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[Senate Report 107-171]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 436
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-171

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

 
                   CALFED BAY-DELTA AUTHORIZATION ACT

                                _______
                                

                 June 24, 2002.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1768]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1768) to authorize the Secretary of the 
Interior to implement the Calfed Bay-Delta Program, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Calfed Bay-Delta Authorization 
Act''.

SEC 2. DEFINITIONS.

    For purposes of this Act:
          (1) Calfed bay-delta program.--The term ``Calfed Bay-Delta 
        Program'' means the programs, projects, complementary actions, 
        and activities undertaken through coordinated planning, 
        implementation, and assessment activities of the State and 
        Federal agencies in a manner consistent with the Record of 
        Decision.
          (2) Calfed policy group.--The term ``Calfed Policy Group'' 
        means a committee of State and Federal agencies referenced in 
        the Record of Decision and established to oversee the Calfed 
        Bay-Delta Program, or the appropriate successor entity created 
        as part of any permanent governing structure pursuant to 
        section 4(d).
          (3)   Environmental water account.--The term ``Environmental 
        Water Account'' means the reserve of water provided for in the 
        Record of Decision to provide water, in addition to the amount 
        of the regulatory baseline, to protect and restore Delta 
        fisheries.
          (4) Federal agencies.--The term ``Federal agencies'' means 
        the following:
                  (A) The Department of the Interior (including the 
                Bureau of Reclamation, Fish and Wildlife Service, 
                Bureau of Land Management, and United States Geological 
                Survey);
                  (B) The Environmental Protection Agency;
                  (C) The Army Corps of Engineers;
                  (D) The Department of Commerce (including the 
                National Marine Fisheries Service);
                  (E) The Department of Agriculture (including the 
                Natural Resources Conservation Service and the Forest 
                Service); and
                  (F) The Western Area Power Administration.
          (5) Governor.--The term ``Governor'' means the Governor of 
        the State of California.
          (6) Implementation memorandum.--The term ``Implementation 
        Memorandum'' means the Calfed Bay-Delta Program Implementation 
        Memorandum of Understanding dated August 28, 2000, executed by 
        the Federal agencies and the State agencies.
          (7) Record of decision.--The term ``Record of Decision'' 
        means the Federal programmatic Record of Decision dated August 
        28, 2000 issued by the Federal agencies and supported by the 
        State.
          (8) Secretary.--The term ``Secretary'' means the Secretary of 
        the Interior.
          (9) Stage 1.--The term ``Stage 1'' means the programs and 
        projects planned for the first 7 years of the Calfed Bay-Delta 
        Program, as specified in the Record of Decision.
          (10) State.--The term ``State'' means the State of 
        California.
          (11) State agencies.--The term ``State Agencies'' means the 
        following:
                  (A) The Resources Agency of California (including the 
                Department of Water Resources and the Department of 
                Fish and Game);
                  (B) The California Environmental Protection Agency 
                (including the State Water Resources Control Board); 
                and
                  (C) The California Department of Food and 
                Agriculture.

SEC. 3. BAY DELTA PROGRAM.

    (a) In General.--The Record of Decision is approved as a framework 
for addressing Calfed Bay-Delta Program components consisting of water 
storage, ecosystem restoration, water supply reliability, conveyance, 
water use efficiency, water quality, water transfers, watershed, 
Environmental Water Account, levee stability, governance, and science. 
The Secretary and the heads of the Federal agencies are authorized to 
carry out the activities in the Record of Decision, subject to the 
provisions of this Act, so that the program goals consisting of 
protecting drinking water quality; restoring ecological health; 
improving water supply reliability, including additional water storage 
and conveyance; and protecting Delta levees; will progress in a 
balanced manner.
    (b) Authorized Activities--
          (1) Specific activities authorized.--The Secretary and the 
        heads of the Federal agencies are authorized to undertake the 
        activities described in this subsection in furtherance of Stage 
        1 of the Calfed Bay-Delta Program as set forth in the Record of 
        Decision, subject to the provisions of this Act, if the 
        activity has been subject to environmental review and approval 
        as required under applicable Federal and State law, and has 
        been approved and certified by the Calfed Policy Group to be 
        consistent with the Record of Decision.
                  (A) Water storage.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $200,000,000 may be expended for 
                the following:
                          (i) planning activities and feasibility 
                        studies for the following projects to be 
                        pursued with project-specific study:
                                  (I) enlargement of Shasta Dam in 
                                Shasta County;
                                  (II) enlargement of Los Vaqueros 
                                Reservoir in Contra Costa County; and
                                  (III) in-Delta storage in San Joaquin 
                                and Contra Costa Counties;
                          (ii) planning and feasibility studies for the 
                        following projects requiring further 
                        consideration:
                                  (I) Sites Reservoir in Colusa County; 
                                and
                                  (II) Upper San Joaquin River storage 
                                in Fresno and Madera Counties;
                          (iii) developing and implementing groundwater 
                        management and groundwater storage projects; 
                        and
                          (iv) comprehensive water management planning.
                  (B) Conveyance.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $125,000,000 may be expended for 
                the following:
                          (i) South Delta Actions:
                                  (I) South Delta Improvements Program 
                                to--
                                          (aa) increase the State Water 
                                        Project export limit to 8500 
                                        cfs;
                                          (bb) install permanent, 
                                        operable barriers in the south 
                                        Delta;
                                          (cc) design and construct 
                                        fish screens and intake 
                                        facilities at Clifton Court 
                                        Forebay and the Tracy Pumping 
                                        Plant facilities; and
                                          (dd) increase the State Water 
                                        Project export to the maximum 
                                        capability of 10,300 cfs;
                                  (II) reduction of agricultural 
                                drainage in south Delta channels; and
                                  (III) design and construction of 
                                lower San Joaquin River floodway 
                                improvements.
                          (ii) North Delta Actions:
                                  (I) evaluation and implementation of 
                                improved operational procedures for the 
                                Delta Cross Channel to address fishery 
                                and water quality concerns;
                                  (II) evaluation of a screened 
                                through-Delta facility on the 
                                Sacramento River; and
                                  (III) design and construction of 
                                lower Mokelumne River floodway 
                                improvements;
                          (iii) interties:
                                  (I) evaluation and construction of an 
                                intertie between the State Water 
                                Project and the Central Valley Project 
                                facilities at or near the City of 
                                Tracy; and
                                  (II) assesment of the connection of 
                                the Central Valley Project to the State 
                                Water Project's Clifton Court Forebay 
                                with a corresponding increase in the 
                                Forebay's screened intake;
                          (iv) other infrastructure improvements:
                                  (I) evaluation and implementation of 
                                the San Luis Reservoir lowpoint 
                                improvement project;
                                  (II) installation and operation of 
                                temporary barriers in the south Delta 
                                until fully operable barriers are 
                                constructed;
                                  (III) actions to protect navigation 
                                and local diversions not adequately 
                                protected by the temporary barriers;
                                  (IV) facilitation of water quality 
                                exchanges and similar programs to make 
                                high quality Sierra Nevada water in the 
                                eastern San Joaquin Valley available to 
                                urban southern California interests; 
                                and
                                  (V) the Sacramento-San Joaquin 
                                Comprehensive Study.
                  (C) Water use efficiency.--Of the amounts authorized 
                to be appropriated for fiscal years 2003 through 2005 
                under this Act, no more than $295,000,000 may be 
                expended for the following:
                          (i) water conservation projects that provide 
                        water supply reliability, water quality, and 
                        ecosystem benefits to the Bay-Delta system;
                          (ii) technical assistance for urban and 
                        agricultural water conservation projects;
                          (iii) water recycling and desalination 
                        projects, including projects identified in the 
                        Bay Area Water Recycling Plan and the Southern 
                        California Comprehensive Water Reclamation and 
                        Reuse Study;
                          (iv) water measurement and transfer incentive 
                        actions; and
                          (v) certification and implementation of best 
                        management practices for urban water 
                        conservation.
                  (D) Water transfers.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $5,000,000 may be expended for 
                the following:
                          (i) increasing the availability of existing 
                        facilities for water transfers;
                          (ii) lowering transaction costs through 
                        permit streamlining; and
                          (iii) maintaining a water transfer 
                        information clearinghouse.
                  (E) Environmental water account.--Of the amounts 
                authorized to be appropriated for fiscal years 2003 
                through 2005 under this Act, no more than $100,000,000 
                may be expended for implementation of the Environmental 
                Water Account.
                  (F) Integrated regional water management plans.--Of 
                the amounts authorized to be appropriated for fiscal 
                years 2003 through 2005 under this Act, no more than 
                $250,000,000 may be expended for the following:
                          (i) establishing a competitive grants program 
                        to assist local and regional communities in 
                        California in developing and implementing 
                        integrated regional water management plans 
                        to carry out Stage 1 of the Record of 
                        Decision; and 
                          (ii) implementation of projects and programs 
                        in California that improve water supply 
                        reliability, water quality, ecosystem 
                        restoration, and flood protection, or meet 
                        other local and regional needs, that are 
                        consistent with, and make a significant 
                        contribution to, Stage 1 of the Calfed Bay-
                        Delta Program.
                  (G) Ecosystem restoration.--Of the amounts authorized 
                to be appropriated for fiscal years 2003 through 2005 
                under this Act, no more than $225,000,000 may be 
                expended for the following:
                          (i) implementation of large-scale restoration 
                        projects in San Francisco Bay, the Delta, and 
                        its tributaries;
                          (ii) restoration of habitat in the Delta, San 
                        Pablo Bay, and Suisun Bay and Marsh, including 
                        tidal wetlands and riparian habitat;
                          (iii) fish screen and fish passage 
                        improvement projects;
                          (iv) implementation of an invasive species 
                        program, including prevention, control, and 
                        eradication;
                          (v) development and integration of State and 
                        Federal agricultural programs that benefit 
                        wildlife into the Ecosystem Restoration 
                        Program;
                          (vi) financial and technical support for 
                        locally-based collaborative programs to restore 
                        habitat while addressing the concerns of local 
                        communities;
                          (vii) water quality improvement projects to 
                        reduce salinity, selenium, mercury, pesticides, 
                        trace metals, dissolved oxygen, turbidity, 
                        sediment, and other pollutants;
                          (viii) environmental water acquisitions to 
                        improve fish spawning and survival in the Delta 
                        and its tributaries;
                          (ix) integrated flood management, ecosystem 
                        restoration, and levee protection projects;
                          (x) scientific evaluations and targeted 
                        research on program activities; and
                          (xi) strategic planning and tracking of 
                        program performance.
                  (H) Watersheds.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $75,000,000 may be expended for 
                the following:
                          (i) building local capacity to assess and 
                        manage watersheds affecting the Bay-Delta 
                        system;
                          (ii) technical assistance for watershed 
                        assessments and management plans; and
                          (iii) developing and implementing locally-
                        based watershed conservation, maintenance and 
                        restoration actions.
                  (I) Water quality.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $125,000,000 may be expended for 
                the following:
                          (i) addressing drainage problems in the San 
                        Joaquin Valley to improve downstream water 
                        quality;
                          (ii) implementation of source control 
                        programs in the Delta and its tributaries;
                          (iii) developing recommendations through 
                        scientific panels and advisory council 
                        processes to meet Calfed's goal of continuous 
                        improvement in Delta water quality for all 
                        uses;
                          (iv) investing in treatment technology 
                        demonstration projects;
                          (v) controlling runoff into the California 
                        aqueduct and other similar conveyances;
                          (vi) addressing water quality problems at the 
                        North Bay Aqueduct;
                          (vii) studying recirculation of export water 
                        to reduce salinity and improve dissolved oxygen 
                        in the San Joaquin River;
                          (viii) implementation of projects to enable 
                        San Francisco Bay Area water districts to work 
                        cooperatively to address water quality and 
                        supply reliability issues, including 
                        connections between aqueducts, water transfers, 
                        and infrastructure improvements that encourage 
                        regional approaches, including potential 
                        alternatives related to East Bay Municipal 
                        Utility District's contract with the Bureau of 
                        Reclamation dated July 20, 2001, that would 
                        improve water quality and water supply 
                        reliability in San Francisco Bay and Sacramento 
                        County Regions.
                          (ix) development of water quality exchanges 
                        and other programs to make high quality water 
                        available to urban areas; and
                          (x) development and implementation of a plan 
                        to meet all existing water quality standards 
                        for which the State and Federal water projects 
                        have responsibility.
                  (J) Levee stability.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $100,000,000 may be expended for 
                the following:
                          (i) assisting local reclamation districts in 
                        reconstructing Delta levees to a base level of 
                        protection;
                          (ii) enhancing the stability of levees that 
                        have particular importance in the system 
                        through the Delta Levee Special Improvement 
                        Projects program;
                          (iii) developing best management practices to 
                        control and reverse land subsidence on Delta 
                        islands;
                          (iv) refining the Delta Emergency Management 
                        Plan;
                          (v) developing a Delta Risk Management 
                        Strategy after assessing the consequences of 
                        Delta levee failure from floods, seepage, 
                        subsidence, and earthquakes;
                          (vi) developing a strategy for reuse of 
                        dredged materials on Delta islands; and
                          (vii) evaluating, and where appropriate 
                        rehabilitating the Suisun Marsh levees.
                  (K) Science.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $100,000,000 may be expended for 
                the following:
                          (i) establishing and maintaining an 
                        independent science board, technical panels, 
                        and standing boards to provide oversight and 
                        peer review of the program;
                          (ii) conducting expert evaluations and 
                        scientific assessments of all program elements;
                          (iii) coordinating existing monitoring and 
                        scientific research programs;
                          (iv) developing and implementing adaptive 
                        management experiments to test, refine and 
                        improve scientific understandings;
                          (v) establishing performance measures, and 
                        monitoring and evaluating the performance of 
                        all program elements; and
                          (vi) preparing an annual Science Report.
                  (L) Program management, oversight, and 
                coordination.--Of the amounts authorized to be 
                appropriated for fiscal years 2003 through 2005 under 
                this Act, no more than $30,000,000 may be expended for 
                the following:
                          (i) program-wide tracking of schedules, 
                        finances, and performance;
                          (ii) multi-agency oversight and coordination 
                        of Calfed activities to ensure program balance 
                        and integration;
                          (iii) development of interagency cross-cut 
                        budgets and a comprehensive finance plan to 
                        allocate costs in accordance with the 
                        beneficiary pays provisions of the Record of 
                        Decision;
                          (iv) coordination of public outreach and 
                        involvement, including tribal, environmental 
                        justice, and public advisory activities under 
                        the Federal Advisory Committee Act; and
                          (v) development of Annual Reports.
          (2) Authorized actions.--The Secretary and the Federal agency 
        heads are authorized to carry out the activities authorized by 
        this Act through the use of grants, loans, contracts, and 
        cooperative agreements with federal and non-federal entities 
        where the Secretary or Federal agency head determines that the 
        grant, loan, contract, or cooperative agreement will assist in 
        implementing the authorized activity in an efficient, timely, 
        and cost-effective manner.

SEC. 4. MANAGEMENT.

    (a) Coordination.--In carrying out the Calfed Bay-Delta Program, 
the Federal agencies shall coordinate their activities with the State 
agencies.
    (b) Public Participation.--In carrying out the Calfed Bay-Delta 
Program, the Federal agencies shall cooperate with local and tribal 
governments and the public through a federally chartered advisory 
committee or other appropriate means, to seek input on program elements 
such as planning, design, technical assistance, and development of peer 
review science programs.
    (c) Science.--In carrying out the Calfed Bay-Delta Program, the 
Federal agencies shall seek to ensure, to the maximum extent 
practicable, that--
          (1) all major aspects of implementing the Program are 
        subjected to credible and objective scientific review; and
          (2) major decisions are based upon the best available 
        scientific information.
    (d) Governance.--In carrying out the Calfed Bay-Delta Program, the 
Secretary and the Federal agency heads shall undertake their activities 
in accordance with the terms of the Implementation Memorandum until 
such time as the Implementation Memorandum is replaced by approval of a 
permanent governing structure, whereupon the Secretary and agency heads 
shall undertake their activities in accordance with the permanent 
governing structure. The Secretary and the Federal agency heads shall 
work with their State counterparts to develop a permanent governing 
structure and shall seek congressional authorization and approval of 
the permanent governing structure, as necessary.
    (e) Environmental Justice.--Consistent with Executive Order 12898 
pertaining to Federal Actions to Address Environmental Justice in 
Minority and Low-Income Populations, it is the intent of the Congress 
that the Federal and State agencies should continue to collaborate to 
develop a comprehensive environmental justice workplan for the Calfed 
Bay-Delta Program and fulfill the commitment to addressing 
environmental justice challenges referred to in the Calfed Bay-Delta 
Program Environmental Justice Workplan dated December 13, 2000.

SEC. 5. REPORTING REQUIREMENTS.

    (a) Report and Certification by Calfed.--The Secretary, in 
cooperation with the Governor, shall submit a report of the Calfed 
Policy Group by December 15 of each year to the appropriate authorizing 
and appropriating Committees of the Senate and the House of 
Representatives that describes the status of implementation of all 
components of the Calfed Bay-Delta Program and that certifies whether 
or not the Calfed Bay-Delta Program is progressing in a balanced manner 
which allows all program components to be advanced, including 
additional water supply, ecosystem restoration, and water quality. The 
Secretary's report shall describe--
          (1) the progress of the Calfed Bay-Delta Program in meeting 
        the implementation schedule for the Program in a manner 
        consistent with the Record of Decision;
          (2) the status of implementation of all components of the 
        Calfed Bay-Delta Program;
          (3) expenditures in the past fiscal year and year to date for 
        implementing the Calfed Bay-Delta Program; and
          (4) accomplishments in the past fiscal year and year to date 
        in achieving the objectives of additional and improved--
                  (A) water storage;
                  (B) water quality;
                  (C) water use efficiency;
                  (D) ecosystem restoration;
                  (E) watershed management;
                  (F) levee system integrity;
                  (G) water transfers;
                  (H) water conveyance; and
                  (I) water supply reliability.
The report shall discuss the status of Calfed Bay-Delta Program goals, 
current schedules, and relevant financing agreements.
    (b) Statement of Balance.--Substantial progress in each of the 
categories listed in subsection (a) shall be considered in determining 
whether the Calfed Bay-Delta Program is proceeding in a balanced manner 
for purposes of making the certification provided for in subsection 
(a). In addition, in making such certification the Secretary, in 
cooperation with the Governor, shall prepare a statement of whether the 
program is in balance which takes into consideration the following:
          (1) Status of all Stage 1 actions, including goals, 
        schedules, and financing agreements;
          (2) Progress on storage projects, conveyance improvements, 
        levee improvements, water quality projects, and water use 
        efficiency programs;
          (3) Completion of key projects and milestones identified in 
        the Ecosystem Restoration Program;
          (4) Development and implementation of local programs for 
        watershed conservation and restoration;
          (5) Progress in improving water supply reliability and 
        implementing the Environmental Water Account;
          (6) Achievement of commitments under State and Federal 
        Endangered Species Acts;
          (7) Implementation of a comprehensive science program;
          (8) Progress toward acquisition of the State and Federal 
        permits, including Clean Water Act section 404 permits, for 
        implementation of projects in all identified program areas;
          (9) Progress in achieving benefits in all geographic regions 
        covered by the Program;
          (10) Legislative action on water transfer, groundwater 
        management, water use efficiency, and governance issues,
          (11) Status of complementary actions;
          (12) Status of mitigation measures; and
          (13) Revisions to funding commitments and program 
        responsibilities.
    (c) Revised Schedule.--If the report provided for in subsection (a) 
and the statement of balance provided for in subsection (b) conclude 
that the Calfed Bay-Delta Program is not progressing in a balanced 
manner so that no certification of balanced implementation can be made, 
the Calfed Policy Group shall prepare a revised schedule and such other 
modifications, to ensure the Calfed Bay-Delta Program will progress in 
a balanced manner consistent with the intent of the Record of Decision. 
This revised schedule shall be subject to approval by the Secretary and 
the Governor, and upon such approval, shall be submitted to the 
appropriate authorizing and appropriating Committees of the Senate and 
the House of Representatives.
    (d) Financial Summary.--In addition to the report required pursuant 
to subsection (a), no later than February 15 of each year the Secretary 
shall submit to the appropriate authorizing and appropriating 
committees of the Senate and the House of Representatives a financial 
report containing a detailed accounting of all funds received by 
Federal and State agencies for implementing the Calfed Bay-Delta 
Program in the previous fiscal year, a budget for the proposed projects 
to be carried out in the upcoming fiscal year with the Federal portion 
of funds authorized under this Act, and a listing of all projects to be 
undertaken in the upcoming fiscal year with the Federal portion of 
funds authorized under this Act.

SEC. 6. CROSSCUT BUDGET AND AUTHORIZATION OF APPROPRIATIONS.

    (a) Crosscut Budget.--The President's Budget shall include requests 
for the appropriate level of funding for each of the Federal agencies 
to carry out its responsibilities under the Calfed Bay-Delta Program. 
Such funds shall be requested for the Federal agency with authority and 
programmatic responsibility for the obligation of such funds. At the 
time of submission of the President's Budget to the Congress, the 
Director of the Office of Management and Budget shall submit to the 
appropriate authorizing and appropriating committees of the Senate and 
the House of Representatives an interagency budget crosscut report that 
displays the budget proposed for each of the Federal agencies to carry 
out the Calfed Bay-Delta Program for the upcoming fiscal year, 
separately showing funding requested under both pre-existing 
authorities and under the new authorities granted by this Act. The 
report shall also identify all expenditures since 1996 within the 
Federal and State governments used to achieve the objectives of the 
Calfed Bay-Delta Program.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary and the heads of the Federal agencies 
$1,630,000,000 to pay the federal share of carrying out Stage 1 of the 
Record of Decision for fiscal years 2003 through 2005, in accordance 
with the provisions of this Act. The funds shall remain available 
without fiscal year limitation.

SEC. 7. FEDERAL SHARE OF COSTS.

    The federal share of the cost of implementing Stage 1 of the Calfed 
Bay-Delta Program as set forth in the Record of Decision shall not 
exceed 33.3 percent.

SEC. 8. COMPLIANCE WITH STATE AND FEDERAL LAW.

    Nothing in this Act preempts or otherwise affects any Federal or 
State law, including any authority of a federal agency to carry out 
activities related to, or in furtherance of, the Calfed Bay-Delta 
Program.

                                PURPOSE

    The purpose of S. 1768, as ordered reported, is to 
authorize the Secretary of the Interior and other Federal 
agency heads to implement the Calfed Bay-Delta Program during 
fiscal years 2003 through 2005.

                          BACKGROUND AND NEED

    The Bay-Delta is the region east of San Francisco Bay, 
where the Sacramento and San Joaquin Rivers converge. It 
supplies drinking water to over two-thirds of the people of 
California and irrigation water for over 7 million acres of 
highly productive agricultural land. The Bay-Delta is the 
largest estuary on the West Coast, and supports over 750 plant 
and animal species. It is also the hub of two massive water 
projects, the Central Valley Project (CVP), operated by the 
U.S. Bureau of Reclamation, and the State Water Project (SWP), 
operated by the California Department of Water Resources. These 
two projects divert some 20 to 70 percent of the natural flows 
in the region, depending on water conditions. The Bay-Delta 
also marks the boundary between northern California, where most 
of the State's water supply originates, and southern 
California, where most of the population and consumptive demand 
exists. On average, in normal water years, over 5 million acre 
feet of water is exported south of the Delta by the two 
projects.
    The Bay-Delta is in decline due to the decades of competing 
demands for its limited water resources. The area has 
experienced serious problems relating to water quality and fish 
and wildlife, raising compliance issues under both the Clean 
Water Act and the Endangered Species Act. Scores of species are 
in decline or are threatened or endangered. Water quality 
degradation makes it difficult and expensive to meet drinking 
water quality standards. Water supply reliability for urban and 
agricultural users is a difficult and challenging issue that 
has significant ramifications for the economy of the State.
    The State and Federal Government entered into a Coordinated 
Operation Agreement (COA) in 1986, in order to coordinate 
operations of the CVP and the SWP. The COA received 
congressional approval in 1986 (Pub. L. No. 99-546). Subsequent 
to enactment of the Central Valley Project Improvement Act 
(Pub. L. No. 102-575, Title XXXIV) in 1992, and in large part 
as a result of issues related to water quality and fisheries 
impacts, State and Federal agencies signed an agreement in June 
1994 to address these issues and to seek a long-term solution 
to the problems of the Bay-Delta.
    In December 1994, State and Federal officials and 
representatives of agricultural, urban and environmental 
stakeholders signed what is known as the Bay-Delta Accord 
(``Principles for Agreement on Bay-Delta Standards between the 
State of California and the Federal Government''), which 
provides interim measures for ecosystem restoration and 
regulatory stability. The Calfed Program, a cooperative 
interagency effort, commenced in 1995, which agencies relying 
on existing statutory authorizations to undertake Program 
activities.
    The stated mission of the Calfed Bay-Delta Program ``is to 
develop and implement a long-term comprehensive plan that will 
restore ecological health and improve water management for 
beneficial uses of the Bay-Delta.'' (``Calfed Bay-Delta Program 
Annual Report 2001''). Federal agency participants in the 
Calfed Bay-Delta Program are: the Department of the Interior 
(including the Bureau of Reclamation, Fish and Wildlife 
Service, and the U.S. Geological Survey); the Environmental 
Protection Agency; the Army Corps of Engineers; the Department 
of Commerce (including the National Marine Fisheries Service); 
the Department of Agriculture (including the Natural Resources 
Conservation Service and the Forest Service); and the Western 
Area Power Administration. Participating State agencies are: 
the Resources Agency of California (including the Department of 
Water Resources and the Department of Fish and Game); the 
California Environmental Protection Agency (including the State 
Water Resources Control Board); and the California Department 
of Food and Agriculture. The Calfed Policy Group, comprised of 
representatives of these Federal and State agencies, oversees 
implementation of the Program. The mandate of the Policy Group 
is to ensure effective, balanced, coordinated, and timely 
implementation of the Program.
    Stakeholders, including representatives of agricultural, 
urban, environmental, fishery, and business interest, and 
Indian tribes and rural counties, all participate in the 
collaborative effort. Input is provided through the Bay-Delta 
Advisory Committee, established pursuant to the provisions of 
the Federal Advisory Committee Act.
    The California Bay-Delta Environmental Enhancement and 
Water Security Act (Division E, Title 1 of Pub. L. No. 104-208; 
Title XI of Pub. L. No. 104-333) was enacted in late 1996. The 
legislation authorized a total of $430 million for fiscal years 
1998 through 2000 for the Federal share of the costs of 
developing and implementing certain ecosystem restoration 
measures relating to the Calfed effort. Funds were appropriated 
under this authority in the amounts of $85 million in fiscal 
year 1998; $75 million in fiscal year 1999; and $60 million in 
fiscal year 2000. Subsequent to the expiration of this 
authority, no funds were appropriated for the Calfed Bay-Delta 
Program in fiscal year 2001, and $30 million was appropriated 
in fiscal year 2002.
    In order to develop a long-term program, Calfed undertook 
an extensive planning effort. This resulted in a June 1999 
Draft Programmatic Environmental Impact Statement/Environmental 
Impact Report (EIS/EIR) and a July 2000 Final Programmatic EIS/
EIR. The planning effort was based on a collaborative process, 
with active stakeholder participation. On June 9, 2000, a 
framework agreement entitled ``California's Water Future: A 
Framework for Action,'' was released. On August 28, 2000, the 
Federal and State agencies released the Record of Decision 
(ROD), setting forth a programmatic long-term plan for the Bay-
Delta.
    The ROD selects a preferred program alternative for the 
Bay-Delta Program, setting forth the long-term, overall 
direction of the 30-year Program. Under the ROD, the Calfed 
agencies will proceed with the specific actions in Stage 1, 
which covers the first 7 years, with overall projected Federal 
costs of $2.4 billion. The ROD provides that the Calfed Bay-
Delta Program continue as a Federal-Statepartnership intended 
to build a framework for managing water in California. According to the 
ROD, the objectives of the long-term program for restoration and 
management of the Bay-Delta estuary are four-fold: to restore the 
ecological health of a fragile and depleted Bay-Delta estuary; improve 
the water supply reliability for the State's farms and cities that draw 
water from the Delta and its tributaries, including 7 million acres of 
the world's most productive farmland; protect the drinking water 
quality of the 22 million Californians who rely on the Delta for their 
drinking water supplies; and protect the Delta levees that ensure the 
integrity of the Delta as a conveyance and ecosystem.
    Under the ROD, the Program has the following components: 
water storage; ecosystem restoration; water supply reliability; 
conveyance; water use efficiency; water quality; water 
transfers; watersheds; Environmental Water Account: levee 
stability; governance; and science. The ROD describes the 
Calfed Bay-Delta Program as one of the most extensive ecosystem 
restoration efforts ever proposed, the most intensive water 
conservation effort ever attempted, the most far-reaching 
effort to improve drinking water quality for Californians, and 
the most significant investment in water storage and conveyance 
in California in decades.

                          LEGISLATIVE HISTORY

    S. 976, the ``California Ecosystem, Water Supply, and Water 
Quality Enhancement Act of 2001,'' was introduced by Senator 
Feinstein on May 25, 2001. On July 19, 2002, the Subcommittee 
on Water and Power held a legislative hearing to receive 
testimony on S. 976. On December 5, 2001, Senator Feinstein 
introduced S. 1768, the ``Calfed Bay-Delta Authorization Act''. 
The Committee on Energy and Natural Resources considered S. 
1768 at its business meetings on May 22 and June 5, 2002. At 
its business meeting on June 5, 2002, the Committee on Energy 
and Natural Resources ordered S. 1768 favorably reported with 
an amendment in the nature of substitute.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTES

    The Senate Committee on Energy and Natural Resources, in 
open business session on June 5, 2002, by majority vote of a 
quorum present recommends that the Senate pass S. 1768, if 
amended as described herein.
    The rollcall vote on reporting the measure was 18 yeas and 
5 nays as follows:
        YEAS                          NAYS
Mr. Bingaman                        Mr. Domenici
Mr. Akaka                           Mr. Nickles
Mr. Dorgan                          Mr. Campbell
Mr. Graham \1\                      Mr. Thomas
Mr. Wyden                           Mr. Hagel
Mr. Johnson
Ms. Landrieu \1\
Mr. Bayh
Mrs. Feinstein
Mr. Schumer \1\
Ms. Cantwell
Mr. Carper
Mr. Murkowski
Mr. Craig
Mr. Shelby \1\
Mr. Burns
Mr. Kyl
Mr. Smith \1\

    \1\ Indicates vote by proxy.

                          COMMITTEE AMENDMENT

    The amendment in the nature of a substitute makes the 
following changes to S. 1768 as introduced:
          1. Authorizes the Calfed Bay-Delta Program for 3 
        years as opposed to 5 years;
          2. Reduces the overall authorization from $2.4 
        billion to $1.63 billion;
          3. Limits the Federal share to no more than 33.3 
        percent of overall Stage 1 Program costs;
          4. Requires Calfed Bay-Delta Program funding to come 
        through several different Federal agencies with the 
        specific programmatic responsibility for the activity 
        rather than including all funding in the budget of the 
        Bureau of Reclamation as had been done in the past;
          5. Provides greater specificity with respect to 
        authorized actions;
          6. Adds appropriations levels for each Program 
        component to ensure that the Program is proceeding in a 
        balanced manner; and
          7. Adds a provision containing criteria to be used by 
        the Secretary for making an annual determination of 
        balanced progress in the Program.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 contains the short title.
    Section 2 defines terms used in the Act.
    Section 3(a) approves the Record of Decision as a framework 
for addressing Calfed Bay-Delta Program components, and 
authorizes the Secretary of the Interior and heads of the 
Federal agencies to carry out the Record of Decision, subject 
to the provisions of the Act, so that the program goals will 
progress in a balanced manner.
    Subsection (b)(1) authorizes the Secretary and the heads of 
the Federal agencies to undertake the activities described in 
the subsection subject to the provisions of the Act if the 
activity has been subject to environmental review and approval 
as required under applicable Federal and State law and has been 
approved and certified by the Calfed Policy Group to be 
consistent with the Record of Decision. The subsection sets 
forth activities authorized for fiscal years 2003 through 2005 
and sets authorization limits under each of the listed areas. 
This paragraph authorizes the lead Federal agency for a Program 
component as currently designated by the Calfed Bay-Delta 
Program to carry out the specific activity listed. The 
Committee expects that the President's Budget will reflect this 
allocation of responsibility among the Federal agencies for 
carrying out the Program.
    Subsection (b)(2) authorizes the Secretary and the Federal 
agency heads to carry out the authorized activities through the 
use of grants, loans, contracts, and cooperative agreements 
with Federal and non-Federal entities where the Secretary or 
Federal agency head determines such action will assist in 
implementing the authorized activity in an efficient, timely, 
and cost-effective manner.
    Section 4(a) requires the Federal agencies to coordinate 
with the State agencies in carrying out the Calfed Bay-Delta 
Program.
    Subsection (b) requires the Federal agencies to cooperate 
with local and tribal governments and the public in carrying 
out the Program.
    Subsection (c) requires the Secretary to seek to ensure to 
the maximum extent practicable that all major aspects of 
implementing the Calfed Bay-Delta Program are subjected to 
credible and objective scientific review and that major 
decisions are based on the best available scientific 
information.
    Subsection (d) requires the Secretary to undertake the 
Calfed Bay-Delta Program in accordance with the Implementation 
Memorandum on governance dated August 28, 2000, until such time 
as a permanent governing structure is approved. The Secretary 
and the Federal agency heads shall seek congressional 
authorization and approval of the permanent governing 
structure, as necessary.
    Subsection (e) states the intent of Congress that the 
Federal and State agencies should continue to collaborate to 
develop a comprehensive environmental justice workplan for the 
Calfed Bay-Delta Program and fulfill the commitment to 
addressing environmental justice challenges referred to in the 
Calfed Bay-Delta Program Environmental Justice Workplan dated 
December 13, 2000.
    Section 5(a) requires the Secretary, in cooperation with 
the Governor, to submit a report of the Calfed Policy Group by 
December 15 of each year to Congress describing the status of 
implementation of all components of the Calfed Bay-Delta 
Program and certifying whether or not the Program is 
progressing in a balanced manner.
    Subsection (b) provides that substantial progress in each 
of the categories listed in subsection (a) shall be considered 
in determining whether the Calfed Bay-Delta Program is 
progressing in a balanced manner. In making the certification 
regarding balance, the Secretary, in cooperation with the 
Governor, is to prepare a statement of whether the Program is 
in balance taking into consideration items as set forth in the 
subsection. The intent of the provision is to help ensure that 
the Calfed Bay-Delta Program is carried out in accordance with 
the principles, linkages and commitments of the Record of 
Decision.
    Subsection (c) provides that if the report provided for in 
subsection (a) and the statement of balance provided for in 
subsection (b) conclude that the Program is not progressing in 
a balanced manner so that no certification of balanced 
implementation can be made, the Calfed Policy Group shall 
prepare a revised schedule to ensure that the Program will 
proceed in a balanced manner. The revised schedule will be 
subject to approval by the Secretary and the Governor and shall 
be submitted to the Congress.
    Subsection (d) requires the Secretary to submit a financial 
summary to the Congress by February 15 of each year.
    Section 6(a) requires the President's Budget to include 
requests for the appropriate level of funding for each of the 
Federal agencies to carry out its responsibilities under the 
Calfed Bay-Delta Program. The funds shall be requested for the 
Federal agency with authority and programmatic responsibility 
for the obligation of the funds. At the time of submission of 
the President's Budget, the Director of the Office of 
Management and Budget is to submit to the Congress an inter-
agency budget crosscut report that displays the budget proposed 
for each of the Federal agencies to carry out the Calfed Bay-
Delta Program for the upcoming fiscal year. The report is to 
identify all expenditures since 1996 within the Federal and 
State governments used to achieve the objectives of the Calfed 
Bay-Delta Program.
    Subsection (b) authorizes to be appropriated to the 
Secretary and the heads of the Federal agencies $1,630,000,000 
to pay the Federal share of carrying out Stage 1 of the Record 
of Decision for fiscal years 2003 through 2005, in accordance 
with the provisions of the Act. The funds are to remain 
available without fiscal year limitation.
    Section 7 provides that the Federal share of the cost of 
implementing Stage 1 of the Calfed Bay-Delta Program as set 
forth in the Record of Decision shall not exceed 33.3 percent.
    Section 8 states that nothing in the Act preempts or 
otherwise affects any Federal or State law, including any 
authority of a Federal agency to carry out activities related 
to, or in furtherance of, the Calfed Bay-Delta Program.

                   COST AND BUDGETARY CONSIDERATIONS

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 18, 2002.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1768, the Calfed 
Bay-Delta Authorization Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                  Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1768--Calfed Bay-Delta Authorization Act

    Summary: S. 1768 would authorize the appropriation of $1.63 
billion to implement the first seven years (known as Stage I) 
of the Calfed Bay-Delta program (CALFED). Assuming 
appropriation of the authorized sums, CBO estimates that 
implementing S. 1768 would cost $1.2 billion over the 2003-2007 
period. S. 1768 would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply.
    A consortium of 18 federal and state agencies in California 
participate in the CALFED program, which is designed to 
increase water yield and environmental benefits, as well as 
improve water quality, the reliability of water systems, the 
efficiency of water use, watershed management, water transfers, 
and levee protection in the San Francisco Bay and the 
Sacramento-San Joaquin Delta (known as the Bay-Delta 
watershed).
    S. 1768 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments. The funds authorized by this bill would benefit 
the state of California and local governments in that state. 
Any spending by those governments to participate in the CALFED 
program would be voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1768 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        2002      2003      2004      2005      2006      2007
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

CALFED spending by the Bureau of Reclamation under
 current law:
    Budget authority................................         0         0         0         0         0         0
    Estimated outlays...............................        50        55         0         0         0         0
Proposed changes:
    Authorization level.............................         0       543       543       544         0         0
    Estimated outlays...............................         0        54       163       299       353       353
CALFED spending by Federal agencies under S. 1768:
    Authorization level.............................         0       543       543       544         0         0
    Estimated outlays...............................        50       109       163       299       353       353
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes S. 1768 
would be enacted near the start of fiscal year 2003 and that 
the authorized amounts would be appropriated each year. Based 
on information from the Bureau of Reclamation and the 
historical spending patterns of similar programs, CBO estimates 
that the resulting outlays would total $1.2 billion over the 
2003-2007 period and an additional $0.4 billion thereafter.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 1768 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. The funds authorized by this bill would 
benefit the state of California and local governments in that 
state. Any spending by these governments to participate in the 
CALFED program would be voluntary. The bill would limit the 
federal share of CALFED projects to one-third of the total 
cost.
    Previous CBO estimate: On February 8, 2002, the CBO 
transmitted a cost estimate for H.R. 3208, the Western Water 
Security Enhancement Act, as ordered reported by the House 
Committee on Resources on November 7, 2001. The cost of the 
Senate bill is lower than that of the House Resources 
Committee's version because the former would not authorize 
funding for the Small Reclamation Loan Program, a new 
competitive grant program, an environmental mitigation project 
at the Salton Sea in California, or feasibility studies, as the 
Resources Committee version did. In addition, the Senate bill 
would authorize the appropriation of $1.6 billion for CALFED 
implementation while the House Resources Committee's bill would 
authorize $600 million for the same purpose.
    Estimate prepared by: Federal costs: Julie Middleton; 
Impact on state, local, and tribal governments: Marjorie 
Miller; Impact on the private sector: Cecil McPherson.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1768. The Act is not a regulatory measure in 
the sense of imposing government-established standards or 
significant responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1768.

                        EXECUTIVE COMMUNICATIONS

    On December 11, 2001, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Office of Management and Budget setting 
forth Executive agency recommendations on S. 1768. These 
reports had not been received at the time this report was 
filed. The testimony provided by the Secretary of the Interior 
at the hearing on S. 976 as well as a letter received from the 
Assistant Secretary of the Interior for Water and Science 
relating to S. 1768, follow:

Statement of Gale A. Norton, Secretary, U.S. Department of the Interior

    I am pleased to appear before this subcommittee to provide 
the Department's testimony on S. 976, the California Ecosystem, 
Water Supply, and Water Quality Enhancement Act of 2001.
    S. 976 would authorize funding through the Secretary of the 
Interior, as well as governance and management authorities, for 
the implementation of a comprehensive, balanced, and timely 
water management and environmental restoration program in 
California commonly referred to as the CALFED Bay-Delta 
Program, as reflected in the Federal Record of Decision (ROD) 
issued August 28, 2000. The purpose of the program is to 
increase water yield and environmental benefits, as well as 
improved water system reliability, water quality, water use 
efficiency, watershed management, water transfers, and levee 
protection.
    As the Committee can imagine, our new Administration faced 
a substantial number of major resource issues of high priority 
upon assuming office. In the area of water, virtually every 
western state has issues of concern and controversy demanding 
our attention. With the confirmation of Assistant Secretary for 
Water and Science, Bennett Raley and Commissioner of 
Reclamation, John Keys we are able to begin dealing 
substantively with many of the issues before us. We await the 
nomination and confirmation of an Assistant Secretary for Fish 
and Wildlife and Parks and a Director for the Fish and Wildlife 
Service to further assist interagency efforts.
    On the Columbia River, the Colorado River and in the 
Central Valley of California, among others, we are beginning 
our examination of the results of multi-year, multi-million 
dollar planning and negotiation efforts. We are looking not 
only at the results of these enormous work efforts but also at 
the process used, both internal and external, and the 
information that was relied upon to make decisions. In addition 
we are examining the data which provided insight on the 
biological and socio-economic consequences of these major 
initiatives.
    On all of the matters before us, one conclusion is 
uniformly applicable: we will continue to work toward solutions 
and we will make decisions that reflect the President's 
commitment to the balanced and sensible resolution of resource 
issues across our Nation.
    In the case of CALFED, we find the comprehensive and 
integrated nature of actions proposed and the commitment to the 
development of a credible science program in support of the 
decisionmaking process are all laudable. The manner in which 
federal and state administrations have worked may be considered 
a model for solutions to resource management problems. 
Likewise, we feel that we can secure similar success in 
achieving the goals of CALFED in the context of our 
responsibilities in all western states.
    Clearly, significant progress has been made in the 
dedication of state and federal monies for ecosystem 
improvements in the watersheds that constitute the Sacramento-
San Joaquin Delta and the San Francisco Bay. On the Federal 
side, Congress has appropriated nearly $500 million for CALFED 
related efforts, for Central Valley Project Improvement Act and 
CALFED initiatives focused on improving the aquatic and 
terrestrial habitats of the CALFED solution area.
    A Record of Decision is in place that captures years of 
planning on all program elements of ecosystem restoration, 
levee system integrity and improvement, water supply and 
reliability improvements, water quality improvement, improved 
water use and efficiency, improvements to the upper watersheds, 
water transfers, storage, and conveyance.
    Congress needs to authorize the CALFED program so we can 
proceed with balanced progress on all resource fronts. The 
Department also recognizes that outstanding issues are still in 
need of resolution and we are committed to finding those 
solutions expeditiously and in concert with this Committee, 
with the Congress, the administration of Governor Davis and the 
stakeholders who have been so actively and constructively 
involved.
    I would like to express my deep appreciation to the 
Committee for your obvious commitment to making significant 
progress with the CALFED program. I also appreciate the 
consistent concerns demonstrated by this Committee that 
progress be made and for your work efforts in developing the 
bill being considered today. Your continued willingness to work 
with the Department and the Administration on this matter is of 
real and continuing importance to us.
    S. 976 is an important step forward. Clearly, additional 
authorizing legislation is required to proceed with the 
complete program. We support the purposes and many of the 
provisions of the bill. However, we also have a number of 
concerns with the bill as written, and we believe some 
modifications are necessary. We would like to continue working 
with the Committee to achieve a bill we can fully support and 
which will implement the CALFED program consistent with the ROD 
and agreements reached in the Bay-Delta Accord of 1994 and the 
CALFED framework agreement. We note that S. 976, like other 
CALFED legislation before the Congress, would be quite 
expensive.
    The results of the CALFED planning process reflect an 
attempt to balance competing needs and interests. The CALFED 
planning process brought together agricultural, urban, 
environmental and business stakeholders with the state and 
federal agencies in an effort to build agreements on the 
approaches to managing California's complex water and natural 
resource issues. We recognize that solutions to any set of 
problems as large and interconnected as those facing California 
will be complex. However, all interests must respect the needs 
and concerns of others. The CALFED ROD attempts to recognize 
the core interests of all the parties and build a solution that 
reduces the conflicts in the existing and long-established 
system and to balance competing interests for comprehensive 
progress. In addition, consideration should be given to 
analysis of impacts of the ROD on tribal trust assets, as 
discussed in the ROD. With the support of Congress and the 
State of California, CALFED can lead the way in a collaborative 
process that includes extensive participation of all 
stakeholders to provide many long-term solutions to 
California's water management and infrastructure improvement 
needs.
    The ``Fed'' side of the CALFED Program demonstrates a 
cooperative planning and coordination effort among ten Federal 
agencies, including U.S. Fish and Wildlife Service, the U.S. 
Bureau of Reclamation, the U.S. Geological Survey, and the 
Bureau of Land Management, within the Department of the 
Interior, as well as the U.S. Environmental Protection Agency, 
National Marine Fisheries Service, U.S. Forest Service, Natural 
Resources Conservation Service, U.S. Army Corps of Engineers, 
and Western Area Power Administration.
CALFED history and background
    The CALFED Bay-Delta Program is a response to the water 
management and ecosystem problems that came so clearly into 
focus in the drought of 1987 to 1992 experienced within the 
Bay-Delta system. Furthermore, the historic and ongoing 
conflicts between water management for supply and fishery 
protection give rise to the urgency of the CALFED program. The 
waters of Sacramento and San Joaquin Rivers converge in the 
Sacramento-San Joaquin Delta, which is the largest estuary in 
the West Coast, and discharges into the San Francisco Bay and 
to the Pacific Ocean. The Bay-Delta is a maze of waterways and 
channels that carry over 40 percent of the State's total runoff 
to the Bay and provides drinking water for more than 22 million 
Californians, important habitat for over 750 plant and animals 
species, irrigation water for most of the $27 billion 
agricultural sector, and water essential to the manufacturing 
and commercial sectors of the State. Over the past decades, 
California has witnessed declines in water quality, fish, 
wildlife and associated habitat, and the reliability of water 
supplies. The goals of CALFED, which the Administration fully 
support, are to reverse all these trends.
    In December 1994, the State and Federal governments signed 
the Bay-Delta Accord, which signaled a new approach to managing 
the Delta and finding solutions to longstanding problems in 
California. In 1995, CALFED was initiated as a cooperative, 
interagency effort to reduce conflicts in the Bay-Delta, 
modernize water management and infrastructure, and to make 
investments aimed at reducing stressors for species and 
improving the habitat. The CALFED Program has been envisioned 
as a three-phase process:
     Phase I objectives were to identify and define the 
problems confronting the Bay-Delta System and develop a mission 
statement, program objectives, and alternative actions for 
further study. During Phase I CALFED concluded that each 
program alternative would include a significant set of program 
actions which were grouped into elements to address problems 
associated with the ecosystem and water management 
infrastructure.
     Phase II objectives were to develop a preferred 
program alternative, conduct a comprehensive programmatic 
environmental review process, and develop an implementation 
plan focusing on the first 7 years (Stage 1 of implementation). 
Phase II objectives were achieved through issuance of the Final 
Programmatic Environmental Impact Statement/Environmental 
Impact Report (IS/AIR) in July 2000 and a Record of Decision 
signed on August 28, 2000.
     CALFED is currently in Phase III, a long-term 
process implementing specific actions to achieve the goals of 
the CALFED program. Phase III objectives are to implement the 
plan selected in the IS/AIR over the next 25 to 30 years. State 
1 of implementation, for the first 7 years, is underway. Site-
specific, detailed environmental review and feasibility level 
analysis will occur during Stage 1 prior to implementation of 
each proposed action.
CALFED program accomplishments
    In the past several years substantial progress has been 
made on a number of complex water and natural resource issues 
through the combined efforts of the public and state and 
federal agencies working together as CALFED. The greatest 
accomplishment of the CALFED effort so far is bringing all the 
State and Federal agencies together to produce the CALFED 
Record of Decision, signed August 28, 2000, which documents the 
comprehensive plan for improving California's water supply and 
water quality, as well as restoring ecological health in the 
Bay Delta. This Committee has received copies of the most 
recent annual report of accomplishments which details progress 
in many CALFED program areas. We particularly would like to 
bring your attention to the many creative approaches to 
addressing historic areas of conflict such as the Environmental 
Water Account.
    Also of interest is the CALFED Science Program. We expect 
this program to provide peer review of the science and 
information underlying all elements of the CALFED program from 
adaptive management, to ecosystem improvement projects, to 
project operations and beyond, we expect CALFED to be supported 
by a strong and credible science program.
    Public workshops have been and are being undertaken by the 
program on scientific components of public controversies and 
are clarifying the state of scientific knowledge, thereby 
reducing the level of controversy. In the near term, these 
workshops include issues associated with Delta Cross channel 
operations, effectiveness of the Environmental Water Account 
for salmon and Delta smelt, salinity effects of levee breaches, 
and the use of scientific adaptive management. Additional 
workshops will be undertaken as topics are identified.
CALFED funding
    From FY 1998 to FY 2000, Congress appropriated $190 million 
for the CALFED Ecosystem Restoration Program and an additional 
$30 million for other program elements, including projects to 
improve water supply reliability. These funds were provided 
through an account in the Bureau of Reclamation budget, but 
funding for specific projects or programs has been transferred 
to participating Federal agencies based on plans developed by 
CALFED. As noted above, CALFED agencies have used these and 
other funds to screen water diversions for the benefits of fish 
and farmers, restore degraded habitat, establish an 
environmental water program, develop conjunctive use projects 
and develop a state and federal water operations plan. No funds 
were provided for this account in FY 2001, largely because the 
appropriations committees deferred to the authorizing 
committees to review the Program and develop any needed 
legislation.
    The ROD outlines a partnership of State, Federal, and 
private funding, and estimated that a total of $8.7 billion 
from state, federal, and private sources would be needed for 
the Program's implementation. According to Governor Davis, the 
State is moving forward to finance implement actions called for 
in the ROD. In order to support the Federal side of this unique 
partnership, it is important that appropriate legislation be 
enacted to authorize Federal Government participation as 
contemplated by the ROD.
Benefits of S. 976
    The Bay Delta is the hub of the State's water supply system 
and an area of unsurpassed ecological importance. Single-
purpose efforts to solve problems in the past have failed 
adequately address the comprehensive nature of the Bay-Delta 
resources and problems and the conflicts between supply and 
demand. S. 976 would provide authorization for continued 
Federal participation in the CALFED Bay-Delta Program and to 
meet Record of Decision commitments. As such, the 
Administration supports many elements of this bill, recognizing 
that some modifying language may be needed.
    In particular we are supportive of three primary principles 
outlined in the bill.
    Balanced Approach.--The authorizing language needs the 
CALFED principal of comprehensive planning by outlining and 
providing authority to carry out a water supply plan to promote 
the ecological health and improve water management in the Bay 
Delta.
    Measurable Goals and Objectives.--The legislation would 
provide for developing measurable goals and objectives for 
implementing and documenting ``significant'' progress in 
achieving the ROD's program elements and the proposed ecosystem 
enhancement and water supply program actions. Further, the 
legislation calls for utilizing credible and objective 
scientific review and basing decisions on the ``best available, 
independently peer-reviewed information.''
    Governance, Local Coordination, and Public Involvement.--
The legislation affirms that the participating Federal agencies 
would help operate the Bay-Delta Program through a permanent 
governance structure that encourages local and regional 
partnerships in implementing the Program. The legislation also 
specifies that State area-of-origin rights would be preserved. 
Further, the legislation recognizes the need for participating 
Federal agencies to cooperate with state, local, and tribal 
governments, non-governmental organizations and the public to 
obtain input on program implementation planning, design, 
technical assistance, ecosystem restoration, and peer review of 
science efforts.
Concerns with S. 976
    Despite the progress that has been accomplished through the 
CALFED Bay-Delta Program, the Administration has some 
significant concerns relative to the legislation before the 
Subcommittee today. In addition to the major concerns noted 
below, we would like to work with the Committee to address 
technical and other changes as it considers this legislation.
    Cost Sharing.--One of the central components of the ROD is 
the notion of ``beneficiary pays,'' whereby users who benefit 
from investments in the infrastructure should pay for those 
benefits. The ROD contemplated the Federal Government, the 
State, and project beneficiaries each sharing roughly one-third 
of the costs of implementation. S. 976 generally establishes a 
maximum Federal cost-share of 50% for each project or activity, 
but does not otherwise indicate how the cost-share should be 
determined. We do not object to the 50% ceiling, however, we 
believe that the cost-sharing should otherwise be consistent 
with current law or policies. Depending on the project purpose, 
under current law local sponsors are required to provide up to 
100 percent of a project's cost (e.g., for costs allocated to 
municipal and industrial water supply projects). We wish to 
stress the importance of clarifying and integrating cost-
sharing measures into the program. We would like to clarify 
that assignment of operation and maintenance costs will be 
consistent with general policies.
    Project Authorizations.--We are also concerned about 
provisions of the bill that seem to authorize construction of 
projects before they have completed the normal Administration 
review of economic and environmentally feasibility. Some 
language also circumvents Congressional oversight of individual 
projects. Consistent with longstanding policies, we believe 
that authorization for construction should be provided only 
after the Administration and Congress have completed a full and 
favorable review of project economics and environmental 
feasibility.
    Authorization of Appropriations.--Sections 3, 4, and 5 of 
the legislation state that appropriations are authorized ``* * 
* in such sums as are necessary * * * '' to carry out the 
actions authorized by the particular section. This appears to 
imply that there is unlimited funding authority for 
implementing the CALFED Program. Further, it is not clear 
whether all appropriations will be coming through the 
Department of the Interior, or whether the concept of a cross-
cut budget will be employed and appropriations will be made 
directly to the participating Federal agencies which, in some 
instances, would lead to greater efficiency.
    Reporting and Oversight.--In general, the reporting and 
oversight requirements are unclear; it is not apparent which 
agency is specifically responsible for the compilation of data 
for submission to Congress. The ROD states that the CALFED 
staff would be responsible for associated program reporting 
requirements, however the legislation implies that this would 
be the responsibility of the Secretary of the Interior.
Conclusion
    The history of the settlement of California and the 
ensuring development of its water resources is replete with 
political and legal battles. Although agreement on water 
management may not be immediately achievable, the CALFED 
Program is a step in reaching a common vision of actions needed 
for progress. CALFED represents a new approach to an old 
problem by combining the interests of state and federal 
agencies with regulatory power over the Bay-Delta together with 
urban, environmental, and agricultural users, who each have a 
vested interest in the maintenance and improvement of the Bay-
Delta. The CALFED Program has shown water managers, policy 
makers and the public how to move California toward more 
equitable and efficient water and ecosystem management. 
Continued implementation of the CALFED plan offers the 
opportunity for a long-term solution to the critical problems 
confronting the Bay-Delta. Specifically, the Department will 
continue to operate the Central Valley Project in accordance 
with the provisions of the State's Water Quality Control Plan, 
Central Valley Project Improvement Act, the Endangered Species 
Act, and other applicable statutes. The Department is aware of 
the importance of meeting its environmental commitments, and 
the importance to the water users of adequate water supply 
reliability. For these reasons, the Department will continue to 
work through the CALFED process to improve the environment, and 
increase the system's water management flexibility.
    We believe that the bill attempts to offer a balanced 
approach toward implementing the ROD commitments and would 
allow the Federal government sufficient authority to continue 
to participate in the CALFED program. We look forward to 
working with the Committee and others in Congress to address 
the Administration's concerns. Mr. Chairman, I would like to 
reiterate my appreciation to the Committee and others for 
continuing to work with the Department to address the 
significant water and environmental issues facing the West.
    I would be pleased to answer any questions you may have.
                                ------                                

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                      Washington, DC, May 14, 2002.
Hon. Dianne Feinstein,
U.S. Senate,
Washington, DC.
    Dear Senator Feinstein: In response to your request, I am 
pleased to provide an update on our views of the CALFED program 
and on your bill, S. 1768. First, I would like to express my 
deep appreciation for your commitment and leadership, as well 
as that of Congressman Calvert to making significant progress 
with the CALFED program. I also appreciate your efforts in 
developing legislation to authorize funding for the CALFED 
program. The Secretary and I have pledged that the Department 
will continue to work through the CALFED process to improve the 
environment and increase the system's water management 
flexibility. Let me reiterate that sentiment and reaffirm that 
the Department is committed to making CALFED work.
    We firmly support the CALFED program and the concepts 
embedded in the Record of Decision (ROD) which set forth the 
activities to be undertaken under CALFED. We recognize there is 
a long history of conflict over many of the issues CALFED 
addresses. However, absent CALFED we believe the result would 
be conflict and stalemate where all stakeholders and resources 
suffer. By addressing a broad range of complementary programs 
in a balanced manner, CALFED can ensure that the interests of 
all the stakeholders are recognized and addressed.
    The CALFED program holds great promise for those who 
benefit from the use of the Bay-Delta and for restoration of 
the Bay-Delta's ecological health. However, our ability to move 
forward on a broad basis is limited until the CALFED program is 
authorized. The Administration believes it is critical to 
authorize the program and begin implementing it so that we can 
show improvements to the water management infrastructure, 
conditions for fish and wildlife, and water quality. This is 
one of the reasons why your legislation is so important.
    While we support S. 1768 and moving forward with 
implementing the CALFED program, we must note that the 
Administration has significant concerns regarding the 
implementation of the following program elements.
     Language in the existing Implementation Memorandum 
stating that the CALFED program should have no significant 
redirected impacts will likely make implementation of the 
CALFED plan difficult to manage. It is not realistic to assume 
that changes to the ecosystem and an integrated water delivery 
and storage system will not have effects which ripple 
throughout the system. To address this concern, we believe the 
authorizing legislation must ensure the comprehensive and 
balanced nature of the CALFED Program, with strong and clear 
beneficiaries pay provisions.
     We are also concerned that the programmatic 
language concerning cost-sharing and beneficiaries pay 
arrangements may invite future conflict. Project beneficiaries 
should pay for project benefits; beyond that, a \1/3\ federal, 
\1/3\ state, \1/3\ local cost share should prevail, except in 
those situations where the local cost-share, under existing 
agency laws and regulations, is higher.
     It is important that any CALFED legislation 
authorizes funding for the participating federal agencies and 
ensures that these funds are spent in accordance with the 
mission of the CALFED program.
     We are concerned about the cost of the program and 
believe that legislation needs to authorize an integrated 
program that can fund balanced implementation in the current 
fiscal climate.
     Finally, regardless of the exact form of the 
authorization process, any project submitted as part of a 
CALFED project authorization bill must first go through the 
normal Administration review process, as spelled out in 
Executive Order 12322.
    We have discussed these issues at various times and look 
forward to working with you to address them. We believe that if 
legislation authorizing CALFED does not pass, the existing 
problems and challenges of managing water in California will 
continue to produce significant economic and environmental 
conflicts.
            Sincerely,
                                                  Bennett W. Raley.

           ADDITIONAL VIEWS OF SENATOR KYL AND SENATOR CRAIG

    We appreciate the efforts that the Senator for California 
has made to address the concerns raised with this legislation. 
We have had several discussions and considerable progress has 
been made in providing some definition to what is a very 
expensive initial commitment to what will likely be an even 
more expensive multi-year program
    We still have some concerns, however.
    While we would prefer to continue work on the legislation 
in Committee so that we can present a complete package to the 
Senate, we understand the desires of the Senator from 
California to have some action in Committee before we become 
tied up in the Energy Conference. We believe there is an 
understanding that we will continue to work on concerns 
previously raised as we proceed to the floor, and with that 
understanding, we do not object to moving this legislation at 
the present time.
    We do want the Committee report to reflect some of the 
issues that we and other Members have with the amendment before 
us, and that we will try to work out those concerns before the 
legislation is brought up in the full Senate. Those concerns 
fall into several areas.
    Our first concern is the need for balance between 
conservation and environmental objectives and the need for 
additional water supplies, including additional storage. 
Senator Feinstein has been very up-front in her belief that 
California must have additional storage to meet its needs and 
we should ensure that this program guarantees that. We need to 
have balance in this interim program as well as in the overall 
multi-year program if we later authorize it. We have the 
experience of the CVP legislation and the original CALFED 
authorization where those expectation were not met.
    Our second concern is past commitments to water users. 
Section 3408(j) of the CVP legislation required the Secretary 
of the Interior, within three years, to develop a plan to 
replace the water taken from them under that legislation and 
actually replace that water within 15 years. That hasn't 
happened. We are now seeing portions of the CVP Restoration 
Fund going to CALFED and some of the project improvements that 
will increase yield, such as raising Shasta Dam, also being 
considered as part of CALFED. We know Senator Feinstein is also 
concerned about the effect on water users and only reluctantly 
backed off from her earlier assurance language, but we do need 
to keep some faith with our past promises.
    Quite frankly, we think we need some better understanding 
of where California is going and how much the federal 
government will ultimately be asked to pay. This measure 
focuses on the Bay-Delta, but it has implications for 
California's water future. Some of the House measures go much 
further and include provisions in other parts of the State, 
although none have so far tackled Salton Sea.
    We certainly understand the politics of water, and don't 
think it would be helpful to the Senator from California if we 
got into how California will meet its 4.4 requirement. However, 
in fairness, we need to know that California will abide by its 
promise to reduce Colorado River water to its 4.4 million acre 
feet entitlement before we commit the federal government to 
funding yet more water projects for California.
    A final concern is the overall cost. We appreciate that 
large and complex water problems can be very expensive. 
Nonetheless, we must make certain we don't commit ourselves to 
a multi-billion dollar program for the Bay-Delta only to find 
that we need a somewhat smaller program in Northern California, 
a somewhat more expensive program in Southern California, and 
an enormously more expensive program for the Salton Sea.
    We also have a fair-sized delegation from the Pacific 
Northwest with concerns on the Columbia River Basin, a number 
of Upper Basin Members who have ecosystem concerns as well as 
authorized but unfunded storage programs, and other members 
with their own specific concerns. At some point, we need to 
take stock of where we are going.
    The cost to the federal government in the latest amendment 
is $1.6 billion over three years, but that may not be the 
entire tab since we have seen both the Administration and the 
Appropriations Committees allow other authorities to be used to 
further the CALFED program. The language in the amendment that 
calls for a cross-cut budget and requires any agency 
obligations to come from appropriations to that agency and be 
reflected in that agencies' budget will help. It would be nice 
to have that information now so we could determine with some 
greater precision exactly what we will be spending and whether 
we really need an additional $1.6 billion to make certain that 
all parties interested in this program remain at the table when 
the feasibility studies come in.
    We have made considerable progress and we again want to 
express our appreciation to the Senator from California for her 
willingness to continue to work on our concerns.

                                   Jon Kyl.
                                   Larry E. Craig.

                    ADDITIONAL VIEWS OF SENATOR KYL

    The ability of the State of California to live within its 
Colorado River entitlement of 4.4 million acre feet in years of 
normal supply has implications far beyond the borders of 
California. As the single largest user in the lower basin of 
the river, California's continued use in excess of its 
entitlement draws down the large water reservoirs shared by 
Arizona and Nevada. In an already over-allocated system, the 
Colorado River basin states are experiencing severe drought 
conditions this year. In the lower basin, Arizona and Nevada 
are both absolutely dependent upon a well-managed Colorado 
River system to supply our citizens with the municipal, 
industrial and agricultural water upon which our economies 
depend.
    The California Colorado River Water Use Plan, or ``4.4 
Plan'' as it is sometimes called, was intended to create a real 
incentive within California to solve its own water problems by 
making reasonable transfers from the large agricultural demand 
in the southern deserts to the municipal demand of Metropolitan 
Water District of Southern California on the coastal plain. 
Indeed, Arizona agreed to voluntarily forego some of its own 
precious Colorado River water supply to insure California a 
``soft landing'' as it worked its way through the 
implementation of the California Colorado River Water Use Plan, 
because we were committed to seeing these transfers occur. Now 
that plan is threatened by a lack of consensus among 
Californians to make these transfers in the manner originally 
contemplated. While we must sympathize with Californians, and 
do our best to assist them in this time of difficulty, Arizona 
cannot continue to allow California to exceed its allotment in 
these dry years without an effective step-down plan in place.
    The Interim Surplus Guidelines, adopted by former Secretary 
of the Interior Bruce Babbitt on January 25, 2001 (66 Fed. Reg. 
No. 17, p. 7772), specifically provide that if the California 
Colorado River water contractors have not executed the 
necessary agreements to implement the California 4.4 Plan by 
December 31, 2002, the Interim Surplus Guidelines will be 
suspended and water allocations will be made instead on the 
Bureau of Reclamation's ``70R'' strategy. That means no surplus 
water for either California or Nevada in 2003 from the Colorado 
River. Without surplus, California will be forced to cut back 
to 4.4 million acre feet, regardless of the consequences. Most, 
if not all of that burden will fall on Metropolitan Water 
District of Southern California. The Interim Surplus Guidelines 
can only be reinstated if California ``completes all required 
actions'' and manages to reduce California agricultural demand 
to 3.74 million acre feet in calendar year 2003. That reduction 
action will not occur without a major agreement in place to 
effectuate the agricultural-to-urban transfers.
    Arizona supports the California Colorado River Water Use 
Plan because it represents a solution to a long-standing 
problem that will fix the problem once and for all. We cannot, 
in these times of drought and full demand for the Colorado 
River resource, continue to apply band-aid solutions. Arizona 
and the entire Colorado River basin need the certainty that 
comes with a comprehensive California plan. Without that 
certainty, Arizona will have no choice but to strictly enforce 
its rights under the 1964 allocation decree in Arizona v. 
California.

                                                           Jon Kyl.

                   ADDITIONAL VIEWS OF SENATOR BURNS

    During the hearing and mark up of this bill, I expressed 
several concerns including its overall cost, the need for water 
storage as a primary goal, and its effects on agricultural 
producers in the Central Valley. While Senator Feinstein worked 
with my colleagues and I to limit the authorization to $1.6 
billion over three years, that is a huge commitment of taxpayer 
dollars. I have worked on a number of rural water projects and 
Indian water settlements for Montana, and I know how difficult 
these are to authorize and pay for. I would hate to see rural 
Montanans go without drinkable water as a result of this 
project, and I will be watching to make sure the immediate 
goals of CALFED are achieved before we go any further.
    Beyond my concerns over cost and project priority, one of 
the reasons I have taken an interest in this bill is due to its 
impact on farmers. This bill does nothing to ensure reliable 
water supplies to farmers in the Central Valley. I appreciate 
Senator Feinstein's willingness to work with the producers and 
her understanding that this country relies upon farmers for our 
safe, affordable food supply.
    The CALFED Record of Decision and this bill take a very 
broad approach to water quality, but I believe they are both 
missing a very important element. Neither addresses the issue 
of how, or why, reliability of Central Valley Project contract 
Supplies for south-of-the-Delta Central Valley Project 
contractors has diminished since CVPIA was implemented in 1992. 
Or, more importantly, how those reliability and supply issues 
will be improved as we move forward.
    It is vital that the Secretary of Interior prepare a report 
describing what agreements and commitments have been made by 
Interior officials to address the water deficiencies for 
Central Valley Project contractors since October 1992, and a 
plan of action to further improve the current situation. A 
second report should identify specific fish, wildlife, and 
restoration requirements that have reduced water availability 
for Central Valley Project operators, and the observed 
population effects of those policies. it would be a mistake to 
move forward without addressing the supply issues we currently 
face.
    This bill does not do all it could for farmers. But I will 
continue to work with Senator Feinstein until we get closer to 
where we need to be.
                                                      Conrad Burns.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 1768 as ordered 
reported.

                                  
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