99–010

Calendar No. 608

107TH CONGRESS REPORT " SENATE ! 2d Session 107–289

KLAMATH BASIN EMERGENCY OPERATION AND 

MAINTENANCE REFUND ACT OF 2001

SEPTEMBER 17, 2002.—Ordered to be printed 

Mr. BINGAMAN, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany H.R. 2828]

The Committee on Energy and Natural Resources, to which was 

referred the Act (H.R. 2828) to authorize payments to certain 

Klamath Project water distribution entities for amounts assessed 

by the entities for operation and maintenance of the Project’s transferred works for 2001, to authorize refunds to such entities of 

amounts collected by the Bureau of Reclamation for reserved works 

for 2001, and for other purposes, having considered the same, reports favorably thereon without amendment and recommends that 

the Act do pass. 

PURPOSE OF THE MEASURE

The purpose of H.R. 2828 is to authorize the Secretary of the Interior to refund amounts collected from Klamath Project irrigation 

and drainage districts, as well as from certain individuals, for operation and maintenance of the Project’s irrigation works for water 

year 2001. 

BACKGROUND AND NEED

The U.S. Bureau of Reclamation Klamath Project lies within 

three counties along the Oregon and California border; Klamath 

County in southern Oregon, and Modoc and Siskiyou Counties in 

northern California. Authorized in 1905 for irrigation, the Klamath 

Project serves approximately 1,400 farms and provides irrigation 

water to approximately 220,000 acres in an otherwise arid area. 

In 1988, the U.S. Fish and Wildlife Service listed the Shortnose 

and Lost River sucker fish as ‘‘endangered’’ under the Endangered 

Species Act (ESA). In 1992, a biological opinion was issued on the 

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effect of annual Klamath Project operations on the endangered fish. 

That opinion established a requirement that the annual minimum 

lake level be maintained at 4,139 feet above sea level in at least 

6 out of every 10 years. 

In 1996, the Bureau of Reclamation agreed to meet certain minimum instream flows below Iron Gate Dam, a non-federal facility 

on the Klamath River, to protect habitat for anadromous fish. In 

1997, Southern Oregon and Northern California Coastal Coho 

salmon were listed under the ESA as ‘‘threatened’’ species. A 1999 

biological opinion from the National Marine Fisheries Service concluded that Klamath Project operations that year would affect, but 

not likely jeopardize, coho salmon. 

Following a declaration of severe drought for the Klamath Basin 

in 2001, two new biological opinions from the U.S. Fish and Wildlife Service and the National Marine Fisheries Service were issued 

on April 5 and April 6, 2001. The opinions stated that the Bureau 

of Reclamation’s operation of the Klamath Project for the year 

would jeopardize the continued existence of the endangered sucker 

fish and threatened coho salmon, and would harm but not jeopardize the continued existence of bald eagles who also rely on 

Project water. The opinions also called for the minimum elevation 

in upper Klamath Lake to be maintained at 4,140 feet above sea 

level at the end of September, and increased flows in the Klamath 

River. 

On April 6, 2001, the Bureau of Reclamation released the Klamath Project 2001 Operations Plan, stating that based on the requirements of the biological opinions and extreme drought conditions, only limited deliveries of Project water would be made for irrigation. Only a small area (Langell Valley and Bonanza) received 

water from Clear Lake and Gerber Reservoirs. Additional minor relief was also provided on July 24, 2001, when the Department of 

the Interior announced it would release about 70,000 to 75,000 

acre-feet of water from Upper Klamath Lake to assist farmers in 

the Klamath Project area. 

Despite the non-delivery of water to most Klamath Basin farmers, they were still responsible for 2001 operations and maintenance expenses for the Project. Based on the unique circumstances 

affecting the Klamath Project in 2001, H.R. 2828 authorizes the 

Secretary of the Interior to make refunds to qualified Klamath 

Project entities and individual contractors for amounts assessed to 

them for operation and maintenance of the Klamath Project for 

2001. It also enables the Secretary of the Interior to waive additional operation and maintenance payments due for 2001 for certain irrigation districts which contracted with the Bureau of Reclamation for water from the Klamath Project. 

LEGISLATIVE HISTORY

H.R. 2828 was introduced by Representative Walden on August 

2, 2001 and passed by the House of Representatives on November 

13, 2001. An identical bill, S. 1824, was introduced by Senators 

Smith and Wyden on December 13, 2001. The Subcommittee on 

Water and Power held a hearing on H.R. 2828 and S. 1824 on June 

6, 2002. At the business meeting on July 31, 2002, the Committee 

on Energy and Natural Resources ordered H.R. 2828 favorably reported. 

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COMMITTEE RECOMMENDATION

The Committee on Energy and Natural Resources, in open business session on July 31, 2002, by a voice vote of a quorum present, 

recommends that the Senate pass H.R. 2828, as described herein. 

SECTION-BY-SECTION ANALYSIS

Section 1 provides the short title, the ‘‘Klamath Basin Emergency 

Operation and Maintenance Refund Act of 2001’’. 

Section 2 defines the term ‘‘qualified Klamath Project entity’’

which is used in the Act. 

Section 3, subsection (a) authorizes the Secretary of the Interior 

to pay each qualified Klamath Project entity an amount equal to 

the amount that entity assessed its members or other persons for 

the operation and maintenance of Klamath Project works in 2001. 

Subsection (b) requires each qualified entity, as a condition of 

payment, to (1) provide the Secretary with documentation concerning the total amount assessed; and (2) execute a binding agreement under which the payments under this Act will be distributed 

to the members or other persons assessed operation and maintenance fees in 2001. 

Subsection (c) authorizes the Secretary to waive any remaining 

2001 operation and maintenance fees for Klamath Project reserved 

works. 

Subsection (d) authorizes the Secretary to pay individuals receiving water from the Klamath Project under contracts entered into 

pursuant to the Warren Act (43 U.S.C. 523–525), an amount equal 

to amounts collected for operation and maintenance costs for 2001. 

The Secretary is also authorized to waive any remaining 2001 

charges. 

Section 4 authorizes appropriations to cover the amounts not 

paid by qualified Klamath Project entities for operation and maintenance of the reserved works for 2001 and directs that cost incurred by the Bureau of Reclamation in implementing the Act shall 

be nonreimbursable. 

Section 5 directs that activities or funding pursuant to the Act 

shall not be considered a supplemental or additional benefit under 

the Reclamation laws. 

COST AND BUDGETARY CONSIDERATION

The following estimate of the cost of this measure has been provided by the Congressional Budget Office.

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 6, 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 H.R. 2828, the Klamath Basin 

Emergency Operation and Maintenance Refund Act of 2001. 

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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.

H.R. 2828—Klamath Basin Emergency Operation and Maintenance 

Refund Act of 2001

Summary: H.R. 2828 would authorize the Secretary of the Interior to refund fees assessed by the Bureau of Reclamation on Klamath Basin irrigation and drainage districts for certain operation 

and maintenance costs for calendar year 2001. Subject to appropriation of the necessary funds, the Secretary would also be authorized to pay for 2001 operations and maintenance costs of water 

projects managed by water districts in the basin. Finally, the act 

would authorize the Secretary to waive any remaining fees for 2001 

that have not yet been paid. These refunds and waivers also would 

apply to individuals in the basin who have water contracts with the 

bureau. 

CBO estimates that implementing H.R. 2828 would cost about $2 

million in 2003, assuming appropriation of the necessary funds. In 

addition, the bureau would be authorized to refund fees collected 

for certain operations and maintenance costs which would increase 

direct spending by less than $150,000; therefore, pay-as-you-go procedures would apply. 

H.R. 2828 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 2828 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—

2003 2004 2005 2006 2007

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 1

Estimated authorization level ....................................................................... 2 0 0 0 0 

Estimated outlays ......................................................................................... 2 0 0 0 0 

1 Enacting H.R. 2828 also would cause a negligible increase in direct spending in 2002. 

Basis of estimate 

H.R. 2828 would require the Bureau of Reclamation to refund 

fees association with the operation and maintenance of water 

projects run by the bureau (these are known as reserved works) 

and those run by local water districts (these are known as transferred works) in the Klamath Basin. Based on information from the 

bureau, CBO estimates that implementing H.R. 2828 would increase direct spending by less than $150,000 in 2003. In addition, 

we estimate the legislation would cost about $2 million in 2003, assuming the appropriation of the necessary funds. 

Reserved works 

The bureau pays for the operation and maintenance of certain 

structures used for flood control, storage, and drainage that have 

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not been transferred to districts. Under current law, the bureau 

bills Klamath Basin and other water users for those operation and 

maintenance costs. H.R. 2828 would authorize the Secretary of the 

Interior to refund fees paid to the bureau for operations and maintenance of reserved works in 2001. CBO estimates these refunds 

would increase direct spending by about $150,000 in 2003. 

Transferred works 

The bureau has transferred some structures used for flood control, storage, and drainage to local irrigation and drainage districts. 

Following transfer the districts are responsible for operation and 

maintenance costs. Under H.R. 2828, the Secretary of the Interior 

would be authorized to reimburse districts with transferred works 

for their 2001 operation and maintenance expenses from appropriated funds if they meet certain criteria. Based on information 

from the bureau, CBO estimates reimbursing the Klamath Irrigation District and other eligible districts would cost about $2 million. 

Pay-as-you-go consideration: The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. CBO estimates that 

enactment of H.R. 2882 would increase direct spending by about 

$150,000 in 2002. 

Intergovernmental and private-sector impact: H.R. 2828 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. 

Previous CBO estimate: On November 13, 2001, CBO prepared 

a cost estimate for H.R. 2828 as ordered reported by the House 

Committee on Resources on November 7, 2001. The two versions of 

this legislation are identical, but CBO has slightly revised its estimate of the cost of this legislation. 

Based on updated information from the bureau on the actual cost 

of operating and maintaining reserved works in 2001, CBO increased its estimate of direct spending under the legislation from 

$100,000 to about $150,000. In addition, based on the actual operation and maintenance costs of transferred works for 2001, CBO increased its estimate of the cost of reimbursing related fees from 

$1.5 million to $2 million, subject to appropriation of the necessary 

amounts. 

Estimate prepared by: Federal costs: Julie Middleton; impact on 

state, local, and tribal governments: Marjorie Miller; impact on the 

private sector: Lauren Marks. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

H.R. 2828. The bill is not a regulatory measure in the sense of imposing Government-established standards or significant economic 

responsibilities on private individuals and businesses. 

No personal information would be collected in administering the 

program. Therefore, there would be no impact on personal privacy. 

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Little, if any, additional paperwork would result from the enactment of H.R. 2828. 

EXECUTIVE COMMUNICATIONS

The pertinent legislative report received by the Committee from 

the Department of the Interior setting forth Executive agency recommendation relating to H.R. 2828 are set forth below:

U.S. DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, DC, August 27, 2002. 

Hon. JEFF BINGAMAN, 

Chairman, Committee on Energy and Natural Resources, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: This letter responds to your request for the 

views of the Department of the Interior on S. 1824 and H.R. 2828, 

concerning refunds of amounts collected from Klamath Project irrigation and drainage districts for operation and maintenance of the 

Project’s transferred and reserved works for water year 2001. This 

confirms testimony of Mark Limbaugh, Director of External and 

Intergovernmental Affairs for the Bureau of Reclamation (Reclamation) before the Subcommittee on Water and Power on June 6. The 

bills also authorize the Secretary of the Interior to waive requirements that the districts pay additional operation and maintenance 

(O&M) charges for the remainder of 2001. Our comments will address both bills. 

As much as the Department can sympathize with the unfortunate plight of the water supply contract holders in the Klamath 

Project, we do have some concerns about the long-term policy and 

cost ramifications these bills may unintentionally set. 

The troublesome series of events that occurred last year in the 

Klamath Basin were a reminder of the cyclical nature of droughts 

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

water. The financial difficulties suffered by the irrigators, their 

families, and the community as a whole is something Reclamation 

has worked hard to counter. The Department responded quickly 

last year and continues to play an integral role in finding workable 

long-term solutions for that region. 

In March 2002, the President established the Klamath River 

Basin Federal Working Group, which is chaired by Interior Secretary Norton and includes Commerce Secretary Evans, Agriculture Secretary Veneman and CEQ Chairman Connaughton. The 

Working Group has since undertaken immediate and long-term actions to address the complex economic and natural resource issues 

in the basin. For instance, the Working Group announced $1.6 million from the Department of Agriculture (USDA) to accelerate assistance for water management and water quality actions on Forest 

Service land. The Department accelerated the construction schedule on screening of the A canal, and anticipates finishing construction in April 2003. Reclamation announced two significant restoration projects that will add water to a water bank. These projects 

involved partnerships with The Nature Conservancy and The 

Rangeland Trust. The Administration is considering additional 

water quality and water quantity measures and is considering reprogramming of Reclamation funds to accelerate water conservaVerDate Sep 04 2002 18:11 Sep 21, 2002 Jkt 099010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR289.XXX SR289
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tion and habitat restoration projects in the Klamath River Basin. 

Also, the USDA provided $20 million to help affected farming families. 

In addition to these Administration efforts, the region’s congressional delegation, including Senator Gordon Smith and Congressman Greg Walden, were instrumental in passing a potent conservation title in the Farm Bill, also strongly supported by the Administration, which included $50 million specifically for Klamath farmers and ranchers to pursue conservation measures. The Klamath 

community may also be able to qualify for some of the large funding increases for the Environmental Quality Incentives Program 

(EQIP), Wetlands Reserve Program (WRP), and Conservation Reserve Program (CRP) authorized in the Farm Bill. 

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

West, where we must manage water for endangered species, fulfill 

our trust responsibilities to Native Americans, and meet the needs 

of irrigators and other water users. Although what happened in the 

Klamath Basin was an extraordinary example of drought and Endangered Species Act (ESA) conditions hampering water deliveries 

for contract customers, this is not the first example, nor will it be 

the last. Over the years, there have been countless examples of 

when contractors were unable to get their full contract allotment 

of water due to drought or environmental demands. Nonetheless, 

O&M costs were incurred and the contractors paid their share. 

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

enters the dawn of its second century, it is important that we not 

shed the tenets of our success from our first 100 years. The fundamental principles of Reclamation have always included fulfilling 

our contractual commitments and delivering water to our contractors in the arid West. The corresponding contractual commitment 

of the water users to help maintain this infrastructure, in good 

times and bad, is essential to the success of the program. 

The Department recognizes the hardships experienced by Klamath area residents. It is also keenly aware of the severe drought 

conditions playing out across the West. Reclamation also recognizes 

it will have additional water management challenges in the future. 

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

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

they did with Klamath customers. What we must not do is give 

cause to those persistent critics of Reclamation programs that allege the beneficiaries of our programs do not pay their fair share, 

even in the most difficult of times. That is why the Department has 

some serious concerns about the long-term policy and cost ramifications that these bills may unintentionally set. For example, applying the logic of these bills to all such situations could cost Federal 

taxpayers many millions of dollars per year in lost O&M payments. 

Every year there are water contractors who do not receive the full 

amount of water for which they have contracted, due to drought, 

ESA concerns, or over-allocation of scarce water. Nevertheless, if 

those contractors want to ensure future deliveries, they must help 

maintain the facilities that make those deliveries possible. 

The Department values its working relationship with our Klamath Project customers and is committed to working through the 

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complex issues all of us face in that region. Reclamation stands 

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

Project customers. 

The Office of Management and Budget advises that there is no 

objection to the presentation of this report from the standpoint of 

the Administration’s program. 

Sincerely, 

JOHN W. KEYS III. 

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 Act H.R. 2828, as ordered reported.

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