senator Murkowski. Thank you, Senator Smith.
    Commissioner, Dr. Bartels, thank you both for your 
testimony, again, and for the fine work that you do for the 
Bureau. And Dr. Bartels, we appreciate you coming all the way 
from Alaska. You can now go home and take care of things on the 
home front. Have a nice flight. Again, thank you for your 
willingness to work with us on some of these issues that are 
outstanding, and for your help in getting some of these moving 
forward, we appreciate that a great deal.
    With that, let's move to the second panel, please. Good 
afternoon, gentlemen. I'd also like to welcome you, 
Commissioner Blatchford--I know that you have also traveled a 
long way to be with us this afternoon--the Alaska Department of 
Community and Economic Development. And Mr. McDaniels, I would 
be remiss in not acknowledging that you, also, have a 
transcontinental flight, so thank you for being with us, as 
well, this afternoon.
    Commissioner Blatchford, if we can start with your 
testimony, and then we will proceed to Mr. McDaniels. Welcome.

         STATEMENT OF EDGAR BLATCHFORD, COMMISSIONER, 
   ALASKA DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, 
                         ANCHORAGE, AK

    Mr. Blatchford. Thank you, Madam Chair, and members of the 
committee for this opportunity to testify on behalf of the 
State of Alaska and the Department of Commerce, Community and 
Economic Development. These legislative proposals are very 
important to the affected communities and residents of Alaska.
    I am testifying before you because our department's Alaska 
constitutional mandate to assist communities.
    Alaska believes a joint Federal-State Floodplain and 
Erosion Mitigation Commission is long overdue. This legislation 
recognizes that floodplain management measures and erosion 
mitigation interrelate, frequently overlap and often rely on a 
multi-agency approach. We work closer with the Federal, State 
and Native organizations, and we encourage this working 
togetherness.
    We also believe, Madam Chair and members of the committee, 
in being multi-objective. I, as Commissioner of the Department 
of Commerce and Economic Development, cannot assist the 
communities most at risk. The burden on our State and Federal 
resources in disaster assistance and emergency response can and 
should be reduced.
    For a few communities, this can not happen without a 
coordinated Federal-State effort to address the flood and 
erosion problems. The Department of Commerce, Community and 
Economic Development is charged with creating a local economic 
base for most of our villages in rural Alaska. We need to 
provide jobs, and it is difficult when the land under your feet 
is washing away during each storm, or the river breaks up, 
flooding the communities. We need a decisionmaking body that 
can make recommendations and see direct implementation of flood 
and erosion mitigation solutions. We need a decisionmaking body 
to set priorities for those most in need, and to assign agency 
leads in the State and Federal Governments. Right now, we do 
not see the Federal or State governments as having direct 
programs, roles or leadership in addressing erosion.
    We have to avoid the problem to begin with. Sometimes we 
can gather money to try to fix the problem through structural 
erosion control, but if moving the community is the most cost-
effective, socially-acceptable solution, State and Federal 
Governments do not have clear program authority to assist.
    S. 49 includes matters to be studied by the proposed 
Federal-State Floodplain and Erosion Mitigation Commission. My 
staff advises me that much study has already been performed, 
and is readily available from prior Federal and State-funded 
study projects. Still, Alaska is very appreciative of the study 
funding support.
    However, what is lacking is a coordinated Federal-State, 
high-level leadership team to make what in some cases will be 
hard and difficult decisions. Let me make it clear, as I stated 
before the U.S. Senate Appropriations hearing that Senator 
Stevens chaired, and you, Senator Murkowski, participated in 
last summer in Anchorage that started the momentum toward this 
needed legislation, erosion and flooding is, with many of our 
communities, having some type of impact. Erosion and flooding 
are naturally occurring events. Few communities in Alaska are 
at great risk, and need, in my opinion, to consider the option 
of moving.
    With good information, we hope to avoid placement of 
expensive infrastructure that can be threatened or needs 
erosion control, but we need good data. Our Department is 
working closely with the Corps of Engineers to move forward on 
the erosion assessments that have been stated as a priority 
need, and was funded through the Corps in last year's Omnibus 
Appropriations Bill. We believe these erosion assessments by 
the Corps, which include using our Department's detailed 
community maps, will provide excellent information for avoiding 
siting of new infrastructure in erosion-prone areas.
    Let me comment just briefly, Madam Chairman and members of 
the committee, on Alaska's lack of water resource data, and 
express my support for S. 1338. In the area of flood 
forecasting, stream gaging is vital for the data needed to 
support Alaska's flood map modernization effort. Our Department 
is the State lead for map modernization and stream gage data is 
critical for producing updated, accurate flood maps.
    Alaska's stream gage density is about one stream for every 
4,500 square miles, compared to the rest of the United States 
which has one stream gage for every 430 square miles. USGS's 
gaging program, the National Streamflow Information Program, 
only has 19 percent of the approved gages in place to provide 
surface water information. We encourage Congress to fund the 
stream gaging deficit in our State.
    Thank you again, Madam Chair and members of the committee, 
for the opportunity to be here this afternoon. I look forward 
to any questions that you might have.
    [The prepared statement of Mr. Blatchford follows:]

  Prepared Statement of Edgar Blatchford, Commissioner, Department of 
           Community and Economic Development, Anchorage, AK

    Thank you, Madam Chair and members of the Committee for this 
opportunity to testify on behalf of the State of Alaska and the 
Department of Commerce, Community and Economic Development on these 
legislative proposals that are important to the affected communities 
and residents of Alaska.
    I am testifying before you because of our department's Alaska 
Constitutional mandate to assist communities.
    Senate 49, a bill sponsored by the Alaska delegation and supported 
by the State of Alaska and particularly by our Department will be the 
primary legislation on which I will comment.
    Alaska believes a joint Federal-State Floodplain and Erosion 
Mitigation Commission is long over due.
    This Legislation recognizes that floodplain management measures and 
erosion mitigation interrelate, frequently overlap and often rely on:

    1) A multi-agency approach--Federal-State-Native organizations 
working together;
    2) And must be multi-objective--I can't fulfill my Commerce & 
Economic Development duties as Commissioner, unless I also assist the 
Community's most at Risk. The burden on our State and Federal resources 
in Disaster assistance and Emergency response can and should be 
reduced. For a few communities (3-4) this can not happen without a 
coordinated State-Federal effort to address the flood & erosion 
problems. How do you create an economy, provide jobs when the land 
under your feet is washing away during each storm, or as River Breakup 
floods the community?
    3) Finally, we need a DECISION-MAKING body that can make 
Recommendations and see that direct implementation of flood and erosion 
mitigation solutions, and SET PRIORITIES for those MOST in need, and 
ASSIGN Agency leads in the State and Federal government. Right now we 
do not see the Federal, or State Governments as having direct programs, 
roles or leadership in addressing EROSION. Flooding and floodplain 
management, Yes--Erosion--we don't have the program authorities needed 
to:

   AVOID the problem to begin with;
   sometimes we can gather money to try to FIX the problem 
        through Structural Erosion Control, but if
   MOVING is the most cost effective, socially acceptable 
        solution--State and Federal Governments do not have clear 
        program authorities to assist.

    Senate 49, includes ``Matters to Be Studied'' by the proposed 
Federal-State Floodplain & Erosion Mitigation Commission. Staff advises 
me that much ``Study'' has been performed and is readily available from 
prior Federal (primarily the Corps of Engineers) and State funded 
``Study'' Projects. Alaska is very appreciative of the Study funding 
support. However, what is lacking is a COORDINATED Federal-State high-
level leadership team to make, what in some cases, will be hard 
decisions.
    Let me make it clear, as I stated before the U.S. Senate 
Appropriations Hearing that Senator Stevens chaired and Senator 
Murkowski, you participated in last summer in Anchorage that started 
the momentum towards this needed Legislation:

    Erosion and flooding is, with many of our communities, having some 
type of an impact--erosion and flooding are naturally occurring events.
    A very few communities in Alaska are at great risk, and need, in my 
opinion, to consider the option of moving.

    With good information, we hope to avoid placement of expensive 
infrastructure that can be threatened or that needs erosion control. 
But we need good data. Our Department is working closely with the Corps 
of Engineers to move forward on the Erosion Assessments that have been 
stated as a priority need and was funded through the Corps in last 
year's Omnibus Appropriations Bill. We believe these Erosion 
Assessments by the Corps, using our Department's detailed Community 
Maps, will provide excellent information for avoiding siting of new 
infrastructure in erosion prone areas.
    Let me comment briefly on Alaska's lack of water resource data, and 
express my support for Senate 1338 ``Alaska Water Resources Act of 
2005'', particularly the bills stated ``. . . particularly in the area 
of FLOODFORECASTING. Stream gaging is also vital for the data needed to 
support the Alaska's Flood Map Modernization effort (lead by FEMA 
nationally). Our Department is the State lead for Map Modernization and 
stream gage data is critical to producing updated, accurate flood maps.
    Alaska's stream gage density is about 1 stream gage for every four-
thousand, five hundred square miles, whereas the rest of the U.S. has 
about 1 stream gage per 430 square miles.
    The USGS's gaging program (the National Streamflow Information 
Program) only has 19% of the approved gages in place to provide surface 
water information. We encourage Congress to fund the stream gage 
deficit our State faces.
    Thank you again for the opportunity to testify before you this 
afternoon. I look forward to any questions you may have.

    Senator Murkowski. Thank you, Commissioner.
    Mr. McDaniels.

            STATEMENT OF ELMER MCDANIELS, MANAGER, 
              TUMALO IRRIGATION DISTRICT, BEND, OR

    Mr. McDaniels. Madam Chairman, members of the subcommittee, 
I'm Elmer McDaniels, and I'm from the Tumalo Irrigation 
District in Bend, Oregon. The Tumalo Irrigation District, or 
TID, was founded in 1914 and currently serves about 45 square 
miles with 8,100 irrigated acres between Bend and Sisters, 
Oregon, on the east slope of the Cascade Mountains.
    I would like to state at the outset our thanks to Senator 
Smith and Senator Wyden for introducing S. 247, a bill to 
authorize the Secretary of the Interior to assist the Tumalo 
Irrigation District in the planning, design and construction of 
the Water Conservation Project in Deschutes County, the process 
we have successfully used with the recently dedicated Bend Feed 
Canal Project.
    The project involved the piping of approximately 6 miles of 
open canals, and returning 20 cfs of conserved water to in-
stream flows under the Oregon State Water Conservation Statute, 
which represents $5.4 million of public benefit. I'd like to 
also say that the 30 second feet that has been mentioned 
before, that Senator Smith mentioned, is not a water right in-
stream, it's a gentlemen's agreement between all of the 
Districts, and could go away at any time with drastic droughts, 
worse than what we have now. We would put 20 second feet of 
water in-stream, plus the 5.6 that we've already put in the 
Bend Feed Canal Project we just finished, and that water right 
was transferred to the State permanently to be in-stream.
    I'd like to submit for the record four letters of support, 
two from our State's Department of Water Resources, and two 
from the Department of Fish and Wildlife. Under this bill, the 
State of Oregon will hold and conserve the in-stream water 
right resulting from the project. It's not a gentlemen's 
agreement or something that will go away.
    Senator Murkowski. Those letters will be included in the 
record.
    Mr. McDaniels. Thank you.
    The benefits of this particular water conservation project 
are to eliminate water loss, enhance public safety, and 
conserve energy along the project's 6-mile length. This project 
will provide significant in-stream flow benefits to both Tumalo 
Creek and the Deschutes River, a major tributary to the 
Columbia River, draining much of central Oregon. The Federal 
and State interest in constructing this project is apparent, 
pending the need for solutions in the Deschutes Basin for in-
stream flow, anadromous fish, and environmental issue. We view 
that the work that would be undertaken with this project is a 
partnership model that the Bureau should consider for their own 
projects, consistent with Water 2025.
    The total expected Federal share for this project is $14 
million, and that can be spread over 3 to 5 years, the same as 
the estimated project planning, design and construction costs. 
Although TID isn't putting up the traditional cash portion of 
this project cost-share, we propose to count the value of the 
20 second feet of conserved water generated by the project and 
transferred back in-stream, a $5.4 million value, which is 
explained in our written testimony, which is the equivalent of 
the traditional local match. That, along with our in-kind 
service of existing project-related features, constitute a 
total of $7.4 million of local match value.
    The precedent for this method of water-return cost-share 
accounting is from Nebraska, where the value of the conserved 
water and returned water is used as a part of the cost-sharing 
portion in the Platte River Basin Endangered Species Recovery 
Implementation Program. I would also like to submit materials 
for the record on that program's cost-sharing as well.*
---------------------------------------------------------------------------
    * Retained in subcommittee files.
---------------------------------------------------------------------------
    Senator Murkowski. They will be included.
    Mr. McDaniels. We believe this bill offers a district such 
as ours the opportunity to undertake a project having so many 
positive benefits in terms of water conservation savings, water 
enhancement, protection of listed species and reliable water 
supply to our service area customers during the drought and to 
increase public safety in our communities.
    Thank you for the opportunity to testify on this important 
legislation to our District. I'd be pleased to try to answer 
any questions that you have, and I look forward to favorable 
action by the Subcommittee on Water and Power. Thank you.
    [The prepared statement of Mr. McDaniels follows:]

            Prepared Statement of Elmer McDaniels, Manager, 
                  Tumalo Irrigation District, Bend, OR

    Madam Chairwoman, Members of the Subcommittee, I am Elmer 
McDaniels, Manager of the Tumalo Irrigation District in Bend, Oregon. 
The Tumalo Irrigation District--or TID--was founded in 1914 and 
currently serves about 45 square miles with 8,100 irrigated acres 
between Bend and Sisters, Oregon, on the east slope of the Cascade 
Mountains.
    I would like to state at the outset our thanks to Senator Smith and 
Senator Wyden for introducing S. 247--a bill to authorize the Secretary 
of the Interior to assist in the planning, design, and construction of 
the Tumalo Irrigation District Water Conservation Project in Deschutes 
County, Oregon--a piece of legislation the District strongly supports. 
It is vital to us as we undergo the rapid urbanization and growth that 
is occurring throughout our part of the state during a period of 
continuing drought. The project involves the piping of approximately 
six miles of open canals, and returning 20 cfs of conserved water to 
in-stream flows under the Oregon State Water Conservation Statute, 
which represents $5.4 million of public benefit. Under this Bill, the 
State of Oregon will hold the conserved in-stream water right resulting 
from the project.
    The benefits of this particular water conservation project are to 
eliminate water loss, enhance public safety, and conserve energy along 
the project's six-mile length. The completed project, including other 
work by TID, will deliver pressurized water to TID irrigators during 
drought years, whereas they now receive an inadequate water supply in 8 
out of 10 years. From a watershed enhancement perspective, this project 
is to provide significant in-stream flow benefits to both Tumalo Creek 
and the Deschutes River, a major tributary to the Columbia River, 
draining much of central Oregon. Recently, the Middle Deschutes River 
has been reduced to seasonal flows as low as 30 cfs, and the goal for 
this project is to enhance that flow to eventually achieve 250 cfs for 
the Middle Deschutes basin, a river reach that is significantly 
productive for trout and anadromous fisheries.
    The TID Water Conservation Project will provide a 20 cfs water 
savings to transfer to in-stream, in the Tumalo Creek and the Deschutes 
River. Together with previous 111) water conservation efforts, this 
represents 10.4% of the 250 cfs basin goal for restoring the Deschutes 
River, which will greatly impact stream ecosystem and habitat for 
listed species as well as provide flow stability for both anadromous 
fisheries and residents. The completed project will eliminate or reduce 
farm pumping systems thereby saving energy, realize pressurization 
throughout the irrigation system, and reduce the risk of injury and 
drowning to small children growing up in our District around open 
canals.
    The Tumalo Irrigation District, even though it's a non-Reclamation 
District, has a history of working with the Bureau on solutions. The 
Federal and State interest in constructing this project is apparent 
given the need for solutions in the Deschutes basin for in-stream flow, 
anadromous fish, and environmental issues; we view the work that would 
be undertaken with this project as a model that the Bureau should 
consider for their own projects, consistent with Water 2025.
    The total expected Federal share for this project is $14 million, 
the same as the estimated project planning, design, and construction 
costs. Although TID isn't putting up the traditional cash portion of 
this project cost-share, we propose to count the value of the 20 cfs of 
conserved water generated by the project and transferred back in-
stream--a $5.4 million value--towards our equivalent local match along 
with our in-kind services. We appreciate the fact there may be some 
confusion regarding the cost-share requirements. Section 3, Subsection 
(b), part (2) of S. 247--Credit Toward Non-Federal Share states:

          ``The Secretary shall credit toward the non-Federal share of 
        the Project----
                  (B) an amount equal to----
                          (i) the value of any water converted by the 
                        Project to instream water rights, as determined 
                        in accordance with State law . . .''

    The precedent for this method of water-return cost-share accounting 
is from Nebraska, where the value of the conserved and returned water 
is used as part of that State's cost-sharing portion in the Platte 
River basin Endangered Species Recovery Implementation Program.
    The $5.4 million dollar value of the water is calculated as 
follows:

   A single cubic foot per second will irrigate approximately 
        60 acres.
   The 20 cfs of conserved water is equivalent to the amount of 
        water needed to irrigate 1,200 acres of land in the TID. (20 
        cfs is equal to approx. 10,000 gallons per minute.)
   The current market price of 1 acre of TID water rights is 
        $4,500.
   1,200 acres  $4,500 = $5.4 million in value of 
        water

    I would also like to submit for the Record three letters: one from 
the State of Oregon, one from the State's Department of Water 
Resources, and one from the State's Fish and Wildlife Department.
    We believe this Bill offers a District such as ours the opportunity 
to undertake a project having so many positive benefits; in terms of 
water conservation savings, watershed enhancement, protection of listed 
species, for reliable water supply to our service area customers during 
the drought, and to increase public safety in our communities.
    Thank you for the opportunity to testify on this important 
legislation to our District. I am pleased to answer any questions that 
you may have, and we look forward to favorable action by the 
Subcommittee on Water and Power.

    Senator Murkowski. Thank you, both of you gentlemen. I 
appreciate your testimony here this afternoon, and your efforts 
in getting here.
    Commissioner Blatchford, you spoke to the importance of the 
coordinated effort, and I think this is one of the real 
advantages that we see with S. 49 is the coordinated Federal-
State effort. How important is it--and from the State of 
Alaska's perspective, how important is it--that we have some 
kind of a standardized policy to deal with the coastal erosion 
and the flooding problem statewide?
    Mr. Blatchford. Senator Murkowski and Senator Smith, the 
importance of standardization is growing, because we see a 
growing problem in Alaska with erosion. It's along the Yukon, 
the Kuskokwim, and the Bering Sea. And we, the standards would 
allow, Madam Chair, for us to make the sometimes--I believe 
will be--difficult and hard decisions on where to place 
infrastructure, whether it means placing the infrastructure 
further away from where the community is now located. But a 
standardized approach is extremely important, Madam Chair, even 
though, Madam Chair, each community is very, very unique.
    Senator Murkowski. With the mapping that is being 
undertaken and a recognition that if we can better anticipate 
what the years of erosion may bring, we can be smarter in our 
decisions as to where we place the school or the community 
center.
    Do we have any real estimates on the amount of funding that 
we currently need to address the coastal erosion and the river 
erosion around the State?
    Mr. Blatchford. I have not seen any universal or State-wide 
estimate of how much it would cost to deal with the problem, 
the growing problem, but I believe it would be in the hundreds 
of millions of dollars. Just looking at one community, Madam 
Chair, and that is the community of Shishmaref, a community 
that has massive erosion problems caused by the Bering Sea, 
I've been there several times, starting back in the early 
1990's, and it's a community that I'm familiar with because my 
grandmother was from that area, but we're talking about the 
cost of moving homes, schools, the National Guard Armory, the 
entire infrastructure in the community, and it's a growing 
community. So my approach would be to look for good, solid 
ground upon which to build a new community, but that would be 
very, very expensive.
    Senator Murkowski. How are we doing in terms of identifying 
those areas and those communities that are subject to the 
flooding and erosion?
    Mr. Blatchford. Madam Chair, members of the subcommittee, 
that's easy to do, because the communities contact us whenever 
the water starts to rise or the banks start to fall in, and 
then we have to move into a crisis mode to try to move the 
infrastructure, whether it's the school, or the homes or the 
washeteria. And this is a recurring problem in some cases. It 
happens on an annual basis in the spring of the year. For the 
past couple of decades, we have made, the State of Alaska has 
made efforts in trying to place the infrastructure on higher 
ground, in safer locations. But the Yukon and the Kuskokwim 
River, and all of the tributaries that feed into those massive 
rivers, they follow their own course, we can't tell them which 
way to go. We can try to direct them, but the mighty Yukon is 
the mighty Yukon.
    Senator Murkowski. Do you have any suggestions for us here 
in Congress? And I'm kind of smiling as I'm saying this, just 
listening to your last comment--we can't tell the River where 
to go. We can't deal with the forces of Mother Nature, but we 
can try to anticipate. And sometimes we get lucky, and 
sometimes we've guessed entirely wrong. From your perspective 
as a commissioner who goes out, who's in the villages, who's 
listening to the concerns from the community, what specifically 
can we do? As Senator Smith mentioned in his previous comments, 
it always comes down to money, but short of it just coming down 
to the dollars, what can we do here?
    Mr. Blatchford. What can we do? Madam Chair, that's a very 
good question. The first thing I would suggest is that we not 
place infrastructure where we know there's going to be an 
erosion control problem. In one community, they voted to move, 
but then they were told that they would not have their new 
school or their new National Guard Armory if they decided to 
move, the infrastructure had to be placed on that particular 
site. I believe, Madam Chair, that it was a lack of 
coordination within various agencies within the State and 
Federal Governments. But when we look at Alaska, and how vast 
the State is, and how powerful nature is in the Northern 
Hemisphere, we have to appreciate local people's input, and we 
listen very closely to what local people suggest to us, and we 
try to take those suggestions and work through the various 
agencies.
    Senator Murkowski. It really does need to be a much better 
coordinated effort than we've had in the past.
    One very quick question on S. 1338, the Water Resources 
Act, recognizing that you do come from a coastal community, you 
know how important a plentiful supply of potable water is for 
the fish, for the seafood processing plants, for tourism, for 
all of the activity that goes on, whether it's mining, oil and 
gas development, whatever is happening--do you see water supply 
issues presenting themselves as a problem for the State in the 
upcoming years?
    Mr. Blatchford. Madam Chair, I spent most of my adult life 
in the community of Seward, and Seward is a community that has 
heavy rainfall----
    Senator Murkowski. Lots of rain.
    Mr. Blatchford. And you have one of the largest ice fields 
right behind Seward, and numerous glaciers feeding off of the 
ice field. And still, when the cruise ships come in, the 
question is, ``Do we have enough water to supply the cruise 
ships, the town, and the city of Seward?'' And it is going to 
be a problem, I believe, particularly out in southwest Alaska, 
western Alaska, where you have a high water table, and in many 
cases you have a lack of a water and sewer system, where the 
honeybucket system is still in use. The question of drinking 
water will always be there, but I think, Madam Chair, that the 
problem will become more severe because in many of the areas, 
particularly native Alaska, you have a growing population. More 
young people are becoming a larger part of the community. In 
some cases, Madam Chair, you're looking at 30 to 40 percent of 
the people in the community are under the age of 16. So I would 
say the problem of drinking water is going to become more 
severe.
    Senator Murkowski. I appreciate your testimony. I've got 
one question for Mr. McDaniels, but I think I'm going to defer 
at this time to Senator Smith.
    Senator Smith. Thank you, Madam Chair. Elmer, it's good to 
see you again. We certainly appreciate you coming back all this 
way. I know that flight very well. You're here on a good cause.
    I wonder if, for the Senate record, Elmer, you could give 
the subcommittee a quick summary of the many pressures and 
competing demands on water in the Deschutes Basin.
    Mr. McDaniels. Senator, Chair, environmental, fish, safety, 
irrigation, agriculture, just for starters.
    Senator Smith. How about local demands, city growth?
    Mr. McDaniels. Local demand for the cities, tremendous 
growth in Redmond/Bend, Madras is beginning to feel it, 
Prineville is beginning to feel it, just tremendous demands for 
a watershed that is just not producing what it needs. We have 
taken the lead, I feel, in trying to pipe, eliminate seepage 
loss to help the in-stream, to help our water users. We've 
already, as you are well aware, completed one project, this is 
the second phase.
    Senator Smith. Is it fair to say that the residential 
demand for water has never been higher, and that Californians 
are certainly welcome in Oregon, and they're coming there in 
droves, not just to vacation, but to live permanently?
    Mr. McDaniels. Well, as an example of what you're asking, 
when I came to Bend in 1992, July 1992, the population was just 
under 19,000. Today, it's 62,500.
    Senator Smith. And it's a very arid part of Oregon. We're 
often thought of as sort of a rainforest, but that's the other 
side of the mountains.
    Mr. McDaniels. That's the other side of the mountains.
    Senator Smith. Elmer, if you were to market the water that 
we propose to conserve, rather than put it back into the 
stream, do you think you'd have any buyer?
    Mr. McDaniels. Absolutely. When one water user will buy 
water from another user, they're paying about $4,500 an acre, 
plus the mapping and all of the legal work that goes with it. 
Now, we are not interested in going in that direction. We're 
environmentalists, we want a better supply of water for our 
water users. I like to fish, too. We want water in-stream for 
fishing, kayaking, you name it.
    Senator Smith. And there's an abundance of all of those 
activities going on there. It is certainly a recreational 
capital of the Northwest now, it seems.
    Mr. McDaniels. It seems to be, yes, sir.
    Senator Smith. Well, Elmer, as I said to Commissioner Keys, 
we will continue working on S. 247 to get it in the kind of 
shape that can ultimately--I think we can pass it now, but 
ultimately we've got to pass it with the administration, too, 
so we will work with you as well, if you've got ideas for how 
to do that. It's very, very important that we accomplish this, 
and the sooner the better.
    Mr. McDaniels. Madam Chair, Senator Smith, we would be glad 
to work with you and the subcommittee and Reclamation to fix 
this up so we can get it passed.
    Senator Smith. Thank you very much, great to see you.
    Mr. McDaniels. Thank you.
    Senator Murkowski. Thank you, Senator Smith.
    Mr. McDaniels, I asked Commissioner Keys a question along 
the same lines in terms of the crediting issue. I asked whether 
or not the administration, the Bureau would change their 
position on supporting this legislation, if the project were to 
be altered so that the cost-share amounts were amended to 
reflect credit for the actual cost of the in-kind services, and 
he didn't commit one way or another. Do you think that this 
legislation--that the water district could go forward with a 
proposed project, if it were to reflect credit for the actual 
costs?
    Mr. McDaniels. We would work with you and the subcommittee 
and Mr. Keys to do what we can to get this bill approved. I 
would like to qualify that answer by--the third phase of this 
project will be done strictly by Tumalo Irrigation District to 
pipe another 60 miles of what I call a distribution system, the 
smaller naturals, from 48" diameter down to 6" diameter. And 
that is going to cost us about $14 million.
    Senator Murkowski. Fourteen?
    Mr. McDaniels. Million dollars.
    Senator Murkowski. Well, I think we've heard very clearly 
here that there is an effort to work on this issue. Working 
with you, Senator Smith, it sounds like the commissioner is 
clearly willing to do that. And then the subcommittee will be 
working with you on that, too, to see what we can do to assist.
    Both gentlemen, I appreciate your time, your effort in 
getting here, and the testimony that you have provided the 
subcommittee this afternoon.
    We'll be working on these issues. I appreciate it. And we 
are concluded.
    [Whereupon, at 4:20 p.m., the hearing was adjourned.]

                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                                Tumalo Irrigation District,
                                           Bend, OR, July 21, 2005.
Hon. Lisa Murkowski,
Chairman, Subcommittee on Water and Power, Committee on Energy and 
        Natural Resources, U.S. Senate, Washington, DC.
    Dear Senator Murkowski Thank you for the opportunity to testify 
before your Subcommittee on Water and Power of the Committee on Energy 
and Natural Resources on July 12, 2005, regarding S. 247, to authorize 
the Secretary of the Interior to assist in the planning, design, and 
construction of the Tumalo Irrigation District Water Conservation 
Project in Deschutes County, Oregon.
    The following is the question that has been submitted for the 
record, and the response to be submitted for the record:
    Question. You point to the Platte River Basin Endangered Species 
Recovery Implementation Program as a ``precedent'' for S. 247's water-
return cost-share component. However, wasn't that part of a negotiated 
settlement for the Platte River? How do you respond to Commissioner 
Keys' assertion that the two are distinguishable?
    Answer. We agree with Commissioner Keys that each is 
distinguishable--one was put together in a regulatory setting (Platte 
River), and one is put together in.a legislative setting (Tumalo). That 
is not the basis for the ``precedent''. The basis is that each 
recognizes that an amount of water has a dollar value. And, as such, 
each example uses that as a basis for ``cost-sharing'' in a non-
traditional way. The principle has already been accepted in a 
governmental setting with the same agency involved (Bureau of 
Reclamation). We don't see that it makes a difference whether it is 
regulatory of legislative.
    We also don't see the significance behind the word ``negotiated''. 
We have put forth in our testimony the ``how-we-arrived-at'' 
justification behind the value that we ascribe to our 20 cfs of water 
for purposes of cost-sharing. We are more than willing to sit down with 
the Bureau of Reclamation at their area office here in Oregon to 
discuss these figures if that would be useful in moving the legislation 
forward in Washington. DC.
            Sincerely,
                                        Elmer G. McDaniels,
                           District Manager/Secretary to the Board.
                                 ______
                                 
                         Department of the Interior
           Office of Congressional and Legislative Affairs,
                                    Washington, DC, August 4, 2005.
Hon. Lisa Murkowski,
Chairman, Subcommittee on Water and Power, Committee on Energy and 
        Natural Resources, U.S. Senate, Washington, DC.
    Dear Chairman Murkowski: Enclosed are responses prepared by the 
U.S. Geological Survey to questions submitted following the July 12, 
2005, hearing on S. 49 and S. 1338.
    Thank you for the opportunity to provide this material for the 
record.
            Sincerely,
                                             Jane M. Lyder,
                                               Legislative Counsel.
[Enclosure.]

         Responses of Dr. Leslie Holland-Bartels to Questions 
                         From Senator Murkowski
S. 49, the Alaskan Floodplain and Erosion Mitigation Commission Act of 
        2005
    Question 1. Does the Department agree that some type of commission 
is needed to better coordinate the development of policy on what the 
federal government should be doing to combat coastal erosion and 
flooding in rural Alaska?
    Answer. The development of Federal policy is the responsibility 
oldie Federal government. However, this process should not occur in a 
vacuum. Accordingly, we support coordination with and input from the 
State and from local interests and believe that sound policy would 
result from such coordination without the need to establish a 
commission.
    It is important also to keep in mind that coastal erosion and 
flooding occur naturally; they are of concern primarily where we have 
developed our coastal and flood plains. The objective is not to combat 
these natural forces. Instead, it is to evaluate their impacts, 
identify potential solutions, and determine which options, if any, may 
be appropriate to pursue.
S. 1338, Alaska Water Resources Act of 2005
    Question 2. My understanding is that the Interior Department has 
often conducted water resource studies, including the quantity of water 
available from aquifers. In Alaska, there is very little information 
available on the size and recharge capabilities of Alaska aquifers used 
for potable water by many of the residents in the Mat-Su Valley and on 
the Kenai Peninsula. If this bill is enacted, what will the Department 
do to identify such aquifers?
    Answer. If the bill is or is not enacted, the Department and the 
U.S. Geological Survey will continue to work with its partners to 
identify priorities in Alaska for study.
                                 ______
                                 

    [Responses to the following questions were not received at 
the time this hearing went to press.]
        Questions for John W. Keys, III, From Senator Murkowski
 questions on s. 247, the tumalo water conservation project act of 2005
    Question 1. What is the difference between the method of crediting 
and accounting for water proposed for the TID water conservation 
project in Deschutes County, Oregon, and the Platte River Basin 
Endangered Species Recovery Implementation Program?
    Question 2. This sounds like a Water 2025 project. Why doesn't the 
Administration support it?

        QUESTIONS ON S. 819, THE PACTOLA RESERVOIR REALLOCATION 
                       AUTHORIZATION ACT OF 2005

    Question 3. If this legislation is enacted, will Reclamation be 
able to execute the new contracts immediately?
                                 ______
                                 
          Question for Edgar Blatchford From Senator Murkowski
      question on s. 1338, the alaska water resources act of 2005
    Question 1. As Commissioner of Economic Development in Alaska, you 
know how important a plentiful, affordable supply of potable water is 
to further economic development. How important is it for Alaska's 
economy to get more information on its current and future water supply 
sources?
                                 ______
                                 
         Questions for John W. Keys, III, From Senator Bingaman
    Question 1. S. 648 (Smith)--Reclamation's budget request for 
funding to support its drought relief program has not been significant 
in recent times. This is surprising given the drought conditions that 
have affected large parts of the West. For 2005 and 2006, the President 
requested only $500,000. In the drought-plagued years of 2003 and 2004, 
only $899,000 and $1.12 million were requested, respectively.

   What is Reclamation's approach for addressing drought 
        conditions--is additional funding needed to support that 
        approach?
   Rather than merely extending the authority for the existing 
        Drought Relief Act--should a different approach be taken or new 
        authority developed?
   How much has the Bureau of Reclamation expended under the 
        Drought Relief Act program since its enactment?
                                 ______
                                 
          Questions for John W. Keys, III, From Senator Wyden
    Question 1. Isn't one of the missions of the Bureau to encourage 
partnerships with local governments to meet water supply needs?
    Question 2. Increasing flows in Tumalo Creek will make the stream 
and the Deschutes River a better place for fish to live by giving them 
more water and by cooling water temperatures. Aren't such environmental 
benefits important missions of the Bureau?
    Question 3. You state in your testimony that you do not support 
this legislation because, based on your calculations, the non-Federal 
cost share is not 50%. Basically, the Bureau doesn't think that the 
water-return cost-share should be credited to the State. Mr. McDaniels 
states in this testimony that a Nebraska project has gotten credit for 
water-return cost-share. So why then is it okay for Nebraska to get 
credit for water-return but not for Oregon?
    Question 4. If the local sponsors met the 50% requirement, would 
you support this legislation?

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                   State of Oregon,
                                Water Resources Department,
                                         Salem, OR, April 26, 2005.
Elmer McDaniels,
Manager, Tumalo Irrigation District, Bend, OR.
    Dear Elmer: As you know the Water Resources Department has long 
supported the Tumalo Feed Canal Project, and that support continues. 
Tumalo Irrigation District has been a leader in water conservation, as 
guidanced by your selection to receive the 2002 Oregon Water Resource 
Commission's Water Conservation and Restoration award, and the 2003 
Governor's Oregon Plan Certificate of Appreciation.
    The Tumalo Feed Canal Project will continue this tradition of 
excellence in water resource management. The piping of the canal will 
eliminate seepage loss and provide for a more reliable delivery of 
water to TID patrons. The project also has the potential to 
significantly improve streamflows in Tumalo Creek and the middle 
Deschutes River. We look forward to receiving your application for 
allocation and use of conserved water.
    If you have any questions, or if the Department can be of further 
assistance, please contact Kyle Gonnan, SC Region Manager, at 541-388-
6669.
            Sincerely,
                                                 Phil Ward,
                                                          Director.
                                 ______
                                 
                                   State of Oregon,
                           Department of Fish and Wildlife,
                                          Salem, OR, June 22, 2005.
Elmer McDaniels,
Manager, Tumalo Irrigation District, Bend, OR.
Re: Tumalo Feed Canal Piping Project

    Dear Elmer: I am writing to express ODFW support for the proposed 
Tumalo Feed Canal piping project. The Oregon Department of Fish and 
Wildlife (ODFW) understands the project will result in piping of 
approximately 6 miles of open canal with 100% of the conserved water 
transferred in-stream at an estimated rate of 20 cubic feet per second.
    Stream flows restored through this project will enhance redband 
trout (an Oregon Sensitive species), brown trout, and mountain 
whitefish populations and other aquatic resources in Tumalo Creek from 
the point of diversion downstream to the confluence of the Deschutes 
River and in the Deschutes River downstream to Lake Billy Chinook. 
Benefits to fish populations will accrue through improvements in water 
quality and quantity resulting in enhanced feeding, resting, and 
rearing habitats and improved access to spawning areas in Tumalo Creek. 
This project will also compliment other in-stream flow enhancement 
projects implemented by the Tumalo Irrigation District and other basin 
interests.
    The combined effect of project benefits to Tumalo Irrigation 
District operations and aquatic resources make this a true win-win 
project. ODFW greatly appreciates the efforts of the Tumalo Irrigation 
District to restore important aquatic habitats and resource values for 
present and future generations of Oregonians.
            Sincerely,
                                               Steven Marx,
                                            Acting Deputy Director.
                                 ______
                                 
                                   State of Oregon,
                           Department of Fish and Wildlife,
                                           Salem, OR, July 1, 2005.
Carl W. Hopp, Jr.,
Attorney at Law, LLC, Bend OR.
Re: Basis for Oregon Method Flow Recommendations

    Dear Mr. Hopp: I am writing you at the request of Steve Marx to 
answer your inquiry about what the key elements of the Oregon Method 
are and how those are used to establish instream water rights.
    The Oregon Method is one of the methodologies identified in Oregon 
Administrative Rule (OAR 635-400-0015) to be used by the Oregon 
Department of Fish and Wildlife (ODFW) to request instream water 
rights. The rules require that ODFW consider the ``habitat requirements 
for conservation, maintenance or enhancement of fish and wildlife 
migration, spawning, nesting brooding, egg incubation, larval or 
juvenile development, juvenile and adult rearing and aquatic life'' 
when developing an instream flow requirement.
    The Oregon Method is a habitat based model for determining flow 
requirements for salmonid fish and is specific to anadromous and 
resident salmonids only. The method was developed specifically for this 
purpose and is described in the ``Oregon Department of Fish and 
Wildlife Guidelines for Instream Flow Methodologies (1989)'', The 
method computes the percent of cross-sections or area usable for fish 
life history functions. Life histories addressed by the method are: 
Passage, Spawning & Incubation and Rearing.
    Stream flow levels are determined by species and life functions 
present during different periods of the year. The method requires field 
measurements and observations at different locations in the stream 
(transects) and at different flows. Measurements include water depth 
and velocity at many locations along transects across the stream, 
observations of the stream (wetted area), proximity to cover, relative 
proportion of pools and riffles, and spot measurements of depth and 
velocity.
    Once the field measurements are completed the data is analyzed by 
comparing it to standard criteria and determining the amount of stream 
width meeting the criteria; calculating the average conditions for each 
species and life function and plotting average stream conditions that 
meet all or a majority of the criteria, You then chart the periods of 
the year when each species and life function is present and select the 
highest of the flows needed by the individual species and life 
functions present during each period of the year (called optimization).
    ODFW then uses this information to apply for an instream water 
right for a reach of stream. ODFW is required to provide to the Water 
Resource Department (WRD) an application containing:

   Name and extent of the stream or lake.
   Species and life stage of fish or wildlife resources.
   Statement of the purpose for which the water is requested.
   Amount of flow requested, by month.
   Description of the technical data and methods used.
   Evidence of notification of DEQ and Parks and affected local 
        governments.
   Statement that the amount requested is the minimum amount 
        necessary.

    If the requested amount of flow is greater than the Expected 
Natural Average Flow (ENAF) (the amount of flow expected to naturally 
be in the stream half of the time) then WRD limits the requested 
instream water right to ENAF. In the case of the Mid Deschutes, below 
Bend, the instream water right is well below ENAF.
    WRD then goes through a public review process before granting the 
instream water right. Once the water right granted and certificated it 
is held in trust by WRD for the people of Oregon.
    I hope this addresses your questions on how the Oregon Method is 
used to establish instream water rights. If you have questions or need 
additional clarification please give me a call at 503-947-6084.
            Sincerely,
                                               Rick Kepler,
                                   Manager, Water Quality/Quantity.
                                 ______
                                 
                                   State of Oregon,
                                Water Resources Department,
                                           Salem, OR, July 7, 2005.
Elmer McDaniels,
Manager/Secretary, Tumalo Irrigation District, Bend, OR.
    Dear Elmer: I am pleased to respond to your request for a letter 
that describes Oregon's allocation of conserved water statute (ORS 
537.455--537.500).
    The Allocation of Conserved Water Program allows a water user who 
conserves water to use a portion of the conserved water on additional 
lands, lease or sell the water, or dedicate the water to instream use. 
Use of this program is voluntary and provides benefits to both water 
right holders and instream values.
    The statutes authorizing the program were originally passed by the 
Legislative Assembly in 1987. The primary intent of the law is to 
promote the efficient use of water to satisfy current and future 
needs--both out-of-stream and instream. The statute defines 
conservation as ``the reduction of the amount of water diverted to 
satisfy an existing beneficial use achieved either by improving the 
technology or method for diverting, transporting, applying or 
recovering the water or by implementing other approved conservation 
measures.''
    In the absence of Department approval of an allocation of conserved 
water, water users who make the necessary investments to improve their 
water use efficiency are not allowed to use the conserved water to meet 
new needs; instead any unused water remains in the stream where it is 
available for the next appropriator. In exchange for granting the user 
the right to use a portion of the conserved water, the law requires 
allocation of a portion to the state for instream use.
    After mitigating the effects on any other water rights, the Water 
Resources Commission allocates 25 percent of the conserved water to the 
state (for an instream water right held by the State of Oregon) and 75 
percent to the applicant, unless the applicant proposes a higher 
allocation to the state or more than 25 percent of the project costs 
come from federal or state non-reimbursable sources. A new water right 
certificate is issued with the original priority date reflecting the 
reduced quantity of water being used with the improved technology. 
Other certificates are issued for the applicant's portion of the 
conserved water and for the state's instream water right. The priority 
dates for these certificates are either the same as the original right, 
or one minute junior.
    If you need additional information or if I can be of further 
assistance, please contact me at (503) 986-0885. Many thanks for your 
continued interest in this program.
            Sincerely,
                                                  Bob Rice,
                                           Field Services Division.
                                 ______
                                 
       Prepared Statement of Anita Winkler, Executive Director, 
                    Oregon Water Resources Congress
                       re: s. 648--drought relief
    As Executive Director for the Oregon Water Resources Congress 
(OWRC), I appreciate this opportunity to support your efforts to extend 
the drought relief provisions included in the Reclamation States 
Emergency Drought Relief Act of 1991 by introducing S. 648.
    The OWRC represents organized agricultural interests in the State 
of Oregon. Its members include irrigation districts, water control 
districts, drainage districts, ports, cities, individual farmers, and 
agribusiness associates. With our broad base of representation around 
the State, OWRC has the experience and expertise to comment on this 
issue.
    The original Emergency Drought Relief Act was enacted in 1991, when 
the effects of drought, occurring at the end of a fairly long stretch 
of above-normal water years, were very significant. The authority 
provided by this Act has been utilized by many Western water users, 
including irrigators in Oregon, as a basis for federal assistance in 
the past decade.
    S. 648 would allow Oregon water users to receive drought 
assistance, including loans for nonstructural and minor structural 
activities for the prevention or mitigation of the adverse effects of 
drought. The bill would extend the ability of the Secretary of Interior 
(Secretary) to purchase water made available by Federal Reclamation 
project contractors through conservation or other means with respect to 
which the seller has reduced the consumption of water. The bill would 
also allow the continued use of facilities at federal Reclamation 
projects for the storage or conveyance of project or non-project water, 
for use both within and outside an authorized project service area.
    We are encouraged that Congress recognizes that regional drought 
disasters in the Western United States cause serious economic and 
environmental losses. As Oregon and other Western states face yet 
another year of sustained drought conditions, we support Senator 
Smith's effort to employ S. 648 as a vehicle to extend this authority 
for another five years.
    Thank you for this opportunity to comment.
                                 ______
                                 
Prepared Statement of Charles Nylander, Chairman of the Legislative and 
Budget Committee for the Western Coalition of Arid States (WESTCAS), on 
                                 S. 648

    The Western Coalition of Arid States (WESTCAS) is submitting this 
testimony to the United States Senate Committee on Energy and Natural 
Resources, Subcommittee on Water and Power regarding S. 648; introduced 
by Mr. Smith of Oregon to amend the Reclamation States Emergency 
Drought Relief Act of 1991, to extend the authority for drought 
assistance. My name is Charlie Nylander and I represent the interests 
of WESTCAS and serve as Chairman of the Legislative/Budget Committee.
    Drought assistance is of particular concern for our member's 
states, 6 out of 7 of which are currently experiencing drought 
conditions, spanning `abnormally dry' to `extreme drought' on the U.S. 
Drought Monitor scale maintained by the University of Nebraska. Direct 
affects of such conditions include above average fire risks, water 
restrictions resulting from widespread water shortages, crop losses and 
pasture damage.
    WESTCAS is a coalition of approximately 125 water and wastewater 
districts, cities and towns, and professional associations focused on 
water quality and water quantity issues in the States of Arizona, 
California, Colorado, Idaho, Nevada, New Mexico, Oregon and Texas. Our 
mission is to work with Federal, State and Regional water quality and 
quantity agencies to promote scientifically-sound laws, regulations, 
appropriations, and policies that protect public health and the 
environment in the arid West.
    The Bureau, of course, is a major architect for water storage and 
research related to new water technologies that provide enormous 
benefit to the economies and livelihoods of a water-dependent West. 
WESTCAS urges granting an extension to Federal agencies, namely the 
Bureau of Reclamation, which has existing authority to respond to 
drought conditions. Authorized by the `Reclamation States Emergency 
Drought Relief Act of 1991', the Bureau of Reclamation is well suited 
to, and has been effectively providing vital services to drought 
afflicted communities for the past 14 years. Some of the benefits 
include drought and water quality research and mitigation measures. Our 
organization supports granting this extension to the Bureau of 
Reclamation while Congress works on a National Drought Policy.
    Extending the authority of the Bureau is of importance to all 17 of 
the Reclamation States which, despite having a wet winter, are now 
facing a sixth year of widespread drought conditions. However, 
Reclamation States are not by any means the only ones in the United 
States currently afflicted by drought. Drought monitoring maps 
currently show 19 additional states in various stages of drought 
conditions. Along with passing this amendment to the Reclamation States 
Emergency Drought Relief Act of 1991, Congress must also recognize that 
there
    currently exists no permanent overarching federally-coordinated 
plan for drought preparedness and response. As drought is an ongoing 
problem affecting more people in the United States than any other 
natural hazard, Congress must also take the next step in drought policy 
and implement the recommendations of the National Drought Policy 
Council. By following these recommendations and taking a proactive 
approach the country will be poised to reduce the amount of damage 
caused by future droughts.
    We thank you for the opportunity to provide this statement for the 
hearing record.

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