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[Senate Hearing 108-338]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 108-338

                        CALFED BAY-DELTA PROGRAM

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   on

                                S. 1097

        TO AUTHORIZE THE SECRETARY OF THE INTERIOR TO IMPLEMENT 
                      THE CALFED BAY-DELTA PROGRAM

                               __________

                            OCTOBER 30, 2003

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

                                 ______

92-207              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

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

                    Subcommittee on Water and Power

                    LISA MURKOWSKI, Alaska, Chairman
            BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
JON KYL, Arizona                     BOB GRAHAM, Florida
LARRY E. CRAIG, Idaho                RON WYDEN, Oregon
JAMES M. TALENT, Missouri            TIM JOHNSON, South Dakota
JIM BUNNING, Kentucky                DIANNE FEINSTEIN, California
CRAIG THOMAS, Wyoming                CHARLES E. SCHUMER, New York
                                     MARIA CANTWELL, Washington

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

                        Kellie Donnelly, Counsel
                Patty Beneke, Democratic Senior Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Birmingham, Thomas W., General Manager/General Counsel, Westlands 
  Water District, Fresno, CA.....................................    35
Boxer, Hon. Barbara, U.S. Senator from California................     2
Burns, Hon. Conrad, U.S. Senator from Montana....................     5
Calvert, Hon. Ken, U.S. Representative from California...........     9
Dorgan, Hon. Byron L., U.S. Senator from North Dakota............     8
Feinstein, Hon. Dianne, U.S. Senator from California.............     2
Gastelum, Ronald, CEO, Metropolitan Water District of Southern 
  California, Los Angeles, CA....................................    40
Graff, Thomas J., Regional Director, Environmental Defense, 
  Oakland, CA....................................................    30
Guy, David J., Executive Director, Northern California Water 
  Association, Sacramento, CA....................................    46
Kyl, Hon. Jon, U.S. Senator from Arizona.........................     7
McPeak, Sunne Wright, President and CEO, Bay Area Council, San 
  Francisco, CA..................................................    28
Murkowski, Hon. Lisa, U.S. Senator from Alaska...................     1
Raley, Bennett W., Assistant Secretary for Water and Science, 
  Department of the Interior.....................................    12
Wright, Patrick, Director, California Bay-Delta Authority, 
  Sacramento, CA.................................................    25

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    59

                              Appendix II

Additional material submitted for the record.....................    79

 
                        CALFED BAY-DELTA PROGRAM

                              ----------                              

                       THURSDAY, OCTOBER 30, 2003

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:40 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski presiding.

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

    Senator Murkowski. I call to order this hearing of the 
Water and Power Subcommittee. Welcome, and good afternoon. 
Thank you all for coming. I certainly appreciate the interest 
in today's hearing.
    Mark Twain, at one point in time, said, ``Whiskey is for 
drinking, water is for fighting.'' And I think certainly in 
California, in regard to this issue, and in many parts of the 
West, that statement is probably more than just a little bit 
accurate.
    Today, the Water and Power Subcommittee will receive 
testimony on S. 1097, the Calfed Bay-Delta Authorization Act. 
This legislation was introduced by Senators Feinstein and 
Boxer. It authorizes the Secretary of the Interior and various 
Federal agency heads to implement the Calfed Program, a program 
that has been working to improve water management in California 
since its inception with the Bay-Delta Accord in December 1994. 
Both California Senators should be commended for their efforts 
in formulating this legislation, and their efforts to improve 
the very difficult water issues in your State.
    This bill authorizes $880 million for fiscal years 2004 
through 2007 for program-specific areas. Authorization for 
Federal participation in the Calfed Program expired in 2000; 
however, various program activities have continued to be funded 
under existing authorities.
    I'm looking forward to learning more about this legislation 
from today's witnesses. In particular, I am interested in 
understanding the extent of the existing Federal authorities 
and whether additional authorization is necessary. I would also 
like to understand how the Calfed Program is progressing, in 
terms of water-supply reliability, water quality, ecosystem 
restoration, and levy system integrity. And, finally, I would 
hope that we would learn how much funding has been expended 
pursuant to the Calfed Program to date, and how much funding is 
needed for its completion.
    Now, I know that there is a lot of interest in this 
hearing. We've received many requests from groups wishing to 
testify. I'd like to note that, under our committee rules, any 
interested party may submit testimony for the hearing record, 
which will remain open for an additional 2 weeks.
    The committee has already received written testimony from 
the Hoopa Valley Tribe, which I would like to enter into the 
hearing record.
    We have three panels this afternoon--a congressional panel, 
the administration, and a public-stakeholder panel--but before 
we move into the panel, I would like to recognize our committee 
members for opening statements at this time, in the order in 
which they arrived.
    Senator Feinstein.
    [The prepared statement of Senator Boxer follows:]

 Prepared Statement of Hon. Barbara Boxer, U.S. Senator From California

    I am pleased today that the Senate Energy and Natural Resources 
Committee is holding a hearing on S. 1097, the Calfed Bay-Delta 
Reauthorization Act, introduced by my colleague, Senator Feinstein. As 
you know, I am a cosponsor of this legislation, which would authorize 
the Secretary of the Interior and other Federal agency heads to 
participate in the implementation of the CALFED Bay-Delta Program.
    For decades, water allocation in California was conducted through 
endless appeals, lawsuits, and divisive ballot initiatives. Such 
battles were painful and they prevented us from finding real solutions 
to our state's very real water problems. In 1994, a new state-federal 
partnership program called CALFED promised a better way. Through a plan 
to provide reliable, clean water to farms, businesses, and millions of 
Californians while at the same time restoring our fish, wildlife and 
environment, CALFED was committed to identifying a solution that all 
water users could share.
    Over the years, what has made CALFED work is that it employs a 
consensus approach that balances the needs of the various interests 
competing for California's scarce water resources. This balance is most 
clearly articulated in the Record of Decision (ROD) that was agreed to 
on August 28, 2000 by the federal government and the State of 
California. The CALFED ROD outlines clearly the CALFED Bay-Delta 
Programs' goals and repeatedly reiterates the need to move forward with 
these goals in a balanced manner.
    This legislation authorizes the federal agencies to undertake the 
actions and activities identified in the ROD. It is our intent that all 
activities are to be implemented in a manner consistent with the ROD. 
This legislation is not intended to authorize activities, such as major 
construction projects, that would otherwise require completion of 
feasibility studies, permits under section 404(a) of the Clean Water 
Act and other applicable laws, and project-specific authorizations. In 
addition, the legislation requires that federal participation in the 
CALFED Bay-Delta Program proceed in a way that is consistent with other 
laws.
    This legislation provides a carefully crafted, balanced approach 
for meeting water supply needs, improving water quality, and 
environmental restoration. Thus, the bill would protect the fragile 
Bay-Delta region, while addressing the entire state's water needs in a 
comprehensive manner.
    The CALFED Bay-Delta Program has played a vital role in meeting 
California's water needs. This bill will ensure that continues.

       STATEMENT OF HON. DIANNE FEINSTEIN, U.S. SENATOR 
                        FROM CALIFORNIA

    Senator Feinstein. Thank you very much, Madam Chairman, and 
thank you very much for holding this hearing. I also want to 
thank Chairman Domenici and ranking member Bingaman for 
granting my request to hold this hearing. And I want to welcome 
Congressman Ken Calvert, who's been the leader in the House 
with the bill--while not quite like this bill, not that 
different from the bill, with no major differences that are 
irreconcilable that I can see.
    And I also want to thank Bennett Raley. I want to commend 
you for your leadership on the Quantification Settlement 
Agreement, which gradually weans California off of the Colorado 
River down to 4.4 million acre-feet over the next 15 years. Ron 
Gastelum, from the Metropolitan Water District, who is also 
here, and others, played a very critical role in these 
negotiations. I know it wasn't easy. I want to thank you for 
your steadfastness in the four districts that were involved.
    I think this is really a big chip off of the shoulders of 
Colorado's River States and their Senators, and I hope it helps 
us with Calfed. Because, if you think for a moment, you can't 
remove 700,000 acre-feet of water from California without 
finding a way to gain other water to replace it.
    My view is that if we don't pass a Calfed bill now, 
California will not have enough water in a decade or so. The 
electricity crisis is just a forerunner, in a minor way, to 
what will happen with respect to water. The last time we 
increased our water infrastructure was the mid-1960's, when 
Governor Pat Brown built the California Water Project. And, at 
that time, we were 16 million people. Today, we're 36 million 
people, and we're going to be 50 million people within the next 
15 to 20 years. So this program is not ``too much, too soon.'' 
It even could be ``too little, too late.''
    The essence of Calfed--and I want to take a couple of 
minutes--is creating a predictable environment and a 
cooperative framework for California's communities to plan for 
their water supply and for protection of fish, salmon, 
fisheries, and the environment. There are three core principles 
enshrined in the bill that Senator Boxer and I have introduced: 
balance--the program goes together, it moves forward together; 
consistency with the record of decision; and a partnership 
between the State and Federal Government.
    California has many different water needs. Ecological 
restoration for the environment. Yesterday, I met with 
Westlands, today I met with the Hoopa Tribe, both of whom have 
concerns about the Trinity River. They need to come together. 
They need to settle these concerns. Recycling, desalination, 
water quality, and conveyance for cities, and storage, both 
ground water and surface, for our farms and our people. 
California is prone to drought, so it makes sense to store 
water taken from wet years for use in dry years.
    A Calfed bill must evenhandedly provide for all these 
interests so Californians, all of them, can rally around it. 
That's why the bill we have introduced explicitly requires 
balanced implementation. And I must tell you--and I must thank 
Senator Kyl, of Arizona. I know he's relieved we're off the 
Colorado River, or going off the Colorado River, but he has 
really done yeoman service in helping with this bill, and I'm 
very, very grateful for that help.
    Our bill respects that Calfed has a history, and it 
respects the past agreements that Californians have made.
    I want to just quickly go a little bit into the history. 
When I came here, in 1993, there were suits all over the place. 
And I thought, I'm going to call in the stakeholders, and I'm 
going to call in the Secretary of the Interior, I'm going to 
see if there's any way people can get out of the courtroom and 
come around the table and begin to talk about water without the 
emotion, but in a very practical solution-oriented manner. So 
we held a number of meetings, and that kind of began a process 
which became known as Calfed, whereby, at one point, I think 
there were 17 different stakeholder groups sitting down and 
meeting.
    The Bay-Delta Accords were negotiated in 1994. And then, in 
2000, the record of decision was carefully negotiated by all 
groups--environmentalists, urbans, agriculture--was signed by 
the Secretary of the Interior, and was signed by the Governor 
of California.
    This record of decision sets forth specific commitments to 
enter into a process which will result in the balanced 
implementation of the water interests of all California.
    My bill adopts the record of decision as a framework for 
Calfed's program components. This is compromise language. It 
was negotiated at great length, and we need to keep its 
recognition that the record of--the recognition that the record 
of decision is our roadmap. Patrick Wright is here from 
California, along with many others who will be introduced, and 
they've done a terrific job.
    Finally, a Calfed bill needs to create a governance 
structure so that the Federal Government will participate 
actively with the State in making important decisions. One 
water project is federal, one water project is State. It makes 
sense. So we need a governance structure to ensure an active 
Federal role in the partnership.
    So, I urge the administration and the House to support a 
bill that increases our water supply, that also protects our 
environment by proceeding in a balanced fashion. Let me quickly 
just brief the elements of the bill.
    The Chairman mentioned its $880 million authorization over 
4 years. The Federal cost share is limited only to one third. 
That's far below what most water bills have. This bill includes 
$102 million for planning and feasibility studies, for water 
storage, an additional $77 million for conveyance, $100 million 
for ecological restoration. This means improving fish passages, 
restoring streams, rivers, habitats, and water quality. The 
evidence shows that Calfed's ecological restoration is working 
well to date.
    About $400 million has been spent to improve fish passages, 
restore wetlands, and otherwise improve ecological restoration 
since the 1990's. The results are the best part, and no one can 
debunk it, fish populations are improving. We aren't all the 
way there yet, but we've made real progress. $153 million for 
water conservation, recycling, $84 million for desalination and 
water cycling projects, programs to improve water quality for 
drinking, $95 million for grants to local California 
communities to develop plans and projects, and $50 million for 
watershed planning and assistance. We have projects for levy 
stability, with $70 million, ensuring Calfed has strong 
supporting science; and $50 million and $25 million for program 
management, oversight, and coordination. And, finally, $75 
million for the environmental water account, which purchases 
available water for environmental and other purposes.
    Now, last Congress, I introduced a Calfed bill in November 
2001, and I worked really hard with members of this committee 
to get the bill favorably reported out of committee by a vote 
of 18-5. I kept on working to address members' concerns, even 
after the bill was reported. Senator Kyl helped me, on his 
side, convening meetings, asking for concerns, vetting the 
bill.
    I'll tell you what we learned. First, some Senators were 
afraid that Calfed was going to require more than its fair 
share of the Bureau of Reclamation's budget. I think, Senator 
Burns, you were one of those. We cut the authorization level 
twice, ultimately to $880 million, to meet these concerns. We 
also limited the Federal cost share.
    A number of Republican Senators were concerned that 
environmental projects not needing authorization would sail 
smoothly ahead, while storage projects lacking congressional 
approval would languish. To meet this concern, we require in 
the bill specific language for balanced implementation of the 
program. All aspects have to proceed in a balanced way.
    Other Senators were concerned that they had no good handle 
on the Federal funding on the numerous different agencies 
involved in Calfed. We met this concern by requiring OMB to 
prepare a crosscut budget showing the Federal funding of each 
of the different agencies. There was concern, at the Bureau of 
Reclamation, that we would short the projects for other States. 
We also prepared a specific list of the projects to be funded 
and how much each one would get. That's all there.
    These changes improved the Calfed bill, and a simplified 
short authorization passed the Senate at the very last minute, 
at the very last half hour of the session. We could not, 
however, get it passed in the House of Representatives. With 
the support of Representative Calvert, with Representative 
Pombo, I hope and expect we will achieve a different result.
    And I had the opportunity, Madam Chairman, to talk a bit to 
the Governor-elect of California about this. And I'd like to 
quickly read in the record a letter from him. And it's, ``Dear 
Senator Feinstein, As the Governor-elect, I'd like to express 
my strong support for advancing Federal legislation on the 
Calfed Bay-Delta Program. I strongly urge Congress to 
reauthorize the Federal contribution to Calfed in order to 
encourage the participating Federal agencies to fully engage in 
a partnership with the State of California and the stakeholders 
of the Calfed Program. I share your belief that Calfed can 
provide a long-term comprehensive plan to address challenges in 
the Bay-Delta region by balancing water-resource management 
issues, including supply, quality, and ecosystem restoration. 
I, therefore, support the efforts that you, Congressman 
Calvert, and the entire California congressional delegation are 
taking to help California implement this important program.''
    I believe this is his first letter to us, and, as such, I 
hope it indicates the importance of this Calfed Program to our 
State.
    Thank you very much, Madam Chairman.
    Senator Murkowski. Thank you, Senator Feinstein.
    Senator Burns.

         STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR 
                          FROM MONTANA

    Senator Burns. Thank you very much. And I want to 
congratulate Senator Feinstein. Nobody has devoted more hours 
to this issue. And let me say that I sincerely appreciate what 
they're trying to do in California, and I'm pretty supportive 
of what they're trying to do. We voiced----
    Senator Feinstein. Could you eliminate the ``pretty''?
    [Laughter.]
    Senator Burns. Huh?
    Senator Feinstein. Could you eliminate the ``pretty'' and 
just be supportive?
    Senator Burns. Um.
    Senator Feinstein. I'm teasing.
    Senator Burns. I thought you ladies liked the word 
``pretty.''
    Senator Feinstein. Well----
    [Laughter.]
    Senator Burns. And I guess we still have the--almost the 
same concerns, but I appreciate the movement that Senator 
Feinstein has made with regard to the Calfed issue. Nobody 
wants to argue that California does not need more water at the 
south end of the State. I'm deeply concerned about and saddened 
by what California is going through out there right now with 
the fires and everything, but that has nothing to do with this.
    I said, from the get-go, that Calfed was starting, kind of, 
on the wrong end of their problem. They've got to make some 
more water. They've got to come to the idea that we should 
expand our ability to store water in the existing facilities, 
and also maybe look at new facilities. I am supportive of that 
because of population growth, of the people-pressure on water, 
and also the ability to do some things on the environmental 
side, without the cost being very, very heavy on the people-use 
side.
    And I also want to associate myself with the words of 
Senator Feinstein, when Senator Kyl probably has been one of 
the key players in these negotiations, understanding the 
situation, and also understanding the law, as he does. The 
Senate is very, very appreciative of his talent.
    But I went through the 1991 water settlement with 
California. I didn't sign the conference report then, because 
it was unfair to, not only California, but also because 
California played it pretty loose on who controls the water, 
and I am very much of an opponent of the Federal Government, 
Washington, D.C., controlling any water, because I don't want 
to get into a situation where they dictate here what water will 
be used for. And we fall on our saber about those things. 
Whiskey's for drinking, water's for fighting, in the West.
    So I want to congratulate Senator Feinstein because she has 
come a long way. There are now conditions in here to enlarge 
and to enhance water storage and to possibly create more water. 
And while we might not create any more water, we're sure going 
to hold it, and for the right reason. And not only for the 
Delta, but also for agriculture. Because I come to this with 
one single thing in my mind, and Senator Feinstein knows what 
it is, and that is, I fight awfully hard to protect the 
agricultural base, and I will continue to do that.
    So I look forward to working on this piece of legislation. 
I helped Senator Feinstein vote it out of committee last time, 
and told her that we could work on it. And her word was good, 
and we have been working on it. And I will continue to do that 
in good faith. And I'm particularly appreciative of the work 
that she's done and the miles that she has come on this piece 
of legislation.
    And I thank the Chair, and I'd ask that my official 
statement be made a part of the record.
    Thank you.
    Senator Murkowski. Thank you. And your statement will be 
included as part of the record.
    [The prepared statement of Senator Burns follows:]

   Prepared Statement of Hon. Conrad Burns, U.S. Senator From Montana

    First of all, I would like to thank Senator Murkowski for holding 
this hearing, and Senator Feinstein for all her hard work on this 
issue. Water in California, as with the entire West, is a complicated 
and difficult issue.I would like to welcome the witnesses today, 
particularly Tom Birmingham from Westlands Water District. The 
importance of having an agricultural interest at the table cannot be 
stressed enough.
    There are people who wonder why I care so deeply about the 
California farmers, but I have been close to this issue since the early 
90's when the Senate passed the Central Valley Project Improvement Act. 
I never did sign the conference report, partly because the legislation 
``reallocated'' 800,000 acre/feet of water away from South of the Delta 
farmers. This bill seeks to get some of that water back, and I 
appreciate that effort. To me, that is one of the key issues this 
legislation needs to address.
    Having been involved with the CalFed legislation for several years 
now, I can say with confidence that S. 1097 is an improvement over 
previous versions. I appreciate that the authorization has been trimmed 
to $880 million over 5 years, and that there are efforts to make sure 
that construction of new water storage projects progresses alongside 
other water conservation and ecosystem projects. This balance is very 
important to me, because water storage is crucial to meeting the 
growing needs of any growing state. The fact that the federal cost-
share is limited to one-third of project costs is also an improvement.
    For all its improvements, I am not ready to endorse this bill just 
yet. Unanswered questions remain, and maybe we can answer some of those 
questions in today's hearing. I think we need to make sure we are 
authorizing activities that are necessary to achieve the goals of 
better meeting the goals of the CalFed agreement. The follows a 
``beneficiary pays'' model, and while that sounds good I am not sure 
what it means. The American taxpayer will be paying for 1/3 of these 
activities, and I am not clear on how the American taxpayer is a 
beneficiary.
    The federal government funds worthy projects in every state in the 
nation, and CalFed projects may indeed be included in that list. I just 
want to make sure we know what we're buying and that we can afford it. 
I look forward to continuing to work with Senator Feinstein and my 
other colleagues to make sure we are doing the right thing for all 
Californians and for all Americans.

    Murkowski. Senator Kyl.

      STATEMENT OF HON. JON KYL, U.S. SENATOR FROM ARIZONA

    Senator Kyl. Thank you very much, Madam Chairman. Madam 
Chairman, I'll just be very brief, but I want the people who 
have traveled a long way to be here to appreciate some things. 
I think probably most of you do.
    When Senator Burns talked about the way that Senator 
Feinstein has worked this legislation, he did not overstate the 
case; he understated it. She is the best in the Senate at 
buttonholing, lobbying, calling meetings, inundating you with 
information, more than you want, and using every technique 
known to man or woman to get people to see the light. And she 
has just worked extraordinarily hard on this.
    There are two other things that you all need to know--and, 
by the way, the same thing goes for Ken Calvert, but he's not 
getting the accolades here--but Senator Burns just said that 
Senator Feinstein's word is good, and that probably is the best 
thing that you all have going for you.
    Because this is a project that, in one form or another, 
and, I think, pretty close to the form that it's been 
introduced, needs to happen. And it's going to be very hard, 
because you come along at a time when we've got this big budget 
deficit, and there were some other problems last year, and so 
it's a hard thing--even though the project has a great deal of 
merit, it's a hard thing to get done. And if you were working 
with somebody here who was not trusted by their colleagues, it 
would be very difficult. You have just the opposite here.
    When Senator Feinstein sat down with me--we've had the same 
thing in Arizona, these difficult negotiations with lawsuits 
and all of the rest of it, and you finally have to sit down and 
try to negotiate them out. And when you're all done the last 
thing you want is to bring it back to Washington and have 
everybody start to undermine what you did or to nitpick it to 
death.
    I fully appreciate that phenomenon and all the work that 
you all put into this. But when Senator Feinstein said, 
``Here's what we've done,'' I knew what the reaction of some 
colleagues would be, and I suggested to Senator Feinstein that 
she make several changes. She did. I know some of those were 
kind of hard for some of you to swallow. But she was 
extraordinarily constructive in putting this thing together in 
a way that I could defend it, as a Senator from another State, 
and I'm happy to do so, and happy to do it again.
    So I will continue to work, to the extent that I can, with 
Senator Feinstein. And I guess what I want you folks in 
California to know is, please don't be disappointed. I know. 
I've been through the same thing. I've got a thing going right 
now myself here that we're going to have a long time to get 
through. It's very frustrating, it's very time consuming. The 
process here can be maddening. Don't give up. Keep of good 
cheer. Be constructive. Keep educating us. That's what we need. 
And be understanding of the financial issues, and we'll find a 
way to work around all these problems.
    Also, Bennett Raley and all the folks from the Department 
of the Interior, have been enormously helpful here, too. So 
there are a lot of good people of goodwill working on this. 
It's hard. But with good, constructive work, we can try to get 
this thing through.
    And, Senator Feinstein, I commend you, and, Madam Chairman, 
commend you for holding this hearing.
    Senator Murkowski. Senator Dorgan.

        STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR 
                       FROM NORTH DAKOTA

    Senator Dorgan. Madam Chairman, thank you very much.
    Has Congressman Calvert testified yet?
    Senator Murkowski. He has not.
    Senator Dorgan. All right.
    Senator Murkowski. We're still getting through our 
openings.
    Senator Dorgan. Well, I have a major keynote address here 
that----
    [Laughter.]
    Senator Dorgan. Let me--you know, I would second all that 
my colleagues have said about Senator Feinstein. She's worked 
tirelessly on this issue, and I'm happy to help her and work 
with her. I know this is important to California.
    And, you know, I would say that Senator Kyl made a very 
important point. When you're dealing with water policy, you 
have to have some patience. I mean, these are difficult 
projects that require tireless devotion and dedication, and 
this has proven to be the case with this project. But Senator 
Feinstein has never given up, and so I think she has the 
ability to work with the members of this committee in a way to 
get a satisfactory result. I'm really happy to work with her. I 
think she makes a complete and effective presentation, and has 
done the groundwork that's necessary to get legislation 
through.
    Senator Feinstein, thank you for your work. And I, as the 
ranking member of this subcommittee, look forward to working 
with you to see if we can't get the results we need.
    Senator Feinstein. Thanks, Byron.
    Senator Murkowski. Thank you.
    And, with that, let's turn to Congressman Calvert. Mr. 
Calvert is the sponsor of H.R. 2828, which is the Calfed 
legislation now moving through the House. So we welcome you to 
the Committee. Thank you for your patience this afternoon as we 
have made our opening comments.
    Welcome.

                STATEMENT OF HON. KEN CALVERT, 
              U.S. REPRESENTATIVE FROM CALIFORNIA

    Mr. Calvert. Thank you. I appreciate you having me here, 
Madam Chairman. And thank you, Senator Dorgan and Senator Kyl, 
Senator Burns, a good friend, Senator Feinstein, as I share my 
thoughts on California water and the future of all 
Californians. I certainly appreciate your having this hearing.
    And I know that all of our thoughts and prayers are with 
the people in southern California today who are going through a 
difficult time. It seems that we have a number of problems in 
California. A lack of energy and certainly these wildfires 
aren't helpful. And water is a catastrophe waiting to happen in 
California, as Senator Feinstein well knows in the hard work 
that she has shown to resolve California's water issues. But 
we're running out of time. So I know that patience is 
important, but this is a very difficult problem.
    I certainly want to share my appreciation of Senator 
Feinstein's valiant strides in introducing her Calfed bill and 
her efforts to find balanced solutions. As you're aware, 
Senator, I based the structure of my bill, H.R. 2828, on the 
purposes and intent of your bill. I believe your efforts today 
will only strengthen the resolve to pass a Calfed bill this 
session.
    I've been working closely with my subcommittee colleagues 
and stakeholders, and conducted field hearings in California 
and hearings here in Washington, to gain an understanding of 
what is right for California water.
    What I've heard, across the board, is that we need storage, 
as Senator Burns points out, we need efficient conveyance, we 
need improved water quality, we need more agency 
accountability, and we need strong communication and 
coordination. Your efforts here today provide all members the 
opportunity to see what is working and what minor improvements 
to the California water system are needed to assure that more 
than 35 million people continue to have an adequate and a safe 
water supply. As Senator Feinstein points out, that population 
continues to increase.
    I also believe that your bill provides other water managers 
and other States and river basins an opportunity to see a 
system that is working and, with our legislation, will be a 
balance to all water users.
    Our bills are close. I'm confident that the differences can 
be resolved. I commit to work with you, Senator, and the 
distinguished members of this committee and the subcommittee I 
chair, to work out what few differences we do have so we can 
get the needed Federal authorization that's been so lacking in 
the last decade.
    You know, in a last point, a lot of the hard work that 
Bennett Raley and certainly others have put into this, the 
Quantification Settlement Agreement has been resolved. That's 
good news. Now the hard work begins. We have a few years, 
really, to wean ourselves from the Colorado River. And without 
Calfed, we can't do it. We must have this.
    Obviously, desalinization is an important issue, and there 
are other issues, but unless we can move water from the north 
to the south in the good times, we're not going to be able to 
meet the goals that we must meet. And, as you all know, 
especially from Arizona and Nevada and other States, water is a 
fungible commodity, and the lack of water has a direct cost on 
price, and price is certainly something that's very important 
to farmers, as you know, Senator Burns. And so as the scarcity 
of water increases, the price of water increases with it.
    So, with that, again, I'm thankful for having this 
opportunity to be here. And if you have any questions, I'd be 
happy to answer them, though they just called a vote and I have 
to get back over to the House.
    So thank you.
    Senator Murkowski. Well, we don't want to keep you from 
your vote. Let me just ask you very quickly, looking into your 
crystal ball, what do you figure the prospect of Calfed 
legislation passing the House is?
    Mr. Calvert. I'm very confident we will pass a bill out of 
committee soon--soon being when we come back into session--and 
get a bill on the floor. We came very close last session, and I 
feel confident that we can get a bill passed. But, you know, 
it's--this catastrophe that's happened in California the last 
few days shows that we cannot put off problems. We have to deal 
with them early on and be proactive in these types of things, 
and especially water. You can't put off water problems, because 
when it's upon you, you can't solve it overnight.
    Senator Murkowski. Are there questions for Congressman 
Calvert?
    Senator Feinstein.
    Senator Feinstein. If I may, I'd like to thank him. I 
happened to agree with what he said. I believe that if we each 
get a bill through our respective houses, we'll be able to work 
out any differences that exist in conference and get the job 
done in a way that I think everybody would be proud. There are 
controversies. We've worked to solve them. So I would be very 
optimistic, and I want to thank you very much, Ken, for coming 
over today.
    Mr. Calvert. Well, thank you Senator. I appreciate it.
    Senator Feinstein. Thank you.
    Mr. Calvert. I look forward to working with you.
    Senator Murkowski. Thank you.
    Anything from any other committee members? If not, thank 
you for your time this afternoon, Congressman.
    Mr. Calvert. Thank you, Madam Chair.
    Senator Murkowski. I appreciate it.
    I just wanted to note for the record, Senator Domenici was 
planning on attending the hearing today, but was called away to 
an Energy and Water Appropriations conference meeting. The 
chairman has asked that his prepared statements be included in 
the record. But he did want to have me pass on to you, Senator 
Feinstein, his commendation for all the hard work that you have 
been doing on this issue and his desire to continue to work 
with you as we move forward.
    Senator Feinstein. Thank you very much.
    [The prepared statement of Senator Domenici follows:]

       Prepared Statement of Hon. Pete V. Domenici, U.S. Senator 
                            From New Mexico

    Madam Chairman, I appreciate you holding this hearing today on S. 
1097, the CalFed Bay-Delta authorization legislation.
    I would like to commend my colleague, Senator Feinstein, for her 
efforts to deal with these critical water issues in California. She has 
been persistent in bringing water management issues to the front of the 
national agenda. I would also like to thank Senator Feinstein for her 
willingness to engage in bi-partisan efforts to carry forward the 
business of the Energy and Natural Resources Committee.
    The significant water issues highlighted by this CALFED legislation 
are not unique to California. For example, we have recently held a 
hearing on legislation addressing major water issues in Arizona. Other 
members of the Energy and Natural Resources Committee have equally 
pressing water resources issues.
    My state, New Mexico, struggled through a disastrous summer 
requiring Herculean efforts by Federal, State and every other water 
management group. We have now reduced our storage to historic lows and 
we face potentially traumatic choices this coming year. If anything, 
New Mexico has fewer resources and is in worse shape than California.
    For these reasons, I am developing legislation to address the 
breadth of water issues faced by my state. For lack of a better name, I 
have been referring to this legislation as New Mexico FED.
    I look forward to working to resolve the remaining issues on S. 
1097, and equally important, I took forward to working with Senator 
Feinstein and my other colleagues on the Committee to address the water 
issues that face New Mexico and the rest of the Western U.S.
    Thank you, Senator Murkowski, for conducting this hearing today.

                               Appendage

    Additionally, I feel that CALFED is increasingly significant in 
light of the recent historic agreement among the U.S. Department of the 
Interior, the Colorado Basin States and in particular, the users of 
Colorado River water in California in an effort to reduce California's 
dependence on Colorado River Water.
    The CalFed program was first initiated almost 10 years ago with the 
signing of the Bay-Delta accord in 1994. The parties who have worked 
long and hard in developing and managing the highly integrated and 
interdependent projects of the CalFed program should be commended. 
Every Western state, if it has not already done so, should pay close 
attention and where possible, learn from California's experience in 
this effort.
    The collaborative process leading to the Bay-Delta Record of 
Decision and this legislation sets the stage for the long-term Federal-
State relationship in California and establishes a possible formula for 
other Western states.
    However, I have several concerns, which I hope will be addressed in 
part at this hearing and which may require that I travel to California 
to see first hand the programs and facilities represented by this 
legislation.
    While the list of projects and programs addressed in this 
legislation are extensive, S. 1097 does not solve ALL of California's 
water resources issues. Since the Committee announced this hearing, I 
have met with multiple organizations from California who have sought my 
support for CalFed. My staff and I have also met with other California-
based groups who feel their projects should receive equal attention to 
those included in CalFed. Notably, the current CalFed legislation 
represents only four years of the Federal-State partnership. Thus, it 
is important, that the Committee understand what California water 
issues are resolved by the CalFed legislation and what additional 
authorization requests the Committee should anticipate for other 
California water projects.
    A major question on S. 1097 is whether new authorities are needed 
to implement the Federal-State relationship or whether existing 
authorities are sufficient. This is a key issue in developing Western 
water policy. I hope that today's hearing and subsequent discussions 
will help increase my understanding of the Federal government's 
existing authorities to address complex water issues and lay a 
foundation for assessing the right course of action on water issues for 
other states, like New Mexico.
    As has been discussed before, every state in the West is facing the 
same water trauma. Recently, this committee conducted a hearing on 
water settlements and other projects in Arizona. As many of you know, I 
am currently in the process of developing broad-reaching water 
legislation for New Mexico. Thus, the policy and other implications of 
the CalFed legislation must be viewed in light of these broader Western 
needs.
    Finally, I want to commend my colleague from California, Senator 
Feinstein, for her hard work on S. 1097. Again, thank you Madam 
Chairman for taking on these weighty issues.

    Senator Murkowski. Let's go to panel No. 2. I'd like to now 
welcome Assistant Secretary Bennett Raley, who is testifying on 
behalf of the Administration.
    Mr. Raley, thank you for joining us this afternoon.

 STATEMENT OF BENNETT W. RALEY, ASSISTANT SECRETARY FOR WATER 
            AND SCIENCE, DEPARTMENT OF THE INTERIOR

    Mr. Raley. Madam Chairman, thank you very much for 
providing us with the opportunity to address this 
extraordinarily important issue for the Department of the 
Interior and, in fact, the United States.
    The resources at issue in the State of California are of 
national importance. It's a nationally important economy, 
nationally important environmental and other resources. And 
like the other States, we believe that it is only with the 
relentless attention and support of all of the people here in 
this body, as well as the administration, that we'll enable 
people out on the ground, at the State and local level, to find 
the tools to resolve what will otherwise be an unending series 
of catastrophes.
    Senator Feinstein spoke, in her opening remarks, of finding 
this a--if I could use the word--a morass of litigation. And, 
if I may, I can say it no more plainly than that this 
administration believes that solutions like Calfed are 
absolutely critical to avoiding unending series of 
catastrophes. In fact, you can look at Secretary Norton's Water 
2025 Initiative, which the Secretary announced this spring and 
completed regional hearings on throughout the West this summer, 
over 3,000 people attended these hearings in the West to talk 
about common-sense solutions to avoiding, or at least 
minimizing, conflict over water. We drew heavily upon Calfed, 
and the successes and failures in Calfed, in terms of it being 
an experiment in size and in its scale, as the Secretary 
developed Water 2025.
    We do not want to deal with a future that does not include 
a Calfed authorization. And I will be blunt, there is virtually 
nothing that I can disagree with in Senator Feinstein's opening 
remarks, with the minor exception that we may have different 
perspectives on the amount of money that is currently available 
at this time within the President's budget. That's something 
that I suspect will be discussed within this body, and the 
executive branch will make its preferences known. But the 
goals, the objectives, and the relentless search for resolution 
of tough issues that Senator Feinstein spoke of, we agree with 
much of what she and all of you have done together.
    I also want to thank, on behalf of the Secretary, Senator 
Feinstein for noting the success of the Secretary, the four 
water-management agencies, and the seven States on the Colorado 
River. And we know that that could not have occurred without 
the support of members of this subcommittee in searching for a 
long-term durable solution.
    There is very much a connection between the long-term 
success, with respect to the California plan for the Colorado 
River, and Calfed. As Senator Feinstein, Senator Kyl, Senator 
Burns, and, I believe, all observed, in one way or another, 
that if California is to meet its needs from a water-use 
standpoint, from an environmental standpoint, from a 
recreational standpoint, for water as its population grows, we 
must have Calfed, because the only other alternative will be 
the decimation of agricultural communities that we do not 
believe should bear disproportionate burdens within California 
as it struggles to meet the challenges of a population that I 
saw the other day, L.A. growing something like 800 people per 
day.
    And so, without reservation, we're supportive of the 
concepts of Calfed. We believe that, with the exception of what 
I consider to be fairly technical matters that I've noted in my 
opening statement--which, Madam Chairman, I'd like to request 
be submitted for the record--that success is attainable. And if 
I can borrow a term that we used at some risk in the Colorado 
River negotiations, I do believe that we are achingly close. 
With the leadership of the Senators of this subcommittee, Mr. 
Calvert, and Mr. Pombo, in the House, we are achingly close to 
concluding this chapter in the long story of enabling 
California to meet the needs of its people and its resources.
    With that, Madam Chairman, I'd like to just refer to my 
written statement and leave whatever time may be available for 
questions from the Senators.
    Senator Murkowski. Thank you, and your written comments 
will be included as part of the record.
    [The prepared statement of Mr. Raley follows:]

      Prepared Statement of Bennett W. Raley, Assistant Secretary 
           for Water and Science, Department of the Interior

                              INTRODUCTION

    Madam Chairman, members of the Subcommittee, I appreciate the 
opportunity to appear before you today to discuss the proposed bill 
authorizing the Secretary of the Interior to implement the CALFED Bay-
Delta Program. S. 1097 provides authorization for the Secretary of the 
Interior and the heads of the participating Federal agencies to carry 
out implementation of the CALFED Bay-Delta Program as set forth in the 
Record of Decision. Furthermore, S. 1097 would authorize funding, as 
well as governance and management authorities for a comprehensive, 
balanced, and timely water management program for California.
    I would like to express my sincere appreciation to the Committee 
for your continued support and commitment to making significant 
progress with the CALFED Program. I also appreciate the concerns 
demonstrated by this Committee that progress be made and your efforts 
in developing the bill being considered here before us today. Your 
continued willingness to work with the Administration and Department on 
this matter is of real and continuing importance to us. The current 
bill addresses many of the concerns raised in previous testimony, and 
we appreciate the approach the Senate is taking to authorize a clean 
CALFED bill. While we appreciate the effort and commitment that has 
gone into this bill, this testimony highlights several outstanding 
concerns that will need to be addressed for the Administration to 
support this legislation.

            OVERVIEW OF PROGRESS ON CALIFORNIA WATER ISSUES

    Before addressing S. 1097, I would like to briefly focus on several 
key California water issues and provide you with an overview of CALFED 
accomplishments to date. Virtually every Western state has issues of 
concern and controversy demanding our collective attention. The 
Department of the Interior has recently initiated Water 2025 which is a 
commitment to work with states, tribes, local governments, and the 
public, within existing resources, to address the realities of water 
supply challenges in the West. Water 2025 recognizes crisis management 
is not an effective solution for addressing long-term systemic water 
supply problems. This effort is intended to focus sustained attention 
on measures that local communities can be put in place to proactively 
anticipate and mitigate the water conflicts we will otherwise 
inevitably experience, even in non-drought years. In some areas of the 
West, communities are already implementing water banks, voluntary 
transfers between existing users, and water conservation measures to 
address potential water supply crises in advance.

                COLORADO RIVER WATER DELIVERY AGREEMENT

    A prime example of crisis prevention is the recent conclusion of 
decades of controversy with the signing of the Colorado River Water 
Delivery Agreement. On October 16, 2003, Secretary Norton was joined at 
Hoover Dam by representatives of the seven Colorado River Basin States 
and the four California water agencies (Imperial Irrigation District, 
Coachella Valley Water District, the Metropolitan Water District of 
Southern California and the San Diego County Water Authority), to 
celebrate this historic agreement that allows for the largest ``ag to 
urban'' transfer in the West. This agreement, forged under the 
Secretary's leadership resolves important issues that were of 
significant concern to many in the West and in Congress.
    By executing this pact, California will keep its 1929 promise to 
limit its use of Colorado River water to 4.4 million acre-feet by 
adopting specific, incremental steps to gradually reduce its use over 
the next 14 years. This Agreement includes measures that provide water 
for San Diego and its other growing cities in the southern half of the 
state, which are dependent on additional water conservation within 
California's farming communities. Under recently enacted state 
legislation, California will develop strategies to address the 
environmental concerns of the Salton Sea.
    The California water management agencies have agreed among 
themselves as to how California's 4.4 million acre-feet will be 
allocated within the state. Reaching this agreement benefits not only 
California, but also the seven states in the Colorado River Basin, 
allowing them to protect their authorized allocations and meet their 
future water needs.
    The key elements of the deal are:

          1. Caps previously unquantified water entitlement of the 
        Imperial Irrigation District (IID) and Coachella Valley Water 
        District.
          2. Provides for the conservation and transfer of up to 
        277,700 acre-feet from IID to the San Diego County Water 
        Authority.
          3. Resolves longstanding disputes over the beneficial use of 
        Colorado River water.
          4. Reinstates the availability of Colorado River surplus 
        water for California and Nevada urban water users, providing 
        for a 14 year gradual reduction to California's allocated share 
        of Colorado River water (a reduction from 5.2 to 4.4 million 
        acre-feet).
          5. Provides water and wheeling arrangements for settlement of 
        the San Luis Rey River Indian Tribes.

    This is a historic Agreement that settles longstanding disputes 
regarding the allocation of Colorado River water within California that 
have been in dispute since 1931. This Agreement provides several 
immediate and long-term benefits to the beneficiaries of the Colorado 
River, such as:
    1. The fundamental principal of the Law of the Colorado River is 
upheld in this Agreement: Legal allocations to each state must be 
respected and enforced. In the past commentators and others within the 
Basin have suggested that transfers of additional water from the Upper 
Basin's allocation to California would be the best approach to resolve 
problems associated with California's overuse of the River. That 
approach would have been inconsistent with the basic structure and the 
allocations to each basin as provided in the Colorado River Compact of 
1922. The Department does not believe that undermining the certainty of 
the allocations established over the past century would solve problems 
within the Basin; rather, such an approach would lead to a prolonged 
period of uncertainty and instability for all water users within the 
Basin. As a recent editorial in Utah stated: ``By firming up the water-
rights issue, California will have to adhere to its fair share of water 
from the Colorado River.''
    2. Through this Agreement, California has taken concrete steps to 
honor the commitment its legislature made in 1929 to live within an 
allocation of 4.4 MAF from the Colorado River. As a result, 
reinstatement of the Interim Surplus Guidelines, will once again allow 
California to have a grace period to reduce its use to 4.4 MAF. This 
will allow California to better plan and implement water conservation 
activities in a manner that avoids adverse impacts to its economy.
    3. Reduction in water use by California directly reduces demand on 
water stored in Colorado River reservoirs thereby reducing the risk of 
future shortages on the River. Arizona, with the most junior priority 
in the lower Basin, is particularly at risk of future shortages, and we 
are currently experiencing historic drought in the Basin.
    4. This Agreement is a resounding endorsement of the role of the 
Basin States to collectively fashion new approaches to solve issues 
within the Basin. The success of this Agreement builds on the Seven 
Basin States' consensus plan that was ultimately adopted by the 
Department as the Interim Surplus Guidelines. Secretary Norton chose to 
live by, and enforce, the deadlines that were agreed to by all seven 
Basin States. This Agreement honors and respects the agreements and 
obligations among the states that were incorporated in the Interim 
Surplus Guidelines.
    5. Lastly, bringing Southern California's water use into alignment 
with its allocation from the Colorado will also help reduce pressures 
on supplies from Northern California. As we saw earlier this year, the 
reduction in available Colorado River supplies to MWD lead to 
additional transfers from Northern California. The agreements reached 
on quantification of agricultural allocations in the Colorado River 
Water Delivery Agreement will provide a framework for additional 
transfers in the future.
    President Bush summarized these benefits in his statement of 
October 16: ``this Agreement allows the Colorado River to meet emerging 
water needs and provides certainty for the people of the Basin 
States.''

                                 CALFED

    The CALFED Bay-Delta Program is also an example of crisis 
prevention. The CALFED 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 have given rise to the urgency of the CALFED 
Program. For more than 7 years the collaborative State-Federal CALFED 
Program has been searching for the equilibrium among the Delta's 
complex problems and stakeholders with divergent interests.
    Since Secretary Norton last appeared before the Senate Energy and 
Natural Resources Committee in July 2001 on the CALFED Program, much 
has been achieved in California water issues through the implementation 
of the CALFED Bay-Delta Program. I have attached to my statement a 
description of the accomplishments the program has achieved in years 
one through three. A collective investment of approximately $1.925 
billion has been made in Years 1 through 3 from numerous Federal, state 
and local funding sources which has attributed to a vast array of 
project accomplishments in the program areas of water supply 
reliability, drinking water quality, levees, ecosystem restoration, 
watershed, science and oversight and coordination. Of the $1.925 
billion, $1,204 million was state funding, $491 million was local 
funding and $230 million was Federal funding. The Federal investment 
for all directly related and overlapping programs and projects that 
contribute to achieving the CALFED ROD objectives within and 
overlapping the geographic solution area is a total of $600 million.

                       RECENT CALFED DEVELOPMENTS

State Established California Bay-Delta Authority
    The California Bay-Delta Authority (CBDA) was established by State 
legislation enacted in 2002 to provide a permanent State governance 
structure for the collaborative State-Federal effort that began in 
1994. Pursuant to that legislation which was effective January 1, 2003, 
the CBDA formally assumed responsibility for overseeing State 
implementation of the CALFED Bay-Delta Program. The legislation calls 
for the CBDA to sunset on January 1, 2006, unless Federal legislation 
has been enacted authorizing the participation of appropriate Federal 
agencies in the CBDA. Currently Federal agencies are participating with 
the CBDA and have engaged with their State CALFED partner agencies in 
the first two meetings.
    Interior and other Federal agencies involved with CALFED are 
discussing among themselves and with CBDA how our interaction with this 
new entity will evolve. As this is a unique intergovernmental 
arrangement, there are no prototypes to examine and from which to 
learn. We are proceeding cautiously in our examination of the many 
legal and institutional issues that have been identified.

Renewed Agreements
    The California Bay-Delta Public Advisory Committee Charter was 
renewed in August under the Federal Advisory Committee Act. The renewal 
of the Charter allows the Committee to continue to provide 
recommendations to the Secretary of the Interior, the Governor of 
California, and the 24 Federal and State CALFED cooperating agencies on 
Program implementation of the CALFED Bay-Delta Program. Our 
participation under the MOU has advanced the Program's implementation 
through the coordinated planning, scheduling, and budgeting for 
programs and projects.

Establishment of D.C. Level Federal-Agency Coordination Working Group
    The Department of the Interior as the lead Federal Agency for 
CALFED Program implementation has established a Washington-Level 
Working Group consisting of a representative liaison from each of the 
11 Federal participating agencies. This group will meet on a regular 
basis to facilitate coordinated support at the Washington level for 
each of the participating agencies. The group will focus on providing 
the higher level support and coordination needed by the 11 Federal 
agencies for Program implementation.

Napa Proposition
    The Napa Proposition is a process to develop feasible plans to 
implement key actions contained in the CALFED ROD. The primary 
objective of the initial Napa discussions was to develop a proposal for 
the integration of the State Water Project (SWP) and the Federal 
Central Valley Project (CVP) in a manner that is consistent with the 
spirit and intent of the CALFED ROD. The proposition was developed 
during meetings that were a continuation of an ongoing relationship 
between the project agencies and their contractors to ensure better 
coordination of the day-to-day operations of both projects.
    The proposition is expected to increase moderately supplies for 
both projects. By better managing risk, it will allow higher 
allocations earlier in the year, increasing certainty for both CVP and 
SWP contractors. Most importantly, the proposition sets the stage for 
implementation of key CALFED programs, including increasing pumping 
capacity at the SWP Banks Pumping Plant to 8,500 cfs and continuation 
of the Environmental Water Account. It also recognizes the fundamental 
CALFED objective of improving Delta water quality.
    I would emphasize that the Napa Proposition is only a 
recommendation at this time and that no final decisions have been made. 
This recommendation will be considered through a more formal decision-
making process described in the CALFED ROD, including various 
stakeholders and public review activities.

Integration of Water Planning--CA Water Plan Update, Water 2025 and 
        Bay-Delta Program
    The State has just issued a Draft Update of the California Water 
Plan which proposes a set of water resource actions to meet future 
water needs. One central theme that is consistent across the Water 
Plan, Water 2025, and the Bay-Delta Program is the need to pursue 
regional and local water development as a critical element to help 
determine priorities and demand. All three programs call for 
coordinated and integrated planning for determining future projects, 
approaches, or strategies for addressing future water needs. With 
respect to Water 2025, Secretary Norton has stated that the CALFED 
Program is a perfect example of how agencies and stakeholders can 
effectively work together towards a common goal.

Re-evaluation of Program Budgets & Targets
    Since the signing the Bay-Delta Programmatic ROD in 2000, financial 
conditions have changed, and the implementing Federal and State 
agencies, as well as Bay-Delta Public Advisory Committee and the CBDA, 
have concluded that it is time to reassess and develop a strategic plan 
for the near-term implementation of the Program. The CBDA recently 
directed its staff to reassess the Program which will include a review 
of the targets and budgets necessary to meet Program goals specified in 
the ROD. The reassessment will make recommendations on replacing 
original monetary targets with performance-oriented targets as they are 
developed. Careful consideration will also be given to Program 
implementation that can be fully funded in the current fiscal climate; 
program implementation must be firmly based upon realistic expectations 
regarding actual appropriations. Failure to develop affordable CALFED 
Program components may jeopardize the progress of a balanced CALFED 
Program.
    A CALFED Finance Plan is being developed to enable the Program to 
continue implementation in a balanced manner. The Draft Finance Options 
Report will develop finance options for each of the CALFED Program 
elements based on an evaluation of benefits, beneficiaries, and costs. 
A Final Finance Options Report will propose a final set of finance 
options, including the institutional structure to implement a finance 
plan. An Independent Review Panel (8 nationally recognized experts) has 
been established to review and comment on each of these reports.
    Let me now turn to the legislation before us. In order to support 
the Federal component of the reevaluated Program, it is important that 
appropriate legislation be enacted to authorize Federal Government 
participation.

                         FEINSTEIN LEGISLATION

    This legislation represents a comprehensive approach to water 
issues in California. The bill proposes the commitments made in the 
2000 Record of Decision as the road map for implementation of the 
CALFED Bay-Delta Program and respects past agreements Californians have 
made by representing compromise language negotiated at great length.
    In general, however, the bill addresses a larger authorization 
package than may be required by the 11 Federal agencies to implement 
and participate in the Record of Decision actions. Our Federal agencies 
have been able to rely on over fifty existing authorities (passed by 
Congress) that continue to enable Federal agency participation. We are 
submitting for the record a detailed matrix of those existing 
authorities. The key areas in which additional authorization is 
necessary are as follows:
    Environmental Water Account (EWA)--While the bill provides 
authority and participation for EWA program activities for the period 
years 4-7, we believe that the bill should authorize implementation of 
a long-term EWA in a fashion that supports the vision and flexibility 
envisioned in the ROD. The establishment and successful operation of a 
long-term EWA will be one of the most significant accomplishments of 
CALFED in reducing the conflicts between fisheries and water project 
operators.
    Levee Stability Program--The goal of the Levee System Integrity 
Program is to provide long-term protection for multiple Delta resources 
by maintaining and improving the integrity of the extensive Delta 
levees system. Authorization for feasibility study for risk assessment 
strategy, Delta Emergency management plan, dredged material reuse on 
Delta Islands, and best management practices to control and reverse 
land subsidence is needed as noted in the ROD.
    Implement Conveyance Program Elements--Authorization is needed for 
feasibility studies for the increased pumping to 10,300 cfs at H. O. 
Banks Pumping Plant, fish screen and intake at Clifton Court, and San 
Luis Reservoir Low Point Project.
    Ecosystem Restoration Program Financial Assistance--Authorization 
is needed to carry out the Ecosystem Restoration Program activities 
through the use of grants and cooperative agreements with non-Federal 
entities
    Cross-Cut Appropriation--Finally, Interior supports the concept of 
a cross-cut appropriation as delineated in the proposed bill which we 
believe will reduce inefficiencies and further improve Federal agency 
participation and recognition of implementation requirements. A cross-
cut appropriation would more accurately reflect the contributions of 
the participating Federal agencies and lessen the risk to other 
Reclamation funded programs and projects in the Western states.
    Additional Concerns--The Administration has several specific 
concerns with the proposed legislation.

   As mentioned, appropriations are unlikely to approach the 
        $880 million envisioned for Stage 1. Balanced progress in the 
        program can only be achieved with a realistic expectation of 
        CALFED appropriations.
   Section 3 (C, iii): While the Administration supports 
        improvements in Water Use Efficiency, this section references 
        two studies that the Administration has not yet cleared. We 
        cannot support legislation that codifies any studies that have 
        not finished Administration review. Similarly, Sec. 3(C, iii, 
        II) directs the Secretary to review any seawater desalination 
        and regional brine line feasibility studies, regardless of the 
        lack of prior Department involvement in those studies. Such 
        studies are generally not conducted with the best interests of 
        the taxpayer in mind, and should under no circumstances be 
        adopted by either the Administration or Congress without being 
        subjected to the same scrutiny that applies to federally-
        sponsored studies.
   The legislation presumes authorization of storage projects 
        that are only now in the early phases of feasibility studies; 
        if those projects are not pursued beyond the feasibility study 
        stage, for whatever reason, it could indicate that CALFED 
        implementation is out of balance; however, the legislation 
        offers no alternate path for getting implementation back in 
        balance. CALFED should identify alternate paths for achieving 
        the outcomes of the storage component (as well as other 
        components) of the program.
   The Administration is concerned that the bill gives blanket 
        authorization to projects that have not undergone the normal 
        process of Executive Branch review. Completing this review 
        process for all federal projects is crucial to ensure that the 
        projects are in the national interest and appropriately address 
        the problems facing the Bay Delta.
   Section 5 (e) and Section 6 (a) duplicate one another to a 
        large extent; reporting requirements could be integrated and 
        streamlined by requiring a single budget crosscut.
   Section 6 (a): There are Constitutional concerns regarding 
        this section; Congress cannot direct what the President 
        includes in his budget requests. The Department of Justice has 
        provided alternate language that we plan to share with the 
        Committee.

                               CONCLUSION

    The CALFED Program is truly at a critical juncture. After years of 
planning, the Program is now moving into the strategic implementation 
of key program and project activities. This forward momentum has been 
invigorated recently by the resolution of California's use of Colorado 
River water, the Napa Proposition's recommendations on coordinated 
operations of the CVP and SWP, and the implementing CALFED agencies' 
commitments to re-evaluate the CALFED Program. I strongly believe that 
re-evaluation of the Program with a focus on developing affordable 
component actions that create a durable and balanced solution to 
continuous improvement in water supply, water quality and the 
environment will best serve the interests of all Californians. These 
objectives are within our reach.
    The Administration is encouraged by the accomplishments to date 
under the CALFED Program. Your support of the CALFED Program through 
enactment of pertinent authorizing legislation and associated funding 
for the participating Federal agencies is fundamental to continuing 
Federal implementation efforts under the Program. Through Federal, 
State, and public collaborative implementing efforts, progress has been 
made in improving water supply reliability and the ecological health of 
the Bay-Delta Estuary. By working together, we are putting programs 
into action that I believe will lead to the realization of the long 
term benefits and expectations of the CALFED Program.
    This concludes my testimony. Madam Chairman, I would like to 
reiterate my appreciation to the Subcommittee and others for continuing 
to work with the Administration to address the significant water issues 
facing California. I would be happy to answer any questions.
Attachments:*
    1. CALFED Accomplishments for Years 1 through 3
---------------------------------------------------------------------------
    * Retained in subcommittee files.
---------------------------------------------------------------------------
    2. CALFED Bay-Delta Program Federal Authorities for ROD and Related 
Activities

    Senator Murkowski. You have suggested that perhaps the $880 
million authorization in S. 1097 is not a realistic 
expectation. If, in fact, you do not consider that to be a 
realistic expectation of the Calfed appropriations, what would 
you consider to be an amount that is realistic?
    Mr. Raley. A fair question, Senator, and I do not have an 
answer for that. We are just highlighting that, in light of 
budget pressures that Senator Kyl referenced, that--and without 
necessarily in any way disagreeing with Senator Feinstein's 
accounting of the history of how this has been pared back and 
pared back, it may not be that the full $880 million is 
available.
    Our goal is to make the most appropriate and efficient use 
to achieve the principles that were articulated by Senator 
Feinstein of the Calfed balance and integration at the local 
level, et cetera, with whatever resources are available. We 
want Calfed to be scalable--in other words, that it moves 
forward in a meaningful and productive path with whatever 
resources are made available as a part of the budgeting 
process. But I'm sorry, Madam Chairman, I do not have a number 
to provide to you.
    Senator Murkowski. I guess I probably would have been 
surprised if you had, but I needed to ask the question.
    Mr. Raley. Thank you.
    Senator Murkowski. In your written comments, you discussed 
the authority that the Federal Government already has to 
undertake Calfed Program activities. Could you explain what 
they already have and, in your opinion, what authorities the 
Federal Government lacks.
    Mr. Raley. Well, as I recall, we rely on some 50, 
approximately, acts of Congress that--to support or authorize 
various aspects of the activities that are within Calfed, writ 
large, which includes both category A and category B 
expenditures.
    We believe that there are four areas for which additional 
authority would be appropriate. And so that I do not mistake 
them, if you'll allow me to turn to find those four in my 
testimony----
    They are: additional authority with respect to a long-term 
environmental water account, additional authority with respect 
to levy stabilization efforts, additional authority for 
conveyance project feasibility studies, and ecosystem system 
restoration grant-making. Those are four areas where we believe 
existing authorities are not adequate to support what is 
clearly going to be a part--or needed as a part of Calfed, 
moving forward. By listing those, we are not in any way 
implying that--a lack of support for the Calfed authorization 
that is the focus of Senator Feinstein and Senator Boxer's bill 
in this body, and Congressman Calvert and his colleagues over 
in the House.
    We would far prefer that there be the programmatic 
authorization for Calfed that Senator Feinstein and her 
colleagues have been working on for so long, because it will 
provide the unity, if you will, the cohesiveness, the crosscut 
budget, and many other advantages to reaching success that we 
simply won't have if we are forced to move forward, as we have 
over the last three years, on a piecemeal basis, reaching and 
pulling from I think it's 50 different authorities.
    Senator Murkowski. How much is currently being spent on 
activities that could be identified as consistent with the 
program components that are identified through the Calfed 
legislation?
    Mr. Raley. Madam Chairman, I believe it's slightly under $2 
billion over years one through three. I recognize the bulk of 
that came from State and local sources, and that, as I recall, 
the Federal contributions over those 3 years is something like 
$230 million. Now, within categories A and B of Calfed 
expenditures, there are expenditures that virtually everyone 
agrees move forward on the Calfed objectives. There are others 
in category B that have greater or lesser degrees of direct 
relevance to the principles of Calfed, so it's difficult, in 
light of the significant scope of Federal activities in 
California, to draw the line at a precise place. So our 
assessment was, where it's been, over years one through three, 
under $2 billion, and $230 million of that being Federal.
    Senator Murkowski. And then one last question. Again, in 
your written comments, you note that the legislation presumes 
authorization of storage projects that may not be authorized 
after additional studies are completed. And you state in the 
testimony, that, ``Calfed should identify alternative paths--
alternate paths for achieving the outcomes of the storage 
component of the program.'' So do you have any suggestions as 
to how the storage component of the program can best be 
achieved?
    Mr. Raley. The Secretary believes that the storage 
component of the program can best be achieved by pursuing the 
path that Senator Feinstein, Senator Burns, Senator Kyl, and 
all of you have talked about. We are very supportive of that. 
The reference in my testimony is a recognition of the reality 
that as projects go through the NEPA process, we will have to 
look at all alternatives for achieving a particular goal. And, 
you know, we can't be pre-decisional, in terms of which one we 
might implement.
    On the other hand, the Secretary has joined with Senator 
Feinstein and others, and applauds her for recognizing that 
with the explosive population growth in California, unless 
other important sectors--whether it be agriculture, the 
environment, others--are, sort of, thrown overboard, which is 
not good public policy and not going to happen, the pie will 
have to be expanded.
    Senator Murkowski. Thank you. I appreciate your answers.
    We'll next move to Senator Feinstein. For the information 
of those present, we have been called to a vote on an 
amendment, and I understand that they're cutting us off at 20 
minutes, so you'll be seeing us coming and going throughout 
this hearing.
    So, Senator Feinstein, if you would care to ask your 
questions?
    Senator Feinstein [presiding]. Thank you very much.
    Let me thank you for your testimony, Mr. Raley. Your 
comments on storage surprised me a little bit, because there's 
no way of knowing about a storage project until you do the 
feasibility studies on it. And I guess the four connected--
Raising Shasta, Los Vaqueros, for water quality, the Upper San 
Joaquin, and Sites. Now, some of those probably will be more 
positive than others, but you can't tell without doing the 
feasibility. Are you saying that we should not proceed to do 
those feasibility studies?
    Mr. Raley. No. I apologize if that's the inference. That 
was not the intent. We just simply were looking to, ultimately, 
the selection of what alternatives would be implemented. We are 
very supportive of the approach that you've adopted, in terms 
of proceeding with feasibility analyses for storage.
    Senator Feinstein. See, I mean, this always remains an area 
of controversy, but, I mean, I've lived in California all my 
life. I've seen its growth. And, you look at how people use 
water, and you see very practical things. And, you know, I'm 
one that believes in conservation. It's kind of interesting, in 
some respects there is more conservation in the North than 
there is in the South in a lot of areas. You know, there are 
dry lawns, people don't water, everything is conserved, et 
cetera. But I've become convinced that you really can't solve 
the problem unless you're better able to take water from the 
wet years and hold it for the dry years, because nothing we do, 
if the planet is getting warmer, is really going to remove that 
need for storing water. And I'd be very happy to, you know, sit 
down and work that out with you.
    I also think, you know, clearly you've sent us a message 
from OMB, and OMB has said, I guess, that $880 million is 
unlikely to be available over the next 4 years. So then the 
question becomes, What do we do about it? Do we lengthen the 
years? Do we cut the gross amount? And based on what? And I 
mentioned this very briefly to Mr. Wright, who's sitting 
directly behind you. And I would hope that within the next 
couple of weeks you might get together with him and might come 
up with a program that is fundable, that the administration is 
willing to make a commitment to.
    The reason I say this is because, you might guess, from my 
perspective there's some degree of frustration. You know, I've 
tried to listen to everybody, I've tried to take what they have 
into consideration, just keep changing and changing. And we've 
got to get momentum. We've got to move this bill.
    Mr. Raley. Senator, I understand your frustration and think 
you're being quite gentle in expressing it. We will work 
together with all stakeholders in California. I can assure you 
that within the administration there is serious attention given 
to this legislation, as well as its counterparts in the House. 
And I do believe, without being able to predict what the number 
is, all the issues are resolvable. We are achingly close to--to 
borrow the term from the Colorado River fights about 3 months 
ago, achingly close to success, and we want to get there.
    Senator Feinstein. Well, let me ask you this last question, 
and then I've got to recess the committee and go and vote. Give 
me a length of time that we can solve these questions--in 
weeks, not months--because then I'm going to hold you to it.
    Mr. Raley. That's why I'm taking my time in answering.
    [Laughter.]
    Mr. Raley. Could I complete that answer upon your return 
from voting?
    Senator Feinstein. Yes, you may.
    Mr. Raley. Okay, thank you.
    Senator Feinstein. Thank you.
    And we'll recess the committee for the time being. Thank 
you.
    [Recess.]
    Senator Murkowski [presiding]. We're back on the record. 
And before we were interrupted by that vote, I believe, Senator 
Feinstein, you were asking Mr. Raley some questions. And if you 
wanted to complete your round of questioning, that would be 
appropriate at this time.
    Senator Feinstein. Thank you, Madam Chairman.
    Mr. Raley is going to come forth with pearls of wisdom as 
to when we might be able to have an answer with respect to a 
commitment from the administration on funding, how much, over 
what period of years.
    Mr. Raley. Senator, I hoped that you had been distracted by 
other matters in the vote and would not remember the question 
that was posed.
    [Laughter.]
    Mr. Raley. But I didn't expect that to be the case. I 
cannot give you a number today. That is above my pay grade, and 
I don't want to pretend. In talking to Patrick Wright, I 
believe that the Calfed process can go back and come up with 
numbers that Calfed, and particularly the Calfed Bay-Delta 
Authority, the State agency, believe are appropriate for 
funding amounts in the, sort of, near to medium term.
    What I can do, in terms of commitments, Senator, with 
respect to working out the issues, is commit that on the 
substantive issues, we will meet with your staff--and I know 
them to be reasonable, and I mean that--meet with your staff as 
soon as you wish, and we will meet with them until we either 
resolve things or distill down the issues to ones that we 
cannot, at our level, resolve. I'll commit to doing that, you 
know, starting next week.
    Senator Feinstein. I think that would be excellent. We'll 
take you up on it.
    Mr. Raley. All right.
    Senator Feinstein. And let me quickly ask one other 
question. The recycling projects, the studies that Interior has 
been sitting on--your eyes are closed--and then saying that you 
cannot move forward on them? Why can you not move forward on 
them?
    Mr. Raley. Senator, you're again being gentle. The reason 
my eyes were closed is that I had thought that I was through 
being embarrassed about one in particular of those studies. The 
study on recycling in southern California--I take 
responsibility. The reason I'm looking pained is that I told 
Congressman Napolitano, several weeks ago, that I thought that 
that had been mailed out to the people that had paid for it so 
that they could review the current draft. I later found out 
that I was wrong, that because the people who were working on 
that had been pulled off to another issue, it hadn't actually 
gone out, and I've been remiss in not calling Congressman 
Napolitano to tell her that it hadn't gone out.
    But I will go back and find out if it's gone out today. And 
if it hasn't gone out, I will personally commit to you that it 
will go out by close of business Friday in whatever form it's 
in.
    The delay for the last 2 years on that study is my 
responsibility. The version that I saw was--the study was 
gibberish. The executive summary was 30 pages. It was not until 
something like page 28 that there were cost-per-acre-foot 
numbers. I could not tell, from reading the executive summary, 
exactly the message they were trying to communicate to the 
administration or to members of Congress.
    My charge was, go back--if we're talking about the same 
study, Senator--write it in English, take out the internally 
inconsistent matters, do not touch the analysis, but write it 
in English and strip out the gibberish. It's been done. It's 
been sidelined at various times, because some of the people 
working at it are people who have been working on Colorado 
River and other things, and it will go out to the people that 
paid for it by Friday, regardless of the form it's in. There 
has been no intent to sit on that study, other than my personal 
insistence that it speak in English, and that's why I'm deeply 
pained by this.
    Senator Feinstein. So you were not, then, precluding 
recycling projects from being part of this.
    Mr. Raley. Of Calfed?
    Senator Feinstein. Yes.
    Mr. Raley. No.
    Senator Feinstein. Okay.
    Mr. Raley. No. We have separate issues with respect to the 
Bureau of Reclamation's budget. And our overall perspective has 
been that while title 16 is a very important program, and every 
single one of its various components can, in the right place at 
the right time, be material additions to water supply needs, we 
wish to have the Bureau of Reclamation focus on desalinization, 
including seawater and brackish water desalinization, so that 
we do not try to be all things to all people. Simply put, the 
Bureau of Reclamation is not the appropriate entity to be the 
lead, at a Federal level, on wastewater treatment capabilities.
    Senator Feinstein. Now, in addition to recycling, are there 
any other projects which we have not--that you're concerned 
about?
    Mr. Raley. Within the Calfed ROD?
    Senator Feinstein. You say that the administration is 
concerned that the bill gives blanket authorization to projects 
that have not undergone the normal process of executive-branch 
review. And I'm trying to get at what you're referring to.
    Mr. Raley. Senator, I'd characterize that as a continued 
expression by the executive branch of its need to look at 
projects on a case-specific basis. I recognize up front, 
Senator, that that desire is in somewhat--there's a tension 
between that and the desire to move forward on a programmatic 
basis to deal with a balanced Calfed. And we will work through 
that tension to find success.
    Senator Feinstein. Is that aimed because the environment--
there's a certain environmental authorization? Is that what 
you're aiming at?
    Mr. Raley. No, Senator, that is the--at a more substantive, 
sort of, level, that is executive branch wanting to be able to 
look at specific projects and--as a conceptual or a policy 
matter.
    Senator Feinstein. Well, you know----
    Mr. Raley. Do not read more into that than----
    Senator Feinstein [continuing). My view of this is that you 
should have that right. I don't have a problem with it. The 
thing that I have a problem with is the holding everything up. 
You know, I think we ought to work together so that those 
reviews take place. I don't want to fund projects that are not 
valid and cost-effective projects. There's just too much that 
has to be done.
    Mr. Raley. Right.
    Senator Feinstein. So I don't think that should be an 
impediment, because we want to cooperate.
    Mr. Raley. We know you do, Senator. And, actually, we share 
the same goals. And that's an issue that I am quite 
comfortable, I'm certain, can be resolved in the context of 
your legislation.
    Senator Feinstein. Right. And there are some projects where 
you may want to say, ``If the State wants to fund that, that's 
up to us, but we don't feel we should be a part of it.'' And 
originally when we started this process, there were some 
projects that I saw Calfed was doing, and I didn't think we 
wanted to be a part of them either. But I think we've shaken 
some of that out. And, I mean, if there is more of that, then 
we need to take care of it.
    Mr. Raley. Senator, I'd characterize it more as the 
inherent tension as we try to move from the traditional Bureau 
of Reclamation history of project-by-project-by-project 
authorizations to a broader approach of Calfed and a crosscut 
budget. That shift--I mean, if you compare, for example, the 
WRDA process--and I'm not saying that Bureau should go to that. 
I'm just saying the shift from a project-specific history of 
authorizations to something like Calfed takes time, and there 
are some steps in between as we move in that direction. That's 
what that language referred to.
    Senator Feinstein. Okay. Thanks, Mr. Raley.
    Mr. Raley. Thank you, Senator.
    Senator Feinstein. Thanks, Madam Chairman.
    Senator Murkowski. Thank you.
    Thank you, Mr. Raley, for the time that you've spent with 
this committee.
    Mr. Raley. It's a pleasure. Thank you.
    Senator Murkowski. We'd next like to invite to the table 
the following witnesses--this is the stakeholder panel. Mr. 
Patrick Wright, the director of the California Bay-Delta 
Authority, Mr. Ron Gastelum, the CEO of the Metropolitan Water 
District, Mr. Tom Birmingham, general manager for the Westlands 
Water District, Mr. Tom Graff, regional director, Environmental 
Defense, Ms. Sunne McPeak, the CEO of San Francisco Bay Area 
Council, and Mr. David Guy, the executive director of the 
Northern California Water Association.
    Thank you all for being here today. I know that you all 
certainly live with the realities of this program, and the 
committee thanks you for your insight and your contributions 
here. Also, I appreciate the travel that you have taken to join 
us this afternoon.
    Senator Feinstein. Madam Chairman, would you allow me just 
one minute.
    Sunne McPeak and I were supervisors together way back when, 
and it's just great to have her here. And the San Francisco Bay 
Area Council is really a very prestigious group of businesses 
and major community leaders. And I must say that, as a public 
official, she was one of the most impressive I have ever met, 
and so it is just wonderful to have her back here in this new 
capacity, which isn't new to her now, but the years have passed 
for both of us, Sunne.
    Ms. McPeak. Thank you. Thank you, Senator.
    Senator Murkowski. Thank you. Well, with that, if we can 
begin with you, Mr. Wright.

            STATEMENT OF PATRICK WRIGHT, DIRECTOR, 
         CALIFORNIA BAY-DELTA AUTHORITY, SACRAMENTO, CA

    Mr. Wright. Thank you, Madam Chairman and members of the 
subcommittee, for the opportunity to appear before you this 
afternoon.
    Today, I'd like to provide just a brief overview of the 
Bay-Delta Program's major accomplishments, with a special 
emphasis on some of the key events that have taken place during 
the last year. But first, of course, I, too, want to especially 
express my appreciation for the leadership and the persistence 
of your colleague, Senator Feinstein.
    Together with Congressman Ken Calvert, on the House side, 
she has been the strongest champion of this unprecedented 
collaborative effort. And, in fact, we have made tremendous 
progress since the State and Federal agencies came together in 
the summer of 2000 with the Senator's help to a collaborative, 
balanced, comprehensive plan to meet the goals of the program.
    In the first 3 years of the program, we have coordinated 
the expenditures of over $2 billion in Federal, State, and 
local funds to meet the program's goals. We've significantly 
improved the level of coordination among the nearly two dozen 
agencies involved in the program. We have largely eliminated 
the major conflicts that have occurred over Delta operations, 
which previously led to annual shutdowns of the pumping plants. 
And we have launched an independent science program which 
conducts workshops and independent reviews of all the program 
elements.
    Now, I'd be one of the first people to say that one of our 
challenges is describing the benefits of the program, since 
they are not always highly visible. It's difficult sometimes to 
measure the benefits and the value of agency coordination in 
avoiding crises, and memories tend to be short about how bad 
those crises were in the early 1990's.
    And we aren't just talking about a handful of highly 
visible water-supply projects, we're talking about an 
investment in the last 3 years of a billion dollars in water-
supply projects to local communities throughout the State to 
help them better meet their most pressing water needs and, just 
as important, to reduce their dependence on the Delta and the 
Colorado River.
    On the ecosystem side, as well, we're not talking about a 
handful of projects that have the kind of visibility of some of 
Senator Feinstein's other efforts, like headwaters or the 
desert or Tahoe. We're dealing, again, with hundreds of 
ecosystem restoration projects to try to protect the largest 
estuary on the west coast of the Americas.
    Sometimes it's difficult to characterize that, because it's 
a sum total of a lot of small projects. But, believe me, the 
payoff is just as large and just as important for the State's 
economy and environment.
    The program is likely to become more visible this coming 
year as we move forward with a package of actions to improve 
the flexibility of the State's water system, including 
expanding the capability of the State water project to pump 
more water, a new and larger environmental water account to 
protect fish and wildlife, and other measures to improve water 
quality and protect local diverters.
    Now, of course, there continues to be some skepticism out 
there that the agencies can pull this off, that the conflicts 
among competing users in California are simply too great to 
overcome. But I think our growing track record suggests 
otherwise. There is simply no question that we are--that water 
supplies are significantly more reliable today than they were 
three years ago, and there is no question that we have reversed 
the decades-long decline in fish populations. One species has 
already been de-listed, and others are clearly on the rebound.
    And, finally, let me assure you that there's no place in 
the country where so many agencies are working more closely 
together, and no place where more funds are being devoted to 
science to guide our decision-making.
    At last year's hearing, I outlined our top three priorities 
to keep this collaborative effort going. The first was to 
establish a new governance structure to oversee implementation 
of the program and to provide better oversight and 
accountability. The second was to secure passage of a State 
water bond, Proposition 50, to provide the State's share of 
funding. And the third was congressional authorization for the 
Federal agencies to fully participate in the program.
    I'm very pleased to report that we now have a governance 
structure in place and a source of State funding to carry us 
through the next 3 years. What remains to be accomplished is 
the third objective, a bill to authorize Federal partnership 
and full participation in the program. That is the only way to 
ensure that the Federal agencies remain highly committed to the 
program and to maintain a strong State/Federal partnership, 
rather than being left with a State effort with limited Federal 
coordination and oversight.
    Simply put, a strong State/Federal partnership is essential 
to move forward in building upon our accomplishments to date.
    Thank you, again, for hearing my comments.
    [The prepared statement of Mr. Wright follows:]

            Prepared Statement of Patrick Wright, Director, 
             California Bay-Delta Authority, Sacramento, CA

    Chairwoman Murkowski and members of the Subcommittee on Water and 
Power, thank you for the opportunity to appear before you this 
afternoon. Today I would like to provide a brief overview of the Bay-
Delta Program's major accomplishments, with an emphasis on the events 
since I last testified before the Subcommittee.
    But first, I want especially to express my appreciation for the 
leadership and persistence of your colleague Senator Dianne Feinstein. 
Together with Congressman Ken Calvert on the House side, she has been a 
strong champion of this unprecedented effort to implement a long-term 
comprehensive plan to address ecological health and water supply 
reliability problems in the Bay-Delta.
    The California Bay-Delta Program is unique in its collaborative and 
non-regulatory approach to solving water and ecosystem problems. A 
partnership of state and federal agencies and stakeholders, it 
addresses four resource management issues concurrently and in a 
balanced fashion: water supply reliability, water quality, ecosystem 
restoration, and levee system integrity.
    The issues in the Delta have broad effects statewide, and even 
throughout the West. The Bay-Delta system:

   Provides drinking water to 22 million people
   Supports a trillion dollar economy, including a $27 billion 
        agricultural industry
   Forms of the hub of the largest estuary on the west coast 
        and is home to 750 plant and animal species and supports 80 
        percent of the State's commercial salmon fisheries.

    We have made much progress since August 2000, when State and 
Federal CALFED agencies signed the Record of Decision (ROD), formally 
approving a long-term plan for the Delta. In its first three years, the 
Program has:

   Coordinated the expenditures of over $2 billion in federal, 
        state, and local funds to meet the Program's goals;
   Significantly improved the level of coordination among the 
        nearly two dozen agencies that are involved in the program;
   Largely eliminated major conflicts over Delta operations, 
        which previously led to annual shutdowns of the pumping plants, 
        through the development of the Environmental Water Account; and
   Launched an Independent Science Program, which conducts 
        workshops and independent reviews of all program elements.

    At last year's hearing, I outlined our three top priorities for the 
coming year:

   Establishing a new governance structure to oversee 
        implementation of the program;
   Securing passage of the state water bond, Proposition 50, to 
        provide the state's share of funding for the program; and
   Congressional authorization for the federal agencies to 
        fully participate in the program.

    I am pleased to report to you that we now have a governance 
structure in place and a source of state funding to carry us through 
the next three years. What remains to be accomplished is the third 
objective: a bill to authorize federal partnership and full 
participation in the Program.

               CALIFORNIA BAY-DELTA AUTHORITY ACT OF 2003

    The California Bay-Delta Authority (Authority), established by 
California legislation enacted in 2002 (California Bay-Delta Authority 
Act), provides a permanent governance structure for the collaborative 
State-Federal effort that began in 1994. The Authority is charged 
specifically with ensuring balanced implementation of the Program, 
providing accountability to the Legislature, Congress and the public, 
and ensuring the use of sound science across all Program areas.
    The Authority is composed of representatives from six State 
agencies and six Federal agencies, five public members from the 
Program's five regions, two at-large public members, a representative 
from the Bay-Delta Public Advisory Committee, and four ex officio 
members who are the chairs and vice-chairs of the California Senate and 
Assembly water committees. At present, lacking specific authorization 
to be full participants, the federal members engage in discussions but 
do not vote. In addition, the legislation establishing the Authority 
contains a sunset clause that will eliminate the program unless a 
federal authorization bill is passed by 2006.

                 CALIFORNIA VOTERS PASS PROPOSITION 50

    In November 2002, California voters passed a $3.4 billion bond 
measure known as Prop. 50, which provides funding for water quality and 
local water supply projects, coastal land protection and acquisition, 
and for activities directly and indirectly related to the Bay-Delta 
Program.
    In all, the $825 million in direct funding and roughly 2 billion in 
funding for Bay-Delta related programs and projects means that the 
Program is on solid financial footing through FY 2006.

                         FEDERAL AUTHORIZATION

    The Federal agencies have also contributed significantly to the 
program. In the first three years, we have coordinated the expenditures 
of approximately $150 million, primarily from the Department of 
Interior, on programs and projects that directly contribute to the 
goals of the Bay-Delta Program.
    We've also worked with the federal agencies to better clarify the 
elements of the Program that either already have--or still need--
Federal authorization. We have concluded that nearly all of the 
specific projects in the Record of Decision are authorized under 
existing statutes, including the Reclamation Act, the Central Valley 
Project Improvement Act, and the Clean Water Act, but that federal 
legislation is needed to authorize federal involvement in our efforts 
to better coordinate these programs with state and local programs to 
address the state's water supply, water quality, and ecosystem 
restoration needs.
    In summary, with a governance structure and state funding in place, 
our primary goal now is to secure federal authorization and funding for 
the program. That is the only way we can continue to have a strong 
state/federal partnership, rather than a state effort with limited 
federal oversight.
    Thank you again for hearing my comments.

    Senator Murkowski. Thank you, Mr. Wright. I appreciate your 
testimony.
    Ms. McPeak.

 STATEMENT OF SUNNE WRIGHT McPEAK, PRESIDENT AND CEO, BAY AREA 
                   COUNCIL, SAN FRANCISCO, CA

    Ms. McPeak. Thank you, Chairman Murkowski and Senator 
Feinstein. It is, indeed, a pleasure to be invited here to 
share the perspective of the employer community.
    You have my written testimony. Let me just briefly 
summarize our perspective.
    I do work for the Bay Area Council, which is about 270 
major employers in the San Jose/San Francisco/Oakland Bay Area. 
We also work with a coalition of employer organizations 
throughout California. And as Senator Feinstein introduced this 
bill today, she referenced the usual stakeholders that 
participate in water--water agencies in the urban areas, Ag, 
and environmental community.
    A couple of decades ago, the Bay Area Council and employers 
in California became engaged. And I dare say that that's a very 
positive force in the dynamic of trying to reach consensus. For 
me, I have spent, personally, 30 years in California water 
policy. And your opening statement about Mark Twain's humorous 
observation of California's history around water is true--up 
until the time that the Calfed record of decision was signed.
    Now, we're still going to drink whiskey, and hopefully 
we'll do that in celebration. But the reason I'm here today is 
because we have the opportunity to set behind us the water wars 
and to go forward with environmental restoration and stability 
for economic recovery. The employer community in the Bay Area 
and California look to Congress and your action in the Senate 
to be a signal for, ``Can we actually have stability in our 
infrastructure?''
    We participated in the Calfed process. I served for 5 years 
as co-chair of the Citizens Bay-Delta Advisory Committee that 
recommended the record of decision. After 30 years, you get 
some perspective. We have survived changes in administration, 
both in Sacramento and in Washington. That speaks well. I was 
very enheartened to see that our new Governor-elect has already 
become active in supporting the adoption of Calfed as a Federal 
commitment, going forward.
    I want to just underscore why we think it's important that 
there be action on this bill. Even though there exists 
authorization for some of the Federal agencies to participate, 
if there is not the affirmation, the recommitment, the signal 
from the Congress and the Federal administration to be a full 
partner in Calfed, there may be questions, there may not be as 
much enthusiasm, there may not be as much energy committed to 
the implementation of the programs. Furthermore, what Senator 
Feinstein has referenced as a balanced package we want to 
underscore as being essential as integrated set of actions 
that, unless they are fully carried out, all components of 
Calfed, we will not have enough water for either the 
environment or the economy.
    So we come here today in support of you, Senator Feinstein, 
and your leadership. When you pulled everybody together in the 
early 1990's, and we finally got the accord and then moved on 
to Calfed, the business community welcomed that. We have 
unified north, south, east, west, which is not easy to do in 
the State of California. And we greatly appreciate, Madam 
Chair, your hearing us out, and we are enheartened by hearing 
the testimony heretofore that has the prospect of that 
momentum, so that we can, in fact, move ahead on a reasonable, 
reliable water policy for the State of California.
    [The prepared statement of Ms. McPeak follows:]

     Prepared Statement of Sunne Wright McPeak, President and CEO, 
                  Bay Area Council, San Francisco, CA

    The Bay Area Council is a business-sponsored, CEO-led, public-
policy organization founded in 1945 to promote economic prosperity and 
quality of life in the region. The Bay Area region encompasses the nine 
counties that rim San Francisco Bay and their 101 cities, including 
Oakland, San Francisco and San Jose, the heart of Silicon Valley. The 
economy of the Bay Area is approximately $300 billion annually. The 
regional economy not only is dependent on an adequate supply of quality 
water to thrive, but also is closely linked to the environmental health 
of the Bay-Delta Ecosystem. As an association of major employers, the 
Bay Area Council has been involved in California water policy issues 
during the last two decades, and since 1994, has been deeply engaged in 
the CALFED Bay-Delta Program. The Bay Area Council also works closely 
with a coalition of business-sponsored, employer-based statewide and 
regional organizations throughout California.
    The following points summarize the perspectives of the Bay Area 
Council and the coalition of business-sponsored, employer-based 
organizations in support of S. 1097 and implementation of the CALFED 
Bay-Delta Program and Record of Decision.
    With the state and the nation still recovering from a prolonged 
economic downturn, it is critical that we do not hamper economic 
recovery because of a water system in chaos.
    California faced economic chaos and political paralysis in early 
1990 when urban areas throughout the state were imposing mandatory 
rationing due to drought and policy gridlock. At that time, businesses 
were questioning whether to expand or locate plants in California, 
because of concerns regarding unreliable water supplies. Farmers in the 
southern San Joaquin Valley received no surface water supplies and key 
fisheries in the Bay-Delta watershed were declining at alarming rates.
    The Bay-Delta Ecosystem is the largest estuary in North America, a 
key stop on the Pacific flyway. It also is a critical drinking water 
source for 22 million Californians. In addition, the water supplies 
from this watershed also fuel California's economic engine, now the 5th 
largest economy in the world.
    Employers that drive economic growth and productivity are among the 
most dependent on reliable, high-quality water. Thriving businesses 
lead to more jobs that lead to a stronger economy. California's growing 
population, expected to approach 50 million by 2020 will need more 
jobs. The Bay Area alone is projected to generate more than 1 million 
news jobs by 2020 and grow by an estimated 1.4 million people.
    The CALFED Bay-Delta Program provides the road map for the future 
of California water. The key components of the plan are to improve 
water supply and quality and the ecological health of the Bay-Delta 
Ecosystem.
    Through the CALFED Program and local investment in water 
conservation, reclamation and other programs, considerable gains are 
being made in water supply reliability. The water market between 
willing buyers and sellers has also improved. Most impressive have been 
gains in CALFED's unprecedented ecosystem restoration program.
    California businesses have invested literally billions of dollars 
to increase their water efficiency and get more out of every gallon of 
water.
    But full implementation of the CALFED Bay-Delta Program cannot be 
realized without federal authorization and funding.
    S. 1097 provides the authorization and funding to advance the 
CALFED storage and conveyance programs. The business community views 
these components as critical pieces to improving the water supply for 
both California and the states served by the Colorado River.
    Funds also are included for water quality improvements vital to Bay 
Area and California high value-added industries, such as information 
technology and life sciences.
    This legislation also continues to support California's aggressive 
efforts in the area of water use efficiency, water recycling and 
desalination.
    S. 1097 helps to continue the commitment to environmental 
restoration in an essential partnership with responsible federal 
agencies to ensure timeliness and optimal benefit.
    The CALFED Record of Decision was an historic accomplishment made 
possible because of unprecedented cooperation and collaboration between 
federal and state leaders and agencies. A broad base of stakeholders 
joined forces to support an integrated, balanced set of actions 
essential to restore the environment and support economic prosperity. 
It is critical that the federal government remain a vital partner in 
the CALFED Bay-Delta Program. Now is the time for action. Approval of 
S. 1097 ensures that the Bay-Delta Ecosystem will be protected and 
restored while California's economy has the necessary water resources 
to rebound and sustain prosperity.

    Senator Murkowski. Thank you very much. I appreciate that.
    Mr. Graff.

       STATEMENT OF THOMAS J. GRAFF, REGIONAL DIRECTOR, 
               ENVIRONMENTAL DEFENSE, OAKLAND, CA

    Mr. Graff. Thank you, Madam Chair and Senator Feinstein.
    I, too, want to add my comments to those of others, other 
Senators and Sunne McPeak. It's always difficult to follow 
Sunne McPeak when one is on a panel. In the old days, when she 
was the supervisor and the Senator was mayor and supervisor, we 
all worked together on a little project called the Peripheral 
Canal Referendum. Those were amazing days, I have to say.
    However, Senator, your remarkable efforts and persistence 
on these issues are something that your colleagues have 
recognized. That's obviously more important than my recognizing 
it, but I do want to, sort of, attach my voice to that set of 
comments, as well, and just to commend you on the ability to 
get a letter from the Governor-elect and have that be one of 
the first comments of our new leader-to-be in California.
    I'm going to just take highlight excerpts from my written 
testimony--I know that's part of the record--and hopefully not 
take too much of the committee's time.
    I start by saying that the fundamental questions that S. 
1097 presents to this subcommittee, and ultimately to the 
Congress as a whole and to the President, are two: One, whether 
the Calfed Program should be authorized at all; and the other, 
if it is to be authorized, should it be authorized, quote, ``in 
a manner consistent with'' the August 28, 2000, ROD?
    The Calfed Program, as it has evolved, has much to commend 
it. Most notably--although it has, of course, not operated 
without considerable friction among some stakeholders, 
including some at this table and between the Federal and State 
governments, almost irrespective of political party--it's 
greatest strength is that it brings the Federal and State water 
project operating agencies and departments and the Federal and 
State natural resource management agencies under one umbrella. 
Calfed pressures agencies to consult, to resolve differences, 
and to operate in a more consistent manner. And I think Senator 
Feinstein deserves immense credit for making all that happen.
    And that has had effects. Speaking narrowly, from the 
environmentalist perspective, the birds of the Pacific flyway, 
and the migratory and resident fish of the San Francisco Bay-
Delta watershed generally are better off today than they were a 
decade ago when Calfed was originally launched. And this, of 
course, is also a tribute to Congress, and, in particular, to 
the passage of the CVPIA in 1992, and to the work of--the 
bipartisan work, I might add, of Senators Bradley and Garn in 
passing that bill.
    Other Federal laws also play important parts in protecting 
the ecosystem, the Endangered Species Act, the Clean Water Act, 
Fish and Wildlife Coordination Act, among others.
    So even if a Calfed Program, per se, is not formally 
reauthorized by Congress, some version of it, we believe, will 
surely continue. The merits of Federal/State and of operator/
resource-manager cooperation have been widely recognized, and 
all agencies recognize the importance of working together to 
resolve or at least minimize conflicts.
    So that's the good news. What's the bad news?
    The bad news is that the Record of Decision of August 28, 
2000, has not been funded. And I just might comment, in 
retrospect, that was clear that it was not going to happen, 
even under the very budgetarily positive circumstances, Federal 
and State, that were still the case in 2000, and here we are, 
of course, 3 years later, when the fiscal realities are very 
different at both levels of government.
    The most fundamental assumption, that has proved to be 
false, from the August 28, 2000, ROD, was the one Secretary 
Babbitt made in assuming that there would be a minimum of $2.5 
billion in Federal funds available to subsidize Calfed for just 
the first 7 years of the program's life. And it is a 30-year 
program. In his view, the Federal share would have matched 
comparable State and user shares for a total of $7\1/2\ 
billion, and it was actually an $8\1/2\ billion program, and 
the ROD never identified the other billion as to where it would 
come from.
    The second assumption that's proved to be false is the 
remarkable expectation at the time that water users would step 
forward to pay their fair share of the program's costs.
    Anyone looking at the circumstances, even in 2000, would 
have, I think, concluded that the users had no intention of 
contributing significant funds to the environmental restoration 
objectives of the ROD. Indeed, their principal financial 
objective was to get taxpayers to pay, not only for 
restoration, but, as much as possible, for mitigation, 
including the year-to-year funding for the so-called 
environmental water account.
    And we are supporters, I might add, of the environmental 
water account, but it is a mechanism that allows the water 
users to have their full export quantities, and it ought to be 
viewed as mitigation and paid for by users, rather than be 
subsidized by taxpayers.
    Similarly, the users apparently have no intention of paying 
for new surface storage projects either. Their goal, again, 
Federal and State taxpayer subsidies justified, if they believe 
justification is needed at all, by specious arguments that the 
dams they hope and expect taxpayers will fund are environmental 
dams that have no user benefits warranting significant 
contributions by project beneficiaries.
    Senator Murkowski. Mr. Graff?
    Mr. Graff. Yes?
    Senator Murkowski. I'm going to have to interrupt you.
    We've got just a couple of minutes left in a vote.
    Mr. Graff. Okay, I'll try and wrap up.
    Senator Murkowski. I was hoping that you would be able to 
wrap up your testimony before we took a break.
    Mr. Graff. I just wanted to point out, then, a couple more 
things, that the administration is not even funding 25 percent 
of reclamation projects, and that's too bad. And then, lastly, 
although this is a complex matter, probably beyond the interest 
of many who are not from California, the projects and the water 
exporters went to a meeting to which they did not invite many 
other interested parties, including many who have opposed 
Calfed from the start, and came up with a program to increase 
Delta exports by a million acre-feet per year, or more.
    And I brought the documentation for that, in case anyone's 
interested. I understand they're now back-pedaling from that 
number, but it is the number that they put out. And our 
position, basically, on the second part of the bill, whether to 
reauthorize this program on the basis of the August 28, 2000, 
ROD is, no, until at least we understand better what the 
million acre-feet of additional exports mean and we know where 
the funding is coming from.
    Thank you.
    [The prepared statement of Mr. Graff follows:]

       Prepared Statement of Thomas J. Graff, Regional Director, 
                   Environmental Defense, Oakland, CA

    Madam Chair, members of the subcommittee: Thank you for your 
invitation to testify today on S. 1097, the Calfed Bay-Delta 
Authorization Act.
    I am Thomas J. Graff, California Regional Director of Environmental 
Defense, a national environmental advocacy organization. I have 
represented Environmental Defense in various capacities since 1971. I 
have also served on several boards and commissions that have dealt with 
issues related to those raised by S. 1097, including the Colorado River 
Board of California, the National Research Council's Committee on 
Western Water Management Change, the San Joaquin Valley Drainage 
Investigation Program Citizens Advisory Committee, and the Bay Delta 
Advisory Council.
    S. 1097 is a complex bill whose basic intent, as stated by its 
authors, is ``To authorize the Secretary of the Interior to implement 
the Calfed Bay-Delta Program''. Definitions proposed in the bill 
indicate that the Calfed Program includes ``programs, projects, 
complementary actions, and activities undertaken through coordinated 
planning, implementation, and assessment activities of . . . State and 
Federal agencies in a manner consistent with [a] Record of Decision 
(ROD) dated August 28, 2000, issued by the Federal agencies and 
supported by the State''.
    The fundamental questions S. 1097 presents to this Subcommittee and 
ultimately to the Congress as a whole and to the President are:

          (1) Whether the Calfed Program should be authorized at all; 
        and
          (2) If it is to be authorized, should it be authorized ``in a 
        manner consistent with'' the August 28, 2000 ROD.

    These are important and difficult questions not only for 
California's Senators and Representatives, but also for Senators and 
Representatives hailing from other states of the Union, especially the 
Western Reclamation States. The answers Congress gives to these 
questions will have reverberations in physical terms, in economic 
repercussions, and in setting precedents on significant issues of 
natural resource management and of federalism, that will bear on the 
other 49 states almost as much as they will impact California and its 
resources and governance directly.
    The Calfed Program, as it has evolved, has much to commend it. Most 
notably, although it has of course not operated without considerable 
friction among stakeholders and between the Federal and State 
Governments, almost irrespective of political party affiliation, its 
greatest strength is that it brings the Federal and State water project 
operating agencies and departments and the Federal and State natural 
resource management (and to some degree regulatory) agencies under one 
umbrella. Calfed pressures agencies to consult, to resolve differences, 
and to operate in a more consistent, coordinated, and cooperative 
manner, that addresses the interests of many stakeholders.
    Speaking narrowly from the environmental perspective, the birds of 
the Pacific Flyway and the migratory and resident fish of the San 
Francisco Bay Delta watershed generally are better off today than they 
were a decade ago, when Calfed was originally launched. This is in 
large measure a tribute to Congress' passage of the Central Valley 
Project Improvement Act (CVPIA) and especially in this body to the work 
of Senators Bradley and Garn in passing the 1992 omnibus water projects 
act. But it also reflects the operations of other federal laws, 
including the Endangered Species Act, the Clean Water Act and the Fish 
and Wildlife Coordination Act, all of which give Federal (and to some 
degree State) wildlife and environmental quality managers authority and 
tools to fulfill their mandates, working in cooperation with the water 
project operating agencies, who generally view their principal 
responsibility to be the delivery of water supplies to their 
contractors.
    Even if a Calfed program per se is not formally reauthorized by 
Congress, some version of it will surely continue. The merits of 
Federal-State and of operator-resource manager cooperation have been 
widely recognized, and all agencies recognize the importance of working 
together to resolve, or at least minimize, conflicts.
    The much more difficult question, however, is not whether a Calfed 
program of some kind should proceed, whether with formal Congressional 
authorization or without, but rather whether the program that proceeds 
should be the one adopted by the Clinton and Davis Administrations on 
August 28, 2000 in the Record of Decision signed by Secretary of the 
Interior Babbitt and Secretary of Resources Nichols. Many in the 
environmental community have pinned their hopes on the 2000 ROD, have 
successfully worked to pass large State bond measures and funding 
authorizations based on the 2000 ROD, and have rightfully criticized 
significant decisions, particularly decisions by the Department of the 
Interior, that have cut back on environmental assurances promised in 
the 2000 ROD.
    For Environmental Defense, however, whatever one's view may have 
been of the merits of the 2000 ROD when it was issued, it should be 
clear now, more than three years later, that basic assumptions 
underlying the ROD are no longer valid and that the fundamental 
political compromise that Secretaries Babbitt and Nichols forged--that 
appeared to give both the export contractors and environmental 
advocates expectations that Calfed would meet their needs has proved to 
be unsustainable in the real world of stakeholder negotiations and of 
pressure on project operators and resource managers to deliver on these 
expectations.
    The most fundamental assumption that has proved to be false was the 
one Secretary Babbitt made in assuming that there would be a minimum of 
$2.5 billion in Federal funds available to subsidize the Calfed program 
over just the first seven years of the program's life. In his view, 
this Federal share would have matched comparable State and user shares 
for a total of $7.5 billion. For an additional billion dollars of the 
$8.5 billion that the 2000 ROD contemplated would be spent in the first 
seven years, the ROD identified no source.
    The second assumption that also has proved to be false was the 
remarkable expectation that water users would step forward to pay their 
fair share of the program's costs. For any veteran observer of the 
history of both the Central Valley Project and the State Water Project, 
it was of course obvious even in 2000 that the users had no intention 
of contributing significant funds to the environmental restoration 
objectives of the ROD. Indeed, their principal financial objective was 
to get taxpayers to pay not only for restoration, but as much as 
possible for mitigation of their own project environmental impacts, an 
objective on which they have made significant headway not only in the 
passage of State Propositions 40 and 50, but also in year-to-year 
Congressional and State funding of the so-called ``Environmental'' 
Water Account.
    It also should have been obvious then, as it is obvious now, that 
the users have no intention of paying for new surface storage projects 
either. Their goal again: Federal and State taxpayer subsidies 
justified, if they believe justification is needed at all, by specious 
arguments that the dams they hope and expect taxpayers will fund are 
environmental dams, that have no user benefits warranting significant 
contributions by project beneficiaries.
    It is with respect to the federal funding issue that the contrast 
is perhaps greatest between the last Federal Administration and the 
current Administration. Secretary Norton's Water 2025 initiative and 
her Administration's recent successful conclusion of the package of 
agreements surrounding the California 4.4 Plan are real achievements, 
but they are not major departures from the efforts of Secretary Babbitt 
that preceded Secretary Norton's involvements. What is a departure was 
perhaps most graphically demonstrated in Administration testimony just 
last month before this Subcommittee's counterpart in the House of 
Representatives.
    Testifying on a group of bills to authorize Federal participation 
in a number of wastewater recycling projects, including a bill 
introduced by Rules Committee Chairman David Dreier, on which Federal 
cost-shares are generally limited to no more than 25 percent of the 
projects' costs, the Administration brusquely opposed all the projects 
(which Senator Boxer is co-sponsoring in the Senate). To quote the 
Administration testimony on just one of these bills, Congressman 
Dreier's H.R. 2991: ``Any new project authorized at this time will 
place an additional burden on Reclamation's already tight budget, and 
could potentially delay the completion of other currently authorized 
projects. With the tremendous back log of existing Title XVI projects, 
we cannot support the addition of new projects at this time.''
    If there is no Federal money available to cost-share, at no more 
than 25 percent of their total cost, broadly beneficial and supported 
wastewater reclamation projects, for which there are local co-sponsors 
and supplemental funding lined up, what chance is there that the $8.5 
billion program envisioned in the CALFED 2000 ROD will ever be funded 
at the Federal level?
    The lack of assumed Federal funding for most purposes and the lack 
of assumed user funding for environmental purposes and for dam 
construction, however, are not the only major problems with the 2000 
ROD. The other fundamental problem with the 2000 ROD was the 
expectation it created among the Federal and State water project export 
contractors that San Francisco Bay Delta exports could be substantially 
increased, without substantial adverse effects on the Bay, other water 
users, upstream and Delta interests, and the environment. Several of 
the more suspicious and paranoid, or perhaps far-sighted, advocates of 
these often overlooked constituencies were critical of the 2000 ROD 
from the start. The Farm Bureau, the Regional Council of Rural 
Counties, the Central and South Delta Water Agencies and Trinity River 
protectors, to name just a few opponents, either filed litigation or 
pursued active political opposition against the ROD or both.
    Now, just three years after the ROD's issuance, their skepticism 
has proven to be fully warranted. This July, at a meeting in Napa 
attended by Federal and State project operators and Federal and State 
export contractors, but not by Calfed's leaders, by Federal or State 
natural resource managers, or by representatives of many other water 
interest or environmental groups, a Proposition was developed to 
increase Delta exports. According to its leading proponents, the Napa 
Proposition and associated projects authorized in the 2000 ROD would 
increase Delta diversions by a million acre feet per year or more. 
Definitely without any of the new proposed storage projects that the 
2000 ROD singled out for feasibility analysis and mostly without 
significant financial investment in new projects of any kind, the Napa 
Proposition ``created'' a million acre feet for its stakeholder 
participants.
    Claiming that it was simply implementing the 2000 ROD, the Napa 
Proposition would allow State Water Project contractors (who are not 
subject to the acreage limitations established in federal law) 
unprecedented access to the Central Valley Project's water storage 
reservoirs. It would also accept as a liability of the Central Valley 
Project much of the more junior State Water Project's responsibility to 
meet water quality and environmental obligations in the Bay and Delta 
and beyond. In exchange, the most junior contractors of the Central 
Valley Project receive an additional water supply. And what operational 
flexibility and opportunity for coordination Napa determined the 
projects can muster are reserved exclusively for the exporters' 
benefit.
    All this, of course, would operate to the detriment of the other 
interests who were not invited to the Napa negotiations, including not 
only Bay, Delta, upstream, and environmental interests, but Trinity 
River proponents as well. Despite the United States' trust obligation 
to the Hoopa and Yurok Tribes, no promise was extracted from any CVP 
contractor that it would dismiss litigation against the United States, 
the Trinity River and the Tribes, even though CVP contractors would 
receive very substantial benefits if Napa were to be implemented. The 
oft-repeated mantra of the project contractors--``We should all get 
better together''--rings hollow indeed in Napa's aftermath.
    So the fundamental issue this Subcommittee faces, as it considers 
S. 1097, is whether to authorize a program based on the 2000 ROD, for 
which little federal or user funding is likely to be forthcoming and 
which is expected by its principal stakeholder proponents to provide a 
million acre-feet or more per year of additional Delta exports.
    When the question is posed in this manner, I believe the whole 
Senate, including the bill's sponsors, should oppose the bill. It ought 
now to be incumbent, especially on the Napa Proposition's drafters, to 
explain how the CVP and the SWP can safely and equitably increase their 
draw on the Bay Delta ecosystem and on northern California generally by 
over a million acre feet, how they can do it without significant new 
Federal and user funding, and how they can do it without adverse 
impacts on other communities and on the environment.
    Environmental Defense challenges the contractors to make their 
case. If they cannot make their case, this is not the end of Calfed. 
But it should be the end of the unreasonable and unsustainable 
expectations of additional Delta exports that were created by the 
Calfed ROD and that are expanded and codified in the Napa Proposition.

    Senator Murkowski. Thank you.
    I'm going to let everybody take a little stretch break 
while we go vote, and we'll be back in a few minutes.
    Thank you.
    [Recess.]
    Senator Murkowski. Okay, we are back on the record. I 
apologize for that delay. Hopefully, we'll be able to get 
through the balance of the panel without any further 
interruption.
    Mr. Birmingham, if you can give us your testimony, please?

  STATEMENT OF THOMAS W. BIRMINGHAM, GENERAL MANAGER/GENERAL 
         COUNSEL, WESTLANDS WATER DISTRICT, FRESNO, CA

    Mr. Birmingham. Thank you, Madam Chairman and Senator 
Feinstein.
    At the outset, I want to state that Westlands strongly 
supports S. 1097, and would like to extend to Senator Feinstein 
Westlands' appreciation for her introduction of this bill.
    I wish that Senator Kyl and Senator Burns were here, 
because I would like also to extend to them our appreciation 
for their hard work in the last Congress, with Senator 
Feinstein, to craft a bill.
    But I would like to extend to Senator Kyl and Senator Burns 
our appreciation for their hard work, on behalf of California 
and the Nation, to craft a bill in the last Congress that we 
could then, and now, enthusiastically support.
    Westlands Water District is one of 32 Central Valley 
Project contractors south of the Bay-Delta that receive water 
from the Central Valley Project primarily for irrigation 
purposes.
    I certainly don't want to disagree with anything that 
Senator Feinstein said in her opening remarks, but, frankly, 
Calfed probably is a little bit--from our perspective, a little 
bit too late and too little. Agriculture on the west side of 
the San Joaquin Valley, which is one of the most productive 
regions in the world, is at risk because of inadequate water 
supplies. Over the course of the last 10 years, we have seen 
our water-supply reliability go from an average of 92 percent, 
in 1991, to a 50 percent reliability based upon the regulatory 
baseline described in the Calfed Record of Decision.
    That water supply has improved over the course of the last 
few years, in large part thanks to the prodding of Senator 
Feinstein and the efforts of the Calfed agencies to improve 
water-supply reliability. But if we're going to sustain 
agriculture on the west side of the San Joaquin Valley and in 
other areas of California, we must move forward with the Calfed 
Program.
    In 1957, prior to the construction of the State Water 
Project that Senator Feinstein referred to in her comments, the 
California Department of Water Resources wrote, in the first 
California Water Plan Bulletin, bulletin three, ``California is 
presently faced with problems of a highly critical nature, the 
need for further control, protection, conservation, and 
distribution of her most vital resource, water.
    Today, the future agricultural, urban, and industrial 
growth of California hinges on a highly important decision, 
which is well within the power of the people to make. We can 
move forward with a thriving economy by pursuing a vigorous and 
progressive water development planning and construction 
program, or we can allow our economy to stagnate, perhaps even 
retrogress, by adopting a complacent attitude and leaving each 
district, community, agency, or other entity to secure its own 
water supply as best it can with small regard to the needs of 
others.
    As Senator Feinstein said, today we're facing an identical 
problem. We're trying to maintain the economy of the State of 
California with an infrastructure that was designed and 
constructed when the population of the State was 14 to 16 
million people, and today we are at 35 million people, and we 
will have inevitable growth that must be accommodated through 
the construction of new water infrastructure.
    As Senator Feinstein indicated in her opening remarks, 
California has very many different water needs--water for 
environmental restoration, for cities, and for farmers. If the 
needs are going to be met, we must have a program for water 
conservation, recycling, and desalination; water quality must 
be improved; but, of greater importance, from our perspective, 
we need new water storage and water conveyance. The Calfed 
Program was designed to meet the needs of all of these water 
interests in an evenhanded manner, and S. 1097 provides the 
needed authorization for continued Federal participation in the 
Calfed program.
    We are going back to a situation that existed without the 
authorization. We will go back to the situation that existed 
prior to 1994, when the Calfed Program was authorized, where 
the many Federal agencies that had a role in regulating water 
in the State of California--the Environmental Protection 
Agency, the Army Corps of Engineers, the Bureau of Reclamation, 
the Fish and Wildlife Service, and the National Marine 
Fisheries Service--were all taking divergent views of what 
should be done. As Senator Feinstein indicated, among the 
primary purposes of the Calfed Program were to put all of these 
agencies under one umbrella, where they could move forward 
together.
    Today, because of the lack of authorization for the Calfed 
Program, many of the agencies are no longer acting as full 
partners in the Calfed Program. In particular, the 
Environmental Protection Agency and the Army Corps of Engineers 
will play vital roles in the development of a balanced Calfed 
Program, and the authorization provided by S. 1097 is critical 
to bringing them back under the Calfed umbrella.
    At this point, I would like to, again reiterate our support 
for S. 1097. I think that S. 1097, or the Calfed Program, is a 
model that could be used by other States who have similar 
competing needs for water. It is a model of cooperation. And 
because it attempts to address the needs of all water interests 
in a balanced manner, it has the potential of being highly 
successful.
    And, again, I thank the committee, or the subcommittee, for 
hearing my testimony. I would request that it accept my written 
testimony in the record.
    Thank you.
    Senator Murkowski. We will do that.
    [The prepared statement of Mr. Birmingham follows:]

              Prepared Statement of Thomas W. Birmingham, 
 General Manager/General Counsel, Westlands Water District, Fresno, CA

    Madam Chairman and members of the Committee, thank you for allowing 
me to testify regarding S. 1097, the California Bay-Delta Authorization 
Act (Act), introduced by Senator Feinstein to authorize the CALFED Bay-
Delta Program. My name is Thomas Birmingham, and I the General Manager/
General Counsel of Westlands Water District (``Westlands''). At the 
outset, I want to state that Westlands strongly supports S. 1097 and 
extend to Senator Feinstein Westlands' appreciation for her 
introduction of this legislation. The enactment of S. 1097 would ensure 
that the CALFED Program is implemented in a balanced and innovative 
manner that links progress on environmental restoration and enhancement 
with progress on water supply and water quality improvements. Its 
passage is of great importance to the people of California, indeed the 
nation.
    Westlands Water District is a California water district that serves 
irrigation water to a 605,000 acre area on the west side of the San 
Joaquin Valley in Fresno and Kings counties. The District averages 15 
miles in width and is 70 miles long. The demand for irrigation water in 
Westlands is 1.4 million acre-feet per year. Historically, that demand 
has been satisfied through water made available to the District from 
the Central Valley Project under contracts with the United States for 
the delivery of 1.15 million acre-feet.
    Westlands is one of the most fertile, productive and diversified 
farming regions in the nation. Rich soil, a good climate, and 
innovative farm management have helped make the area served by 
Westlands one of the most productive farming areas in the San Joaquin 
Valley and the nation. Westlands farmers produce over 50 different 
commercial fiber and food crops sold for the fresh, dry, canned or 
frozen food markets; domestic and export. Crops grown in Westlands 
include almonds, apples, apricots, asparagus, broccoli, cantaloupes, 
table grapes, wine grapes, lettuce, tomatoes, and cotton.
    Westlands estimates that the value of crops produced by farmers in 
the District exceeds $1 billion per year. Using a well-accepted 
economic assumption that every $1 produced on-farm generates another 
$3.50 in the economy, Westlands farmers produce nearly $3.5 billion in 
economic activity annually. Like every other region of the arid west, 
the ability of our farmers to produce crops and generate this economic 
activity depends on the availability of an adequate, reliable source of 
water.
    Farmers in Westlands benefited from the vision and foresight of 
prior Californians and federal officials who planned, designed, and 
constructed the Central Valley Project and the State Water Project. 
Among these visionaries were the California Department of Water 
Resource engineers who wrote 1957 California Water Plan. They observed:

          California is presently faced with problems of a highly 
        critical nature the need for further control, protection, 
        conservation, and distribution of her most vital resource 
        water. While these problems are not new, having been existent 
        since the advent of the first white settlers, never before have 
        they reached such widespread and serious proportions. Their 
        critical nature stems not only from the unprecedented recent 
        growth in population, industry, and agriculture in a semiarid 
        state, but also from the consequences of a long period during 
        which the construction of water conservation works has not kept 
        pace with the increased need for additional water. Unless 
        corrective action is taken--and taken immediately--the 
        consequences may be disastrous.
          Today, the future agricultural, urban, and industrial growth 
        of California hinges on a highly important decision, which is 
        well within the power of the people to make. We can move 
        forward with a thriving economy by pursuing a vigorous and 
        progressive water development planning and construction 
        program; or we can allow our economy to stagnate, perhaps even 
        retrogress, by adopting a complacent attitude and leaving each 
        district, community, agency or other entity to secure its own 
        water supply as best it can with small regard to the needs of 
        others. The choice of these alternatives is clear.
          The need for coordinated planning on a statewide basis has 
        long been realized. Comprehensive plans have been formulated 
        and reported upon in the past, and noteworthy accomplishments 
        have been achieved by local enterprise and private and public 
        agencies. But despite the great water development projects 
        construed in the past, California's water problems continue to 
        grow day by day.

    Today, the people of California are faced with an identical 
problem. Since the California Water Plan was written in 1957, the 
population of the state has grown from 14 million to over 35 million 
people, and the Department of Water Resources projects that by the year 
2020, the population will exceed 50 million people. Yet, except for the 
efforts of a few local agencies, like Metropolitan Water District of 
Southern California, Kern County Water Agency, and Contra Costa Water 
District virtually no new storage has been constructed. Stated 
succinctly, California is attempting to maintain the state's economy 
with water infrastructure has changed little from the 1960s. It is 
inadequate to meet the existing demands of the state, let alone 
accommodate inevitable growth. The CALFED Program is designed to 
address the immediate need to construct new water conveyance and 
storage facilities and provide essential tools to better manage 
California's water resources, while at the same time restoring and 
enhancing the Bay-Delta watershed.
    Westlands views the CALFED Program from a perspective that is 
substantially different than most water agencies in the state. Over the 
course of the last 12 years Westlands, along with other agencies on the 
westside of the San Joaquin Valley that contract with the United States 
to receive water from the Central Valley Project, has experienced 
chronic water shortages, even in wet hydrologic periods. These 
shortages are the result of the implementation of the federal 
Endangered Species Act and the Central Valley Project Improvement Act, 
which was passed by Congress and signed into law by former President 
George Bush in October 1992.
    The purposes of this Act were:

          (a) to protect, restore, and enhance fish, wildlife, and 
        associated habitats in the Central Valley and Trinity River 
        basins of California;
          (b) to address impacts of the Central Valley Project on fish, 
        wildlife and associated habitats;
          (c) to improve the operational flexibility of the Central 
        Valley Project;
          (d) to increase water-related benefits provided by the 
        Central Valley Project to the State of California through 
        expanded use of voluntary water transfers and improved water 
        conservation;
          (e) to contribute to the State of California's interim and 
        long-term efforts to protect the San Francisco Bay/Sacramento-
        San Joaquin Delta Estuary;
          (f) to achieve a reasonable balance among competing demands 
        for use of Central Valley Project water, including the 
        requirements of fish and wildlife, agricultural, municipal and 
        industrial and power contractors.

    The CVPIA was implemented by the Department of the Interior in a 
manner that has reallocated more than 1,000,000 acre-feet of Project 
water away from farmers who relied upon this water for decades to the 
environment--for the restoration and enhancement of fish and wildlife. 
Moreover, virtually all of the water supply reductions that have 
resulted from implementation of the Act have been imposed on south-of-
Delta Central Valley Project agricultural water service contractors. 
Indeed, the reliability of water supplies for these contractors, 
including Westlands, went from 92% on average in 1991 to 50% under the 
regulatory baseline described in the CALFED Record of Decision.
    The disproportionate impact of these regulatory requirements on the 
water supplies of west side farmers was recognized by Governor Gray 
Davis and former Secretary of the Interior Bruce Babbitt in June 2000, 
when they signed the CALFED document entitled ``California's Water 
Future, A Framework for Action.'' In that document Governor Davis and 
Secretary Babbitt correctly noted that Westlands and other San Joaquin 
Valley agricultural water contractors had been ``disproportionately 
affected by recent regulatory actions,'' and they described a number of 
actions that would restore, over both the short-term and the long-term, 
these contractors' water supplies.
    During the first three years of Stage 1 of the CALFED Program the 
water supplies of Westlands and other south-of-Delta Central Valley 
Project agricultural water service contractors have been restored to a 
significant degree. But the viability of agriculture in this region is 
still at risk because of inadequate water supplies. Implementation of 
the actions that will provide long-term benefits to these contractors 
will require the continued commitment of the federal government to the 
CALFED Program. These actions include construction of an intertie 
between the California Aqueduct and the Delta-Mendota Canal and 
implementation of the South Delta Improvement Program, which will 
increase pumping at the Harvey O. Banks Pumping Plant to 8500 cubic 
feet per second and provide water quality improvements and other 
benefits for in-Delta water users.
    There are numerous reasons the federal government has a prominent 
role in implementing CALFED Program. First, the United States Bureau of 
Reclamation operates the Central Valley Project, the largest water 
supply project in California. In addition, other federal agencies, 
including the Fish and Wildlife Service and the Army Corp of Engineers, 
play a role in regulating the operations of the Central Valley Project 
or the State Water Project and will play a role in restoring water 
supply reliability to agencies that rely on water diverted from the 
Delta. These federal agencies were full partners in the creation of the 
CALFED Program in 1994 because, in part, they understood that a 
successful program to accomplish restoration of the Bay-Delta 
ecosystem, improve water quality, and restore water supply reliability 
would require a coordinated effort.
    California has many different water needs: water for restoration 
for our environment; water for cities; and water for farms. If these 
needs are going to be met there must be programs for water 
conservation, recycling and desalination. Water quality must be 
improved. And of equal importance, we need new water storage, both 
groundwater and surface, and improved water conveyance. The CALFED 
Program was designed to meet all of these needs in an evenhandedly 
manner. S. 1097 provides the needed authorization for continued federal 
participation in the CALFED Program.
    Of great importance to Westlands, S. 1097 explicitly requires 
balanced implementation of the CALFED Program. Key to maintaining that 
balance is the on-going consideration of surface water storage 
projects.\1\ The bill addresses Westlands' fear that environmental 
projects not needing authorization would sail smoothly ahead, while 
storage projects lacking Congressional approval would languish; it 
includes a provision requiring the Secretary of the Interior to 
annually certify that the CALFED Program is progressing in a balanced 
manner among all of its components. If the Program is found to be out 
of balance, the bill would require that the Secretary revise the 
schedule.
---------------------------------------------------------------------------
    \1\ Parenthetically, we take note of the encouraging results in 
recently published engineering reports that are part of the Integrated 
Storage Investigation of In-Delta Storage. These reports generally 
conclude that the project is technically feasible. We hope that the 
CALFED Program will move to the next logical step of preparing a 
proposal to develop the project that reflects its benefits and that is 
acceptable to all participating parties.
---------------------------------------------------------------------------
    The CALFED Record of Decision has been correctly characterized as 
``CALFED's road map.'' The Record of Decision sets forth commitments to 
attend to the water needs of all Californians, cities, farmers, and 
environmentalists. S. 1097 would approve the CALFED Record of Decision 
as the basic policy framework for future state-federal cooperation on 
California water management, while not modifying the federal agencies' 
obligations to implement federal law.
    Finally, S. 1097 provides federal resources for the implementation 
of the CALFED Program in a fiscally prudent manner. The bill would 
require the Office of Management and Budget to prepare a crosscut 
budget showing the federal funding of each of the different agencies, 
and it sets forth a specific list of the projects to be funded and how 
much each would receive.

   The bill authorizes $102 million for planning and 
        feasibility studies for water storage projects--and an 
        additional $77 million for conveyance.
   The bill authorizes $100 million for ecological restoration. 
        This means improving fish passages, restoring streams, rivers 
        and habitats and improving water quality.
   The bill authorizes $153 million for water conservation and 
        recycling.
   The bill authorizes up to $95 million for local California 
        communities to develop plans and projects to improve their 
        water supplies.
   The bill authorizes $50 million for watershed planning and 
        assistance.
   The bill authorizes $70 million for improved levee 
        stability.
   The bill authorizes $75 million for the environmental water 
        account, which purchases available water for environmental and 
        other purposes.

    Stated succinctly, S. 1097 was carefully crafted to be consistent 
with the balance reflected in the CALFED Record of Decision, and its 
implementation will assure continued improvement in water supply, water 
quality, and environmental restoration to the benefit of California and 
the nation. Westlands encourages the Committee and the Senate to act 
quickly to pass this important legislation. Madame Chairman, this 
concludes my testimony. I would be happy to answer any questions that 
you or the members of the subcommittee may have.

    Senator Murkowski. Thank you, Mr. Birmingham.
    Mr. Gastelum, welcome to the committee.

STATEMENT OF RONALD GASTELUM, CEO, METROPOLITAN WATER DISTRICT 
            OF SOUTHERN CALIFORNIA, LOS ANGELES, CA

    Mr. Gastelum. Madam Chairman, Senator Feinstein, thank you 
for this opportunity.
    I'd like to begin by observing that this is not the first 
time that Senator Murkowski, from the great State of Alaska, 
has played a key leadership role on Calfed. And speaking of 
California, we'd like to thank both of them for their 
contributions.
    I have submitted detailed written testimony in support of 
S. 1097, and ask that it be included in the formal record of 
today's proceedings.
    Senator, I noted that you asked four questions at the 
beginning of the hearing. I would like to augment our testimony 
and specifically respond to each of those questions.
    From a southern California perspective, I'd like to focus 
in this hearing on a few key points. California is organized, 
forward-thinking, and progressive in its water management 
because we've learned from our experience. California, in 
general, and southern California, in particular, have stepped 
up to the new reality of water management that most of the 
country will face as the 21st century proceeds and the pressure 
on our water resources becomes more complex. Our example will 
be useful to the rest of the country in many ways, and we need 
the Federal Government to play its role and do its part.
    Today, Metropolitan serves water from the State Water 
Project and the Colorado River to almost 18 million people in 
urban southern California. And through conservation and an 
emphasis on increasing local water resources, we do it with 
about the same amount of water that we served to 5 million less 
people in the early 1980's. Tomorrow, that number will grow, 
and our job is to continue to be reliable in the face of 
numerous challenges, including meeting California's commitment 
to live with its basic Colorado River water allocation, a 
rapidly growing list of new water-quality standards, and real 
limitations on the capacity of the State Water Project and the 
Central Valley Project to meet their water supply and water-
quality contract obligations to Metropolitan and many others.
    From a distance, it may appear that California has 
insurmountable problems--natural disasters, economic issues, 
our State's unique personality, and others. While these may 
certainly present difficulties, there has never been a better 
time in our ongoing effort to manage our water quality and 
quantity. Never have California's water stakeholders been more 
in concert, and never before have we had more tools for 
effective management in place. With the completion of the 
Quantification Settlement Agreement, after long years of 
conflict, we have added to the foundation of living within our 
Colorado River apportionment and assuring the other States' 
interest. The foundation began with southern California's 
integrated resources plan in the early 1990's.
    I would submit, as proof of this assertion, more than the 
signing of an agreement, the QSA, or growing recognition 
throughout the country of our resource plans, I offer the fact 
that when the Department of the Interior cut Metropolitan's 
Colorado River water supply by 60 percent in January of this 
year, we fully complied with the Department's order and met all 
customer demands, all during a record year of drought and even 
with the added demand of the current firestorm.
    We did it because our plan provides for a balanced and 
diverse set of resources and facilities to avoid over-reliance 
on any single source of supply. And an immediate example of how 
this strategy is working is our ability to provide water from 
our reservoirs, at no cost to local, State, and Federal 
agencies, in the effort to fight the southern California fires. 
Tankers are able to get access to three or four of our 
reservoirs that have water in them because of this program, to 
be able to deal with that emergency.
    So on that basis, both the QSA and Calfed reflect today's 
new fundamental reality, that water-supply reliability can best 
be achieved through a diverse and balanced set of actions, 
including storage, conservation, reclamation, and reuse and 
desalination, while ensuring environmental protection and 
enhancement. This diverse strategy toward developing our water 
resources requires cooperation on many levels. Calfed and 
partnership between the State of California and the Federal 
Government are essential.
    S. 1097 authorizes the Federal agencies to participate and 
provides Federal resources for implementation of Calfed. Local 
agencies in the State of California are investing billions of 
dollars, much of it through voter-approved bonds, to assure the 
success of Calfed. Unfortunately, the Federal share has lagged 
considerably behind. While none of the California stakeholders 
expect this to be a Federal program with a majority share 
coming from the Federal Government, some Federal funding and 
Federal participation are a must. The country will benefit from 
this participation, too, in the form of technology advances and 
decision-making models that can be applied in other States 
facing the same challenge.
    Metropolitan is a strong proponent of cost share for 
benefits received from water-management programs. The success 
of a major complex public process, such as Calfed Program, 
rests ultimately in perceptions of fairness, that those who 
benefit from the implementation help pay for those actions in 
reasonable proportion to the benefits received, and that those 
who pay should be assured that they will receive appropriate 
benefits.
    In southern California today, we have spent billions of 
dollars to be able to effect the strategy that Senator 
Feinstein outlined, backing off from imports in dry years and 
being able to take advantage, consistent with a Calfed Program, 
in wet years, and put that in storage. We have increased, in 
southern California, our storage from what we had in the early 
1990's tenfold, and not a single Federal dollar has been used 
in that process. We are fully committed, in California, to pay 
our fair share of the costs.
    In conclusion, let me reiterate that we do support S. 1097, 
and Mr. Calvert's bill in the House. We commend you for holding 
this hearing, other Senators and Senate staff that have offered 
advice to strengthen this legislation, and we commend Senator 
Feinstein for her continued leadership. She is truly recognized 
throughout our State for her expertise in water resources and 
record of achievement in bringing consensus to solve some of 
our most complex and difficult problems.
    Thank you, again, for this opportunity.
    [The prepared statement of Mr. Gastelum follows:]

              Prepared Statement of Ronald Gastelum, CEO, 
  Metropolitan Water District of Southern California, Los Angeles, CA

    Madam Chairman and members of the subcommittee, thank you for this 
opportunity to testify regarding S. 1097, the California Bay-Delta 
Authorization Act (Act), introduced by Senator Feinstein to implement 
the CALFED Bay-Delta Program. My name is Ronald Gastelum. I serve as 
Chief Executive Officer of the Metropolitan Water District of Southern 
California (Metropolitan). Metropolitan is a supplemental water 
supplier for the Southern California regional economy. We serve a 
population of more than 17 million people and an economy that generates 
an annual gross domestic product of nearly $700 billion and provides 
about 8 million jobs. Metropolitan has been constructively engaged in 
the CALFED process since its conception and we strongly support the 
balanced policy direction of CALFED.

                     METROPOLITAN SUPPORTS S. 1097

    Metropolitan strongly supports S. 1097 and urges its passage by 
this subcommittee and the full Senate at the earliest possible date. 
Recently, California finalized the Quantification Settlement Agreement 
(QSA) that after 8 years of arduous negotiations lays a foundation to 
live within our long-term apportionment of 4.4 million acre-feet of 
Colorado River water annually. Similarly, the CALFED Bay-Delta program 
is designed to provide essential tools to better manage California's 
available water resources. CALFED provides a wide range of modern 
management tools to improve water supply reliability, enhance water 
quality, restore the environment, and protect the Sacramento-San 
Joaquin River Delta.
    Both the QSA and CALFED reflect today's new fundamental reality 
that water supply reliability can only be achieved through a diverse 
and balanced set of management actions that enhance regional management 
efforts, improve water quality, and promote environmental restoration. 
There are no single project silver bullets in our planning. Rather, 
success will be achieved through cooperative efforts based on credible 
science to guide decision-making and financial partnerships among the 
beneficiaries. Already, urban Southern California meets 53 percent of 
its water demands through conservation, water recycling, and local 
clean water management programs.
    In California, the state government and local public agencies have 
committed unprecedented resources to make the CALFED program a success. 
In Southern California alone, we are investing more than $8 billion of 
our ratepayers' money to implement the Southern California Integrated 
Resources Plan, which in turn compliments and helps meet the goals of 
the CALFED Program. Similarly, the voters of California have 
overwhelmingly approved more than $6 billion in bonds to implement 
CALFED and related programs. Among the agricultural and urban public 
water supply agencies and in the business community, CALFED and S. 1097 
enjoy virtually unanimous support.
    But, the federal government has a significant responsibility to 
help implement CALFED as well. The federal agencies, including the 
Departments of Interior, Agriculture and Commerce, the U.S. Army Corps 
of Engineers and the Environmental Protection Agency, have been 
partners since 1994 in bipartisan efforts to develop the CALFED Bay-
Delta program. The federal government operates the largest water supply 
project in California, the Central Valley Project, and it promulgates 
numerous regulations that constrain water supply projects throughout 
the state in order to protect the environment. By helping California 
better manage its water resources, S. 1097 provides security for all 
other western states. It further will provide interstate and 
international benefits by increasing populations of salmon and other 
anadromous fish on the west coast and by improving habitat for 
migratory wildfowl on the Pacific Flyway. Madam Chairman, S. 1097 is 
good for California, it is good for the western states, and it is good 
for the nation. We urge that it be passed by this subcommittee and the 
full Senate as soon as practical.

                      CALFED IN HISTORICAL CONTEXT

    S. 1097 would facilitate the implementation of measures both in the 
near-term and longer-term that will provide substantial water supply, 
water quality, and environmental benefits. To fully appreciate the 
significance of the CALFED Program that S. 1097 would implement, it is 
useful to consider the Program in historical context.
    Barely a decade ago, the California water management system was in 
utter chaos. After decades of neglect and loss of extensive habitat, 
key fisheries were in decline. The environmental movement, responding 
to precipitous declines in fishery populations, had successfully sought 
regulatory protections to stop further loss of habitat and potentially 
damaging operational practices of the state's largest water projects, 
the federal Central Valley Project (CVP) and the State Water Project 
(SWP). Wild and Scenic Rivers legislation passed by the California 
legislature in 1972 removed from consideration on-stream dam sites in 
the north coast mountains of California--delivering a crippling blow to 
the 1957 California Water Plan that then provided the backbone strategy 
for meeting the long-term water needs of a growing state. Similarly, 
passage of federal and state Endangered Species Acts, the Clean Water 
Act, the Central Valley Project Improvement Act (CVPIA), and other 
legislation and regulations began constraining CVP and SWP project 
operations in an effort to protect fisheries.
    If these actions were beneficial for fisheries and we believe that 
they were, they also posed formidable challenges for the numerous 
public agencies responsible for providing water supplies to the growing 
California economy. By the mid 1990s, more than 2 million acre-feet 
(MAF) of project yield had been reallocated from CVP and SWP 
contractors through these efforts to restore fisheries. For SWP 
contractors, such as Metropolitan, the reliability of project supplies 
was far short of the promise in our contracts. While the State had a 
contractual obligation to provide full ``Table A'' supplies to SWP 
contractors regardless of hydrology, the actual reliability of the SWP 
by the mid 1990s was far below contract commitments.
    During wetter years, the SWP is still able to provide a fairly 
significant amount of water. Based on the historical record and 
modeling studies of the California Department of Water Resources, 
during the wetter half of water years, the SWP is able to supply 80 
percent or more of full contract commitments. But, during the driest 
years--especially the driest third of years in the historical record--
actions to protect the environment pose a substantial risk of water 
supply shortage for the California economy. Under worst-case 
circumstances (a repeat of water year 1977 or 1991), the SWP 
contractors expect to receive only a 20 percent supply. During an 
extended drought, such as occurred from 1987 to 1992, SWP supplies will 
average only about 40 percent of full contract amounts.
    Inevitably, the prolonged drought of 1987 to 1992 combined with a 
paucity of adequate water management tools resulted in significant 
costs for both the California economy and environment. Toward the end 
of the drought, water rationing was widespread throughout California 
and corresponding economic hardships were significant. Similarly, the 
environment was hard-hit and fishery populations declined at alarming 
rates. Change was imperative. And we developed that change in large 
part through the CALFED Program and by making coordinated local 
investments in Southern California in conservation, recycling, storage, 
short-term water transfers, and desalination.

                ELEMENTS OF THE CALFED BAY-DELTA PROGRAM

    One of the key challenges of CALFED is to address this fundamental 
dilemma: How can we restore water supply reliability for the California 
economy and improve water quality while maintaining our commitment to 
continued restoration of the environment? The CALFED Record of Decision 
(ROD), in essence, provides a blue print for the accomplishment of this 
formidable task.
    In many respects, Southern California provides a case study of the 
effectiveness of the diversified water management strategy embodied in 
the ROD. In 1991 a major reduction in SWP supplies resulted in 
mandatory rationing and economic disruption in Southern California. In 
sharp contrast, Metropolitan has maintained water supply reliability 
for the Southern California economy in recent years. Despite a 
reduction in SWP supplies in 2001 similar to 1991 and an abrupt decline 
in Colorado River supplies this year as well, Metropolitan continued to 
meet all the demands of its customers. We have been able to stay 
reliable because today we rely on a diversified set of water management 
tools and not solely on our contracts for imported water supplies. 
Regional demands for imported water have been reduced as a result of 
major investments in demand management actions, including water 
conservation, recycling, and recovery of contaminated groundwater 
basins. We have also benefited from substantial investments in regional 
surface and groundwater storage. In both 2001 and 2003, Metropolitan 
was able to turn to voluntary water transfers from the Central Valley 
for additional affordable increases in supply.
    All of these tools are consistent with the policy direction 
established in the ROD. If we are to maintain this success, we must act 
and act now to assure both near-term and longer-term success for the 
CALFED Program.
    By the end of this calendar year, the California Bay-Delta 
Authority (CBDA) will have before it the first major implementation 
package of the CALFED Bay-Delta Program. Even before the beginning of 
the CALFED process, state and local agencies in California were 
investing vast sums in local resources to increase our commitment to 
conserve, reclaim and reuse, and desalinate water. But, these local 
resource measures alone cannot provide sufficient reliability for the 
California economy. The near-term CALFED implementation package will 
provide investments in the statewide water delivery system, which in 
combination with local resource investments can provide reliable water 
supplies for California. The near-term package contains elements that 
significantly protect water supply reliability, improve water quality, 
and provide for the continued restoration of California's environment. 
This package marks an enormous positive step in the management of 
California's water resources and environment.
    To improve water supply reliability, the near-term package contains 
elements to improve through-Delta conveyance, including expanding the 
capacity of the SWP Banks Pumping Plant and constructing an intertie 
between the CVP and SWP systems. The package would also significantly 
improve operational efficiencies by better integrating CVP and SWP 
operations. These improvements, particularly improvements in through-
Delta conveyance, will increase the ability to store water south-of-
the-Delta during wet periods so that this water can be withdrawn in 
significant quantities during the driest years, thereby relieving dry-
year pressure on the Delta and competition with other water users. In 
addition, these physical improvements add to the ability to transport 
conserved water from voluntary sellers upstream of the Delta to buyers 
seeking additional supplies south of the Delta in the increasingly 
effective California water market consistent with the policy direction 
of CALFED.
    To improve water quality, the near-term package is expected to 
include several project elements jointly recommended by an historic 
coalition of Delta interests and CVP and SWP contractors. These 
elements include enforceable standards to protect water heights, 
depths, and quality for Delta irrigators; installation of permanent, 
operable barriers and other physical improvements in the central and 
south Delta; and specific actions to improve Delta water quality for 
in-Delta and export water users alike, such as source water quality 
improvements at Frank's Tract in the central Delta, agricultural 
drainage management in the Delta and the San Joaquin Valley, and steps 
to re-circulate water or otherwise increase flows in the San Joaquin 
River to improve quality in the South Delta and help resolve dissolved 
oxygen problems in the deep-water ship channel near Stockton.
    To protect and restore the environment, the near-term package will 
include a long-term Environmental Water Account (EWA). The EWA is one 
of the most innovative resource management tools developed in the 
CALFED Program. The EWA relies on market-driven approaches to provide 
water flows for environmental protection and restoration while 
providing regulatory certainty for water users. Based on the best 
available science, the CALFED near-term implementation package will 
provide EWA with adequate assets and financing to assure the continued 
restoration of fisheries while we simultaneously implement measures to 
increase water supply reliability and enhance water quality.
    The near-term package to be implemented in Phase I of the CALFED 
Bay-Delta Program represents the most significant step to improve the 
statewide water management system in a generation. But, over the longer 
term, many challenges remain. We still must complete studies of 
additional surface storage facilities and move toward implementation of 
those projects that make economic and environmental sense. We must take 
further steps to improve water quality for both in-Delta and export 
water users. We must also assure the long-term financing and success of 
the CALFED environmental restoration, Delta levees, and water use 
efficiency programs.

         THE ROLE OF THE CALIFORNIA BAY-DELTA AUTHORIZATION ACT

    Senator Feinstein's proposed S. 1097, the California Bay-Delta 
Authorization Act (Act), provides the needed federal participation for 
the success of the CALFED Program. The Act approves the CALFED ROD as 
the basic policy framework for future state-federal cooperation on 
California water management. It authorizes the federal agencies to 
participate as voting members in the California Bay-Delta Authority, 
the governance mechanism for CALFED created by the California 
legislature. Equally important, the Act provides federal resources for 
the implementation of the near-term CALFED implementation package and 
for the longer-term success of the Program.
    For the near-term implementation package, the Act provides modest 
funding for increasing the capacity of the SWP Banks pumping plant, 
constructing the CVP-SWP intertie, improving agricultural drainage 
management, modifying Frank's Tract and other source water quality 
actions, and implementing re-circulation projects to increase flows in 
the lower San Joaquin River. Over the longer-term, the Act provides for 
a federal cost share to complete studies of CALFED surface storage 
facilities, maintain water use efficiency performance, continue 
environmental restoration activities, reconstruct and enhance Delta 
levees, and, importantly, assure that state-of-the-art science supports 
all CALFED decisions and activities. The bottom line is that the Act 
has been carefully crafted through a bi-partisan effort to be 
consistent with the balance reflected in the CALFED ROD and its 
implementation will assure continued improvement in water supply, water 
quality, and environmental restoration to the benefit of California, 
the western states, and the nation.

                     THE BENEFICIARY PAYS PRINCIPLE

    Finally, I would like to close this testimony with some 
observations regarding the beneficiary pays principle. Metropolitan is 
a strong proponent of this principle. The ultimate success of a major, 
complex, public process like the CALFED Bay-Delta rests in no small way 
on perceptions of fairness that those who benefit from the 
implementation of program actions help pay for those actions in 
proportion to the benefits received. An important corollary to this 
principle is that those who pay should be assured that they will 
receive commensurate benefits so they will participate in the cost 
sharing required to implement program actions. But, we are also 
concerned that some will twist the beneficiary pays principle to 
undermine support for S. 1097.
    It is extremely important to recognize that local agencies and the 
state of California are investing billions of dollars to assure the 
success of the CALFED Program. In Southern California, Metropolitan and 
its member agencies are in the process of investing more than $8 
billion to implement the Southern California Integrated Resources 
Program. We have set a course for our ratepayers to pay $2 billion to 
reclaim, reuse, and desalinate brackish water and ocean water; another 
nearly $1 billion to implement water conservation measures; $2 billion 
to implement the QSA; and $3 billion to construct more than 2.5 million 
acre-feet of additional regional surface and groundwater storage 
capacity. Similarly, the California voters have overwhelmingly approved 
more than $6 billion in public bonds to finance CALFED and related 
activities: $1 billion in Proposition 204 in 1996 primarily for 
environmental restoration and another $2 billion in Proposition 13 in 
2000 and more than $3 billion in Proposition 50 in 2002 for water 
supply, water quality, and other CALFED related projects.
    Unfortunately, the federal share of financing CALFED has lagged 
considerably behind the local and state shares. To date, based on 
CALFED data, during the program's first three years, the federal 
government accounts for only about 9 percent of CALFED funds and this 
share is rapidly declining each year. Metropolitan believes that S. 
1097 provides a reasonable and fair federal share of CALFED financing 
for the next few years. S. 1097 helps fund the near-term implementation 
package that will provide considerable benefits at a very modest cost. 
It provides funds for long-term efforts to improve water efficiency, 
restore the environment, and improve watersheds. Many of these publicly 
beneficial activities cannot pencil out based solely on local costs and 
benefits and federal funds are essential for their implementation.
    With regard to larger infrastructure investments, such as 
additional surface storage, S. 1097 provides $102 million primarily to 
complete feasibility studies. We submit that this is a sound approach. 
The CALFED ROD concludes that additional surface and groundwater 
storage capacity is required to maintain balance between water supply, 
water quality, and the environment over the long-term. However, until 
feasibility studies are completed, beneficiaries are identified, and 
cost sharing agreements are developed, it is not possible to determine 
which specific projects should proceed and how. S. 1097 makes no final 
commitment and does not provide sufficient funds to construct any 
project, it merely provides the resources to answer key questions so 
that we can determine in the future how to best add to California's 
water storage capacity and meet our water quality and environmental 
goals.
    Given the benefits to the federal CVP project, the contributions of 
federal regulations to the problems being remedied, the interstate and 
international benefits of some CALFED actions, and the general public 
benefits of other CALFED actions, Metropolitan believes that S. 1097 
provides an effective and fiscally appropriate vehicle to enable 
California to manage water resources in a manner that will provide 
long-term stability in the Western United States. We commend Senator 
Feinstein for her leadership in introducing S. 1097.
    Madam Chairman, this concludes my testimony. I would be happy to 
answer any questions that you or the members of the subcommittee may 
have.

    Senator Murkowski. Thank you.
    Mr. Guy, your testimony, please.

    STATEMENT OF DAVID J. GUY, EXECUTIVE DIRECTOR, NORTHERN 
          CALIFORNIA WATER ASSOCIATION, SACRAMENTO, CA

    Mr. Guy. I thank you, Madam Chairman, Senator Feinstein.
    Let me also join the chorus in admiring the work that you 
all have done, and particularly the patience that you've had, 
Senator Feinstein. But I think, more important than the 
patience, we sure admire your perseverance and your 
determination, and please retain those characteristics, because 
the California water community needs you, and California as a 
whole needs you.
    I represent Northern California Water Association. It's the 
area north of the Bay-Delta. It's the area--it's largely a 
rural area, but, of course, a large bulk of the water supply in 
California comes from this particular area. This is not just a 
normal rural area, it's a combination of agriculture, it is 
integrated with a series of at least five national wildlife 
refuges, many State wildlife management areas.
    You have what are now considered some of the world-renowned 
salmon restoration projects in this region. And this is all 
integrated into a water-management program that I think is very 
important, and I believe that S. 1097 will help facilitate that 
and continue the progress that we have made in the Sacramento 
Valley to advance this integrated program. And for that reason, 
we support S. 1097 enthusiastically.
    This integrated program will not only meet the needs in the 
local rural areas--again, for farms, for refuges, for the 
fish--but it will also, in our view, if we can manage the 
resource properly, it can also meet needs in the Bay-Delta as 
well as needs in the rest of the State. And this has led, this 
integrated program, to several partnerships that I think are 
worth noting.
    I noted, Senator Feinstein, one of your three critical 
points was partnerships, and you mentioned the State and 
Federal partnerships, and those are, needless to say, very 
important, but there's also a series of local partnerships that 
have evolved that I think are really giving Calfed a large 
boost, and one of those, most notably, is the Sacramento Valley 
Water Management Program, which resolved the so-called Phase 8 
proceedings before the Bay-Delta.
    I have several of my partners here at the table today that 
have exerted tremendous leadership to make this happen, and 
it's really the first time in the State of California, I 
believe, that North and South have worked together to, again, 
meet these ideals of meeting the water needs of all of the 
different factions. It's also important because it's a rural/
urban partnership, which is very difficult. And we are working 
very well together, and there's a lot of work to be done, but 
we have started to do that. And I believe that Calfed, the Bay-
Delta Authority, and S. 1097 are all very important in helping 
us advance those partnerships, and vice versa. So we sure laud 
the bill.
    And, of course, all of the things that are in your bill, 
whether it be water conservation, water-use efficiency, whether 
it be the fish-passage improvements, the water-quality 
improvements, and then, of course, surface storage, including 
Sites Reservoir and enlarged Shasta, we believe, are all 
critical components to advancing, not only this integrated 
program, but the partnerships that are so critical to making 
this process work. So, again, we think the bill is very good in 
that regard.
    I will also say that I believe the balance feature that you 
mentioned, I believe, is really the key to making this program 
work; and not only balance across the different program areas, 
as mentioned, but I think the provision in the bill that talks 
about balance across geographic regions is very important, 
because water tends to be very parochial in nature. People look 
at their own particular region. And it doesn't matter, in some 
ways, if all the program elements are balanced, if a particular 
region does not feel that they are not being benefitted. And I 
think that that is a real key provision in this particular 
bill.
    With that said, I do think that there are some coordination 
issues that could be improved upon. I think Tom Birmingham 
touched on some of those, but I think improved coordination 
amongst the Federal and State agencies, as well as a 
recognition that the Calfed Program is a whole and must proceed 
as a whole, I think, is really important as we move forward.
    So I will close in just saying, again, we support S. 1097, 
congratulate you and the continued efforts of Senator Feinstein 
and also Congressman Calvert across the building, and look 
forward to working with you two to make it work.
    [The prepared statement of Mr. Guy follows:]

        Prepared Statement of David J. Guy, Executive Director, 
         Northern California Water Association, Sacramento, CA

    Dear Chairman and members of the Subcommittee, my name is David 
Guy. I am the Executive Director of the Northern California Water 
Association (NCWA). NCWA supports S. 1097 and strongly believes that, 
with the recommendations described below, this legislation will help 
provide water and environmental security for Northern California and 
the rest of the state.
    NCWA is a geographically diverse organization, extending from 
California's Coast Range to the Sierra Nevada foothills, and nearly 180 
miles from Redding to Sacramento. Our members rely on the waters of the 
Sacramento, Feather, Yuba and American Rivers, smaller tributaries and 
groundwater to irrigate nearly 850,000 acres that produce every type of 
food and fiber grown in the region. Many of our members also provide 
water supplies to state and federal wildlife refuges, and much of this 
land serves as important seasonal wetlands for migrating waterfowl, 
shorebirds and other wildlife.
    We welcome the opportunity to provide the Northern California 
perspective on water supply security and to present both the 
opportunities and challenges we now face. The Subcommittee's interest 
in California water security is appropriate and very timely given the 
importance of a successful resolution to the environmental and water 
supply problems in the Sacramento San Joaquin River Delta and San 
Francisco Bay (Bay-Delta). The Bay-Delta is a tremendous economic and 
environmental resource to California and the nation, and there is much 
at stake in how we implement the numerous ecosystem restoration and 
water management actions.
    Northern California water users have committed to help improve 
water supply reliability, water quality and environmental benefits. The 
Sacramento Valley's initiative and effort to help protect salmon and 
other aquatic species is unprecedented and is now recognized as one of 
the most exciting and progressive voluntary salmon restoration efforts 
in the United States. Today, more than a dozen NCWA members, 
representing over 500,000 acres of irrigable land, have either 
completed or will soon be constructing screens to prevent fish 
entrainment at their diversions. Many NCWA members have also initiated 
far-reaching efforts to refurbish fish ladders, construct siphons, 
remove dams, create habitat conservation plans and implement other 
habitat improvement projects to enhance the environment, while at the 
same time improving water supply reliability.
    Additionally, NCWA and the Northern California water users have 
embarked on an integrated water management program that has broad 
support from water suppliers and local governments throughout Northern 
California. This integrated program includes these fish passage 
improvements (fish screens and siphons), groundwater management, 
evaluation of the Sites off-stream reservoir, flood protection, water 
use efficiency programs, potential expanded storage in Lake Shasta, 
intra-regional water transfers and exchanges, and watershed management.
    During the past year this integrated program led to an 
unprecedented water rights settlement among water users throughout 
California. This settlement, now known as the Sacramento Valley Water 
Management Program, and the ensuing integrated water management 
program, avoided the extremely contentious Phase 8 Bay-Delta water 
rights proceedings before the State Water Resources Control Board 
(SWRCB). The parties to the agreement include NCWA, the Bureau of 
Reclamation (BOR), the Department of Water Resources (DWR), the federal 
contractors in the San Luis and Delta-Mendota Water Authority, the 
State Water Contractors, and Contra Costa Water District. This 
proceeding would have pitted these parties from throughout the state 
against each other. This integrated program will now serve as the heart 
of a regional strategy for the Sacramento Valley.
    The Sacramento Valley Water Management Program and the integrated 
water management program focus on meeting the water supply demands 
within the Sacramento Valley during all year types, both now and into 
the future. Northern California water users believe that, once the full 
demands within the Sacramento Valley are met, this integrated program 
will help make water supplies available for use in and beyond the Bay-
Delta to meet water quality standards, and provide for export water 
users in the San Joaquin Valley, Southern California, the Central 
Coast, and as assets for the Environmental Water Account (EWA) and 
other environmental programs.
    Although there are many components in the integrated water 
management plan for the Sacramento Valley, the components involving 
surface storage draw the most attention and deserve further 
elaboration. Sites reservoir and enlarged Shasta are important parts of 
water management in the Sacramento Valley and are critical to 
addressing and solving CALFED problems. We believe that a great mistake 
will be made and an opportunity will be lost if the feasibility of a 
storage project (like Sites) is viewed in a traditional fashion, with 
the ``yield'' of the reservoir merely divided up among a pre-identified 
group of ``beneficiaries.''
    We have an opportunity to view Sites in a manner different from the 
traditional storage reservoir. This stems, in part, from its location 
within or adjacent to the Glenn-Colusa Irrigation District (GCID) and 
districts within the Tehama-Colusa Canal Authority (TCCA). Initially, 
this allows the reservoir to be filled through the conveyance of water 
into the reservoir pursuant to a wheeling agreement with GCID for use 
of GCID's Main Canal and/or potentially through a wheeling agreement 
with the BOR or others for use of the Tehama-Colusa Canal.
    In addition, how one operates Sites should take into consideration 
opportunities presented by the fact that it can be integrated with 
local interests within the Sacramento Valley so that it is operated and 
managed in conjunction with local interests' direct diversion water 
rights, other surface water resources, including storage rights within 
Shasta Reservoir, and groundwater resources. Proceeding with integrated 
water management will provide direct and indirect benefits. These 
direct and indirect benefits include securing independent, reliable and 
certain supplies of irrigation, municipal and industrial (M&I) and 
environmental water of suitable quality for reasonable beneficial uses 
by local interests within the Sacramento Valley. They will also provide 
benefits to the environment, including improvements in Delta water 
quality, the availability of water for the EWA, in management 
flexibility that will be made available in the Sacramento Valley, and a 
more dependable water supply for water users within the Delta as well 
as water users south of the Delta.
    The ability to operate in a flexible manner to maximize system-wide 
benefits is not unique to GCID or the TCCA; it is a shared ability that 
could be exercised by other entities within the Sacramento Valley.
    From the very beginning of the CALFED process, indeed, before the 
Record of Decision (ROD) was issued, Northern California interests have 
been fairly clear that, in general, we were not responsible, in fact or 
in law, for the problems that exist in the Bay-Delta. In our view, 
those problems were created by others. As a consequence, we can only 
support solutions that solve problems in a manner that does not harm 
Northern California interests. We cannot support and will oppose 
solutions that seek to solve problems created by others at the expense 
of Northern California.
    I hasten to add that from the onset, Northern California has 
nonetheless been willing to work with CALFED to seek solutions that 
meet the test of no redirected adverse impacts while advancing 
substantially actions and programs that would improve the Bay-Delta. We 
are still willing to participate in these programs and, in fact, have 
initiated actions that, when completed, will substantially advance the 
CALFED goals.
    I have read and am familiar with S. 1097 as well as with the CALFED 
ROD. I have followed CALFED actions and activities closely since August 
28, 2000. With the foregoing in mind, I first offer comments on the 
program activities in S. 1097 followed by comments and suggestions on 
the administration and management of the CALFED Bay-Delta Program.

I. Integrated Water Management (Sec. 3(c) (3)(F).)
    As discussed above, Northern California has been at the forefront 
of integrated water management and supports the provisions of S. 1097 
to advance this cause. This integrated program for the Sacramento 
Valley will help ``carry out Stage 1 of the Record of Decision.''

II. Specific Program Activities
    As previously mentioned, the integrated program for the Sacramento 
Valley contains several important components that will help advance the 
CALFED Bay-Delta Program. This includes:

   Fish Passage Improvements (Sec. 3(c)(3)(G)(iii).)
   Proposed Sites reservoir and enlarged Shasta 
        (Sec. 3(c)(A)(ii)(I).)
   Water Use Efficiency and System Improvement Projects 
        (Sec. 3(c)(3)(c).)
   Water Quality Improvements (Sec. 3(c)(3)(I)
   Water Transfers (Sec. 3(c)(3)(D).)
   Enlarged Shasta (Sec. 3(c)(A)(i)(I).)
   Watershed Management (Sec. 3(c)(3)(H).)

III. Administration and Management
    With respect to the administration and management of the CALFED 
program, we offer the following suggestions.
    A. Balance (Sec. (5)(b); 3(b))--The concept of ``balance'' is 
critical to a successful CALFED. S. 1097 deals with this issue by first 
requiring the Secretary, in cooperation with the Governor, to annually 
certify that the Program is ``progressing in a balanced manner which 
allows all program elements to be advanced.'' Without these types of 
procedures there is little question in my mind that certain parts of 
the program (i.e., water supply storage and conveyance projects) will 
lag behind other CALFED programs and projects and, indeed, may never be 
completed. In addition to program balance, the provision in subpart 
(b)(9) is critical to assure that there is ``progress in achieving 
benefits in all geographic regions covered by the Program.''
    B. Administration of Activities--There has been a fairly large 
disconnect between the whole purpose and need for CALFED and the way 
regulatory agencies approach their missions.
    The CALFED program is multi-dimensional in nature and not only 
evaluates, on a programmatic level, numerous alternative approaches 
but, in light of the significant water related problems at issue, in 
fact incorporates multiple elements which in the normal context might 
be considered, in themselves, as alternatives, one to the other. In 
other words, the problems dealt with by CALFED are so significant that 
looking at one option as if it were in opposition to another is 
counter-productive to meeting CALFED goals.
    While all of the planning and actions associated with CALFED 
contemplate this integrated approach toward water management, 
regulatory agencies, particularly the United States Army Corps of 
Engineers and the Environmental Protection Agency, adhere to an overly 
rigid application of, for example, the Clean Water Act section 
404(b)(1) alternatives analysis. This requires one to view each of the 
CALFED potential solutions not as an integrated whole, but rather as 
alternatives, one to the other. As a consequence, the ability to 
maximize benefits through full-integrated water management is lost in 
favor of rigid analyses developed to deal with situations dissimilar to 
CALFED.
    The law itself does not require this rigid application of 
regulatory standards. However, it probably requires specific 
Congressional direction and guidance (contemplated in existing law) to 
make certain that regulatory review occurs in an appropriate fashion. 
Section 3(b) alludes to this quest for a fully integrated water 
management solution that will not be hampered by an overly rigid 
regulatory mind-set. This goal might be further advanced through 
additional language in Section 4 such as the following:
    ``Pursuant to the provisions of 33 U.S.C. Sec. 1344(r), information 
of the effects, if any, of a discharge of dredged or fill material, 
including consideration of the guidelines developed under 33 U.S.C. 
Sec. 1344(b)(1), will be included in the environmental impact statement 
undertaken pursuant to the National Environmental Policy Act (NEPA) for 
any CALFED project or program requiring federal authorization and such 
environmental impact statement will be submitted to Congress prior to 
the authorization of the project or the appropriation of funds for the 
construction of the project.''
    C. Agency Coordination (Section 4(a))--A fundamental problem that 
was identified early in the San Francisco Bay-Delta Estuary process was 
the multiple statutory, regulatory and agency coverage (overlap) of 
critical issues. Indeed, the whole concept of CALFED was borne out of 
the unintended adverse consequences of uncoordinated activities 
conducted by multiple agencies seeking to address the same problem.
    In a critical way CALFED has, in fact, worked to focus attention on 
a coordinated set of goals and actions. Nonetheless, an important 
element still must be addressed. While agencies work, in part, within 
CALFED, at critical times they remove themselves from that process and 
retreat to their individual regulatory processes. Thus, critical CALFED 
programs and projects are still required to scale multiple, 
duplicative, regulatory processes which add costs and time to that 
which would otherwise be necessary and which consequently challenge the 
feasibility of any proposed project or program.
    The solution, we believe, is not in asking any regulatory body to 
abrogate its responsibility to another or in the modification of any 
underlying statutory program. Instead, we propose a ``regulatory 
streamlining'' or ``regulatory coordination'' process in which all 
project elements or a program are evaluated at one time and, in this 
context, all regulatory requirements are also made known (along with 
mitigation measures) at one time. In this manner duplicative and/or 
inconsistent regulatory mandates can be immediately identified, 
evaluated and dealt with; and a project or program proponent can 
understand, at that time, what its total requirements/obligations will 
be. In this way intelligent decisions on how to proceed or how not to 
proceed can be made with the knowledge of all relevant facts.
    This process is not unique. The Federal Power Act, 16 U.S.C. 
Sec. 791a et seq., provides for similar procedures associated with the 
licensing under that Act. Regulatory and other relevant agencies, under 
the provisions of the Electric Consumers Protection Act (ECPA) are 
required to notify the Federal Energy Regulatory Commission (FERC) and 
the project proponents of all of the regulatory conditions that must be 
included within a license. FERC, in turn, must include in any license 
issued under the Federal Power Act appropriate conditions based upon 
what is provided by those other regulatory agencies. See 16 U.S.C. 
Sec. 805j(1); Mine Reclamation Corporation, et al. v. Federal Energy 
Regulatory Commission, et al., 30 Fed.3d 1519, 1525 (D.C. Cir. 1994). 
There is no absolute veto of any regulatory requirement, but merely an 
``all cards up'' understanding of what will need to be done in order to 
proceed with a project.\1\ Not only does this save a great deal of 
time, but it also allows the project proponents to make an intelligent 
business decision about whether and how to proceed. Id.
---------------------------------------------------------------------------
    \1\ 16 U.S.C. Sec. 803j(2) does provide FERC with a process and 
criteria that it must follow if it determines that recommended 
conditions will be inconsistent with the purposes and requirements of 
the Act.
---------------------------------------------------------------------------
    To accomplish these purposes, we propose language such as the 
following to add to Sec. 4(a):
    ``The Secretary working with the Governor shall develop a 
regulatory coordination and streamlining program in which all permits, 
licenses or other approvals associated with the permitting approval of 
projects under this Act will take place. This regulatory coordination 
or streamlining program shall insure that all Federal and California 
agencies' respective regulatory programs will take place at one time 
and that they will be coordinated in a manner that reduces or 
eliminates process- or substantive-related duplication and 
inconsistencies, thereby reducing costs and time that would otherwise 
be required; Provided, that nothing herein is intended nor should it be 
construed to affect the substantive regulatory requirements that may be 
applicable.''
    As in many situations, the problem faced by project proponents is 
not the need to comply with appropriate environmental obligations but 
the problem created by multiple, duplicate or inconsistent regulations. 
This problem is particularly troublesome in a situation as complex as 
the one presented by CALFED. The type of language proposed here, while 
not fully addressing all of the potential problems, will go a long way 
in remedying the situation that otherwise exists.
    Thank you for the opportunity to testify today on the CALFED 
program and the important water issues facing California.

    Senator Murkowski. Thank you.
    I appreciate the comments from each of you on the panel 
here today, and thank you for joining us here at the committee.
    I have individual questions that are more specific to each 
of you that will be presented so that you can respond in 
writing. But just a few general questions, and I'll just 
present them to you as a panel, and if you can give me your 
very brief comments.
    But recognizing that you are the panel of stakeholders and 
from certainly different interests, whether they be 
metropolitan or rural or north or south, I'd like to hear just 
very briefly and very succinctly what aspects of this 
legislation are most important to your specific organization.
    Mr. Wright, let's put you on the hot-seat first.
    Mr. Wright. Sure. Speaking from the perspective of the 
agencies themselves, the number one issue is to cement the 
State/Federal partnership and to avoid a perception that this 
is a State-driven program and that the agencies aren't a 
hundred percent with us in putting this thing together.
    Money's important, absolutely. But first comes the 
commitment to the program itself. So that's number one.
    Senator Murkowski. Thank you.
    Ms. McPeak.
    Ms. McPeak. The business community would echo that. Without 
the Federal Government being a full partner, there is 
continuing uncertainty and the lack of coalescing of all the 
agencies working together. That spells probably unreliability 
in our future water supply. The business community fully 
embraces all components of Calfed. We know we have to move on 
all of them together. That will be possible only if all of the 
Federal and State agencies are at the table. Federal agencies 
need to have the enthusiastic endorsement, reaffirmation of 
Congress.
    Senator Murkowski. Thank you.
    Mr. Graff.
    Mr. Graff. I guess I would answer your question this way, 
that the matter that is of most concern to us is that 
additional commitments of water to users, particularly not paid 
for by users, not come at the expense of the environments that 
have just recently begun to respond to the benefits of 
congressional legislation and other actions past. Let me just 
say that those environments should include the Trinity River, 
which is in my written remarks, but I did not mention in my 
oral testimony.
    Senator Murkowski. Thank you.
    Mr. Birmingham.
    Mr. Birmingham. The issue that has been critical to 
agricultural water districts on the west side of the San 
Joaquin Valley is balanced implementation of the Calfed 
Program. There are three provisions in S. 1097 that will 
promote balanced implementation of the program, in fact, will 
mandate it. First, the Secretary is required to annually 
certify--the Secretary of the Interior is required to annually 
certify that the programs are moving forward in a balanced 
manner; and if not, revise the schedule for implementation. 
Second, S. 1097 contains a provision that requires that the 
Secretary report on progress being made on each of the elements 
of the program, including water-supply reliability, water-
quality improvement, levy restoration, and ecosystem 
restoration.
    And then, finally, the provisions of the bill that 
prescribe how much will be spent for each program, how much 
will be authorized for each program, will ensure that as the 
program moves forward, it will do so in a balanced manner, each 
element of the program being linked to others. And so I think 
that those are the three provisions of the bill that, from our 
perspective, are most important.
    Senator Murkowski. Thank you.
    Mr. Gastelum.
    Mr. Gastelum. As I've looked at this bill on a number of 
occasions, I've thought, well, there might some improvements 
here or there that I would like to make from the perspective of 
urban southern California. But we are very pleased with this 
bill, because it represent progress. It represents the 
principles that we most want to see happen in California--
cooperation, sound science, interagency governmental 
cooperation.
    What we like, in terms of what would happen for the good in 
southern California particularly, is the water-quality 
improvements that will come with the conveyance actions, with 
the science-based decisions on moving water at particular times 
of the year that has less impact on the environment and allows 
us to move water into storage. All of these things are possible 
under Calfed, and, in particular, this legislation.
    Senator Murkowski. Mr. Guy.
    Mr. Guy. I believe the most important aspect of the bill is 
the integrated nature of the components, and I think it's 
important that the bill spells out all of the different 
components in enough detail that people in California can see 
exactly what is expected of this program. And I think it's that 
integrated nature of all the separate components, whether it be 
water-use efficiency, surface storage, off-stream storage, 
whether it be fish-passage improvements, water-quality 
improvements, all of that in one package, and making sure that 
there's balance across those areas and across the geographic 
regions, is important to the bill.
    Senator Murkowski. I appreciate the distilling in at least 
a couple of sentences, or maybe a couple of paragraphs or less, 
so I'm going to ask you one more.
    You've told me what you like best about it. In your 
opinion, is there anything that needs to be included, added? 
Mr. Gastelum, you've pretty much said you like it as it is. But 
in the opinion--in your opinion or that of the organizations 
that you represent, what needs to be added to make it work for 
your perspective, for your group of stakeholders?
    Mr. Guy.
    Mr. Guy. Well, my written comments, which I hope are in the 
record, spell out a couple of suggestions on that, and I think 
they really get categorized with respect to regulatory and 
agency coordination. And I think several fairly simple 
provisions that, again, recognize the Calfed, as a whole, that 
parts of the program are not alternatives to other parts of the 
program, and that the legislation recognize that the Calfed 
Program is a whole and that all of the programs need to be 
implemented simultaneously, together--or I guess that's 
redundant--but together in a integrated fashion. I think that 
some language would be very helpful there, and it would not be 
anything significant.
    Senator Murkowski. Thank you.
    Mr. Gastelum, want to add anything?
    Mr. Gastelum. I would. I think that if we could add 
anything more to this bill, it would be to provide perhaps 
stronger and clearer direction to the Federal agencies to 
participate in this process. So, money aside, if we could get 
their full attention and their decision-making process in 
coordination with the State, that would be something to be 
desired.
    Senator Murkowski. Thank you.
    Mr. Birmingham.
    Mr. Birmingham. I don't disagree with what Mr. Gastelum 
stated, although I think that one of the questions that has 
been raised is, why do we need Calfed authorization if the 
agencies are already authorized to engage in most of the 
programs that are described? And I think that what Mr. Gastelum 
just stated is the reason that we need to have a specific 
Calfed authorization.
    Frankly, I don't think that there is anything that I would 
suggest should be added. In drafting the bill, Senator 
Feinstein and her staff were diligent about reaching out to 
every interest group in the California water community and 
engaging with them to make sure that their concerns were 
addressed. I don't think that there's anything in this--I think 
I can safely say that there are things in the Calfed Program 
that everyone--that somebody would dislike--there's something 
in there for everybody to dislike, but there's also something 
in there for everybody to love.
    And I think that's part of the beauty of the program. And 
the beauty of this particular bill is that it is the product of 
a tremendous effort to ensure that the interests of all of the 
communities were addressed in its crafting.
    Senator Murkowski. Thank you.
    Mr. Graff, do you agree?
    Mr. Graff. No. I don't think I do. I think I'm going to go 
back to testimony of Mr. Raley and just get right to the guts 
of it. I mean, his first major point here in his statement of 
the administration's concerns is to say, ``As mentioned, 
appropriations are unlikely to approve--to approach the $880 
million envisioned for stage one. Balanced in the program can 
only be achieved with a realistic expectation of Calfed 
appropriations.''
    And in light of a scaled-back program, both in terms of 
Federal dollars, and even more so in terms of user dollars, we 
need to figure out, before we go forward, whether the 
additional commitments of water that the contractors agreed to 
at Napa are really going to happen at the expense of the 
environment. I think that's the question we have to answer 
first.
    Senator Murkowski. Ms. McPeak.
    Ms. McPeak. Unreliability and uncertainty are the death 
knell for investment. So if we're looking to economic recovery 
and continuing to retain the employers in California, and in 
this country, as a matter of fact, then there's got to be 
certainty within a regulatory framework. And we would never 
second-guess Senator Feinstein or this committee on getting to 
the bill. It's probably based on all that we know, as good as 
it can possibly be.
    Going back a few years, when I sat and we, at the Bay-Delta 
Advisory Committee, advised on a governance structure for 
Calfed, there were a few principles that we strongly advocated 
and that the business community wanted to see, and that is that 
everybody had to be at the table. If you've got some agencies 
who have the ability to absent themselves and do not understand 
that it is the policy and the presumption of the Federal 
Government that they will all work together and work in 
partnership with the States agencies, then that just is greater 
uncertainty and unreliability in that regulatory framework. It 
will be a dampening force on or factor for attracting 
investment in California.
    Therefore, what we think would be very salutatory, if it's 
possible, is, as Mr. Gastelum has said, strengthen the language 
as a directive and imperative to all of those Federal agencies, 
that they are to participate in full faith, at the highest 
level, continuously, introduce a sense of urgency about 
implementation, and that there must be consultation among them 
in any--before they take independent action under their 
authorities.
    In other words, that they've got authority to exercise, and 
it's going to impact any aspect of the Calfed implementation 
program, that they must, in fact, consult one another around 
that table before taking independent action. I cannot tell you 
how beneficial that would be, nor how much of a shift in 
paradigm as to how the business community usually experiences 
government.
    There is no substitute for leadership. That's what this 
bill is about. It's about creating the momentum that Senator 
Feinstein talked about and registering, very loud and clear, 
that the Federal Government is a full partner in the Calfed 
implementation. It's a new era.
    Senator Murkowski. Mr. Wright.
    Mr. Wright. I'll just say briefly, because, of course, at 
the program we don't take specific positions on bills; we leave 
that to our State and Federal administrations. I should add, 
though, that we did, at the request of Senator Feinstein, work 
very closely with her staff and other members to make sure that 
the bill was fully consistent with the Calfed plan.
    Senator Murkowski. I appreciate your responses.
    Senator Feinstein.
    Senator Feinstein. Thanks very much, Madam Chairman. I 
think those were very good questions.
    Mr. Graff, whom I've known for at least 30 years, as well--
matter of fact, I knew him when he had a little more hair on 
the top.
    Mr. Graff. That's a long time ago.
    Senator Feinstein. On the issue of beneficiary pays, I 
would call the attention to page 34, the Record of Decision, 
and read one sentence, ``A fundamental philosophy of the Calfed 
Program is that costs should, to the extent possible, be paid 
by the beneficiaries of the program actions.''
    We have replicated this in the bill, on page 19--actually, 
beginning on page 18--with this language, ``Any feasibility 
studies''--because most of their concern revolves around the 
cost of the storage--``Any feasibility studies completed for 
storage projects as a result of this act shall include 
identification of project benefits and beneficiaries and a 
cost-allocation plan consistent with the beneficiaries pay 
provisions of the Record Of Decision.''
    There is beneficiaries-pay language in this bill. 
Obviously, we can't determine what it is. Calfed would have to 
do that at a later time. But that is the full intent, and I 
would hope that the record--and I know the record will reflect 
that.
    With respect to the Napa River issue, Mr. Wright, let me 
ask you this question. Mr. Graff claims that the Napa proposal 
will result in about one million acre-feet of water exported 
from the delta. It's important to note, at the outset, that the 
Napa meetings produced only a proposal, as I understand it, for 
coordinated system operation, and the appropriate agencies are 
making decisions on delta pumping levels through a separate 
process.
    Besides the caveat that no final decisions have been made 
yet, didn't the State Department of Water Resources estimate 
that--just that week, that only about 250,000 acre-feet of 
water would be exported from the delta? And didn't the State 
give this estimate at an Assembly Parks and Wildlife Committee 
hearing?
    Mr. Wright. That's correct, Senator. And in addition to 
that, of course, as you, yourself, said, it's one part of a 
comprehensive package and will not move forward until the whole 
package does.
    Senator Feinstein. Good. So I'm glad we settled that one.
    Now, you know, one of the things that I think we are all 
thinking about is the amount, Madam Chairman. There is actually 
a lot of money in the base, before we even start on the amount. 
So the $880 million really is not reflective of net new Federal 
dollars. And I think one key might be, how do we tailor the 
language so that it only includes the Federal share? And what 
should that be? Do you have any comment on that, Mr. Wright?
    Mr. Wright. Well, let me say again, in response to 
Interior's comments, it is true, as you, yourself, stated it, 
that the vast majority of things that we do at the program is 
to coordinate agency programs that are already authorized. It 
is a coordination effort. There are a handful of things that 
Assistant Secretary Raley mentioned that lack authorization, 
but most of what we need to do is authorized.
    Having said that, though, you've heard from just about all 
the witnesses here on the importance of balance and the 
importance of a comprehensive program. So if you were to limit 
the bill just to those very small handful of things that aren't 
authorized, then you're not going to reassure folks here that 
you're authorizing a balanced, comprehensive plan.
    Somehow you're going to have to strike a balance between 
having the bill be comprehensive enough to send that message, 
but not imply, from a financial perspective, that you're 
authorizing a massive new program, because you're not. You're 
authorizing the coordination----
    Senator Feinstein. Yeah, well, let me stop you here. We 
can't appropriate any money--and we've been doing it, and 
they're not going to do it anymore--without an authorization. 
That's why the authorization connected to a dollar amount 
becomes so important.
    Mr. Wright. Right.
    Senator Feinstein. Now, if you could tell me--because we 
worked the $880 million. You know, this didn't come out of the 
sky. It really came actually, from your suggestions. Can you 
make any suggestions today based on the fact that the State, 
through bond funds, actually has a lot of the funding that it 
would require to be used, if it's possible to reduce that 
amount and still carry out, in the balanced way, the program we 
contemplate?
    Mr. Wright. We will--as Bennett said earlier--we will work 
with him over the next several weeks. I don't want to get out 
in front of either the Federal or State side on a budgetary 
question. But it's obviously a legitimate question, and we need 
to work with both of them to give you that answer.
    Senator Feinstein. If it's possible for you to stay and do 
it now--you know, the session's going on, and I think we need 
to get a bill, and I think we need to have closure on that 
amount so that it is lean and mean, with respect to--and we all 
know the Federal deficit situation--but that there is a 
commitment to follow through on it.
    Mr. Wright. I would be happy to talk to Interior and the 
new administration about doing that.
    Senator Feinstein. Mr. Raley said that he'd be available 
effective next week. If you could possibly make yourself 
available----
    Mr. Wright. I can be available whenever you need me to. 
That would not be a problem.
    Senator Feinstein. Okay, that would be terrific.
    Mr. Gastelum, you're very smart, you run a huge water 
district. Focus for a minute on the beneficiary-pays principle. 
And you mentioned it in your comments. Can you elaborate more 
on how you think this principle could work for Calfed?
    Mr. Gastelum. As you correctly pointed out, this is 
embedded in Calfed today. There is no formula that has been 
established in Calfed or elsewhere on beneficiaries pay. So 
what we have, I believe, in California, is a commitment that 
we're going to figure that out. We believe that it relates to 
cost share, or something that you would relate to on the 
Federal level in a very real way and something you do all the 
time, you expect cost-sharing on a local level.
    So we are expecting, in southern California, that in any 
particular project there will be some share of Federal dollars 
in the Calfed program, some share of State dollars--and that 
may be general fund, it could be bond funds--and some share of 
local, and that the locals, as beneficiaries, will be expected, 
however, they finance it locally, to contribute a portion.
    What the formula is on how you do that will end up being a 
part of the process. I'd like to say that we had a formula. 
We'll probably be making some law, if you--or setting some 
precedents in California that will be useful for others who are 
confronting this, but we are clearly committed to do that in 
California.
    Senator Feinstein. So let me--and let's take one of the 
storage projects for example--let's just take the Shasta Raise. 
And, Mr. Wright and others, you might want to chime in. I would 
assume that if that proves to be cost-effective and feasible, 
and meets environmental NEPA concerns, that there will then be 
an allocation of cost also that will go down through the system 
for all those that draw water out of that Shasta Dam. Is that a 
fair assumption to make?
    Mr. Gastelum. I think that's right. And in southern 
California's case, as an example, if there was an increment of 
water available that could be allocated to southern California, 
and southern California was unwilling to pay for that water, 
additional water supply, as beneficiaries, we would not expect 
to receive that water. But if we were asking to receive it, I 
would expect we'd pay for our allocated share.
    Senator Feinstein. Anybody else want to comment on that?
    Mr. Birmingham. Well, the example that you used is raising 
Sites. In fact, the--I'm sorry, raising Shasta--in fact, 
reclamation law would require an analysis of the costs and 
beneficiaries, and then allocate the costs of that particular 
project. We anticipate that, for other storage facilities, 
including the Sites or storage on----
    Senator Feinstein. Upper San Joaquin?
    Mr. Birmingham [continuing]. On Upper San Joaquin, there 
would be a similar analysis.
    Mr. Graff. Senator, let me--I would have said nothing, 
because I think you questions about beneficiary-pays are very 
helpful to finally pinning down some of the specifics on this 
that have been missing for so long. But when Mr. Birmingham 
brings up reclamation law, one of the big problems to date, the 
reason we are in these enormous difficulties, is that as a 
result of past reclamation law, both legal compliance and not, 
we have had users who have paid minimally on Federal and--paid 
back minimally on Federal investment, and we're not in an era 
where we can continue that. If we use the old reclamation-law 
formulas to build massively expensive projects, basically 
that's the taxpayers paying, not the users paying.
    Mr. Birmingham. And I could respond to that by observing 
that under a public law enacted in 1986, all of the capital 
costs of the Central Valley Project must be, and will be, 
repaid by 2030. And under reclamation law, capital costs of the 
project must be repaid within 40 years.
    I wouldn't disagree with Mr. Graff's comment that we 
haven't paid as much as we should have paid at this point, but 
all of those costs will be repaid by the date prescribed by 
Congress.
    Senator Feinstein. Thank you. I think that's very helpful.
    Mr. Graff. But without interest.
    Senator Feinstein. Thank you. I think that clarifies that.
    I want to just say one thing about Mrs. McPeak. She booked 
two red-eye flights to get here--one to get here tonight and 
one to go home tomorrow. And as one who does the cross-
continental, there is nothing worse, except if you live in 
Alaska, maybe.
    [Laughter.]
    Senator Murkowski. Thank you for being here.
    Senator Feinstein. I'd just like you to know we very much 
appreciate it.
    Mr. Guy, let me ask this question. You mentioned briefly in 
your testimony how Sites Reservoir will have benefits greater 
than traditional storage projects. Could you elaborate on this 
point?
    Mr. Guy. Yes. Thank you, Senator.
    Sites Reservoir, in my view, is really water storage for 
the 21st century, because it does provide the multiple benefits 
that I think you're suggesting. First, it's off-stream storage. 
It's in the coast range, on the west side of the valley, in 
about as good a place as you could find for off-stream storage. 
It will be fiscally sound, to the extent that it will utilize 
the existing conveyance facilities that are already in place. 
And it really provides the benefits that I think you're asking 
about, because you integrate it with other supplies within the 
region.
    What that allows you to do is, it allows you to have 
additional water, or water in the river, during--in the 
Sacramento river, which, of course, is the primary river in the 
Bay-Delta system, during times of the year when that water will 
benefit salmon, steelhead. It can provide water-quality 
benefits in the delta. It can provide water for the 
environmental water account by being upstream of the delta and 
by essentially making that water available during critical 
times. You can essentially control the water to the point where 
you can provide these multiple benefits. And it's not a 
traditional yield. It provides you tremendous flexibility, by 
being upstream of the delta, to meet all of the various demands 
that are called for in the Calfed Program.
    Finally, it really provides the opportunity for urban/rural 
partnerships. And, I think, building on Secretary Raley's 
comments, it really allows the rural/urban folks to work 
together in a partnership manner, I think, as we move forward 
long term.
    Senator Feinstein. Well, I'd just like to thank everybody. 
It's a long haul. I think we have a fine Chairman. Hopefully, 
we'll be able to move this bill.
    What I'd like to do, if you would agree to it, Senator, is 
sit down with you and Mr. Raley and Mr. Wright after they 
finish their joint deliberations on the funding part of it, and 
see exactly where we are, and then hopefully be able to move 
the bill.
    Senator Murkowski. Well, we would look forward to working 
with you, Senator Feinstein, on this. The staff of this 
subcommittee will be happy to sit down and, as you say, once 
there's been an opportunity for you, Mr. Wright, and Mr. Raley 
to work through some of those issues. We will be working 
forward.Senator Feinstein. Great, thank you very much. I 
appreciate it. Thank everybody.
    Senator Murkowski. I appreciate all that you all have put 
into this very complex and very necessary effort. So we 
appreciate your time and attention and your travel. So thank 
you. We're adjourned.
    [Whereupon, at 5:20 p.m., the hearing was adjourned.]

                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

     Responses of Bennett Raley to Questions From Senator Murkowski

    Question 1. Section 3(b) of S. 1097 approves the 2000 Record of 
Decision (``ROD'') as a ``framework'' for addressing certain CALFED 
Bay-Delta Program components.
    a. Does this approval, as a framework, rise to the level of 
codification of the ROD?
    Answer. Section 3(b) of S. 1097 states in part that:

          The Record of Decision is approved as a framework for 
        addressing Calfed Bay-Delta Program components consisting of 
        ...[list of activities omitted]. The Secretary and the heads of 
        the Federal agencies are authorized to carry out (undertake, 
        fund, or participate in) the activities in the Record of 
        Decision, subject to the provisions of this Act and the 
        constraints of the Record of Decision, so that the Program 
        activities consisting of . . . [list of activities omitted] . . 
        . will progress in a balanced manner.

    The bill does not codify any of the specific activities in the 
CALFED Bay-Delta Program Record of Decision (ROD). All activities 
included in the ROD need further study and environmental review before 
decisions on those activities can be made. The bill authorizes the 
Federal agencies to undertake studies, analysis and reviews necessary 
to make final project decisions.
    b. To what extent do you feel this ``approval'' authorizes federal 
implementation of the ROD?
    Answer. The language in Section 3(b) of S. 1097 (noted in the 
response to question 1a.), authorizes the Federal agencies to carry out 
activities in the CALFED Bay-Delta Program Record of Decision. However, 
this authority is subject to the provisions of the proposed bill.
    Section 3(c)(l) of S. 1097 states that:

          The Secretary and the heads of the Federal agencies are 
        authorized to carry out 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 
        cost-share and other 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 [CBDA] to be consistent with the 
        Record of Decision.

    Section 3(c)(1) read in combination with Sections 3(c)(2) and (3) 
of the proposed bill limits that authority to the specifically 
enumerated activities.
    c. Do you believe approving the ROD as a ``framework'' affords you 
the necessary authority to carry out the activities in S. 1097? 
Activities in the ROD?
    Answer. Approving the CALFED Bay-Delta Program Record of Decision 
(ROD) as a ``framework'' generally affords the implementing agencies 
the necessary authority to carry out the activities in S. 1097, which 
provides for implementing Stage 1 of the CALFED Bay-Delta Program. 
However, we recommend that additional language should be added to the 
proposed legislation to clarify the following:
          1. Environmental Water Account (EWA). While the bill provides 
        authority and participation for EWA program activities for the 
        period years 4-7, we believe that the bill should authorize 
        implementation of a long-term EWA in a fashion that supports 
        the vision and flexibility envisioned in the ROD. The 
        establishment and successful operation of a long-term EWA will 
        be one of the most significant accomplishments of the CALFED 
        agencies in reducing the conflicts between fisheries and water 
        project operations.
          2. Conveyance Program Elements. While the bill provides for 
        expending funds and evaluating certain conveyance activities, 
        it should also provide for conducting feasibility 
        investigations on (a) increasing pumping to 10,300 cfs at H. O. 
        Banks Pumping Plant, (b) designing and constructing a fish 
        screen and intake at Clifton Court, and (c) evaluating the San 
        Luis Reservoir Low Point Project.
    Approving the ROD as a ``framework'' does not provide sufficient 
authority to the implementing agencies to undertake all ROD enumerated 
actions as this encompasses more than is authorized under S. 1097 which 
covers only Stage 1 implementation--years 1-7 of the 30-year Program. 
The Administration does not support giving blanket authorization to 
CALFED program components, as this bill proposes. Individual project 
components must go through their own NEPA analysis, and have separate 
authorizations. However, the Administration is willing to continue to 
work with Congress on the challenges inherent in moving forward 
expeditiously on important projects, while still ensuring oversight on 
the behalf of taxpayers and the environment.
    d. Does this provision connote that such activities are to be 
carried out consistent with the ROD, as is mentioned elsewhere in S. 
1097? How much latitude does it give the Secretary of the Interior in 
implementing aspects of the 30-year plan outlined in the ROD?
    Answer. Yes, a general interpretation of Section 3(b) in 
combination with other sections of the bill, implies that 
implementation of the CALFED Bay-Delta Program Record of Decision (ROD) 
should progress in a balanced manner, consistent with the ROD. The ROD, 
as a framework, enumerates various activities that can be implemented 
to achieve the Program objectives. Varying combinations of activities 
could conceivably be employed to achieve those objectives. 
Consequently, the Secretary of the Interior would have discretion in 
implementing those actions that would achieve the objectives rather 
than being specifically held to implementing all enumerated activities. 
However, the bill would not re-authorize CALFED for the full 30 years.
    e. How does this section Sec. 3(b) compare with the more explicit 
authority in Sec. 3(c)(1) for federal agencies to carry out actions in 
this subsection in furtherance of Stage 1 of the ROD? Does the former, 
in your view, confer more general authority than the activities in 
Sec. 3(c)?
    Answer. As alluded to in the question, Section 3(b) provides for 
generally implementing the CALFED Bay-Delta Program in a balanced 
manner, consistent with the Record of Decision (ROD). Section 3(c)(1) 
enumerates specific activities to be carried out by the Federal 
agencies during Stage 1 of the CALFED Bay-Delta Program. Section 3(c) 
appears to limit the broader grant of authority in Section 3(b) since 
Section 3(b) is subject to the provisions of the proposed bill, 
including Section 3(c). Section 3(c) also limits activities that should 
be pursued, but the activities listed are broad and correspond to most 
all of the actions listed in the ROD.

    Question 2. S. 1097 authorizes appropriations for a host of CALFED 
program components, some of which federal agencies already have 
authority to perform.
    a. How much money is currently being spent on activities that could 
be identified as consistent with program components identified in S. 
1097 (e.g., activities in Sec. 3(c)(3), such as water storage, 
conveyance, water use efficiency, and ecosystem restoration)? In other 
words, to what degree is the new appropriation level authorized by S. 
1097 above and beyond federal funds currently being spent on these 
types of activities?
    Answer. A collective investment of approximately $1.925 billion has 
been made in Years 1 through 3 from numerous Federal, state and local 
funding sources, which has contributed to project accomplishments in 
the program areas of water supply reliability, drinking water quality, 
levees, ecosystem restoration, watershed, science and oversight and 
coordination. Of the $1.925 billion, $1.204 billion was state funding, 
$491 million was local funding and $230 million was Federal funding. 
The Federal investment for all directly related programs and projects 
that contribute to achieving the CALFED Record of Decision objectives 
within the geographic solution area, Category A Programs, is a total of 
$230 million.
    Although CALFED-related activities have been funded under existing 
authorities, these should not be considered a baseline for CALFED 
funding. Any CALFED funding in the context of a re-authorized program 
must be considered in the larger context of what is necessary to 
achieve program goals.
    b. What would the benefit be in terms of federal appropriations of 
having the authorization provided under S. 1097 versus continued 
funding under existing authorizations?
    Answer. Over the past two fiscal years, funding for CALFED 
activities has been appropriated through Reclamation's Water and 
Related Resources account, rather than through Reclamation's Bay-Delta 
account. This has occurred because Congress has refused to fund the 
Bay-Delta account without CALFED Program reauthorization. The impact of 
this to Reclamation is that increased funding in specific Central 
Valley Project line items in the Water and Related Resources account 
for in-lieu Bay-Delta activities potentially decreases the amount of 
funding available overall in Water and Related Resources to Reclamation 
core mission activities.
    If the CALFED Program is reauthorized under S. 1097, funding could 
be provided directly to Reclamation's Bay-Delta account, reducing 
funding impacts to Reclamation core mission activities. There is also a 
benefit to Reclamation and to the CALFED Program if other Federal 
CALFED agencies receive authority and funding for CALFED activities 
directly through their own appropriation process. Program authorization 
and direct funding will ensure the full spectrum of CALFED Program 
elements can be funded and implemented in a balanced manner. Without 
authorization of S. 1097, only those program activities for which 
agencies currently have authority can be implemented or funded, 
potentially upsetting the balance of progress across the entire 
Program.
    c. What would be the consequences for federal appropriations of not 
enacting this legislation?
    Answer. Not enacting legislation and subsequent appropriations 
places the implementing Federal agencies in the potential position of 
redirecting funds away from core missions in order to meet authorized 
CALFED Bay-Delta activities. This could have adverse effects on 
programs that benefit California and other states.
    Also, Congress has indicated in House Report 108-357, Making 
Appropriation for Energy and Water Development for the Fiscal Year 
Ending September 30, 2004, and for other Purposes, that it will be 
difficult for Congress to continue its support of the CALFED Bay-Delta 
Program and enact fiscal year 2005 appropriations absent authorizing 
Program legislation.

    Question 3. With regard to the relationship between federal and 
state activities and the implementation of the CALFED Bay-Delta 
Program--
    a. What is the function of the California Bay-Delta Authority, and 
how is it expected to interact with federal agencies and their 
activities under S. 1097? Specify this relationship especially with 
respect to the Department of the Interior.
    Answer. The California Bay-Delta Authority (CBDA) was established 
by State legislation enacted in 2002 to provide a permanent State 
governance structure for the collaborative State-Federal effort that 
began in 1994. Pursuant to that legislation which became effective 
January 1, 2003, the CBDA formally assumed responsibility for 
overseeing State implementation of the CALFED Bay-Delta Program. The 
legislation calls for the CBDA to sunset on January 1, 2006, unless 
Federal legislation has been enacted authorizing the participation of 
appropriate Federal agencies in the CBDA.
    The state legislation specifically charges the CBDA with ensuring 
balanced implementation of the Program, providing accountability to the 
Legislative, Congress and the public, and ensuring the use of sound 
science across all Program areas. The CBDA is a coordinating body and 
has no legal authority over Federal agencies. Final decisions on 
actions continue to reside with the implementing/funding agency.
    Six Federal agencies are named as members of the CBDA including 
three from the Department of the Interior: the Secretary of the 
Interior, the Operations Manager of the U.S. Fish and Wildlife Service, 
California/Nevada Operations Office, and the Regional Director of the 
U.S. Bureau of Reclamation, Mid-Pacific Region. Also named are the 
Regional Administrator of Region IX of the U.S. Environmental 
Protection Agency, the District Engineer of the Sacramento District of 
the Army Corps of Engineers and the Regional Administrator of the 
Southwest Region of the U. S. National Marine Fisheries Service.
    Federal participation in the CBDA is intended to promote 
coordination and interaction with state agency counterparts thereby 
assisting both the state and Federal agencies to more effectively meet 
their common goals and obligations. The existing coordination efforts 
would not markedly change with the enactment of the bill other than the 
Federal members of CBDA would become voting members. But, while 
coordination efforts would not change significantly, a number of 
complex institutional and legal issues would need to be addressed. For 
example, we question whether it would be appropriate for Federal 
members to cast votes on financial matters before the CBDA which are 
entirely within the purview of the State, such as the transfer of funds 
from one state agency to another. Another example is the issue of 
whether the State's conflict of interest codes would apply to Federal 
members of the CBDA; and how we would resolve this question if the 
California Fair Political Practices Commission insisted that the state 
laws are applicable and our Federal legal advisors disagree.
    b. What unique role does (or could) the Bay-Delta Authority have 
that makes it advantageous over having the federal agencies working 
directly with the state agencies?
    Answer. It appears that the Authority is intended by the State of 
California to serve as its primary point of contact with the federal 
government regarding all issues relating to CalFed. In addition, the 
Authority also serves as a forum for education of and collaborative 
discussions between the public, stakeholders, and state and federal 
agencies.
    c. How do the federal CALFED agencies currently interact with the 
California Bay-Delta Authority?
    Answer. Federal CalFed agencies attend Authority meetings, but do 
not participate as voting members. Coordination also takes place 
pursuant to the commitments made by the coordinating agencies in the 
Amended and Restated CALFED Bay-Delta Program Implementation Memorandum 
of Understanding (Implementation MOU). The Implementation MOU sets out 
the roles and responsibilities of the CALFED Agencies in the 
implementation of the CALFED Bay-Delta Program and covers such items as 
program integration and balance, financing, public and tribal 
involvement, science-based adaptive management approach, environmental 
justice, local implementation, etc. The participating agencies meet 
twice a month, in addition to the CBDA meetings, to coordinate CALFED 
related programs and activities.
    d. In your view, do federal agencies need authorization to become 
full partners in CALFED implementation or in implementation of 
activities in the ROD?
    Answer. We believe that we can constructively continue our 
coordination efforts under the umbrella of the Amended and Restated 
CALFED Bay-Delta Program Implementation Memorandum of Understanding and 
through participation in the California Bay-Delta Authority meetings as 
non-voting members.
    e. Are federal agencies participating in Bay-Delta Authority work 
groups? If so, how? If not, why not?
    Answer. While the California Bay-Delta Authority does not have 
``work groups,'' the California Bay-Delta Public Advisory Committee 
(BDPAC) does have a number of stakeholder chaired subcommittees that 
focus on specific program elements and advance recommendations through 
the BDPAC for consideration by the implementing state and Federal 
agencies. Representatives of the Federal agencies regularly attend the 
sub-committee meetings to stay attuned to the stakeholders concerns. In 
addition, the Federal agencies coordinate through state and Federal 
agency meetings twice a month under the umbrella of the Amended and 
Restated CALFED Bay-Delta Program Implementation Memorandum of 
Understanding.
    f. What are the advantages or disadvantages of having the Bay-Delta 
Authority?
    Answer. As noted previously, the California Bay-Delta Authority 
(CBDA) provides a unique forum for discussion and coordination of the 
implementation of the various components of the CALFED Bay-Delta 
Program. This forum is complemented by the state and Federal agencies 
coordination efforts under the Amended and Restated CALFED Bay-Delta 
Program Implementation Memorandum of Understanding.
    The disadvantage of the structure of the CBDA stem from a host of 
unresolved issues relating to the proposed direct federal participation 
in decision making by a State agency.
    g. What authority does the Bay-Delta Authority have over federal 
activities? How are those actions coordinated? Are any actions by the 
Bay-Delta Authority binding for federal agencies?
    Answer. The California Bay-Delta Authority (CBDA) is a coordinating 
body and has no legal or binding authority over Federal agencies. 
Section 79403.5.(c) of the California State Water Code states in part 
that:

          Nothing in this division shall be construed to restrict or 
        override constitutional, statutory, regulatory, or adjudicatory 
        authority or public trust responsibilities of any federally 
        recognized Indian tribe, or any local, state, or federal 
        agency, or to restrict or override authority or responsibility 
        of state, federal, or local water project operations under 
        applicable law and contracts.

    The CBDA assists in prioritizing the CALFED Bay-Delta Program 
activities and funding to ensure balanced implementation; however, 
final decisions continue to reside with the implementing/funding agency 
whether state or Federal. Section 29423.(1) of the California State 
Water Code states: ``Nothing in this division limits or interferes with 
the final decisionmaking authority of the implementing agencies.''
    h. If disagreements occur among stakeholders of the Bay-Delta 
Authority, what mechanisms are in place for resolution?
    Answer. California Bay-Delta Authority (CBDA) members may attempt 
to reach agreement during the course of discussions and deliberations 
at CBDA meetings. Interested stakeholders may resolve issues through 
the California Bay-Delta Public Advisory Committee process, including 
advancing their issues through the various subcommittees to the main 
body. Finally, CALFED participating agencies may raise and resolve 
issues through their twice monthly meetings held under the auspices of 
the Amended and Restated CALFED Bay-Delta Program Implementation 
Memorandum of Understanding. To date, the CBDA has not adopted a 
formalized dispute resolution process.
    i. Do you have recommendations for the Committee on legislative 
language to address this governance issue?
    Answer. Because of the issues associated with being a voting 
member, we recommend that the legislation authorize the Federal 
agencies to continue to work with the CBDA in order to enhance the 
coordination of the CALFED Bay-Delta Program. As previously noted, at 
the present time, we do not feel it is appropriate for the Federal 
members to participate as voting members of the CBDA.

    Question 4. Section 3(d)(3)(A)(I) authorizes appropriations for 
planning activities and feasibility studies for enlarging Shasta Dam 
and Los Vaqueros Reservoir ``to be pursued with project specific 
study.'' Section 3(d)(3)(A)(ii) authorizes appropriations for planning 
and feasibility studies for Sites Reservoir and Upper San Joaquin River 
storage ``requiring further consideration.''
    a. How would this language Sec. 3(d)(3)(A)(I) and 
Sec. 3(d)(3)(A)(ii) change the way the Bureau of Reclamation (BOR) 
currently conducts its planning and feasibility investigations?
    Sections 3(d)(3)(A)(i) and 3(d)(3)(A)(ii) of S. 1097 state:

          (3) Program activities--(A) WATER STORAGE--Of the amounts 
        authorized to be appropriated for fiscal years 2004 through 
        2007 under this Act, no more than $102,000,000 may be expended 
        for the following--(i) planning activities and feasbility 
        studies for the following projects to be pursued with project-
        specific study--(1) enlargement of Shasta Dam in Shasta County 
        (not to exceed 12,000,000); and (II) enlargement of Los 
        Vaqueros Reservoir in Contra Costa County (not to exceed 
        $17,000,000); (ii) planning and feasibility studies for the 
        following projects requiring further consideration--(1) Sites 
        Reservoir in Colusa County (not to exceed $6,000,000); and (II) 
        Upper San Joaquin River storage in Fresno and Madera Counties 
        (not to exceed $11,000,000): (iii) developing and implementing 
        groundwater management and groundwater storage project (not to 
        exceed $50,000,000); and (iv) comprehensive water management 
        planning (not to exceed $6,000,000).

    Answer. Sections 3(c)(3)(A)(i) and 3(c)(3)(A)(ii) would not change 
the way the U.S. Bureau of Reclamation currently conducts planning 
investigations. All of the storage investigations will be conducted 
consistent with existing policies and Federal law.
    b. What practical effect would the different language in clauses 
(i) and (ii) have on these studies?
    Answer. There would be no effect on the way the studies outlined in 
Sections 3(c)(3)(A)(i) and 3(c)(3)(A)(ii) are currently being 
conducted. The studies in clause (i) focus on modifications to existing 
facilities, while the studies in clause (ii) will include an evaluation 
of alternative project locations. This distinction is consistent with 
the CALFED Bay-Delta Program Record of Decision.
    c. Would a CALFED project led by the Bureau of Reclamation (BOR) be 
required to meet all of the requirements guiding federal water 
resources development projects, such as the Principles and Guidelines?
    Answer. Yes. The feasibility studies will meet all the requirements 
for feasibility investigations including Principles and Guidelines, 
U.S. Bureau of Reclamation Law, and necessary environmental 
documentation.

    Question 5. Section 3(c)(3)(B)(I) authorizes $45 million for 
several specific South Delta improvements.
    a. Does this $45 million represent only the federal share of such 
improvements?
    Sections 3(c)(3)(B)(i)(I)(aa) through (dd) of S. 1097 state:

          ``(B) CONVEYANCE--Of the amounts authorized to be 
        appropriated for fiscal years 2004 through 2007 under this Act, 
        no more than $77,000,000 may be expended for the following--
                  (i) South Delta Actions (not to exceed $45,000,000)--
                          (I) South Delta Improvements Program to--
                                  (aa) increase the State Water Project 
                                export limit to 8,500 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;''

    Answer. Yes. A current proposal known as the South Delta 
Improvements Program includes increasing the State Water Project export 
limit to an average of 8,500 cfs, and installation of permanent 
operable barriers in the south Delta. The current schedule is to have 
this project approved and constructed by 2007. Cost estimates provided 
by the California Department of Water Resources for this proposal are 
$120 million. The $45 million would represent the estimated Federal 
share for this project.
    b. What specific South Delta improvements will the federal 
government be involved in and how (e.g., construction, technical 
assistance, etc.)?
    Answer. The U.S. Bureau of Reclamation (Reclamation) will be 
involved in the construction of several permanent operational barriers 
to protect fish and water levels in the south Delta as part of the 
South Delta Improvements Program. This participation is authorized and 
directed under the Central Valley Project Improvement Act, Title XXXIV 
of P.L. 102-575. Reclamation will provide technical assistance to the 
California Department of Water Resources for the design and operation 
of all proposed barriers. Reclamation will also enter into an agreement 
with the State that will define the operation of the Banks Pumping 
Plant at 8,500 cfs pumping capacity to meet the state and Federal Water 
Project's Coordinated Operating Agreement. The U.S. Army Corps of 
Engineers and the U.S. Environmental Protection Agency may be involved 
in the clean water permitting actions required for construction of 
these facilities.
    c. Where the federal government is concerned, what additional NEPA 
analysis would be required to carry out these activities?
    Answer. NEPA compliance is required for all listed activities. The 
U.S. Bureau of Reclamation, in cooperation with the California 
Department of Water Resources, is currently preparing an Environmental 
Impact Statement/ Environmental Impact Report for the South Delta 
Improvements Program to document the decision-making process and 
environmental impacts for the following:
    (1) Increasing the State Water Project export limit to 8,500 cfs to 
support a U.S. Army Corps of Engineers diversion permit and conveyance 
of Federal water supplies;
    (2) Installing permanent, operable barriers in the south Delta;
    (3) Installing and operating temporary barriers in the south Delta 
until the fully operable barriers are constructed; and (4) Actions to 
protect navigation and local diversions not adequately protected by the 
temporary barriers.
    d. In your view, can these South Delta improvements be accomplished 
without ``avoiding adverse fishery impacts and in-Delta water supply 
reliability''--language noted in the ROD (p. 49)?
    Answer. Yes. The operation of the permanent barriers and increasing 
the permitted pumping capacity to 8,500 cfs can be accomplished while 
avoiding the adverse impacts noted. Mitigation measures are being 
formulated to address the potential adverse fishery impacts associated 
with the implementation of the South Delta Improvements Project. 
However, assuring that there would be no additional fishery and water 
supply reliability impacts may reduce the Delta export water supply 
benefits resulting from the South Delta Improvement Program.
    e. Do you believe statutory protection for these objectives is 
necessary as is provided under Sec. Sec. 3(c)(3)(B)(i)(I)(aa) and (dd) 
of H.R. 2641?
    Sections 3(c)(3)(B)(i)(I)(aa) through (dd) of H.R. 2641 state:

          ``(B) CONVEYANCE--Of the amounts authorized to be 
        appropriated for fiscal years 2004 through 2007 under this Act, 
        no more than $77,000,000 may be expended for the following--
                  (i) South Delta Actions (not to exceed $45,000,000)--
                          (I) South Delta Improvements Program to--
                                  (aa) increase the State Water Project 
                                export limit to 8,500 cfs; such 
                                increased pumping is conditional upon 
                                avoiding adverse impacts to fishery 
                                protection and in-Delta water supply 
                                reliability;
                                  (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; such increased pumping is 
                                conditional upon avoiding adverse 
                                impacts to fishery protection and in-
                                Delta water supply reliability;''

    Answer. Statutory protection is not needed for fish species that 
are listed as either state or Federal threatened or endangered species. 
The language in the referenced section of H.R. 2641 is ambiguous in 
that it continues the use of a broad and undefined phrase ``fishery 
protection,'' rather than protection for specific defined species. In 
addition, ``in-Delta water supply reliability'' is also subject to 
interpretation.
    f. What actions are anticipated in the South Delta to minimize 
impacts on drinking water quality? Who will agricultural drainage and 
saltwater intrusion be d.) In your view, can these South Delta 
improvements be accomplished without ``avoiding adverse fishery impacts 
and in-Delta water supply reliability''--language noted in the ROD (p. 
49)? Note: This is the question, verbatim, as posed by the Senate.)
    Answer. Note: Please clarify the question, if you feel our response 
does not answer the question posed. A basic purpose of the South Delta 
Improvements Program is to ensure water of adequate quantity and 
quality for agricultural diverters within the south Delta, and to 
benefit fisheries by reducing straying of salmon into the south Delta. 
The South Delta Improvements Program will have beneficial water quality 
and fishery effects, and will result in less than significant adverse 
impacts through implementation of needed mitigation measures. The type 
of action anticipated to minimize impacts on drinking water quality 
involves alternative operation of various tidal gates associated with 
the operation of the State of California Clifton Court Forebay.

    Question 6. Section 3(c)(3)(C)(i) of S. 1097 authorizes 
appropriations for water conservation projects that provide water 
supply reliability, water quality, and ecosystem benefits to the Bay-
Delta system.a. In the view of the Department of the Interior (DOI), 
does Sec. 3(c)(3)(C)(i) of S. 1097 provide blanket authority for DOI 
and others to undertake water recycling and desalination projects in 
California (subject to the constraints of the subsection)?
    Answer. No. While Section 3(c)(3(c)(i)-(v) provides authorization 
for appropriations to be expended on water recycling and desalination 
projects, it does not provide authority for the Secretary to undertake 
feasibility studies or construction of projects for those purposes. 
However, the Secretary already has feasibility study authority for 
water reclamation and reuse projects under P.L. 102-575, Title XVI.
    b. How would this provision affect implementation and funding of 
previously authorized Title 16 projects?
    Answer. Previously authorized projects under P.L. 102-575, Title 
XVI, as amended, are probably not directly impacted. However, Section 
3(c)(3)(C)(iii)(IV) states that the Federal cost share of any water 
recycling project under this proposed legislation shall not exceed 25 
percent or $50 million per project, an increase over the current $20 
million per cap. This change would therefore affect new projects, but 
not already-authorized projects.
    Feasibility study authority already exists under P.L. 102-575, 
Section 1604, for the U.S. Bureau of Reclamation to conduct water 
recycling and reuse feasibility studies.

    Question 7. S. 1097 refers to the ``beneficiary pays provisions of 
the Record of Decision.'' The ROD states that ``cost allocation plans 
will be based on the principles of beneficiary pays.'' This principle 
state that costs, to the extent possible, shall be paid by the 
beneficiaries of the program actions.
    a. S. 1097 authorizes specific appropriation amounts for various 
categories of activities. Within each of the categories, how will 
spending on individual projects be prioritized? For example, what 
method would be used to select ecosystem projects to receive funds, and 
how would available funds be distributed across selected projects?
    Answer. The implementing Federal agency will determine which 
specific projects have priority within a program on a project-by-
project basis. Federal agencies working with the Administration will 
submit annual budget requests for Congress' review and appropriation. 
Annual requests for project funding and priority will be based on 
Federal parameters and budgetary guidance for that fiscal year.
    The language of the proposed bill does not limit the Federal share 
of any project or any agency participation to 33.3%, but rather it 
limits total Federal participation in the Program to 33.3%.
    Certain CALFED Bay-Delta program elements, including the Ecosystem 
Restoration Program, are predominantly implemented through grant 
programs. These grant programs have and will continue to target 
priorities established by the implementing agencies, and the CALFED 
Science Program along with stakeholder input. To the extent feasible, 
grant awards will be based upon competitive procedures.
    b. In S. 1097, the federal portion of the cost of implementing the 
CALFED Program is limited to 33.3%; the bill, however, does not appear 
to guide federal cost sharing on individual activities. Under S. 1097, 
how would the federal portion of costs be determined for each of the 
studies and projects undertaken as part of CALFED? For example, what 
would be the federal cost-share responsibility for Shasta dam and for 
the Delta levees?
    Answer. For several agencies the Federal portion of cost will be 
based on a specific project-by-project basis while other Federal 
agencies will base the cost sharing at the program level. Individual 
agencies will determine how to portion the costs for each of the 
studies, projects, and/or programs undertaken as part of the CALFED 
Bay-Delta Program.
    The Federal costs for water resource studies and projects are based 
on cost sharing requirements and allocation methodologies outlined in 
Federal laws, policies and Executive level guidance, i.e., Principles 
and Guidelines.
    The four feasibility level studies, including Shasta Dam 
Enlargement, within the Storage Program Element are being pursued with 
state cost sharing on a programmatic level. This arrangement allows 
either party to accomplish work with or without specific funding from 
either party, but provides for the crediting of costs of each party in 
the final reconciliation.
    The project specific cost sharing will be addressed within the 
feasibility study and includes an evaluation of the combined factors of 
costs and benefits, the financial capability of the project 
beneficiaries and a cost allocation of project purposes. The final 
feasibility report will provide detailed information of the Federal and 
non-Federal cost sharing arrangement.
    c. Because many federal agencies use federal appropriations on 
projects that under current law are eligible for a higher federal cost-
share, would the language in S. 1097 restrict federal participation in 
a project to 33.3%? Would each individual federal agency's 
participation be limited to 33.3%?
    Answer. Each Federal agency would have to submit a recommendation 
to the Office of Management and Budget (OMB) and the Administration for 
approval on how to handle that individual agency's interpretation of 
legislation and the 33.3% provision versus previous law(s) and policy. 
Agencies may determine the legislation supersedes previous laws and/or 
policy while other agencies may determine eligibility at higher Federal 
cost-shares rates. In both cases the agency's coordination and approval 
by OMB and the Administration would be required before either option 
was implemented.
    d. Under S. 1097 and the ROD, how will the cost of ecosystem 
restoration be allocated among the federal, state, and local CALFED 
sponsors, recognizing the difficulty of identifying direct 
beneficiaries of ecosystem restoration?
    Answer. Our current view is that if multiple separable features or 
benefit categories are identified in a project the component for each 
individual separable feature, i.e., ecosystem restoration, will be 
determined based on principles and guidelines and the resulting cost-
sharing for each separable project feature, i.e., ecosystem 
restoration, for that implementing agency or local CALFED project 
sponsor will be determined.
    e. Ecosystem restoration and mitigation costs raise the question of 
legacy environmental harm and who is responsible. Are costs related to 
activities that will improve environmental health to be allocated to 
the historic water users who benefited from the projects that diverted 
water away and thus caused ecosystem damage, or are ecosystem 
restoration and mitigation costs to be allocated to the beneficiaries 
of the improved environment?
    Answer. Site specific mitigation required and mitigation costs will 
be attributed to new projects for those individual new project's 
environmental impacts. Mitigation work will be allocated to the Federal 
and non-Federal partners involved in a project based on applicable 
mitigation laws and policies. Environmental restoration or re-
establishment or betterment of the environment health will be cost 
shared based on the applicable agency's restoration laws and policies 
and cost shared according to those agency's environmental restoration 
standards.

    Question 8. Will S. 1097 help implement the recent Colorado River 
agreement? If so, what provisions will aid the agreement's 
implementation?
    Answer. Although this legislation will not directly assist with the 
implementation of the Colorado River Agreement, certainly 
implementation of the CALFED Bay-Delta Program will provide for 
increasing water supply flexibility, water quality and environmental 
restoration. In addition, this allows for a robust water transfer 
market. All of the elements which will aid California in keeping its 
promise to limit its future use of Colorado River water.
    Question 9. In your testimony, you raise a number of concerns with 
S. 1097, as introduced.
    a. You note that S. 1097 references two studies that the 
Administration has not cleared. Which studies are those?
    Answer. The legislation refers to the Southern California 
Comprehensive Water Reclamation and Reuse Study and the Bay Area 
Regional Recycling Program, both of which are authorized under Title 
XVI of P.L. 102-575.
    b. You note that S. 1097 presumes authorization of storage projects 
that may not be authorized after additional studies are completed. You 
further state that ``CalFed should identify alternate paths for 
achieving the outcomes of the storage component of the program.''
    Do you have any suggestions as to how the storage component of the 
program can best be achieved?
    Answer. The Water Supply Reliability Program Element of CALFED has 
several component actions that in varying combinations could be pursued 
to achieve increased water supplies. Should surface storage projects 
not be deemed feasible, complimentary water conservation and 
groundwater storage projects could be investigated and pursued. 
Implementation of CALFED Bay-Delta Program activities will be advised 
by the best available science and adaptively pursued so as to achieve 
the objectives of the Program which does not necessarily imply 
implementing all projects enumerated in the Record of Decision.
    c. You state the Administration's concern that the bill gives 
blanket authorization to projects that have not undergone the typical 
Executive review process.
    Which projects outlined in S. 1097 is the Administration concerned 
with?
    Answer. The language in several sections of the proposed 
legislation appears to give blanket authorization to projects that have 
not undergone the typical project development and Executive review 
process. For example:
    (1) Section 3(c)(3)(A)(iii) provides for both developing and 
implementing groundwater storage projects. Groundwater Projects are 
typically locally driven and Federal participation and funding should 
be subject to the responsible Federal implementing agencies feasibility 
investigations and review process.
    (2) Section 3(c)(3)(C)(iii) directs the Secretary to review any 
seawater desalination and regional brine line feasibility studies, 
regardless of prior U.S. Department of Interior involvement in those 
studies. Such studies are again locally driven and should be adopted by 
the Administration and/or Congress only after being subjected to the 
same scrutiny that applies to Federally-sponsored studies.
    d. With regard to the cross-cut budget, your testimony notes that 
the Department of Justice has alternate language. When will that 
language be provided to the Committee?
    Answer. We are consulting with the Department of Justice and will 
provide the Committee with a response in the near future. Follow-Up 
Questions form Senator Gordon Smith

        Response of Bennett Raley to Question From Senator Smith

    Question 1. My Question does not relate directly to Cal-Fed, but 
rather to a situation in my state. On August 8, 2003, I joined with 
Senator Wyden and Congressman Walden to send a letter to Commissioner 
Keys, requesting that he reconsider the agency's decision to deny 
applicant status in an Endangered Species Act consultation to three 
irrigation districts in southern Oregon.
    I received a response from the Pacific Northwest Regional Director, 
Bill McDonald, that he had been asked to respond on behalf of the 
Commissioner, and that he would not reconsider this earlier decision 
not to grant applicant status to these districts, yet provided few 
justifications as to how his decision had been arrived at.
    I am concerned that his decision, which involves diversions from 
the Klamath Basin, was made at the regional level, even though two 
regions are involved. I am also concerned that this decision may have 
been made without review by the Solicitor's office in Washington.
    In sum, the applicants (the Talent, Medford, and Rogue River Valley 
Irrigation Districts) applied to applicant status based on the Joint 
Consultation Regulations that define Applicant as ``any person, as 
defined in Sec. 3(13) of the Act, who requires formal approval or 
authorization form a federal agency as a prerequisite to conducting the 
action.'' 50 CFR 402.02 (1999).
    Was this decision made, reviewed or approved in Washington, D.C.?
    How does the Department justify these districts applicant status, 
based on the fact that operation of facilities owned and/or operated by 
the districts is an interrelated and/or interdependent activity with 
Reclamation's operation of the Rogue River Basin Project?
    Will you commit to reviewing this decision? I am willing to provide 
you with any additional documentation or prior correspondence you may 
require.
    Answer. The Department will respond to Senator Smith directly with 
regard to this question.
     Responses of Bennett Raley to Questions From Senator Feinstein
    Question 1. I understand that the Administration supports the 
Calfed Bay-Delta Program and the August 28, 2002 Record of Decision. Do 
you believe that there has been an effective partnership between the 
Federal government and the State of California in working on these 
important water management issues?
   What do you expect for that partnership in the future?
    Answer. The CALFED Bay-Delta Program Record of Decision 
contemplates a 30-year Program to improve the quality and reliability 
of California's water supplies and revive the San Francisco Bay-Delta 
ecosystem. The first three years of the Program's implementation have 
produced notable progress in improving water supply reliability and the 
ecological health of the Bay-Delta Estuary. This progress has been 
possible due to the cooperative and collaborative efforts of the 
implementing Federal, state and local agencies. This level of 
interaction is anticipated to continue into the future so as to realize 
the long-term benefits and expectations of the CALFED Bay-Delta 
Program.
   Do you have any recommendations for effective governance 
        structure in CALFED legislation, bringing together State and 
        Federal agencies?
    Answer. We believe that we can constructively continue our 
coordination efforts under the umbrella of the Amended and Restated 
CALFED Bay-Delta Program Implementation Memorandum of Understanding and 
through participation in the California Bay-Delta Authority (CBDA) 
meetings as non-voting members.
    Because of the legal and institutional issues associated with being 
a voting member, we recommend that the legislation authorize the 
Federal agencies to continue to work with the CBDA in order to enhance 
the coordination of the CALFED Bay-Delta Program. As previously noted, 
at the present time, we do not feel it is appropriate for the Federal 
members to participate as voting members of the CBDA.

    Question 2. In her testimony on Calfed legislation last Congress 
before this Subcommittee, Secretary Norton stated that ``Congress needs 
to authorize the Calfed Program so we can proceed with balanced 
progress on all resource fronts.'' Is that still the Administration's 
position?
    Answer. Yes. Secretary Norton on many occasions has emphasized the 
Administration's commitment to making CALFED work for the long term. 
The Secretary has stated that the CALFED Bay-Delta Program is a prime 
example of a forward looking, long-term approach to water management 
and conflict resolution. The U.S. Department of the Interior (Interior) 
is committed to working through the CALFED process to increase water 
supplies and their reliability, improve the environment and increase 
the flexibility and accomplishments of the Bay-Delta system and 
California's water management infrastructure. Moving the Program from 
planning to implementation is a complex challenge given the fiscal 
realities at hand. Interior will continue to work closely with you to 
get the CALFED Bay-Delta Program authorized.

    Question 3. In your oral statement at the hearing, you discussed 
the Southern California Comprehensive Water Reclamation and Reuse 
Study. However, you did not address the status of the second water 
recycling study in California--the Bay Area Regional Recycling 
Program--also authorized in Title XVI, P.L. 102-575. This feasibility 
study was completed in December 1999, but like the Southern California 
feasibility study, has not been submitted to Congress.
   What is the status of the Bay Area Study?
    Answer. The report has been reviewed and processed. The U.S. Bureau 
of Reclamation recently transmitted the report for transmission to 
Congress.
   When will it be submitted to Congress?
    Answer. The report was transmitted to Congress in early December 
2003.

    Question 4. How much funding has the Federal government contributed 
over the first three years of Stage 1 of this Program? How much has the 
State contributed?
    Answer. A collective investment of approximately $1.925 billion has 
been made in Years 1 through 3 from numerous Federal, state and local 
funding sources which has attributed to project accomplishments in the 
program areas of water supply reliability, drinking water quality, 
levees, ecosystem restoration, watershed, science and oversight and 
coordination. Of the $1.925 billion, $1,204 million was state funding, 
$491 million was local funding and $230 million was Federal funding. 
The Federal investment for all directly related programs and projects 
that contribute to achieving the CALFED Record of Decision objectives 
within the geographic solution area, Category A Programs, is a total of 
$230 million. In addition, the Federal investment for all directly 
related and overlapping programs and projects that contribute to 
achieving the CALFED Bay-Delta Program Record of Decision objectives 
within and overlapping the geographic solution area is a total of $600 
million.

    Question 5. How would you describe the level of cooperation and 
commitment of the other Federal agencies to this Program?
    Answer. The level of cooperation and commitment of the 
participating Federal agencies has been steady, however, not uniform. 
This can be attributable to varying funding levels across the agencies, 
lulls in project implementation schedules and diversity of agency 
missions. The enactment of legislation and accompanying appropriations 
would aid in stabilizing the involvement and level of participation by 
Federal agencies.

    Question 6. What is the status of the work on the following storage 
projects:
   Shasta Dam?
    Answer. A Mission Statement Milestone Report has been completed. 
This report describes the plan formulation rationale, the study 
objectives and mission statement, as well as identifying a number of 
concept plans for future investigation. A thorough review of ecosystem 
restoration opportunities on the Sacramento River has been completed, 
as well as a preliminary investigation of potential effects of an 
increased reservoir on the McCloud River. A public outreach program has 
been initiated to involve stakeholders in the plan formulation process. 
A Notice of Intent/Notice of Preparation that initiates formal public 
scoping will issued in the spring of 2004.
    The project schedule is as follows:

             Action                     ROD                Current

Report on Initial Alternatives   .................  March 2004
Plan Formulation Report          .................  June 2005
Draft Feasibility Report & EIS/  .................  March 2007
 EIR
Final Feasibility Report & EIS/  December 2003      September 2007
 EIR

   Los Vaqueros?
    Answer. A draft Planning Report has been completed that provides a 
preliminary analysis of the physical effects of enlarging the reservoir 
as well as an array of operational scenarios. Pending an advisory vote 
by Contra Costa Water District ratepayers in March 2004, work will be 
initiated on the state and Federal environmental compliance process as 
well as additional engineering studies. During the period before the 
March 2004 vote, agency coordination and identification of work 
activities will be accomplished immediately following the March vote.
    The project schedule is a follows:

             Action                     ROD                Current

Local Advisory Vote              .................  March 2004
Plan Formulation Report          .................  November 2004
Draft Feasibility Report & EIS/  .................  June 2006
 EIR
Final Feasibility Report & EIS/  December 2003      June 2007
 EIR

   Sites Reservoir?
    Answer. Planning studies are focused on developing a purpose and 
need description and screening criteria for project alternatives based 
on the CALFED Bay-Delta Program Record of Decision. Work is continuing 
in areas of hydrology, water quality, and hydraulics modeling to assess 
potential project benefits and impacts. Reclamation is also reviewing 
DWR studies relevant to geology, engineering, and conveyance. Initial 
coordination with DWR on economic analyses for the feasibility study 
has begun. Reclamation has initiated agreements with several tribes to 
assess benefits and impacts to their Indian Trust Assets. Reclamation 
is also developing a work plan to assess potential Federal interest in 
the proposed North of Delta Off-Stream Storage plan.
    The project schedule is a follows:

             Action                     ROD                Current

Report on Initial Alternatives   .................  June 2004
Plan Formulation Report          .................  September 2004
Draft Feasibility Report & EIS/  .................  June 2005
 EIR
Final Feasibility Report & EIS/  August 2004        June 2006
 EIR

   Delta Wetlands?
    Answer. The California Department of Water Resources plans to 
publicly release the In-Delta Storage Draft State Feasibility Report in 
December 2003. The State Feasibility Report addresses the technical and 
engineering practicality of a re-engineered alternative that meets 
State design requirements. There will be a 30-day public review period 
subsequent to the final release of the State Feasibility Report which 
is anticipated in February 2004.
    Both the CALFED Science Review Board and DWR are working on 
developing a plan for resolving water quality issues associated with 
water storage on the islands. The cost of an In-Delta Storage Project 
is estimated at $774 million. The U.S. Bureau of Reclamation's 
involvement in the planning study is limited to technical assistance 
since a Federal feasibility study investigation has not been authorized 
by Congress.
    A recommendation by the California Bay-Delta Authority regarding 
the future of the In-Delta Storage Program is scheduled for April 2004.
   Upper San Joaquin storage projects?
    Answer. An interim planning report was completed in October 2003 
describing the storage options still being considered. The findings in 
the interim report show that six surface storage projects appear 
technically feasible and will be considered in more detail. A Notice of 
Intent and Notice of Preparation will be issued in January 2004 to 
initiate formal public scoping . An alternatives report is planned for 
August 2004 that will describe the final set of alternatives to be 
considered in the study.
    The project schedule is as follows:

             Action                     ROD                Current

Issue NOI/NOP                    .................  January 2004
Report on Initial Alternatives   .................  August 2004
Plan Formulation Report          .................  August 2005
Draft Feasibility Report & EIS/  .................  December 2006
 EIR
Final Feasibility Report & EIS/  December 2003      December 2007
 EIR

    Question 7. What is the status of work on new groundwater storage?
    Answer. Within the CALFED Bay-Delta Program, the California 
Department of Water Resources is the lead agency working with local 
interests in evaluating new groundwater storage. To date, the 
conjunctive management program has shown great potential to provide 
short-term water supply benefits. Funding under the State's Proposition 
13 has allowed many locally managed and controlled groundwater studies 
and pilot projects to be developed. Additional work is needed to 
identify more new groundwater projects and implement the projects 
currently identified.

    Question 8. What are the significant water quality challenges 
confronting water users in the Bay-Delta. What progress is Calfed 
making with respect to these challenges?
    Answer. Great strides have been made over the last few years in 
understanding how the Delta works, but much more scientific 
understanding is needed. Delta water quality is at times degraded for a 
number of reasons and this can impact use of the water by agriculture, 
fish and wildlife and municipal suppliers. Man-made and natural 
pollutants can enter the Delta from many upstream watersheds. Water 
diversions may affect the circulation patterns within the Delta. Point 
and nonpoint discharges within the Delta and upstream create both local 
and general water quality concerns. Water diversions upstream and in 
the Delta reduce the overall amount of fresh water in the system, which 
may concentrate degraded constituents and reduce the ability of the 
Delta to rely on natural flushing to resolve water quality problems. 
Significant tidal influences affect delta water quality in ways we are 
still trying to understand.
    The CALFED Bay-Delta Program agencies primary approach to resolving 
water quality concerns is a competitive grant programs. The grant 
review process identifies the highest priority projects with the best 
potential for making near-term improvements and/or developing critical 
information necessary to resolving water quality problems. To date, the 
CALFED agencies have invested over $34 million in 21 water quality 
projects through the Drinking Water Quality and Ecosystem Restoration 
Programs. Examples of the projects funded include:
          (1) Developing solution to improve dissolved oxygen 
        conditions in the San Joaquin River near Stockton;
          (2) Evaluate mercury transport and uptake within the Delta 
        watershed; and
          (3) North Bay Aqueduct Alternative Intake Study.
    In addition, CALFED has supported regional efforts using innovative 
management to provide better water quality ``at the tap,'' including 
the Bay Area's Bay Area Water Quality and Supply Reliability Program.
    Water quality has also benefited from other CALFED Bay-Delta 
program elements. Most notably, the watershed program, which has funded 
over 50 projects with over $19 million, has benefits for both the 
ecosystem and for downstream water quality.

    Question 9. What progress is being made in the ecosystem 
restoration component of the program?
    Answer. Since its inception nearly 7 years ago, the Ecosystem 
Restoration Program (ERP) has facilitated funding for a variety of 
projects contributing to ecosystem restoration on within the ERP's 
geographic scope. ERP investments contributed to sustaining regulatory 
commitments for all CALFED Bay-Delta Program elements in Years 1 
through 3. As of June 2003, 393 ecosystem projects have been funded in 
the approximate amount of $480 million that address recovering 
endangered and other at-risk species, rehabilitating ecological 
processes, maintaining or enhancing harvestable species populations, 
protecting and restoring habitats, preventing establishment of non-
native invasive species and reducing their impact, and improving or 
maintaining water and sediment quality. These projects have resulted in 
the thousands of acres of habitat being protected or restored and 75 
new or improved fish screens have been installed. Additionally, 23 
comprehensive scientific studies have been initiated to address areas 
of uncertainty and develop/enhance ecological data.
    In addition, certain ecosystem restoration activities we are 
implementing pursuant to the Central Valley Project Improvement Act 
(CVPIA) are coordinated through the CALFED ERP Single Blueprint--
concept for restoration and species recovery within the geographic 
scope of the ERP--and support the goals and objectives of the CALFED 
ERP. Implementation of CVPIA activities have resulted in positive 
effects to the numerous species and habitat types throughout the 
Central Valley ecosystem. The investment and results of those CVPIA 
program activities coordinated with the CALFED ERP are briefly 
highlighted as follows:
Habitat Restoration ($124 million investment).
   Applied up to 800,000 acre-feet of Central Valley Project 
        water each year to improve stream flows for salmon, steelhead, 
        and other fish on the Sacramento, American, and Stanislaus 
        Rivers and on Clear Creek.
   Removed five dams and 15 in-stream diversions in basin, 
        providing improved access to over 24 miles of upstream spawning 
        areas and enhanced survival of juvenile outmigrants.
   Acquired over 8,000 acres of riparian habitat.
   Restored or enhanced over 500 acres along 30 miles of basin 
        streams.
   Acquired over 108,000 acre-feet of water through purchase or 
        exchange to improve fish habitat and passage, stream flow, and 
        water temperatures.
   Added approximately 156,000 tons of gravel to streams.
   Made operational changes to protect fish at the state and 
        Federal pumping plants and at the Delta Cross Channel Gates.
   Implemented the Vernalis Adaptive Management Program.
   Acquired over 172 acres of riparian habitat.
   Restored or enhanced over 500 acres along 8.7 miles of basin 
        streams to provide cover and shade.
   Enhanced over 5.4 miles of stream channel as instream 
        habitat for anadromous fish.
   Acquired over 844,000 acre-feet of water for restoration of 
        fish-friendly instream flows.
   Placed nearly 72,000 tons of gravel in San Joaquin River 
        Basin streams to increase spawning habitat availability for 
        native fishes.
Structural Measures ($264.6 million investment)
   Screened or otherwise modified 19 diversions with a total 
        capacity of over 6,700 cubic feet per second to reduce 
        entrainment of juvenile fishes.
   Installed Shasta Dan temperature control device.
   Improved Coleman National Fish Hatchery-Raceways and 
        installed a new water treatment system to protect hatchery 
        production.
   Constructed Livingston Stone National Fish Hatchery on the 
        mainstem Sacramento River to assist in the management and 
        recovery of winter-run Chinook salmon.
   Modified and improved the Keswick Fish Trap.
   Screened 6 diversions to protect juvenile fish.
   Installed a seasonal barrier at the head of Old River.
   Removed a barrier to fish migration on the Cosumnes River.

    Question 10. Please describe the so-called ``Napa Proposition.'' Is 
it consistent with the Calfed Record of Decision? What is the 
significance of this effort?
    Answer. The Napa Proposition is a process to develop feasible plans 
to implement key actions contained in the CALFED Bay-Delta Program 
Record of Decision (ROD). The primary objective of the initial Napa 
discussions was to develop a proposal for the integration of the State 
Water Project (SWP) and the Federal Central Valley Project (CVP) in a 
manner that is consistent with the CALFED ROD. The proposition was 
developed during meetings that were a continuation of an ongoing 
relationship between the project agencies and their contractors to 
ensure better coordination of the day-to-day operations of both 
projects.
    The proposition is expected to moderately increase supplies for 
both projects. By better managing risk, it will allow higher 
allocations earlier in the year, increasing certainty for both CVP and 
SWP contractors. Most importantly, the proposition sets the stage for 
implementation of key CALFED Bay-Delta program elements, including 
increasing pumping capacity at the SWP Banks Pumping Plant to 8,500 
cfs, implementation of the South Delta Improvements Project, 
continuation of the Environmental Water Account, and making 
improvements to Delta water quality among other things.
    The Napa Proposition was really just the beginning of a process and 
no final decisions have been made. The proposition is being considered 
through a more formal decision-making process described in the CALFED 
ROD, including various stakeholders and public review activities.

    Question 11. What is the California Bay-Delta Authority? Please 
describe the role of the Federal agencies in the Authority.
    Answer. The California Bay-Delta Authority (CBDA), established by 
California legislation enacted in 2002 (California Bay-Delta Authority 
Act), provides a permanent governance structure for the collaborative 
State-Federal effort that began in 1994. The CBDA is charged 
specifically with ensuring balanced implementation of the Program, 
providing accountability to the Legislature, Congress and the public, 
and ensuring the use of sound science across all Program areas.
    The CBDA is composed of representatives from six State agencies and 
six Federal agencies, five public members from the Program's five 
regions, two at-large public members, a representative from the Bay-
Delta Public Advisory Committee, and four ex officio members who are 
the chairs and vice-chairs of the California Senate and Assembly water 
committees. Currently Federal agencies are engaging with their State 
CALFED partner agencies and have participated as nonvoting members in 
the first two meetings. This engagement takes the form of coordination 
and discussions on Program implementation efforts.

    Question 12. What relationship, if any, does the Calfed Program 
have with respect to compliance with the Colorado River Agreement?
    Answer. Implementation of the CALFED Bay-Delta Program will provide 
for increasing water supply reliability and flexibility in operations, 
and water quality throughout the Bay-Delta estuary. These anticipated 
improvements will aid in meeting the future water resource needs of the 
State as a whole and enable California to keep its promise to limit its 
future use of Colorado River water.

      Responses of Bennett Raley to Questions From Senator Dorgan

    Question 1. Do you believe that it is important to enact Federal 
authorizing legislation for the Calfed Bay-Delta Program this Congress? 
Why or why not?
    Answer. Yes, and we have said repeatedly that it is important for 
this Congress to pass CALFED legislation. Not enacting legislation and 
subsequent appropriations places the implementing Federal agencies in 
the potential position of redirecting funds away from core missions in 
order to meet authorized CALFED Bay-Delta activities. This could have 
adverse effects on programs that benefit California and other states. A 
lengthy protraction of this effort will also confound the planning 
efforts underway to satisfy the competing water resource needs of 
California.
    Also, Congress has indicated in House Report 108-357, Making 
Appropriation for Energy and Water Development for the Fiscal Year 
Ending September 30, 2004, and for other Purposes, that it will be 
difficult for Congress to continue its support of the CALFED Bay-Delta 
Program and enact fiscal year 2005 appropriations absent authorizing 
legislation.

    Question 2. Does the Calfed Bay-Delta Program enjoy broad support 
among stakeholders in California?
    Answer. Stakeholders and the public have demonstrated a continuing 
interest and commitment to the goals outlined in the CALFED Bay-Delta 
Program Record of Decision (ROD) through participation in the 
California Bay-Delta Public Advisory Committee as well as numerous 
public meetings focusing on specific program and project implementation 
efforts. This commitment has been tempered by current fiscal realities 
and concerns that the broad goals of the ROD continue to be pursued, 
but over a more extended time frame.

    Question 3. What implications, if any, does authorizing the Calfed 
Program have for other western states?
    Answer. Authorization of the CALFED Bay-Delta Program in the 
context of implementing the water supply reliability and environmental 
improvements outlined in the Program's Record of Decision will have 
broad effects statewide and throughout the West. The Bay-Delta system 
provides drinking water to 22 million people, supports a trillion 
dollar economy, including a $27 billion agricultural industry, and 
forms of the hub of the largest estuary on the west coast which is home 
to 750 plant and animal species and supports 80 percent of California's 
commercial salmon fisheries. Better management of California's water 
resources, will provide security for all other western states and 
compliment the achievements made in the Colorado River Agreement. In 
addition, providing stable supplies will enhance economic recovery for 
the 5th largest economy in the world. It further will provide 
interstate and international benefits by increasing populations of 
salmon and other anadromous fish on the west coast and by improving 
habitat for migratory wildfowl on the Pacific Flyway.

    Question 4. When will the secretary complete the additional 
environmental reviews for the December 19, 2000 Trinity River Record of 
Decision, as ordered by the court? Please provide a schedule detailing 
interim steps and final deadline for completion.
    Answer. The Court ordered deadline for completing the Trinity 
Supplemental Environmental Impact Statement (SEIS) is July 9, 2004. In 
the next few weeks, the U.S. Department of Justice anticipates 
requesting the Court's consideration of a delay in completing the SEIS. 
The interim steps required to complete the SEIS are (1) issue 
Administrative Draft SEIS, (2) agency comment period, (3) respond to 
agency comments, (4) issue public draft SEIS, (5) public comment 
period, (6) complete Sec. 7 consultation under the Endangered Species 
Act, (7) respond to public comments, and (8) complete SEIS. A schedule 
for these interim activities will be available upon the Court's 
consideration of our request.

    Question 5. Would enactment of S. 1097 require any adjustments in 
the amount or scheduling of releases of water from the Trinity River 
Division of the Central Valley Project that are provided for in the 
December 19, 2000 Trinity River Record of Decision issued by the 
Secretary?
    Answer. No. The decision by the Secretary of the Interior on the 
amount and scheduling of releases of water from the Trinity River 
Division was made pursuant to provisions of the Central Valley Project 
Improvement Act. The proposed legislation does not address Trinity 
River Division operations.

    Question 6. Would the Napa Proposal, if adopted, require any 
adjustments in the amount or scheduling of releases of water from the 
Trinity River Division of the Central Valley Project that are provided 
for in the December 19, 2000 Trinity River Record of Decision issued by 
the Secretary?
    Answer. No. The Napa Proposition is silent on Trinity River 
Division operations. All project operation modeling has assumed 
implementation of the Trinity River Record of Decision. Although 
operations of the Trinity River Division can affect water supplies 
available in the Sacramento/San Joaquin River Delta, there is no 
reference in the Proposition regarding adjustments in the amount or 
scheduling of releases that are provided for in the December 19, 2000 
Trinity River Record of Decision issued by the Secretary of the 
Interior.

    Question 7. Does the Administration agree with the views expressed 
by the California Secretary of Resources in her October 2, 2003 letter 
to Senators Feinstein and Boxer that
    ``[N]othing in the Napa Proposal jeopardizes implementation the 
Trinity River Record of Decision;'' and
    ``[T]he instream flow schedule in the Trinity River ROD is the 
foundation for restoration of the Trinity River and its native fish.''
    Answer. The U.S. Department of the Interior (Interior) agrees that 
nothing in the Napa Proposition jeopardizes the Trinity River Record of 
Decision (ROD). Interior also agrees that the Trinity ROD provides the 
basis for addressing the restoration of the Trinity River and its 
native fish in a scientific manner using an adaptive management 
strategy.

    Question 8. Do you believe that the Trinity River ROD 
implementation should occur prior to implementation of the Napa 
Proposal? Why or why not?
    Answer. The U.S. Department of the Interior supports moving forward 
on parallel tracks for implementation of these actions. Both Trinity 
River Division operations and integrated Central Valley Project/State 
Water Project operations (Napa Proposition) will be included in the 
Section 7 consultation under the Endangered Species Act for the 
Operational Criteria and Plan for the projects. Neither action can be 
implemented until that consultation is complete. Implementation of 
these actions will also require completion of separate, required 
environmental impact analysis. At that point, final decisions can be 
made on implementation of these actions.

    Question 9. Is it the Department's position that it is upholding 
its trust responsibility to the Hoopa and Yurok Tribes with respect to 
Trinity River restoration? Please explain.
    Answer. The U.S. Department of the Interior (Interior) is upholding 
its trust responsibility to the Hoopa and Yurok Tribes by continuing to 
resolve the present Trinity litigation and support the Trinity Flow 
Record of Decision (ROD) by using those flows in all future condition 
model runs for the Operational Criteria and Plan. In addition, Interior 
is moving forward with the implementation of the non-flow aspects of 
the ROD. Interior has spent over $100 million on the Trinity River 
Restoration Program.

    Question 10. Has the Calfed Program to date helped to increase 
water supply reliability for urban and agricultural water users? Will 
it do so in the future?
    Answer. Yes. In the first three years of implementation, the 
Environmental Water Account (EWA) has secured regulatory commitments to 
stabilize the water supplies of the State Water Project (SWP) and 
Central Valley Water Project (CVP) while providing additional 
protection to sensitive Bay/Delta fish species. Although 2003 was a dry 
year, both SWP and CVP allocations to their users south and west of the 
Delta were at least 75 percent of contractor requests by late summer. 
The EWA provides the Project and Management Agencies the ability to 
plan in advance for operations changes taken to protect fish. This 
proactive approach to resource protection not only reduces conflict and 
uncertainty, it permits more timely responses and helps to avoid crisis 
management. With EWA, time is not lost negotiating the scale, duration, 
or timing of an operations response, or in weighing of possible project 
impacts (since EWA compensates for them).
    Authorization of a long-term EWA is necessary to maintain and 
improve water supply reliability with the flexibility envisioned in the 
CALFED Bay-Delta Program Record of Decision.

    Question 11. Please list accomplishments of the Program to date 
with respect to ecosystem restoration. Answer. The CALFED Bay-Delta 
Program Record of Decision included the Ecosystem Restoration Program 
(ERP) Plan which detailed six goals for the ERP: (1) recover endangered 
and other at-risk species and native biotic communities; (2) 
rehabilitate ecological processes; (3) maintain or enhance harvested 
species populations; (4) protect and restore habitats; (5) prevent 
establishment of and reduce impacts from non-native invasive species; 
and (6) improve or maintain water and sediment quality.
    Since its inception, ERP has funded more than 400 ecosystem 
restoration projects totaling nearly $480 million. The number of 
projects and funds allocated is one way of measuring ERP progress, and 
it is worth noting that most ERP-funded projects meet more than one ERP 
goal. Therefore, the information in the following Table is based upon 
the topic areas which interconnect the ERP goals.

          ERP PROJECTS BY TOPIC AREA AND FUNDING ALLOCATION \1\
------------------------------------------------------------------------
                                          Amount                    #
              Topic name                (millions)  Percentage  Projects
------------------------------------------------------------------------
Fish Screens and Passages.............     $112         23%         67
Local Watershed Stewardship...........      $18          4%         50
Ecosystem Water and Sediment Quality..      $39          8%         47
Shallow Water Tidal and Marsh Habitat.      $62         13%         37
Environmental Education...............       $8          2%         34
Fishery Assessments...................       $9          2%         25
Restoration of Multiple Habitats......      $61         13%         28
Channel Dynamics and Sediment               $47         10%         26
 Transport............................
Non-Native Invasive Species...........       $7          1%         23
Riparian Habitat......................      $22          5%         21
Floodplains and Bypasses..............      $15          3%         12
Uplands and Wildlife Friendly               $45         10%          7
 Agriculture..........................
Special Status Species................      $14          3%         12
Environmental Water Management........       $6          1%          3
Natural Flow Regimes..................      $11          2%          9
                                       ---------------------------------
    Totals............................     $476        100%        401
------------------------------------------------------------------------
\1\ ERP figures include state, Federal and California Urban Water User
  funding sources.

    One of the key successes of the CALFED Bay-Delta program was the 
recent (September 22, 2003) removal of the Sacramento splittail from 
the Federal threatened and endangered species list. The U.S. Fish and 
Wildlife Service (USFWS) found that threats to the species are being 
addressed through habitat restoration actions such as the CALFED Bay-
Delta Program and the Central Valley Project Improvement Act, and that 
as a result, the splittail is not likely to become endangered in the 
foreseeable future.
    Two projects, the Staten Island Project and the Robinson Ranch 
Merced River Salmon Restoration Project, illustrate both the progress 
of the ERP and its commitment to integrating ecosystem restoration 
goals with other Program element goals.
    The Staten Island Project is a prime example of wildlife-friendly 
agriculture and habitat protection. In 2001, ERP contributed $35 
million (one-half of the purchase price) to help acquire Staten Island 
to allow for a contiguous habitat corridor reaching from Stone Lakes to 
the Mokelumne Forks confluence. This corridor was one identified in 
CALFED planning documents. Staten Island, now part of the Cosumnes 
River Preserve, provides winter habitat for sandhill cranes and other 
waterfowl, while a 9,200 acre wildlife-friendly farm continues 
operation under the auspices of The Nature Conservancy. As part of its 
wildlife-friendly operations, parts of Staten Island are periodically 
inundated with water which reduces the threat of catastrophic flooding 
in the North Delta. The Staten Island Project contributes to local 
economic stability by keeping farmland in production, enhancing 
wildlife tourism opportunities, and supporting Delta flood protection 
efforts.
    The Robinson Ranch Merced River Salmon Restoration Project is an 
example of how agencies such as the USFWS, the U.S. Bureau of 
Reclamation, the Merced River Stakeholders Group and the landowner, 
Robinson Ranch, Inc. collaborated to restore Merced River reaches 
crucial to salmon spawning and rearing that were degraded as a result 
of floods, mining, and other activities. This multi-phased project 
addressed reconstruction of the river channel to scale the new channel 
form to match current, post-dam flows. By doing this, the flow of the 
river is refocused to self-maintain spawning beds and other restored 
habitats. The Robinson Ranch Merced River Salmon Restoration Project 
supports the understanding that when habitat is sustained, even at 
lower than historic flows, both ecosystem function and water supply 
reliability goals can be met. In this instance, the restored reach of 
the Merced River supports 25 percent of the salmon spawning of the 
entire river. Both wildlife and agriculture benefit from this project, 
which serves as an example of what can be achieved with a farmer who is 
an active and willing partner and beneficiary of restoration efforts.
    The CALFED ROD commits the implementing agencies to integrating 
their activities with other program elements. The ERP is accomplishing 
this integration and linkages through the ``Single Blueprint'' concept 
for restoration and species recovery within the geographic scope of the 
ERP. The Single Blueprint is not so much a single document as it is the 
shared vision of ecosystem restoration that is sustained through 
collaboration and cooperation among ERP, the Implementing Agencies, 
other CALFED agencies and stakeholders.
    Certain ecosystem restoration activities we are implementing 
pursuant to the Central Valley Project Improvement Act (CVPIA), 
commonly referred to as Category A&B projects, are coordinated through 
the Single Blueprint and support the goals and objectives of the CALFED 
ERP. Implementation of CVPIA activities have resulted in positive 
effects to the numerous species and habitat types throughout the 
Central Valley ecosystem. The investment and results of the CVPIA 
Category A&B program activities organized by the authorizing section of 
the legislation are as follows:
Anadromous Fish--Habitat Restoration ($124 million investment).
    3406(b)(1)--Anadromous Fish Restoration Program. Established AFRP, 
developed Restoration Plan to guide implementation of efforts; 
partnered with local watershed groups; acquired over 8,200 acres and 
enhanced over 1,000 acres of riparian habitat; restored over 5--6 miles 
of stream channel and placed 62,300 tons of spawning gravels; 
eliminated predator habitat in San Joaquin River tributaries; and 
provided for fish protective devices at seven diversion structures on 
Butte Creek.
    3406(b)(1)--Habitat Restoration Program. Established Habitat 
Restoration Program and San Joaquin River Riparian Habitat Restoration 
Program; helped acquire conservation easements on 88,364 acres of 
native habitat and restore 1,111 acres.
    3406(b)(2)--Dedicated CVP Yield. Up to 800,000 acre-feet of Central 
Valley Project water has been applied each year to improve stream flows 
for salmon, steelhead, and other fish on the Sacramento, American, and 
Stanislaus rivers and on Clear Creek. This water has also been used to 
increase survival of juvenile anadromous fish passing through the Delta 
on their way to the sea, and to assist the CVP to meet endangered 
species and water quality obligations.
    3406(b)(3)--Water Acquisition Program (Anadromous Fish Focus). 
Acquired 913,952 acre-feet of water for anadromous fish from 1993-2002.
    3406(b)(12)--Clear Creek Fishery Restoration. Removed Saeltzer Dam 
and diversion; increased flows; restored 2.0 miles of stream channel 
and 68 acres of floodplain; added 54,000 tons of spawning gravel; 152 
acres of shaded fuelbreak have been constructed and 12 miles of roadway 
treated to control erosion.
    3406(b)(13)--Gravel Replenishment and Riparian Habitat Protection. 
Developed long-term plans for CVP streams; placed 111,488 tons of 
gravel in Sacramento, American and Stanislaus Rivers.
    3406(b)(23)--Trinity River Fishery Flow Evaluation Program. 
Conducted flow evaluation studies; completed EIR/EIS to analyze range 
of alternatives for restoring and maintaining fish populations 
downstream from Lewiston Dam; Record of Decision signed December 2000; 
completing Supplemental Environmental Impact Statement as directed by 
Federal court order. SEIS scheduled to be completed by July 2004.
Anadromous Fish--Structural Measures ($264.6 million investment)
    3406(b)(4)--Tracy Pumping Plant Mitigation. Improved predator 
removal; increased biological oversight of pumping; developed better 
research program, new lab and aquaculture facilities; improved and 
modified existing facilities.
    3406(b)(5)--Contra Costa Canal Pumping Plant Mitigation. 
Established cooperative program for fish screen project for Rock Slough 
intake of Contra Costa Canal; 90% designs and environmental evaluation 
completed. New short-term, low-cost mitigation measures are being 
developed to allow for an extension of the construction completion 
date. Final design and construction pending results of CALFED Stage 1 
and other studies.
    3406(b)(6)--Shasta Temperature Control Device. Completed in 1997at 
a cost of $80 million. Has been operated to reduce river temperatures 
without stopping power generation operations (power revenue sales as a 
result of implementing the Shasta TCD are estimated to be $25 million/
yr).
    3406(b)(10)--Red Bluff Dam Fish Passage Program. Completed interim 
actions and modification of Red Bluff Diversion Dam to meet needs of 
fish and water users; studies of fish passage alternatives is ongoing. 
Given guidance by the court on the timing of ESA and NEPA compliance 
activities, work on the EIS/EIR was suspended pending completion of the 
ESA consultation for the CVP as a whole, and the OCAP consultation. A 
final EIS/EIR is now anticipated in FY04.
    3406(b)(11)--Coleman National Fish Hatchery Restoration and Keswick 
Fish Trap Modification. Construction of Livingston Stone National Fish 
Hatchery--the newly constructed hatchery contains facilities for 
broodstock holding, spawning, and rearing. The production capacity of 
the facility is about 250,000 juveniles. Between 30,000 and 250,000 
juveniles have been reared at the facility annually since it was 
constructed. As a result primarily of the release of brood year 1998, 
it has been estimated that about 300 hatchery-origin winter-run 
chinoolk salmon adults from this program returned to the upper 
Sacramento River in 2001
    3406(b)(17)--Anderson-Cottonwood I.D. Fish Passage. Modified dam 
and operations to improve fish passage; designed new fish ladders and 
screens.
    3406(b)(20)--Glenn-Colusa I.D. Pumping Plant. Constructed fish 
screen for 3,000 cfs diversion; completed water control structure and 
access bridge. Completed improvements on side channel.
    3406(b)(21)--Anadromous Fish Screen Program. Established program; 
installed 17 screens and 3 fish ladders at diversions totaling 3,200 
cfs capacity; removed 4 dams and 1 4 diversions. Three screens under 
construction, others in design. Once the screens under construction and 
in design are completed, Reclamation will have screened 75% of the 
diverted water on the Sacramento River.

     Responses of Bennett Raley to Questions From Chairman Domenici

    Question 1. In your testimony, you note that appropriations for the 
Calfed Program are unlikely to reach S. 1097's $880 million 
authorization level.
    What is a reasonable federal appropriation target for fiscal years 
2004 through 2007?
    Answer. We cannot speculate as to a level of appropriations for 
future years, as those decisions must be made in the context of future 
budgets; our statement regarding the $880 million is based on our 
experience with recent CALFED budgets. The CBDA has launched an effort 
to re-examine the project milestones in the existing ROD to more 
realistically reflect likely funding and pace of the program.

    Question 2. It is my understanding that S. 1097 will not solve all 
of California's water problems. Instead, these are numerous California 
water projects that are not included in the 2000 ROD.
    What California water issues are resolved by S. 1097?
    Answer. Your understanding is correct. The proposed legislation 
sets out the CALFED BayDelta Program Record of Decision as a framework 
within which the implementing agencies will undertake actions within 
the CALFED Bay-Delta solution area to protect drinking water quality, 
restoring ecological health, improving water supply reliability, and 
protecting and ensuring the integrity of Delta levees in a balanced 
manner. There are numerous other water management activities going on 
in California that, while compatible with CALFED, are for the most part 
not connected.
    What additional authorization requests should the Committee 
anticipate for other California water projects?
    Answer. Depending on the findings and conclusions of the surface 
storage feasibility studies, construction authorization may be 
requested. It is difficult to anticipate future needs for Congressional 
action on other California water projects.

    Question 3. From your testimony, it seems that the federal 
government already possesses most of the authorities needed to 
implement the Calfed Program.
    If that is the case, what is the most appropriate form for any 
Calfed legislation approved by this Committee?
    Answer. The Federal agencies have been able to rely on over fifty 
existing authorities (passed by Congress) that continue to enable 
Federal agency participation. The key areas in which additional 
authorization is necessary are as follows:
    Environmental Water Account (EWA)--Authorization is required to 
implement a long-term EWA in a fashion that supports the vision and 
flexibility envisioned in the CALFED Bay-Delta Program Record of 
Decision (ROD). The establishment and successful operation of a long-
term EWA will be one of the most significant accomplishments of the 
CALFED Bay-Delta Program in reducing the conflicts between fisheries 
and water project operators.
    Levee Stability Program--Authorization is necessary for feasibility 
study for risk assessment strategy, Delta Emergency management plan, 
dredged material reuse on Delta Islands, and best management practices 
to control and reverse land subsidence is needed as noted in the ROD.
    Implement Conveyance Program Elements--Authorization is needed for 
feasibility studies for the increased pumping to 10,300 cfs at H.O. 
Banks Pumping Plant, fish screen and intake at Clifton Court, and San 
Luis Reservoir Low Point Project.
    Ecosystem Restoration Program Financial Assistance--Authorization 
is needed to carry out the Ecosystem Restoration Program activities 
through the use of grants and cooperative agreements with non-Federal 
entities
    Cross-Cut Appropriation--Interior supports the concept of a cross-
cut appropriation which we believe will reduce inefficiencies and 
further improve Federal agency participation and recognition of 
implementation requirements. A cross-cut appropriation would more 
accurately reflect the contributions of the participating Federal 
agencies and lessen the risk to other Reclamation funded programs and 
projects in the Western states.

    Question 4. The process followed by the federal-state working group 
to develop the CALFED Program included negotiating a complex suite of 
inter-related projects, issuing the Record of Decision, developing a 
State-based management organization, building financial and public 
support, and implementing a myriad of important state water policy 
modifications.
    Do you feel that this approach is an appropriate template for other 
Federal-State water management relationships?
    Answer. Yes. While this approach and adaptive process was developed 
in response to the complex and competing resource needs of California 
its fundamental elements and processes could work well elsewhere. The 
Bay-Delta Public Advisory Committee provides an effective coordination 
structure to facilitate stakeholder involvement in CALFED Program 
implementation. However, the newly formed state oversight agency, the 
California Bay-Delta Authority, does pose several complex legal and 
institutional issues between the state and Federal implementing 
agencies that effect management of the Program.
    Based on experience to date, what would you do to improve the 
process?
    Answer. The cooperative and collaborative approach to problem-
solving is a hallmark of the CALFED Program. We continue to grapple 
with the evolving state and Federal agency institutional and legal 
roles in implementing the Program.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                  South Delta Water Agency,
                                    Stockton, CA, October 28, 2003.
Senator Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Re: S. 1097

    Dear Senator Feinstein: The South Delta Water Agency is writing to 
express our appreciation for your efforts to resolve water related 
problems in California. At this time, Delta interests are negotiating 
with Central Valley Project and State Water Project Contractors to try 
and resolve some of the ongoing issues involved with the export of 
water from the Delta. Although the negotiations are encouraging, 
fundamental differences have yet to be worked out. In light of those 
differences, as well as the areas of agreement, we recommend that 
proposed legislation regarding CALFED not move forward at this time as 
the negotiations anticipate changes or additions to CALFED's Record of 
Decision. Notwithstanding this position, we offer the following 
suggestions which we believe would clarify and strengthen the bill 
without changing its intent and fundamental content. These comments do 
not include some of the other issues in our discussions, many of which 
we would eventually seek to have in legislation.
    Our suggestions relate primarily to three issues. First, CALFED's 
premise of ``all parties getting better together'' does not take into 
account how the export projects have adversely impacted third parties. 
It is our position that Delta interests should not ``get better'' along 
with other interests, but rather should first be protected from the 
adverse impacts caused by exports. Hence, providing full mitigation to 
the projects' impacts should occur before the projects are allowed to 
increase exports or export rates. We believe our negotiations will soon 
define the Delta protections that must and can reasonably be provided 
to assure that the Delta's in-channel water supply and quality are 
adequately protected from the impacts of existing and proposed exports, 
and also provisions to reduce the over-commitment of New Melones water 
yield that has resulted from CVP operations. Our suggestions are 
compatible with our negotiations. Second, the suggestions are to help 
correct the confusion that has resulted from a prevalent belief that 
water storage capacity results in an increase in water supply 
regardless of whether the storage is filled with water that would 
otherwise be lost, such as by capturing excess Delta outflow. Storage 
can be used for other purposes, but can't increase water supply if it 
is filled with water that is basically just reallocated in time or in 
purpose of use. Third, we propose some additions to the CALFED 
reporting requirements. We believe these additions are needed in order 
for Congress to be adequately informed on both the direct and the 
indirect consequences of the Program.
    Our suggestions are as follows:

    [Note: The suggested changes have been retained in subcommittee 
files.]

    Again, our negotiations with export interests anticipate changes to 
the CALFED ROD and programs thereunder. Until such negotiations are 
finalized, we do not think any legislation should go forward at this 
time as we will be proposing additional specifics for such legislation. 
We do believe the parties' negotiations will be completed sometime near 
the end of November, and we will then know better the areas of 
agreement and disagreement. Notwithstanding this, the above suggestions 
are an indication of our position on what needs to be done through the 
CALFED process. We also want to thank you again for your past 
discussions with us on various matters, including your discussions on 
flood control and estate taxes with Alex Hildebrand.
            Very truly yours,
                                              John Herrick,
                                               Counsel and Manager.
                                 ______
                                 
     Statement Clifford Lyle Marshall, Chairman, on Behalf of the 
                     Hoopa Valley Tribe, Hoopa, CA
    Chairman Murkowski, and members of the Subcommittee, the Hoopa 
Valley Tribe respectfully requests that the Congress not extend 
authorization of the Calfed program prior to implementation of the 
Trinity River restoration record of decision consistent with existing 
federal statutes, including the Central Valley Project Improvement Act.
    Throughout California and in many parts of the Nation, the Trinity 
River is recognized as one of the last wild and scenic rivers in 
America. It is a natural resource treasure that should be protected for 
the benefit of all Americans. For communities of the North Coast, the 
Trinity River supports a regional economy based on commercial and sport 
fishing, recreation and tourism. Most importantly from the perspective 
of the Hoopa Valley Tribe, the Trinity River is central to our religion 
and culture, and it is the source of our fishery on which we have 
depended since time immemorial.
    The United States Bureau of Reclamation formally proposed diversion 
of the Trinity River to the Central Valley in 1952. Having been advised 
by the Secretary of the Interior that slightly more than 50% of the 
Trinity's flow at Lewiston, California, would be diverted and that the 
balance would remain available for release to the Trinity River, 
Congress authorized the Trinity River Division (TRD) of the Central 
Valley Project (CVP) in 1955. To this day, the Trinity River is the 
only source of CVP water that is imported to the Central Valley.
    In order to protect North Coast communities from the effects of the 
Trinity River Division, Congress expressly limited diversions from the 
Trinity River to that water deemed by the Secretary to be surplus to 
the needs of Trinity River basin fish and wildlife and communities 
downstream of Lewiston Dam.
    The State of California issued a number of permits associated with 
the Trinity River Division in 1959.\1\ Among the conditions established 
by the state in the permits were Condition 8 \2\ and Condition 9 \3\ 
that, consistent with Congress' instruction, recognized and protected 
the area of origin interests of Trinity/Klamath River basin.
---------------------------------------------------------------------------
    \1\ State Water Permits under Applications Nos. 5627, 15374, 15376, 
16767 and 16768 (September 16, 1959).
    \2\ Condition 8. ``Permittee shall at all times bypass or release 
over, around or through Lewiston Dam the following quantities of water 
down the natural channel of Trinity River for the protection, 
preservation and enhancement of fish and wildlife from said dam to the 
mouth of said stream;

          October 1 through October 31--200 cfs
          November 1 through November 30--250 cfs
          December 1 through December 31--200 cfs
          January 1 through September 30--150 cfs

    Any water released through said Lewiston Dam for use in the fish 
hatchery now under construction adjacent thereto shall be considered as 
partial fulfillment of the above schedule.''
    \3\ Condition 9. ``Permittee shall release sufficient water from 
Trinity and/or Lewiston Reservoirs into the Trinity River so that not 
less than an annual quantity of 50,000 acre-feet will be available for 
the beneficial use of Humboldt County and other downstream users.''
---------------------------------------------------------------------------
    Tragically, upon completion of the Trinity River Division in 1964, 
the Bureau of Reclamation instead diverted up to 90% of the Trinity's 
flow at Lewiston with immediate and devastating effects on the fishery. 
Trinity River fish species today are listed or are candidates for 
listing under the Endangered Species Act. Tribal, sport, and commercial 
fishing interests, along with federal, state, and local governments 
have spent the last 35 years working to restore the river and limit 
diversions to what Congress originally intended.
    In a series of laws, the United States Congress acted to restore 
the Trinity River fishery to those population levels that existed prior 
to construction of the Trinity River Division. The ``Trinity River Flow 
Evaluation--Final Report'' was completed in June 1999, and the 
Secretary of the Interior, with the support of the State of California 
and the concurrence of the Hoopa Valley Tribe, adopted the Report's 
fishery flow requirements in December 2000.
    The fishery flows require 47% of the Trinity's average annual flow; 
the remaining 53% is available for diversion to the Central Valley, 
practically the same volume originally intended to be diverted by the 
Bureau of Reclamation when it proposed the project in the 1950s.
    Regrettably, the Bureau of Reclamation has been barred from 
releasing the water needed for trinity River restoration as a result of 
litigation filed by the Westlands Water District and the San Luis and 
Delta-Mendota Water Authority, among others. That litigation is now 
pending in the Court of Appeals for the 9th Circuit. The State of 
California has filed a brief in support of the Trinity River 
restoration decision. In the meantime, Trinity restoration remains on 
hold; it is now seven years past the deadline Congress set for the 
Secretary to get the restoration program underway.
    On July 18, the Bureau of Reclamation and the Resources Agency 
completed a ``Draft Proposition Concerning CVP/SWP Integrated 
Operations'', also known as the ``Napa Proposal''. Certain aspects of 
the Napa Proposal require enactment of authorizations provided for in 
S. 1097. We believe that, in its present form, the Napa Proposal is 
likely to generate misunderstanding and future causes of controversy 
over the relationship between the coordinated operation of the federal 
and state water projects in the Central Valley and the priority 
established under federal and state law to water from the Trinity River 
Division for: (1) fish and wildlife preservation and propagation in the 
Trinity River; and (2) other beneficial uses of water by Humboldt 
County and users downstream of Trinity River Division facilities.
    The Napa Proposal, among other things, will enable increased 
exports of water from the San Francisco Bay Delta through coordinated 
operation of the State Water Project and the Central Valley Project. 
Nothing in the Napa Proposal or S. 1097 recognizes the fact that the 
restoration of the Trinity River requires a reduction in the diversions 
of Trinity River water to the Central Valley.
    It is generally understood that the Westlands Water District and 
San Luis and Delta-Mendota Water Authority will be major beneficiaries 
of the increased Delta exports enabled by the Napa Proposal if 
implemented by means of the authority and funding provided for in S. 
1097. Westlands Water District and San Luis and Delta-Mendota Water 
Authority have recently proposed reductions in the planned Trinity 
River flows in order to increase the benefits they expect from the Napa 
Proposition. The Department of the Interior and the Hoopa Valley Tribe 
rejected the reductions because they lacked acceptable scientific 
justification. We do not believe that the Congress should make the 
benefits of Calfed available to those entities so long as they persist 
with their attacks against Trinity River restoration.
    Governor Davis' administration addressed the Napa Proposal in an 
October 2, 2003, letter (attached) from Resources Secretary Mary 
Nichols to Senators Feinstein and Boxer, in which Secretary Nichols 
stated:

          nothing in the Napa Proposal jeopardizes implementation of 
        the Trinity River Record of Decision (ROD). In fact, the 
        proposed revisions to the SWP/CVP Operations Criteria and Plan 
        (OCAP) assume that the Trinity River ROD will be implemented as 
        envisioned in December 2000.
          The State continues to support the Hoopa and Yurok Tribes, 
        and Trinity County in their efforts to implement the Trinity 
        River ROD . . . We believe the instream flow schedule in the 
        Trinity River ROD is the foundation for restoration of the 
        Trinity River and its native fish, and we will insist this 
        issue is settled prior to implementation of the Napa proposal.

    We are grateful for Secretary Nichols position, but we have no 
indication whether California's incoming administration will adhere to 
it. At the same time, the Bureau of Reclamation has informally advised 
us that the Napa Proposal could be implemented without the need to 
reduce the amounts of water from the Trinity River Division needed for 
fishery restoration. However, the Bureau has declined to give us 
written reassurance to that effect, notwithstanding that federal and 
state laws clearly give priority to Trinity basin water needs over 
diversions to the Central Valley.
    Our Tribe never intended to be drawn into Central Valley water 
management issues. But because of Westlands attack on our fishery, 
implementation of Trinity restoration may well be delayed until after 
planning decisions are made with respect to the Napa proposal, long-
term Central Valley Project contracts have been renewed, and a revised 
operating plan for the state and federal water projects has been 
adopted. We cannot stand by while Central Valley planning decisions are 
made that potentially leave our rights at risk.
    This is especially true in view of the final National Research 
Council Report, ``Endangered and Threatened Fishes in the Klamath River 
Basin: Causes of Decline and Strategies for Recovery (October 21, 
2003). The report at pages 250-253 makes the following points (all are 
quotations):

          Trinity River flows influence water temperature and quality 
        in the lower Klamath River and its estuary (p. 250).
          The Klamath River below Iron Gate Dam and the Trinity River 
        have the same fish fauna, including runs of salmon . . . salmon 
        and steelhead from the two systems continuously mix. Id.
          Immigrating spawning adults and emigrating smolts from the 
        Trinity River rely on lower Klamath River water temperature and 
        quality to support their success in terms of egg quality, 
        osmoregulatory ability, and survival. Id.
          Efforts to conserve coho salmon and other declining fishes 
        must take both systems into account. Id.
          [T]he Secretary of the Interior in December 2000 issued a 
        Record of Decision (ROD) recognizing that long-term 
        sustainability of the Trinity River's fishery resources 
        requires rehabilitation of the river (p. 251-252).
          The ROD calls for specific annual flows designed to vary with 
        water-year type and patterned to mimic natural variability in 
        annual flows. (p. 252).
          Because of lawsuits by Central Valley water users challenging 
        the EIS/EIR, however, the new flow regime has not yet been 
        fully implemented. Id.
          It is vital that management of the Trinity River, including 
        releases from Lewiston Dam, be viewed in the context of the 
        entire Klamath watershed. The two systems are inextricably 
        linked and are dependent upon each other for long-term success. 
        Efforts are presently underway to use enhanced flow releases 
        from the Trinity to reduce the likelihood of fish kills in the 
        lower Klamath. This represents an important step forward in 
        cooperative management for the sake of the entire basin, rather 
        than a single component. (p. 252-253).

    The foregoing statements by the National Research Council 
demonstrate the need to ensure that the waters of the Trinity River 
that are stored in the Trinity River Division of the CVP be released:

          (1) as required by the ROD for the mainstem Trinity 
        restoration and
          (2) as required for fishery protection in the lower Klamath 
        and pursuant to Humboldt County's 1959 CVP contract.
                                 ______
                                 
                               State of California,
                                          Resources Agency,
                                   Sacramento, CA, October 2, 2003.
Hon. Dianne Feinstein,
U.S. Congress, Hart Senate Office Bldg., Washington, DC.
Hon. Barbara Boxer,
U.S. Congress, Hart Senate Office Bldg., Washington, DC.
    Senators Feinstein and Boxer: I am writing to clarify the state's 
position on the ``Napa Proposal'', which has been the subject of much 
interest and at times misunderstanding. The state agency participants 
in the California Bay-Delta Program have received several letters and 
questions from members of Congress, the California legislature, and 
interest groups. These letters and questions have raised valid 
concerns, and we take these concerns seriously.

              THE NAPA PROPOSAL IS NOT A DECISION DOCUMENT

    The CALFED process is designed to include a broad range of 
stakeholders, collaboration among the State and federal agencies, and 
the development of solutions that address multiple benefits based on 
the best available information. I remain committed to maintaining this 
open and transparent process, but I also recognize that from time to 
time various stakeholder groups will caucus and develop proposals to be 
considered within the scope of the Bay-Delta Program as a whole.
    It is in the CALFED context that I believe the Napa Proposal was 
developed, and it is within this context that it should be considered. 
The Napa Proposal is not a CALFED decision document; it is a proposed 
set of State Water Project/Central Valley Project (SWP/CVP) operating 
rules that will be evaluated and considered as part of a larger set of 
actions to improve the water supply reliability, water quality, and 
ecosystem health of the Bay-Delta system.
    These actions, as described in the CALFED Record of Decision, 
include the South Delta Improvements Program (to increase the SWP's 
pumping flexibility to 8,500 cubic feet per second), the Environmental 
Water Account, the Delta Mendota Canal/California Aqueduct Intertie, 
and related actions to protect water quality and local diverters in the 
Delta. Each of these actions will be fully evaluated and reviewed 
through CEQA and NEPA, through the Bay-Delta Public Advisory Committee, 
and through other public processes established by the California Bay-
Delta Authority (Authority).
swp and cvp operations must be better coordinated to meet the multiple 

             OBJECTIVES OF THE CALIFORNIA BAY-DELTA PROGRAM

    The Authority agencies have been working since the fall of 2002 to 
coordinate and integrate the assumptions and schedules of the above 
actions, so that elected officials, stakeholders, and the public have a 
better understanding of their costs, benefits, and impacts. But as the 
discussions continued, it became clear that progress would be stalled 
and that fewer water supply, water quality, and environmental benefits 
would be achieved through these actions unless the SWP and CVP worked 
to better coordinate their operations. As a result of the Napa 
discussions, we now have a proposal that may accomplish that goal, and 
a renewed commitment to support an integrated package of state and 
federal actions.
    During the last two months, the Authority agencies and stakeholders 
have been working closely to analyze the impacts of the Napa Proposal 
with hydrologic and biologic modeling, together with other elements of 
the South Delta Improvements Program and alternative approaches to 
develop a long-term Environmental Water Account. These analyses will be 
fully described in draft environmental review documents to be issued 
for public review and comment later this year. Following an extensive 
public review process, the agencies expect to issue an integrated set 
of final decisions, together with a financing plan, in the summer of 
2004. I remain confident that this integrated set of actions will 
significantly improve water supply reliability, water quality, and 
ecosystem health of the Bay-Delta system.
 the state continues to support implementation of the trinity river rod
    It is important to note that nothing in the Napa Proposal 
jeopardizes implementation of the Trinity River Record of Decision 
(ROD). In fact, the proposed revisions to the SWP/CVP Operations 
Criteria and Plan (OCAP) assume that the Trinity River ROD will be 
implemented as envisioned in December 2000.
    The State continues to support the Hoopa and Yurok Tribes, and 
Trinity County in their efforts to implement the Trinity River ROD, 
including the development of the Supplemental Environmental Impact 
Statement as required by court order. We believe the instream flow 
schedule in the Trinity River ROD is the foundation for restoration of 
the Trinity River and its native fish, and we will insist this issue is 
settled prior to implementation of the Napa proposal.
    Thank you for your continued support of the California Bay-Delta 
Program and efforts to provide for its federal authorization. If you 
have any further questions, please contact me directly or Tim Ramirez, 
Assistant Secretary for Water Policy and Science, in my office.
            Yours sincerely,
                                           Mary D. Nichols,
                                           Secretary for Resources.

    As a means of disentangling the Trinity River's prior entitlement 
to water from the Trinity River Division from Central Valley water 
resources planning, the Hoopa Valley Tribe seeks legislation to permit 
prompt implementation of the Trinity restoration program. (Attached.)
    So long as the Trinity restoration program remains stalled, the 
Tribe will continue to intervene in matters involving California water 
planning that affect tribal trust resources. Our goal is a guarantee 
that federal and state laws that give priority to the use of Trinity 
River Division water for in-basin needs over exports to the Central 
Valley will be fully enforced as set forth in the Trinity River Record 
of Decision. The proposed legislation attached to this testimony would 
do that.
    Thank you for your attention to our concerns.

                              ATTACHMENTS

Proposed Legislation Regarding Trinity River Record of Decision
Section 1.
    The purposes of this Act are to meet:
    (a) Federal trust responsibilities to protect tribal fishery 
resources; and
    (b) Fishery restoration goals referred to in section 3406 (b)(23) 
of the Central Valley Project Improvement Act, Public Law 102-575, 106 
Stat. 4706 (October 30, 1992).

Section 2.

    (a) Notwithstanding any other provision of law, the record of 
decision by the United States Fish and Wildlife Service entitled 
``Trinity River Mainstem Fishery Restoration'', issued by the Secretary 
of the Interior with the concurrence of the Hoopa Valley Tribe on 
December 19, 2000 (referred to in this section as the ``record of 
decision''), shall be considered to comply with all provisions of law 
under which, and subject to which, the record of decision was issued.
    (b) Upon enactment of this Act, the Secretary of the Interior, and 
any other person with respect to which the record of decision describes 
any right, authority, or obligation, shall implement and otherwise 
comply with the record of decision.
    (c) The Secretary shall incorporate the record of decision into any 
review of the operation of the Central Valley Project pursuant to the 
National Environmental Policy Act.

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