U.S. GOVERNMENT PUBLISHING OFFICE

31–407 PDF WASHINGTON : 2018

S. HRG. 115–321 

HEARING ON OVERSIGHT OF THE ARMY CORPS’ 

REGULATION OF SURPLUS WATER AND THE 

ROLE OF STATES’ RIGHTS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SUPERFUND, WASTE 

MANAGEMENT, AND REGULATORY OVERSIGHT 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

JUNE 13, 2018 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.govinfo.gov 

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

JOHN BARRASSO, Wyoming, Chairman 

JAMES M. INHOFE, Oklahoma 

SHELLEY MOORE CAPITO, West Virginia 

JOHN BOOZMAN, Arkansas 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

MIKE ROUNDS, South Dakota 

JONI ERNST, Iowa 

DAN SULLIVAN, Alaska 

RICHARD SHELBY, Alabama 

THOMAS R. CARPER, Delaware, Ranking 

Member 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

EDWARD J. MARKEY, Massachusetts 

TAMMY DUCKWORTH, Illinois 

CHRIS VAN HOLLEN, Maryland 

RICHARD M. RUSSELL, Majority Staff Director 

MARY FRANCES REPKO, Minority Staff Director 

SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, 

AND REGULATORY OVERSIGHT

MIKE ROUNDS, South Dakota, Chairman 

JERRY MORAN, Kansas 

JONI ERNST, Iowa 

DAN SULLIVAN, Alaska 

JOHN BARRASSO, Wyoming (ex officio) 

CORY A. BOOKER, New Jersey, Ranking 

Member 

BERNARD SANDERS, Vermont 

CHRIS VAN HOLLEN, Maryland 

THOMAS R. CARPER, Delaware (ex officio) 

(III) 

C O N T E N T S 

Page 

JUNE 13, 2018 

OPENING STATEMENTS 

Rounds, Hon. Mike, U.S. Senator from the State of South Dakota .................... 1 

Booker, Hon. Cory A., U.S. Senator from the State of New Jersey ..................... 3 

WITNESSES 

Piner, Hon. Steven M., Secretary, South Dakota Department of Environment 

and Natural Resources ........................................................................................ 3 

Prepared statement .......................................................................................... 6 

Scott, Ward, J., Westerns Govorners’ Association ................................................ 9 

Prepared statement .......................................................................................... 12 

Mulligan, Stephen, J.D., Legislative Attorney, Congressional Research Service .......................................................................................................................... 18 

Prepared statement .......................................................................................... 20 

ADDITIONAL MATERIAL 

Statement of the Western States Water Council .................................................. 60 

Statement of South Dakota Department of Game, Fish, and Parks ................... 77 

Statement of Riter Rogers Law Office ................................................................... 81 

Corps of Engineers Oahe Dam/Lake Oahe Project South Dakota & North 

Dakota Surplus Water Report ............................................................................. 94 

Aurora Brule Rural Water System, Inc; Surplus Water Report .......................... 101 

Statement of the National Water Supply Alliance (NWSA) ................................ 102 

Statement of the Western Governors Association ................................................. 104 

(1) 

HEARING ON OVERSIGHT OF THE ARMY 

CORPS’ REGULATION OF SURPLUS WATER 

AND THE ROLE OF STATES’ RIGHTS 

WEDNESDAY, JUNE 13, 2018 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, 

AND REGULATORY OVERSIGHT, 

Washington, DC. 

The committee met, pursuant to notice, at 3:15 p.m. in room 406, 

Dirksen Senate Office Building, Hon. Mike Rounds (chairman of 

the subcommittee) presiding. 

Present: Senators Rounds, Booker, Ernst, and Van Hollen. 

OPENING STATEMENT OF HON. MIKE ROUNDS, 

U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA 

Senator ROUNDS. Good afternoon. The Environment and Public 

Works Subcommittee on Superfund, Waste Management, and Regulatory Oversight is meeting today to conduct a hearing entitled 

Oversight of the Army Corps’ Regulation of Surplus Water and the 

Role of States’ Rights. 

Today we are meeting to hear directly from stakeholders impacted by the regulatory decisions made by the U.S. Army Corps 

of Engineers. Their testimony will provide the subcommittee an opportunity to consider legislative changes available to Congress, as 

well as the on-the-ground, real-world consequences of decisions 

made by the Army Corps and their effect on States and municipalities. 

Section 6 of the Flood Control Act of 1944 authorizes the Army 

Corps to make available to States, municipalities, and other entities surplus water stored in Army Corps reservoirs for municipal 

and industrial uses. The Flood Control Act also highlights the preeminent role of States and localities with regard to water rights, 

going so far as to State that it is the policy of Congress to recognize 

the primary responsibilities of States and local interests with regard to water supply. 

In December 2016, in the waning days of the previous Administration, the Army Corps published in the Federal Register a Notice 

of Proposed Rulemaking entitled Use of U.S. Army Corps of Engineers Reservoir Projects for Domestic, Municipal, and Industrial 

Water Supply. This rulemaking sought to define, ‘‘key terms’’ in the 

Flood Control Act of 1944 and the Water Supply Act of 1958. 

2 

One of the key terms targeted by the proposed rule is surplus 

water. Surplus water appears undefined in Section 6 of the Flood 

Control Act. In the multi-decade period since the passage of the 

Flood Control Act, with the exception of the previous Administration, the Corps has declined to define surplus water. In formulating 

the proposed rule, the Army Corps failed to take into account natural flows of the river system when defining surplus water. 

Congress clearly intended to recognize and reaffirm the constitutionally protected rights of States to the natural flow of water 

through these river systems. The proposed rule is an attack on 

these States’ rights and the States’ ability to access these natural 

flows. 

In the case of my home State of South Dakota, we live with a 

permanent flood, as thousands of acres of productive farmland have 

been inundated to create the mainstem dams of the Missouri River. 

Last month, I was joined, in a letter, by South Dakota Governor 

Dauggaard, Senator Thune, and Representative Noem, in which we 

stated that 500,000 acres of our most fertile river bottomlands were 

permanently flooded as the reservoirs filled following the construction of these dams. South Dakota citizens and tribal members were 

forced from their homes and communities. 

No one doubts the benefits of multiuse Army Corps projects. But 

they need to be taken into proper historical context. 

In taking such an expansive view of what constitutes surplus 

water and, thus, subject to Federal control, the Army Corps clearly 

does not recognize the constitutionally protected rights of States to 

the natural flows of the river system. Instead, the Army Corps is 

attempting to produce a system in which legitimate municipal and 

industrial projects cannot gain access to the water passing through 

the States by refusing to grant easements to gain access to these 

water resources. 

The Army Corps is currently creating barriers to legitimate 

water uses. Earlier this year, when South Dakota’s Game, Fish, 

and Parks Department requested access to an exceptionally small 

quantity of water from the Missouri River to construct a parking 

lot on government property adjacent to the reservoir, the Army 

Corps denied the request on the basis that this deeply flawed rulemaking had yet to be finalized. 

We all agree that the Army Corps has a legal right to regulate 

the use of water for authorized purposes, such as flood control and 

hydropower generation. I am not seeking to divert any water away 

from congressionally authorized purposes. What I am concerned 

with, however, is the notion that the people do not have a right to 

access the water passing through their States outside of well-defined purposes authorized by Congress. 

Blocking access to such an important resource is in direct conflict 

with congressional intent. Preventing States from accessing the 

water they are entitled to is an attack on our Federalist system of 

government. 

I want to be clear. It was never the intention of Congress to Federalize all of the water in our Country’s major rivers. Any rulemaking to the contrary is an attack on the States’ rights and an 

unlawful taking by the Federal Government. 

3 

My hope is that today’s hearing will shed light on this issue and 

motivate the Army Corps to consider promulgating rules more consistent with congressional intent and the water rights of States. 

This also includes a review and discussion of the existing practice 

of the Army Corps denying access across their take land for legitimate purposes by the States and other approved users. 

Now I would like to recognize Senator Booker for his 5 minute 

opening statement. 

Senator BOOKER. 

OPENING STATEMENT OF HON. CORY A. BOOKER, 

U.S. SENATOR FROM THE STATE OF NEW JERSEY 

Senator BOOKER. Mr. Chairman, I have here my opening statement, which is nothing short of scintillating and also very moving. 

Senator ROUNDS. I would expect nothing less. 

Senator BOOKER. Yes. The time is short, though, sir. I am just 

going to submit it for the record. 

Senator ROUNDS. Without objection. 

Senator BOOKER. And I will pass out copies at the back for those 

of you who would like to read it right now. 

Senator ROUNDS. Thank you, Senator Booker. 

Our witnesses joining us for today’s hearing are Steve Pirner, 

Secretary of the South Dakota Department of Environment and 

Natural Resources; Ward Scott, Policy Advisor, Western Governors’ 

Association; Stephen Mulligan, Legislative Attorney, congressional 

Research Service. 

I want to thank you all for being here and I would, at this point, 

turn to our first witness, Secretary Pirner, for 5 minutes. 

I can’t say enough, and I am just going to do this as a special 

introduction. Secretary Pirner was the secretary of Water and Natural Resources when I was Governor. He was secretary before I became Governor. He has been one of the stellar individuals with regard to his knowledge, his interest, and his intensity in making 

sure that we have clean air, clean water, and that we understand 

the relationship between the Federal and State government. 

I know he is irritated every time I ask him to come to Washington, DC.; he would rather be along the shores of the Missouri 

River and pier, particularly in the summertime, but I most certainly appreciate your participation in this hearing today. So, with 

that, Secretary Pirner, please proceed. 

STATEMENT OF HON. STEVEN M. PIRNER, SOUTH DAKOTA 

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES 

Mr. PIRNER. Thank you very much, Senator Rounds. 

Ranking Member Booker and members of the Committee, my 

name is Steve Pirner, Secretary of the South Dakota Department 

of Environment and Natural Resources. 

You all have heard about the waters of the U.S. rule proposed 

by EPA. Many labeled that rule as the largest Federal takeover of 

our Nation’s water resources ever attempted. However, the water 

supply rule proposed by the Corps of Engineers exceeds that Federal takeover action, at least as it impacts the Missouri River in 

South Dakota. 

4 

Our issues with the proposed water supply rule began in 2008. 

That was when the Corps issued Real EState Guidance Policy No. 

26. This policy requires municipal and industrial water users to acquire a water storage contract prior to the Corps issuing an access 

easement for a pump site. 

But the Corps had no process for issuing the contracts. Therefore, the effect of the policy was to place a moratorium on easements to our Missouri River, our largest and most reliable surface 

water supply in the State. 

To advance the process, the Corps developed the proposed water 

supply rule. Under the rule, the Corps considered stored water, 

which is part of the surplus water, as being all the water in the 

reservoirs. This creates a monumental change in the law and steals 

South Dakota’s rights to natural flows that, by tradition and law, 

are under the jurisdiction of the States. 

To better understand natural flows, visualize our Missouri River 

reservoirs with their stored water sitting on top of the river, with 

natural flow flowing underneath. That natural flow represents 

water that has traditionally been under the jurisdiction of the 

State. 

States’ rights to natural flows of navigable waters within their 

borders are constitutionally founded and protected in the equal 

footing doctrine and Section 1 of the 1944 Flood Control Act. We 

believe no other Federal law usurps these rights. 

Another concern is equity. The Corps has documented the tremendous benefits that reservoirs supply to people throughout the 

basin. Yet, in this rule the Corps applies fees to just the upstream 

States. 

To require the upstream States, who already have paid so much, 

to pay the cost through fees, with people in the downstream States 

enjoying those benefits at no cost, is not fair or equitable. As Governor Dauggaard wrote to the Corps in 2012, to impose all reservoir operation and maintenance costs on upstream States alone 

adds insult to injury. 

We have about 1,000 miles of Missouri River shoreline in South 

Dakota, but only about 100 miles are on the two short, free-flowing 

stretches in the State; the rest border the Corps reservoirs. Therefore, 90 percent of our shoreline is off limits to potential users of 

Missouri River water due to the Corps’ moratorium and the proposed water supply rule. 

Midland Contracting was one of the first to find this out when 

the Corps told them they could no longer pump water use for dust 

control out of the lake behind Big Ben Dam. The amount of water 

used from this reservoir, that is 80 miles long, covers 63,000 acres, 

was miniscule at best. The Corps has held fast to this moratorium, 

refusing to let a contractor pump water in 2011, even while flood 

waters were devastating Pierre, Ft. Pierre, and downstream communities. 

Another example is the city of Pierre. They have been denied access for several years to the river, which runs right alongside the 

city, to install a small pumping station that would allow the city 

to irrigate green space with river water, saving time and money. 

This moratorium remains in place today, as evidenced by the 

Corps response to our issuance of a temporary water right permit 

5 

to a contractor on March 19th, 2018, to use 90,000 gallons of Missouri River water out of the Oahe Reservoir. Oahe holds 6.4 trillion 

gallons. The Corps’ response to this use of 0.000001 percent of 

Oahe water was ‘‘All requests for using water from South Dakota 

reservoirs are on hold until finalized guidance is received from 

headquarters. An alternate source of water should be utilized.’’ All 

of these uses of water were approved by the State through our 

State water rights program. More detailed objections to the proposed rulemaking have been submitted by Governor Dauggaard, 

and I have enclosed those copies of his letters for your information. 

However, the bottom line is the Corps is attempting a Federal 

takeover of the Missouri River water in South Dakota. This rulemaking effort tramples States’ rights and needs to be stopped now, 

before the Corps finalizes the rule in September. The future of 

South Dakota, I believe, is linked directly to having a Missouri 

River water supply that we manage as a State. Please do not let 

the Corps take that away from us. 

We ask for your help in stopping the rulemaking in the name of 

the equal footing doctrine, cooperative federalism, and protecting 

States’ rights under the 1944 Flood Control Act. 

Thank you, Senator, for the invitation to appear here today. 

[The prepared statement of Mr. Pirner follows:] 

6 


31407.074

Testimony of Steven Pirner, PE 

Secretary, South Dakota Department of Environment and Natural Resources 

to the 

US Senate Subcommittee on Superfund, Waste Management and Regulatory Oversight 

"Oversight of the Army Corps' Regulation of Surplus Water and 

the Role of States' Rights" 

June 13, 2018 

Washington, D.C. 

Chairman Rounds, Ranking Member Booker, and Members of the Committee, my name 

is Steve Pirner, Secretary of the South Dakota Department of Environment and Natural 

Resources (DENR). You all have heard about the Waters of the U.S. rule proposed by 

the U.S. Environmental Protection Agency (EPA). Many labeled that rule as the largest 

federal takeover of our nation's water resources ever attempted. However, the Water 

Supply Rule proposed by the U.S. Army Corps of Engineers (Corps) for the Missouri 

River reservoirs exceeds that federal takeover action, at least in South Dakota. 

The Missouri River is the largest, most reliable surface water supply in South Dakota. 

As such, it is extremely important to the state. In the 1950s and 60s, the federal 

government built four massive dams in South Dakota on the Missouri River, but we paid 

a heavy price. Environmentally, these reservoirs flooded more than 500,000 acres of 

our most fertile river bottom lands, never to be seen again. Socially, the dams disrupted 

people, forcing citizens and tribal members from their lands, homes, and communities. 

The promise of federal irrigation projects to help offset those losses never materialized. 

The proposed Water Supply Rule began in 2008 when the Assistant Secretary of the 

Army issued Real Estate Guidance Policy Letter No. 26. This policy requires municipal 

and industrial water users to acquire a water storage contract prior to the Corps issuing 

an access easement to a Missouri River reservoir for a pump site, but the Corps had no 

process for issuing the contracts. Therefore, the effect of the policy was to place a 

moratorium on easements to the reservoirs. 
7 


31407.075

To advance the process, the Corps developed the proposed Water Supply Rule. Under 

the rule, the Corps defines stored water as being all the water in the reservoirs. This 

new definition creates a monumental change to the law and steals South Dakota's 

rights to natural flows that, by tradition and law, are under the jurisdiction of the states. 

To better understand natural flows, visualize the reservoirs of stored water sitting on top 

of a river with natural flow passing underneath; this natural flow represents water under 

the jurisdiction of the state. 

States' rights to natural flows of navigable waters within their borders are constitutionally 

founded, and protected, in the Equal Footing Doctrine. Congress acknowledged this 

states' right in the first sentence of Section 1 of the 1944 Flood Control Act by stating 

" .. .it is declared to be the policy of the Congress to recognize the interests and rights of 

the States in determining the development of the watersheds within their borders and 

likewise their interests and rights in water utilization and control, ... " No other federal 

law usurps this policy. As a consequence of the doctrine and the enacted law, the 

Corps must acknowledge the state's right to natural flows, but its definition of stored 

water does the opposite. 

Another concern with the Corps' rule is one of equity. The Corps has documented the 

tremendous benefits the reservoirs supply to people throughout the basin, yet in the rule 

the Corps applies fees to just the upstream states. To require the upstream states to 

pay the cost through stored water fees with people in the downstream states enjoying 

these benefits at no cost is not fair or equitable. As Governor Daugaard wrote to the 

Corps in 2012, 'To impose all reservoir operation and maintenance costs on upstream 

states alone adds insult to (that) injury." 

Taken together, the moratorium on easement access and proposed Water Supply Rule 

has deprived South Dakota of its Missouri River water because out of a thousand miles 

of Missouri River shoreline, only about one hundred miles are on the two short freeflowing stretches in the state. Therefore, ninety percent of our shoreline is off-limits to 

potential users of Missouri River water. 
8 


31407.076

Midland Contracting was one of the first to find this out when the Corps told them they 

could no longer pump water used for dust control out of the lake behind Big Bend Dam. 

The amount of water to be used from this reservoir that is 80 miles long and covers 

63,000 acres was miniscule at best. The Corps has held fast to this moratorium, 

refusing to let a contractor pump water in 2011 even while flood waters were 

devastating Pierre, Ft. Pierre, and downstream communities. The city of Pierre has 

been denied access for several years to the river to install a small pumping station that 

would allow the city to irrigate green space with river water, saving time and money. 

This moratorium remains in place today, as evidenced by the Corps' response to our 

issuance of a temporary water right permit to a contractor on March 19, 2018, to use 

90,000 gallons of Missouri River water out of the Oahe Reservoir to redo a state parking 

lot just above Oahe Dam. Oahe holds 6.4 trillion gallons. The Corps' response to this 

use of 0.000001 percent of Oahe water was, "All requests for using water from the 

South Dakota reservoirs are on hold until finalized guidance is received from 

Headquarters. An alternate source of water should be utilized." All of these actions by 

the Corps denying use of water already approved by the state are nonsensical at best. 

More detailed objections to the proposed rulemaking have been submitted by Governor 

Daugaard, and I have enclosed copies of his letters for your information. However, the 

bottom line is the Corps is attempting a federal takeover of the Missouri River water in 

South Dakota. This 2008 rulemaking effort tramples state's rights and needs to be 

stopped now before the Corps finalizes the rule in September. The future of South 

Dakota is linked directly to having a Missouri River water supply we can manage. 

Please do not let the Corps take that away from us. We ask for your help in stopping 

the rulemaking in the name of the Constitutional Equal Footing Doctrine, cooperative 

federalism, and protecting state's rights under the 1944 Flood Control Act. 

Thank you again for the invitation. 

Enclosed: Letters from Governor Dennis Daugaard 
9 

Senator ROUNDS. Thank you for your testimony, Secretary 

Pirner. 

We will now turn to our second witness, Ward Scott. 

Mr. Scott, you may begin. 

STATEMENT OF WARD J. SCOTT, 

WESTERN GOVERNORS’ ASSOCIATION 

Mr. SCOTT. Chairman Rounds, Ranking Member Booker, and 

members of the Subcommittee, I appreciate this opportunity to testify today on behalf of the Western Governors’ Association. My 

name is Ward Scott and I am a policy advisor with WGA, where 

my work focused on western water policy and State-Federal relations. 

Western Governors have consistently expressed their concern to 

the Corps regarding its December 2016 proposed rule. These concerns have focused on three primary elements: first, the proposed 

rule would likely have preemptive effects on States’ sovereign authority over water resources and corresponding State laws; second, 

the Corps’ overly broad proposed definition of the term surplus waters includes natural historic river flows, which should remain 

under State jurisdiction; and, third, the Corps has not adequately 

consulted with potentially affected States, nor has it properly assessed potential federalism implications, as required by Executive 

Order 13132, in its development of the proposed rule. 

Water is precious everywhere, but especially in the West, where 

consistently arid conditions, diverse landscapes and ecosystems, 

and growing populations present unique challenges in the allocation and management of scarce water resources. 

State water laws have developed over the course of decades, and 

very greatly do account for local hydrology; the interplay between 

Tribal, State, and Federal legal rights; and complicated systems of 

water allocation. These State laws and the regulatory frameworks 

within which they operate must be accounted for in the development of any Corps rule. 

Western Governors have adopted a bipartisan policy that articulates a fundamental principal recognized by both Congress and the 

U.S. Supreme Court, which is that States are the primary authority for allocating, administering, protecting, and developing water 

resources, and they are primarily responsible for water supply 

planning within their boundaries. 

This well-established State authority is rooted in the U.S. Constitution as States, upon their admission to the Union, established 

their sovereign authority over water resources under the equal 

footing doctrine and continue to maintain this broad authority unless preempted by Federal law. 

Under the proposed rule, the Corps would define surplus water 

to mean any water available at a Corps reservoir that is not required during a specified time period to accomplish a federally authorized purpose of that reservoir. This definition fails to distinguish between surplus water, which is defined in relation to storage and authorized purposes, and natural flow, which is defined as 

waters that would have been available for use in the absence of 

Federal dams and reservoirs. 

10 

In its Notice of Proposed Rulemaking, the Corps does not claim 

that its authorizing statutes, or any other relevant Federal statute, 

preempts State authority over a river’s natural flows. Rather, both 

the Flood Control Act of 1944 and the Water Supply Act of 1958 

clearly direct the Corps to recognize and defer to State law. Nor 

have States transferred or ceded to the Corps any rights to or authority over the allocation and management of natural flows. 

The Corps’ proposed definition of surplus water is beyond the 

scope of its statutory authority and would usurp States’ well-established rights over the natural flows of water through Corps reservoirs. As a result, the proposed rule would conflict with 

Congress’s clear intent to preserve State water law and authority. 

Western Governors believe that any definition of surplus waters 

must plainly exclude natural historic flows from any qualification 

of water subject to the proposed rule. 

Western Governors’ concerns also extend to the process by which 

the rule was developed. States should be afforded the opportunity 

for early, meaningful, substantive, and ongoing consultation with 

Federal agencies as part of the development of any Federal rule, 

policy, or decision which may have impacts on State authority. Nowhere is State consultation more important than in the context of 

western water resource management. 

Consistent with this policy, Executive Order 13132 requires Federal agencies to have an accountable process to ensure meaningful 

and timely input by State and local officials in the development of 

regulatory policies that have federalism implications. 

In its notice, the Corps declares that it does not believe that the 

proposed rule has federalism implications. WGA disagrees with 

this assertion. The proposed rule clearly qualifies for further review 

under Executive Order 13132, as its provisions would have substantial direct effects on the States and their authority over the 

management and allocation of their waters, as well as preemptive 

effects on States’ water laws. 

Proper State consultation in an agency’s decisionmaking process 

produces more durable, informed, and effective policy, and allows 

for genuine partnerships to develop between Federal and State officials. Providing States with an opportunity to submit written comments, which is already required under the Administrative Procedures Act, is not the same as consultation. 

In conclusion, the Corps’ proposed rule has a substantial likelihood of interfering with, impairing, and/or subordinating States’ 

well-established authority to manage and allocate the natural flows 

of rivers within their boundaries and to implement State water 

laws. 

Any definition of surplus water must account for and exclude 

natural flows of the river from waters that would be subject to 

Corps control. The Corps should not deny States access to divert 

and appropriate such natural flows, nor should the Corps charge 

storage or access fees where users are making withdrawals of natural flows from Corps reservoirs. 

The Corps should consult with States on a government-to-government level to better understand the impacts the proposed rule may 

have on States’ authority over water resources and ways in which 

11 

the Corps can partner with States to more effectively manage its 

projects. 

Thank you again for providing this opportunity to testify and for 

bringing attention to these important issues of States’ rights and 

Federal responsibilities. 

[The prepared statement of Mr. Scott follows:] 

12 


31407.077

Written Testimony of Ward J. Scott, Policy Advisor 

Western Governors' Association 

Submitted to the United States Senate 

Committee on Environment and Public Works 

Subcommittee on Superfund, Waste Management, and Regulatory Oversight 

June 13, 2018 

Oversight of the Army Corps' Regulation of Surplus Water and the Role of States' Rights 

Chair Rounds, Ranking Member Booker, and Members of the Subcommittee, I appreciate the 

opportunity to testifY today on behalf of the Western Governors' Association (WGA). My name is 

Ward Scott and lam a Policy Advisor with the Association, where my work focuses on western 

water policy and state-federal relations. 

WGA represents the Governors of 19 western states and three U.S. territories and is an instrument 

of the Governors for bipartisan policy development, information-sharing, and collective action on 

issues of critical importance to the western United States. The elected and appointed officials of the 

western states have a long history of responsible land and water resource management and of 

working collaboratively with the administrative agencies of the federal government. 

My testimony will focus on the Western Governors' concerns with the U.S. Army Corps of Engineers 

(Corps) proposed rule, "Use of (Corps] Reservoir Projects for Domestic Municipal & Industrial 

Water Supply" (Proposed Rule).' Western ·Governors have consistently expressed their opposition 

to the Proposed Rule and to any agency rule or policy that would or has the potential tointerfere with, subordinate, or in any way diminish states' well-established legal authority over 

water resources within their boundaries. 

Western Governors' concerns regarding the Proposed Rule focus on three primary elements. First, 

the Proposed Rule may have preemptive effects on states' sovereign authority over water resources 

and corresponding state laws. Second, the Corps' overly-broad proposed definition of the term 

"surplus waters" includes natural, historic river flows, which should remain under state 

jurisdiction. Third, the Corps' has not adequately consulted with potentially-affected states, nor has 

it properly assessed potential federalism implications as required by Executive Order 13132, in its 

development of the Proposed Rule.z 

Water is precious everywhere but especially in the West, where consistently arid conditions, 

diverse landscapes and ecosystems, and growing populations present unique challenges in the 

allocation and management of scarce water resources. State water laws have developed over the 

course of decades, and vary greatly to account for local hydrology, the interplay between Tribal, 

state, and federal legal rights, and complicated systems of water allocation. In the West, water must 

generally be appropriated under state-granted water rights and is often transferred long distances 

from its point of diversion to its point of use. Additionally, western water users often possess 

vested private property rights in water, which are granted and administered by the states. Western 

'81 Fed. Reg. 91556 (Dec. 16, 2016). 

'WGA Comments, Feb. 27,2017. Available at: 

http: I lwestgov.orgjimages I editor IUSAC E_Surplus_ Waters_Rule_-_final. pdf. 
13 


31407.078

state water laws and the regulatory frameworks within which they operate- are complex and 

diverse and must be accounted for in the development of any Corps rule or policy. 

State Authority over Water Resource Management and Allocation 

Western Governors have adopted policy (WGA Policy Resolution 2015-08, Water Resource 

Management in the West) that articulates a fundamental principle recognized by both Congress and 

the United States Supreme Court: 

States are the primary authority for allocating, administering, protecting, and 

developing water resources, and they are primarily responsible for water supply 

planning within their boundaries. States have the ultimate say in the management 

of their water resources and are best suited to speak to the unique nature of 

western water law and hydrology.3 

This well-established state authority is rooted in the U.S. Constitution's Tenth Amendment, which 

guarantees that, "The powers not delegated to the United States by the Constitution, nor prohibited 

by it to the States, are reserved to the States respectively, or to the people.''• States, upon their 

admission to the Union, established their sovereign authority over water resources under the Equal 

Footing Doctrines and continue to maintain this broad authority, unless preempted by federallaw.6 

Federal statutes addressing western water management have consistently expressed that states 

possess primary authority over their water resources and that it is the intent of Congress to 

preserve and respect such authority and corresponding state laws.' 

No federal laws cited by the Corps that may be applicable to Proposed Rule expressly or impliedly 

preempt state's authority to manage and allocate water resources. Rather, the two federal statutes 

relied upon by the Corps in its Notice of Proposed Rule making (NPRM)B- the Flood Control Act of 

1944 and the Water Supply Act of 1958- clearly recognize and defer to state law. 

Section 1 of the Flood Control Act of 1944 begins with the following: "[l]t is hereby declared to be 

the policy of the Congress to recognize the interests and rights of the States in determining the 

development of the watersheds within their borders and likewise their interests and rights in water 

utilization and control..."9 Similarly, in the Water Supply Act of 1958, Congress declared its intent 

"to recognize the primary responsibilities of the States and local interests in developing water 

supplies for domestic, municipal, industrial, and other purposes and that the Federal Government 

should participate and cooperate with States and local interests in developing such water supplies 

3 WGA Policy Resolution 2015-0B, Water Resource Management in the West Available at: 

http: /fwestgov.org/images I editor /RESO _ Water_Resources_Final_ Version_ OB.pdf 

4 U.S. Const amend. X. 

s Pollard v. Hagan, 44 U.S. 212 (1845). 6 Martin v. Lessee of Waddell, 41 U.S. 367, at 410 (1842) ("[T]he people of each state became themselves 

sovereign; and in that character hold the absolute right to all of their navigable waters and the soils under 

them for their own common use, subject only to the rights since surrendered by the Constitution to the 

general government."); see also, Kansas v. Colorado, 206 U.S. 46 (1907); California Oregon Power v. Beaver 

Portland Cement Co., 295 U.S. 142 (1935); PPL Montana v. Montana, 565 U.S. 576 (2012). 7 See, e.g., the 1866 Mining Act ( 43 U.S.C. § 661); the 1877 Desert Land Act ( 43 U.S.C. §321); the 1920 Federal 

Power Act (16 U.S.C. §§ 802, 821); the Clean Water Act (33 U.S.C. § 1251(b) and (g)); the 1902 Reclamation 

Act (43 U.S.C. § 383); Pollard v. Hagan, 44 U.S. 212 (1845); California v. United States, 438 U.S. 645 (1978). 

• 81 Fed. Reg. 91556 (Dec. 16, 2016). 

9 43 u.s.c. § 701-1. 

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in connection with the construction, maintenance, and operations of Federal navigation, flood 

control, irrigation, or municipal purpose projects."'o Although the Corps cites various statements of 

Congressional intent to justit'y certain provisions of the Proposed Rule in its NPRM, no intent of 

Congress is more repeatedly and clearly expressed throughout the controlling statutes than the 

preservation of, and respect for, states' authority over their water resources. 

The Corps' Proposed Rule 

Through its Proposed Rule, the Corps seeks to establish policies governing the use of its reservoir 

projects within the Upper Missouri River Basin and the treatment of "surplus water" within that 

system.11 Although the Proposed Rule attempts to address "specific issues that have arisen most 

notably in the Corps' Northwestern and South Atlantic Divisions," the Corps has stated that it "is 

also intended to provide greater clarity, consistency, and efficiency in implementing [the Flood 

Control Act of 1944 and the Water Supply Act of 1958] nationwide."'2 

Western Governors have expressed their concerns regarding both the substance of the Proposed 

Rule and the process by which is was developed, both through WGA and individually13 and remain 

concerned that the procedural, legal, and technical issues cited in comments and letters, as well as 

the views and concerns expressed by individual states, have still not been addressed by the Corps 

or incorporated into its decisionmaking processes. These concerns were heightened by the Corps' 

listing of the Proposed Rule in the Spring 2018 Unified Agenda of Regulatory and Deregulatory 

Actions' as currently in its "Final Rule Stage" with a "Final Action" date estimated as January 2019. 

Definition and Treatment of "Surplus Waters" 

Through the Proposed Rule, the Corps seeks to address the use of its reservoir projects for 

domestic, municipal, and industrial water supply, and clarity its use of water supply contracts to 

authorize the withdrawal of "surplus waters" from Corps reservoirs. The Corps' administration of 

water supply contracts at its reservoirs should not have any negative effect on states' primary 

authority over the management and allocation of their water resources or state laws enacted for 

such purposes. The Proposed Rule, however, fails to distinguish between "surplus water," which is 

defined in relation to storage and authorized purposes, and "natural flows," which is defined as 

waters that would have been available for use in the absence of federal dams and reservoirs. 

Section 6 of the Flood Control Act of 1944 authorizes the Corps to enter into agreements "for 

domestic and industrial uses of surplus water that may be available at any [Corps] reservoir," 

provided such uses do not "adversely affect then-existing lawful uses of such water." The statute 

does not provide a definition for "surplus waters." Under the Proposed Rule, the Corps would 

define "surplus water" to mean any water available at a Corps reservoir that is not required during 

a specified time period to accomplish an authorized purpose or purposes of that reservoir. 

10 43 u.s.c. § 390b. 11 81 Fed. Reg. 91556 (Dec. 16, 2016). 

12 81 Fed. Reg. 91558-59. 

13 Western states submitting individual comments to the Corps include: The State ofldaho; the .s!J>..!!:U!f 

Nebraska; the State of North Dakota; the State of Oklahoma; and the State of South Dakota. Comments were 

also submitted by the Western States Water Council; North Dakota Water Commission; North Dakota Water 

Users Association· Association of California Water Agencies: and the Texas Commission on Environmental 

Q~. 

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The Corps does not claim that federal law preempts state authority over natural flows through the 

Flood Control Act of 1944, the Water Supply Act of 1958, or any other relevant statute. Nor have 

states transferred or ceded any rights to, or authority over, the allocation and management of 

natural flows to the Corps. In its NPRM, the Corps acknowledges that some portion of waters to be 

defined as "surplus" would exist without Corps' water storage: "The Corps also recognizes that 

some withdrawals that it may authorize from a Corps reservoir pursuant to Section 6 could have 

been made from the river in the absence of the Corps reservoir project, and in that sense may not 

be dependent on reservoir storage."14 

The proposed definition of"surplus waters" is beyond the scope of the Corps' statutory authority 

and would usurp states' well-established sovereign authority over the natural flows of water 

through Corps reservoirs. As a result, the Proposed Rule would conflict with Congress's clear intent 

to preserve state water law. Western Governors believe that any definition of "surplus waters" 

must plainly exclude natural historic flows from any quantification of waters subject to the 

Proposed Rule. Additionally, natural flows should be exempt from any monetary charges imposed 

by the Corps for water storage, as such waters would exist within the streambed in the absence of 

Corps reservoirs and would not be subject to federal management or the imposition of federal fees. 

Rulemaking Process 

In addition to the substance of the Proposed Rule, Western Governors are concerned about the 

process by which it was developed. States should be afforded the opportunity to consult with 

federal agencies as part of the development of any federal rule, policy or decision which may have 

significant impacts on states' authority- both inherent and delegated. Nowhere is state 

consultation more important than in the context of water resource management 

Western Governors emphasize in WGA Policy Resolution 2017-01, Building a Stronger StateFederal Relationship, that federal agencies should, "have a clear and accountable process to provide 

each state through its Governor as the top elected official of the state and other representatives of 

state and local governments as he or she may designate- with early, meaningful, and substantive 

input in the development of regulatory policies that have federalism implications."ts State 

consultation should be an ongoing process and should continue from the development stage of any 

proposed rule throughout its promulgation. As the agencies receive additional information, 

Governors and the state officials they designate should have the opportunity for ongoing 

engagement with the agencies to develop refinements to any rule. 

Consistent with this policy, Executive Order 13132, Federalism, requires federal agencies to "have 

an accountable process to ensure meaningful and timely input by State and local officials in the 

development of regulatory policies that have Federalism implications.''16 These policies include 

"regulations, legislative comments or proposed legislation, and other policy statements or actions 

that have substantial direct effects on the States, on the relationship between the national 

government and the States, or on the distribution of power and responsibilities among the various 

levels of government."17 ln its NPRM, the Corps declares that it "do[es] not believe that the 

H 81 Fed. Reg. 91556 (Dec. 16, 2016). 

15 WGA Policy Resolution 2017-01, Building a Stronger State-Federal Relationship. Available at: 

http:/ /westgov.orgjimages/editorjPR_2017-01_State_Federal_Relationship.pdt: 16 64 Fed. Reg. 43255 (Aug. 10, 1999). 

17 !d. 

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proposed rule has Federalism implications."'" WGA disagrees with this assertion. The Proposed 

Rule clearly qualifies for further review under Executive Order 13132, as its provisions would have 

substantial direct effects on the states and their authority over the management and allocation of 

their waters. The Proposed Rule would also have a preemptive effect on state water laws (i.e., a 

substantial effect "on the distribution of power arid responsibilities among the various levels of 

government"). 

Proper state consultation in an agency's decisionmaking process produces more durable, informed, 

and effective policy and allows for genuine partnerships to develop between federal and state 

officials. Providing states with an opportunity to submit written comments which is already 

required under the Administrative Procedures Act- is not the same process as "consultation."19 

Federal courts have relied on an ordinary definition of"consultation" and have concluded that state 

consultation requires a meaningful opportunity for dialogue between state and federal officials, 

where federal decisionmakers "seek information or advice from" states or "have discussions or 

confer with [states], typically before undertaking a course of action."zo 

While WGA has submitted written comments under the normal procedures for public input, 

Western Governors have asserted that states should have been consulted throughout this 

rulemaking process. In addition to written comments submitted in response to the Corps' Notice of 

the Proposed Rule, WGA issued letters in August 2013 and again in October 2017 regarding the 

Corps' failure to adequately engage with states in the development of the Proposed Rule. It is our 

understanding that Corps officials have conducted little to no outreach to Governors' offices in 

response to their expressed concerns regarding the Proposed Rule. This failure to consult with 

states has resulted in a rule that largely ignores state concerns that have been consistently 

communicated to the Corps. 

The Corps should develop rules and policies establishing comprehensive procedures for state 

consultation, requiring its officials to conduct pre-decisional- as well as ongoing- government-togovernment engagement with states through their Governors' offices. Such measures should be 

implemented prior to any decision in which the Corps asserts jurisdiction over matters traditionally 

under state authority. 

Conclusion 

Western Governors have a history of responsible and comprehensive water management within 

their states and of working with federal agencies on water-related matters. The Proposed Rule has 

a substantial likelihood of interfering with, impairing, andjor subordinating states' well-established 

authority to manage and allocate the natural flows of rivers within their boundaries and to 

implement state water laws. 

Any definition of "surplus water" must account for, and exclude, natural flows of the river from 

waters that would be subject to Corps control. The Corps should not deny access to divert and 

appropriate such natural flows, nor should the Corps charge storage or access fees where users are 

making withdrawals of natural flows from Corps reservoirs. No federal statute purports to assert 

federal jurisdiction over these waters or to preempt state law. 

'" 81 Fed. Reg. 91556 (Dec. 16, 2016). 19 California Wilderness Coalition v. U.S. Dept of Energy, 631 F.3d 1072, 1087 (9th Cir. 2011). 

20 The New Oxford Dictionary 369 (2001). 

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The Corps should consult with states, on a government-to-government level, to better understand 

the impacts the Proposed Rule may have on states' authority over water resources and ways in 

which the Corps can partner with states to effectively manage its projects and resources. 

This concludes my testimony. Thank you again for providing the opportunity to testify and for 

bringing attention to these important issues of states' rights and federal responsibilities. I will be 

happy to answer any questions you have. 

Testimony of Ward J. Scott Page6 of6 
18 

Senator ROUNDS. Thank you for your testimony, Mr. Scott. 

We will now turn to our third witness, Stephen Mulligan. 

Mr. Mulligan, you may begin. 

STATEMENT OF STEPHEN MULLIGAN, J.D., LEGISLATIVE 

ATTORNEY, CONGRESSIONAL RESEARCH SERVICE 

Mr. MULLIGAN. Thank you, Mr. Chairman. Chairman Rounds, 

Ranking Member Booker, my name is Stephen Mulligan. I am a 

legislative attorney in the American Law Division of the congressional Research Service. Thank you for inviting me to testify today 

on behalf of CRS. I will be addressing legal authorities related to 

the Army Corps of Engineers’ regulation of surplus water and the 

role of States’ rights. 

While there may be a number of policy-related questions that 

arise this afternoon, my testimony focuses on the Corps’ legal authorities. Separate form this testimony, CRS has provided a memorandum to the Subcommittee written by my colleague, Nicole 

Carter, that addresses many of the policy and process-related 

issues. 

The Supreme Court historically has held that the Corps’ authority for projects in navigable waters derives from the Commerce 

Clause and the Federal Government’s interest in promoting navigation throughout the Nation’s waterways. 

In 1899, the Court explained that the States’ control of the appropriation of their waters is subject to the superior power of the 

general government to secure the uninterrupted navigability of all 

the navigable streams within the limits of the United States. 

In the 1940 decision, the Court held that a State could not enjoin 

the Corps from constructing a dam or reservoir, even if the water 

impounded within the reservoir was controlled by the State because, in that case, the State’s program for water development and 

conservation must bow before the superior power of Congress. 

But the Supreme Court also has a long history of cases recognizing that a State owns the navigable waters within its borders. 

When the United States was formed, the Supreme Court explained 

the people of each State became themselves sovereign, and in that 

character hold the absolute right to all their navigable waters and 

the soils under them for their own common use, subject only to the 

rights since surrendered by the Constitution to the general government. Under the constitutional equal footing doctrine, States that 

later joined the Union acquired the same rights granted to the 

original States and, therefore, also acquired ownership of their 

States’ navigable waters upon achieving statehood. 

When these two lines of cases are viewed together, there is a tension between the rights of States to use and regulate navigable waters within their borders and the right of the Federal Government 

to exercise the authority under the Commerce Clause. And this 

tension is not limited to high level constitutional principles; it also 

exists within the texts of the relevant authorizing statutes for the 

Army Corps of Engineers. The Flood Control Act of 1944 authorizes 

various Army Corps projects in navigable waters. It also authorizes 

the Corps to contract for surplus water that may be available at 

Federal reservoirs under the control of the Department of the 

Army. 

19 

Even though the statutes grants authority to the Secretary of the 

Army as an exercise of Federal power, it also provides that it is the 

policy of the Congress to recognize the interests and rights of the 

States in determining the development of the watersheds within 

their borders and, likewise, their interests and rights in water utilization and control. 

Similarly, the Water Supply Act of 1958 is an exercise of Federal 

power that authorizes certain Corps action with regard to Federal 

reservoirs, but it provides that Congress recognizes that the primary responsibilities of the States and local interests in developing 

water supplies for domestic, municipal, industrial, and other purposes. 

This tension created by the interplay between Federal power derived from the Commerce Clause and States’ sovereign right to 

navigable waters has manifested itself in discussion over the Corps’ 

2016 Notice of Proposed Rulemaking on the use of U.S. Army 

Corps of Engineers reservoir projects for domestic, municipal, and 

industrial water supply. 

Some have called into question whether the proposed rule is a 

valid exercise of Federal constitutional and statutory authority. 

While some aspects of the Corps authority on which the proposed 

rule is based have been the subject of litigation, such as the division of authority between the Corps and the Department of the Interior under the 1944 Flood Control Act, it does not appear that the 

provision in question has been litigated with respect to potential 

interference with State ownership of water. 

To date, the Supreme Court has not clearly defined the Corps’ 

obligation with respect to States’ rights over surplus water that is 

held in or passes through the Corps’ reservoirs. 

Thank you, and I will be happy to answer questions at the appropriate time. 

[The prepared statement of Mr. Mulligan follows:] 

20 


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~ Congressional Research Service 

, •' Informing the legislative debate since 1914 

Statement of 

Stephen P. Mulligan 

Legislative Attorney 

Before 

TESTIMONY 

Committee on Environment and Public Works 

Subcommittee on Superfund, Waste Management, and Regulatory 

Oversight 

U.S. Senate 

Hearing on 

"Oversight of the Army Corps' Regulation of 

Surplus Water and the Role of States' Rights" 

June !3, 20!8 

CRS TESTIMONY 

Congressional Research Service 

7-5700 

www.crs.gov 

<Product Code> 

Prepared for Congress-------------------------
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Congressional Research Service 

Chairman Rounds, Ranking Member Booker, and Members of the Subcommittee, my name is 

Stephen Mulligan. I am a legislative attorney in the American Law Division of the 

Congressional Research Service (CRS). Thank you for inviting me to testify on behalf of CRS 

regarding the U.S. Army Corps of Engineers (Corps) regulation of surplus water and the role of 

states' rights. 

The Corps operates federal water projects for a variety of purposes, which Congress identifies when it 

authorizes a project.' Various water supply shortages and greater demand for water supply related to 

municipal and industrial uses (M&I) have brought increased attention to disputes over the control of 

water resources across the country. For example, new applications of energy extraction technologies have 

increased oil and gas production from shale formations in various regions of the United States? And 

expanding populations in the United States have created greater need for domestic access to water 

sources. 3 

Although the federal government has authority related to water resources management, water allocation 

has traditionally been a matter left to the states, which administer their own water rights systems, and 

which possess certain rights to regulate the water use within their boundaries as an attribute of state 

sovereignty.4 At the same time, the Supreme Court has long recognized that federal constitutional 

powers-primarily the Commerce Clause--may limit states' rights to control their waters.' This dual 

exercise of authority over water resources has led to questions regarding a recent Corps' rule entitled "Use 

of U.S. Army Corps of Engineers Reservoir Projects for Domestic, Municipal & Industrial Water Supply" 

(Proposed Rule), discussed in more detail below6 

Constitutional Authority for Water Storage at Federal 

Water Projects 

The Corps has broad constitutional authority for its water projects. The Supreme Court historically has 

held that the Corps' authority derives from the Commerce Clause and the importance of promoting 

navigation throughout the nation's waterways.' The breadth of this authority regarding various purposes 

of the Corps' operations has been recognized by the Supreme Court in multiple cases. 

In 1899, the Court explained that the states' control of the appropriation of their waters was subject to 

"the superior power of the General Government to secure the uninterrupted navigability of the all 

1 For additional background on authorized purposes for Corps' projects, see CRS Report R42805, Reallocation of Water Storage 

at Federal Water Projects for Municipal and Industrial Water Supply, by Cynthia Brown and NicoleT. Carter. For analysis of 

certain policy-related issues to the Corps' reservoirs, see the congressional distribution memorandum submitted with this 

testimony titled Anny Corps of Engineers Reservoirs: Municipal and Industrial Water Supply Activities by Nicole Carter, 

Specialist in Natural Resources Policy, dated June 12, 2018 [Carter Memorandum]. 2 See CRS Report R42333, Marcellus Shale Gas: Development Potential and Water Management Issues and Laws. 

3 E.g. In re MDL-1824 Tri-State Water Rights Litig., 644 F.3d 1160, 1171 (11th Cir. 2011) (discussing the growing water needs 

in Atlanta). 4 See infra§ State Ownership of Water Within Its Boundaries. 5 See U.S. CoNST., art. I, §8, cl. 3 ("The Congress shall have power to ... regulate commerce with foreign nations, and among 

the several states, and with the Indian tribes ... . ").See also infra§ Constitutional Authority for Water Storage at Federal Water 

Projects. 

6 Use ofU.S. Army Corps of Engineers Reservoir Projects for Domestic, Municipal & Industrial Water Supply, 81 Fed. Reg. 

91556 (Dec. 16, 2016) [Proposed Rule]. 1 See Gibbons v. Ogden, 22 U.S. 1 (1824). 

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Congressional Research Service 

navigable streams within the limits of the United States."8 Citing this principle, the Court later held that a 

state could not enjoin the Corps from constructing a dam and reservoir, even if the water impounded 

within the reservoir was controlled by the state.9 The Court rejected the state's argument that the project 

would interfere "with the state's own program for water development and conservation ... [which] must 

bow before the 'superior power' of Congress."10 

The Court has indicated that Congress's constitutional "authority is as broad as the needs of commerce."11 

It has explained that maintaining the navigability of waterways is only one of the various purposes for 

which the federal government may exercise authority over water. 12 The Court has stated that if a particular 

project serves a purpose of navigation, "it is constitutionally irrelevant that other purposes may also be 

advanced."13 It has cited other valid purposes such as flood control, watershed development, and 

"recovery of the cost of improvements through utilization of power" as examples of the breadth of federal 

authority over waters. 14 

Thus, a state's authority over its waters is "subject to the power of Congress to control the waters for the 

purpose of commerce."15 Accordingly, if Congress authorizes the Corps to impound water at one ofits 

projects for purposes related to commerce, the federal authority over the water likely supersedes the 

state's authority for those purposes. Notwithstanding this broad authority, Congress historically has 

deferred to states' authority regarding water allocation, as discussed below. 

Statutory Authority Related to Water Storage at Corps' 

Projects 

Under the Flood Control Act of 1944 (1944 FCA), 16 the Corps may enter contracts with other government 

or private parties for the temporary use of surplus water from its projects. 17 Under the Water Supply Act 

of 1958 (WSA),18 the Corps may enter storage agreements providing permanent storage space at a 

reservoir, even if Congress did not originally authorize such a purpose for the project. 19 The Corps' 

guidance states that surplus water contracts generally should have terms offive years. 20 

' United States v. Rio Grande Dam and Irrigation Co., 174 U.S. 690, 703 (1899). 

9 Oklahoma v. Atkinson, 313 U.S. 508 (1941) ("Since the construction of this dam and reservoir is a valid exercise by Congress 

of its commerce power, there is no interference with the sovereignty of the state."). 

10 Id. at 534-35. 

"United States v. Appalachian Electric Power Co., 311 U.S. 377, 426 (1940). 

12 Id. 

13 United States v. Twin City Power Co., 350 U.S. 222, 224 (1955). 

14 United States v. Appalachian Electric Power Co .• 311 U.S. at426. 

15 Jd. at423. 

16 Act ofDecember 22, 1944,58 Stat. 887. 

17 33 U.S.C. §708. 

18 43 u.s.c. §390b. 

19 43 u.s.c. §390b. 

20 See U.S. ARMY CORPS OFENG'RS, PLANNING GUIDANCE NOTEBOOK, ER 1105-2-100, at app. E (2000) [ER 1105-2-100]. 

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Section 6 of the Flood Control Act of 1944 

Section 6 of the 1944 FCA specifically authorizes the Corps to enter contracts for surplus water. The 

Corps "is authorized to make contracts with States, municipalities, private concerns, or individuals, at 

such prices and on such terms as [it] may deem reasonable, for domestic and industrial uses for surplus 

water that may be available at any reservoir under the control of the [Corps]."21 The contracts entered 

under Section 6 must not "adversely affect then existing lawful uses of such water. "

22 Section I of the 

1944 FCA states that "it is declared to be the policy of the Congress to recognize the interests and rights 

of the States in determining the development of the watersheds within their borders and likewise their 

interests and rights in water utilization and control .... "

23 While some aspects of the Corps' authority 

under the 1944 FCA have been the subject of litigation-such as the division of authority between the 

Corps and the Department of the Interior4

-it does not appear that Section 6 has been litigated with 

respect to potential interference with state ownership of water. 

The Water Supply Act of 1958 

In 1958, Congress recognized state primacy in developing M&I supplies, stating, 

It is hereby declared to be the policy of the Congress to recognize the primary responsibilities of 

the States and local interests in developing water supplies for domestic, municipal, industrial, and 

other purposes and that the Federal Government should participate and cooperate with States and 

local interests in developing such water supplies in connection with the construction, maintenance, 

and operation of Federal navigation, flood contro~ irrigation, or multiple purpose projects.25 

To promote this policy, the WSA authorizes the Corps to include water storage for M&I use as a project 

purpose for new and existing projects: "[S]torage may be included in any reservoir project surveyed, 

planned, constructed or to be planned, surveyed and/or constructed by the Corps of Engineers ... to 

impound water for present or anticipated future demand or need for municipal or industrial water. ... "26 

The WSA includes some limits on how the Corps may add M&I storage as a purpose for its projects?7 

Congress indicated that construction and modification costs would be shared by state and local interests 

and that such costs would be "determined on the basis that all authorized purposes served by the project 

shall share equitably in the benefits of multiple purpose construction."28 The WSA states that it does not 

modify Section 1 of the 1944 FCA. 29 

Additional Statutory Authorities and Restrictions 

In addition to the WSA and 1944 FCA, other federal laws may impact the Corps' ability to enter water 

supply agreements or assess charges for such agreements on a project-specific or location-specific basis. 

21 33 u.s.c. §708. 

uld. 

23 33 U.S.C. §701-1. 24 E.g., ETSI Pipeline v. Missouri, 484 U.S. 495, 509 (1988) (concluding that the 1944 FCA gave the Corps, and not the 

Department of the Interior, and authority to contract to provide "surplus water" from Lake Oahe). 

25 43 U.S.C. §390b(a). 26 43 u.s.c. §390b(b). 

27 Modifications authorized by the WSA that "seriously affect" original purposes or "involve major structural or operational 

changes" must be approved by Congress. 43 U.S.C. §390b(e). 28 43 u.s.c. §390b(b ). 

"43 u.s.c. §390b(d). 

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For example, under the Water Resources Reform and Development Act of 2014 (WRRDA 20 14), no 

charges may be assessed on surplus water contracts on the Missouri River mainstem reservoirs until June 

2024. 30 Other federal laws have mandated that the Corps enter into agreements authorizing usage of 

specific federal facilities during droughts or emergencies and have specified the cost that may be allowed 

for water supply.31 

State Ownership of Water Within Its Boundaries 

The U.S. Supreme Court has long held that a state owns the navigable waters within its borders.32 In 

1842, the Court explained that when the United States was formed, "the people of each state became 

themselves sovereign; and in that character hold the absolute right to all their navigable waters and the 

soils under them for their own common use, subject only to the rights since surrendered by the 

Constitution to the general government. "33 

Under the constitutional equal footing doctrine, states that later joined the union acquired the same rights 

granted to the original states, and therefore also acquired ownership of their state's navigable waters upon 

achieving statehood.34 Thus, states that were admitted to the union and were not part of the original13 

colonies still may claim certain rights to waters within their state boundaries. 

Although the Supreme Court recognized state ownership of water within state boundaries, it also has 

indicated that the state's interest in its waters could be limited by superseding rights assigned under the 

Constitution to the federal government.35 In other words, a state may not claim absolute ownership to 

navigable waters if the federal government has constitutional authority to act with respect to those waters. 

Congressional Treatment of States' Water Rights 

at Federal Water Projects 

Although the federal government has authority to regulate water, Congress historically has deferred to the 

states' authority regarding allocation of water resources within each state. In some cases, Congress 

explicitly has recognized the states' power to assign water rights, though it has done so on a limited basis. 

At other times, it has noted the competing roles of federal and state governments with respect to water 

resources management and included general statements recognizing the interests of a state related to 

specific legislation. 

In some instances, Congress has recognized the authority of states to allocate water and consequently 

required federal compliance with state water rights schemes. For example, Section 8 of the Reclamation 

Act of 1902 (Reclamation Act) requires the Bureau of Reclamation (Reclamation) to conform with state 

30 Water Resources Reform and Development Act of2014, Pub. L. No. 113-121, § 1046(c). 

31 E.g., Water Resources Development Act of2007, Pub. L. No. 110-114, § 5019(c)(l) ("The Secretary shall enter into an 

agreement with the Delaware River Basin Commission to provide temporary water supply and conservation storage at the Francis 

E. Walter Dam, Pennsylvania, for any period during which the Commission has determined that a drought warning or drought 

emergency exists."); id. § 5019(c)(2) ("The agreement shall provide that the cost for water supply and conservation storage under 

paragraph (I) shall not exceed the incremental operating costs associated with providing the storage."). 

32 E.g .• Tarrant Reg'l Water Dist v. Hermann, 133 S. Ct. 2120, 2132 (2013) ("States possess an 'absolute right to all their 

navigable waters and the soils under them for their own common use."') (quoting Martin v. Waddell's Lessee, 41 U.S. 367, 410 

(1842)). 

33 Martin,41 U.S.at410. 

34 Pollard, 44 U.S. at 228-29. See also U.S. CONST. art. IV, §3, cl. 1. 

35 E.g .. Martin, 41 U.S. at410. 

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Congressional Research Service 

water laws "relating to the control, appropriation, use, or distribution of water .... " 36 The Supreme Court 

has explained that Section 8 "requires the Secretary to comply with state law in the 'control, 

appropriation, use or distribution of water"' by a federal project, confirming that Reclamation must 

acquire water rights for water it impounds at its water projects in various states (as had been the agency's 

practice).37 Reclamation then contracts with water users to provide water. Reclamation generally holds the 

water right, which is allocated by the state's water authority, and the water users hold a contract right to 

the water provided under their agreement with Reclamation." 

The 1944 FCA and WSA do not include an identical requirement that the Corps must "comply" with state 

law in its water use. While there are textual differences between the Reclamation Act and the Corps' 

statutory authorities, Congress has not ignored the relationship between federal legislation authorizing the 

Corps' projects and state water rights. The 1944 FCA and WSA arguably may indicate that Congress 

intended to protect the states' ability to administer water rights under state law to some degree despite the 

Corps' use of the water. 

In Section I of the 1944 FCA, Congress stated "the interests and rights of the States in determining the 

development of the watersheds within their borders and likewise their interests and rights in water 

utilization and control .... "39 Congress included specific protection for waters in states "lying wholly or 

partly west of the ninety-eighth meridian"-the drier, western states.'0 Section 1 (b) states that the use of 

waters in those states is authorized for navigation only if it "does not conflict with any beneficial 

consumptive use, present or future, in [such states], of such waters for domestic, municipal, stock water, 

irrigation, mining, or industrial purposes. "

41 In other words, the Corps is not authorized to use water for 

navigation in the western states if the Corps' use of the water would interfere with other beneficial uses. 

The WSA states that it does not modify Section 1 of the 1944 FCA, potentially signaling that Congress 

was not authorizing interference with certain other uses of water at federal projects. During hearings 

related to the passage of the WSA, a Senate subcommittee debated that provision and the effect the 

legislation would have on state water rights.42 One Senator, advocating for recognition of states' authority 

to administer water rights, explained that federal law requires that any water used in Reclamation projects 

be acquired through water rights assigned by the state in which the project is located, and argued that the 

Corps likewise should be required to comply with state water laws. 43 Although the final legislation did 

not include an express statement requiring the Corps to obtain state water rights for its projects, Congress 

amended the original language to remove a provision that was thought to imply that only certain water 

36 See 43 U.S.C. §383. Section 8 states the following: 

!d. 

[n]othing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the 

laws of any State or Territory relating to the controL appropriation, use, or distribution of water used in 

irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in canying out the 

provisions of this Act, shall proceed in confonnity with such laws, and nothing herein shall in any way affect 

any right of any State or of the Federal Government or of any landowner, appropriator, or user of water in, to, 

or from any interstate stream or the waters thereof. 

37 See California v. United States, 438 U.S. 645,674-75 (1978) (emphasis added). 

38 In some cases, water users may have perfected a water right prior to a project's construction and may receive water from a 

Reclamation project under a separate delivery contract. 

l9 33 u.s. c. §701-1. 

40 33 U.S. C. §701-l(b). 

41 !d. 

42 U.S. Congress, Senate Committee on the Public Works, Subcommittee on Flood Control-Rivers and Harbors, Rivers and 

Harbors-Flood Control Act of 1958, Hearing on S. 3910, 85th Cong, 126-35 (1 958). 

43 Jd. at 131. 

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rights under state law may be recognized.44 The final language states that the authority provided under the 

WSA "shall not be construed to modify" Section I of the 1944 FCA or Section 8 of the Reclamation 

Act.45 

The December 16, 2016 Proposed Rule 

On December 16, 2016, the Proposed Rule regarding the Corps' policies and regulations related to the use 

of reservoir projects for M&I supply was published in the Federal Register.46 Although subject to change, 

the Office ofinformation and Regulatory Affairs (OIRA) of the Office of Management and Budget 

currently states that a final action on the Proposed Rule is expected to take place in January 2019.47 

The Proposed Rule provides that it is intended to set forth the Corps' interpretations of its authority under 

Section 6 of the FCA 1944 and the WSA.48 The Corps' states that the "overall intent" of the Proposed 

Rule is to "enhance the Corps' ability to cooperate with State and local interests by facilitating water 

supply uses of Corps reservoirs in a manner that is consistent with the authorized purposes of those 

reservoirs, and does not interfere with lawful uses of water under State law or other Federal Law."49 The 

Proposed Rule would apply only to Corps reservoir projects and not to projects operated by other federal 

or non-federal entities. 5° 

The Proposed Rule states that it has multiple objectives: 

I. Defining certain statutory terms and explaining differences among statutory authorities; 

2. Addressing certain policy questions, including pricing of surplus water agreements under Section 

6 of the FCA 1944; reallocation of storage under the WSA; and accounting of storage usage and 

return flows under WSA agreements; and 

3. Clarifying and simplifying processes for approving and entering into water supply agreements at 

Corps reservoirs. 51 

The following discussion addresses those provisions that are most relevant to surplus water. 52 

Definitions of Statutory Terms 

Among other things, the Proposed Rule would provide a common defmition for the terms "reservoirs," 

"projects" and "reservoir projects" as those terms are used in the WSA and Section 6 of the 1944 FCA. 53 

44 See id. at 134~35. The following language was from the WSA: ''nor shall any storage provided under the provisions of this 

section to be operated in such manner as to adversely affect the lawful uses of the water." Jd 

45 43 U.S.C. §390b(d). The WSA authorizes not only the Cotps, but also Reclamation, to include storage for M&I supplies as a 

project purpose. 

46 Proposed Rule, 81 Fed. Reg. at 91,556. The following section contains a summary of portions of the Proposed Rule, but does 

not address each provision. 

47 Office oflnformation and Regulatory Affairs, Office ofManagement and Budget, View Rule: RJN: 0710-AA72. REGINFO.GOV 

(last visited June II, 2018), bttps:/lwww.reginfo.govlpublicldoleAgendaViewRule?publd~20 1804&RIN9!710-AA 72. 48 Proposed Rule, 81 Fed. Reg. at 91,556. 

49 Id. 

50 !d. 

"Id. 

52 Consistent with the title of the hearing, this testimony focus on issues related to "surplus" water in the 1944 FCA rather than 

the Proposed Rule's relationship with the WSA. 

53 ld. at 91,560. 

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The Corps would define the terms "expansively" to include any Corps facility that impounds water and is 

capable of being operated for multiples purposes and objectives. 54 The Proposed Rule would also include 

parallel definitions of the terms "domestic and industrial uses" under Section 6 of the 1944 FCA and 

"municipal and industrial water supply" under the WSA.55 According to the Corps, these terms would be 

defmed to encompass all water-uses under an applicable water rights allocation system other than 

irrigation under 33 U.S.C. § 390.56 

With regard to Section 6 of the 1944 FCA, the Proposed Rule would define "surplus water" as water 

available at any reservoir that the Assistant Secretary of the Army (Civil Works) determines is not 

required during a specified time period to accomplish authorized federal purposes for any of the following 

reasons: (i) the authorized purpose for which such water was originally intended has not fully developed; 

or (ii) the need for water to accomplish the authorized purpose has lessened; or (iii) the amount of water 

to be withdrawn, in combination with any other such withdrawals during the specified time period, would 

have virtually no effect on operations for authorized purposes. 57 

The Proposed Rule would also defme the phrase "then existing lawful use" in Section 6 of the 1944 FCA 

to mean "uses authorized under a State water rights allocation system, or Tribal or other uses pursuant to 

federal law, that are occurring at the time of the surplus water determination, or that are reasonably 

expected to occur during the period for which surplus water has been determined to be available. "

58 

Determining "Reasonable" Prices for Surplus Contracts 

The Proposed Rule would modifY the methodology by which the Corps determines a "reasonable" price 

for surplus water contracts under Section 6 of the 1944 FCA.59 Currently, the Corps uses the same 

methodology to determine "reasonable" price for temporary surplus contracts under the 1944 FCA and 

permanent water storage under the WSA, except that the price is calculated on an annualized basis for 

temporary surplus contracts. 60 The WSA provides that "the cost of any construction or modification ... 

section shall be determined on the basis that all authorized purposes served by the project shall share 

equitably in the benefits of multiple purpose construction ... .''61 

Under the approach in the Proposed Rule, the Corps would base the price of surplus water contracts on 

the following: 

54ld. 

55 !d. 

the actual, full, separable costs, if any, tbat tbe Government would incur in making surplus water 

available during tbe term of tbe surplus water agreement, such as by administering and monitoring 

tbe contract, or by making temporary changes to reservoir operations to accommodate tbe surplus 

56 Id See also 43 U.S.C. § 390. 57 I d. at 91,589. Under existing Corps' guidance, surface water is defined as either: 

(1) water stored in a Department of the Army reservoir that is not required because the authorized use for the 

water never developed or the need was reduced by changes that occurred since authorization or construction; 

or (2) water that would be more beneficially used as municipal and industrial water than for the authorized 

purpose and which, when withdrawn, would not significantly affect authorized purposes over some specified 

time period. 

ER 1!05-2-100, supra note 20, at E-214. 58 Proposed Rule, 81 Fed. Reg. at 91,589. 

59 Id. at 91,560. 

"'ER 1105-2-100, supra note 20, at E-115. 

61 43 U.S.C. § 390b(b). For additional background and analysis of price-related provisions in the Proposed Rule, see Carter 

Memorandum, supra note 1, at 4-9. 

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water withdrawals. The Corps expects that these costs would be small or nonexistent in most 

cases, since surplus water by definition is not needed for federal purposes, and typically would not 

require any operational changes. 62 

Under this change, the price would be based on the cost that can be identified as specifically associated 

with a surplus contract. For surplus water contracts where federal law provides that no charges may be 

assessed, such as in the WRRDA 2014,63 the reasonable fee calculation would not apply.64 

Combined Easement and Contract Documents 

Under the Proposed Rule, the Corps would require a "combined easement and contract document" for all 

users of surplus water at a Corps reservoir. 65 The storage agreements authorized under the WSA and 

surplus contracts authorized under 1944 FCA often have been separate documents from the real estate 

approvals (e.g., easements) required for construction and operation of the intake facilities. 66 In 2008, the 

Corps updated its real estate policies to specifY that easements sup};orting water supply agreements should 

not be issued before a water supply agreement had been executed. But the Corps' internal audits 

revealed that withdrawals were still being allowed under approximately 1,600 real estate instrurnents.68 

Under the Proposed Rule, withdrawals that are occurring pursuant to easements without associated 

contracts would be reassessed when the easement expires or within five years of the effective date ofthe 

final rule. 69 The Corps states that the requirement for a combined document is expected to streamline the 

process for granting approval to withdraw surplus water and reduce administrative requirements.70 

WSA-Related Provisions 

In addition to changes to terminology and process for surplus water contracts under the 1944 FCA, the 

Proposed Rule addresses a number of issues that are entirely or predominately WSA-specific. These 

include: 

Formalizing and clarifYing the Corps' position regarding when modifications to a reservoir 

require congressional approval because they would "seriously affect" original purposes or 

"involve major structural or operational changes . . :m 

• Requiring the Corps to consider return flows and other inflows made when determining storage 

allocations for water supply and the effects of operations for authorized purposes, and on the 

environment. 72 

62 Proposed Rule, 81 Fed. Reg. at 91,560. 

63 See supra§ Additional Statutory Authorities and Restrictions. 

64 Proposed Rule, 81 Fed. Reg. at 91,560-61. 

65 Id. at 91,561. 66 See id.. at 91,557 ("In many cases ... the Corps has allowed water to be withdrawn from its reservoirs simply by means of an 

easement across federal project lands, without formal water supply agreements .... ").For additional background and analysis of 

easement-related provisions in the Proposed Rule, see Carter Memorandum, supra note 1, at 8-9 

67 !d. at 91,567. 

68 I d. at 91,583. 

69 !d. at 91,561. 

10 Seeid. 

71 See 43 U.S.C. §390b(d). See CRS Report R42805, supra note 1. 

72 Proposed Rule, 81 Fed. Reg. at 91,562. 

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Mandating that the Corps incorporate storage accounting in all new WSA storage agreements in a 

way that makes clear how the Corps measures availability of water for withdrawal, as well as 

return flows. 73 

Formalizing what the Corps describes as its prevailing practice of crediting return flows 

proportionally to all storage accounts rather than to the entity that is responsible for the inflow.74 

Conclusion 

The Proposed Rule addresses numerous issues that have arisen in the context of regulating water 

withdrawals from the Corps' reservoirs. While the legal and policy-based comments to the Proposed Rule 

are too varied to address in this testimony, several commentators have argued that the Proposed Rule 

infringes on states' rights over navigable waters within their borders.75 In particular, these commentators 

argue that the definition of"surplus water" in the Proposed Rule violates a state's right to regulate the use 

of the "natural flow" of waters that would be available to the state regardless of whether the Corps' 

infrastructure were in place. 76 

To date, the Supreme Court has not clearly defmed the Corps' obligation with respect to states' rights over 

surplus water that is held in or passes through the Corps' reservoirs. The Corps' constitutional authority to 

manage its projects for a variety of authorized purposes is broad; Congress has delegated authority to the 

Corps to store water for M&I purposes and authorized it to charge for surplus water stored at certain 

projects.77 But it may also be argued that the Corps' constitutional authority over water stored at its 

projects extends only to the amount of water necessary to meet the purposes of that project and not to any 

surplus water.78 Such an argument, if asserted, may need to be reconciled with Supreme Court precedent 

recognizing generally broad Commerce Clause authority to regulate navigable waters for purposes of 

flood control, navigation, and other congressionally approved purposes. 79 

As a matter of statutory interpretation, it may be argued that, although Congress provided statutory 

authorizations to the Corps related to storage and sale of water stored in a Corps' reservoir, Congress also 

indicated deference should be made to state uses of the water, and that such deference should inform any 

interpretation of the Corps' authority under the 1944 FCA and WSA. Such an argument, however, 

potentially must address the fact that Congress did not include the same express limitations on federal 

power in the 1944 FCA and WSA that it included in the Reclamation Act, and that the Corps' statutory 

authority does not expressly include a limitation related to the "natural flow" of state waters. 

73 ld 

74 Proposed Rule, 81 Fed. Reg. at 91,562. 

75 See, e.g., Letter from Phillip C. Ward, Chainnan, Western States Water Council to The Honorable Jo-Ellen Darcy, Ass't Sec. 

of the Army (Civil Works) (Aug. 6, 2013); Letter from Earl Lewis, President, Nat'! Water Supply Alliance to U.S. Army Corps 

ofEng'rs (Nov. 16, 2017). 

76 See, e.g., Letter from Doug Burgum, Governor, State ofNorth Dakota to U.S. Army Corps ofEng'rs (May 11, 2017). 77 See supra § Statutory Authority Related to Water Storage at Corps' Projects. 

78 See supra§ State Ownership of Water Within Its Boundaries. 

79 See supra§ Constitutional Authority for Water Storage at Federal Water Projects. 

CRS TESTIMONY 

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30 

Senator ROUNDS. Mr. Mulligan, thank you very much for being 

here and thank you for your participation today. 

We all each have now 5 minutes in which to work through our 

questions. There are just a couple of us here. We will take our 

time, work our way through this. We most certainly appreciate all 

of your participation. 

Let me begin with some of the concerns that we have tried to express here and try to flush them out just a little bit. Let me begin 

with Secretary Pirner. 

As a public service, you have been involved in this process for 

more than 20 years, I would say. I won’t say how much longer than 

20 years, but more than 20 years. You probably are uniquely situated to have seen the ongoing processes involved in this discussion 

throughout several decades. 

From a quality of life standpoint, can you speak to the impact 

this proposed rule could have on not just South Dakota, but all of 

rural America? 

Mr. PIRNER. Yes, sir, Senator Rounds. The Missouri River into 

South Dakota, as I mentioned during my testimony, is the largest, 

most reliable surface water supply in South Dakota. South Dakota 

is a relatively arid State. Our other surface water supplies are seasonal, especially on the eastern side of the State. At times we go 

to zero flow in the fall. Groundwater is basically our remaining 

water supply, and there we don’t have it everywhere, and where 

we do have it a lot of times the quality is poor. So, the Missouri 

River is a high quality, very, very important water supply to the 

State. 

You talked about quality of life. It is not only a recreational use; 

it is also a major water supply use. By now, we have 126, out of 

our 464, drinking water systems that are regulated under the Safe 

Drinking Water Act that get their water from the Missouri River. 

That is 27 percent of our water systems. 

Senator ROUNDS. Let me just stop you right there very quickly. 

Can you share a little bit about, most recently, the challenges that 

some of the drinking water systems that even are currently in effect have had accessing to repair or upgrade their systems with 

even getting access over the Corps’ take land, which is the land 

which surrounds the reservoir system that they have purchased in 

order for the water to rise and fall? They have a take line, it is basically Federal Government property that they control, but in order 

to get to the water you cross Corps land in 90 percent of South Dakota. 

Can you talk a little bit about the way that they have treated 

some of our water systems, trying to even upgrade systems that 

are even already right there? 

Mr. PIRNER. Yes, Senator. I think you are talking about the Randall Rural Water System. 

Senator ROUNDS. I am. 

Mr. PIRNER. Which has a surface water intake in the Missouri 

River. They want to do some upgrade and they really have been 

unable to at this point because of this access issue. No easement. 

There is an existing line, there is an existing uptake. They just 

simply want to upgrade and make better their system, but to date 

they have been refused access to even do that. 

31 

Senator ROUNDS. This was more than just one or 2 months? 

Mr. PIRNER. I believe so, yes, sir. 

Senator ROUNDS. Like perhaps years? 

Mr. PIRNER. I don’t know the exact time. All I know is they are 

still waiting. 

Senator ROUNDS. How about the city of Pierre? 

Mr. PIRNER. The city of Pierre has an interesting little project. 

Again, the Missouri River borders the city, the capital of South Dakota. The river is an important aspect, part of the whole city. I 

mean, again, it is there and people use the Missouri River extensively. The city was looking at cutting its water costs, plus the 

State government. The State campus is there as well. They were 

going to do a joint project, put in a pump station, irrigate the city’s 

green space plus the entire State campus with water directly from 

the river, thereby saving time and money and costs. 

Senator ROUNDS. Watering the lawn. 

Mr. PIRNER. Yes, sir. That would be correct. Or irrigation. We 

tried to say that it was irrigation, but so far that hasn’t worked yet 

either. 

But, anyway, again, we issued them a water right to do that, I 

think 2 years ago. 

Senator ROUNDS. Within the existing flow of the Missouri River. 

Mr. PIRNER. Exactly. And about 2 years ago, I think it was. At 

this point in time the Corps has been unresponsive to granting an 

easement across the take line for them to install that pump station. 

Senator ROUNDS. So, do you think, based on that, if we had the 

Corps with their projects in place, with this approach right now, 

could we have even begun to develop the State of South Dakota 

along the Missouri River, basically 500 miles? Under these conditions, could we have even access to begin creating towns along the 

Missouri River based upon the current policy that the Corps has? 

Mr. PIRNER. No, sir, I don’t believe so. We have towns both near 

and far that are relying on the Missouri River today for their water 

supply source. I talked about 27 percent of the water systems. That 

equates to over 22 percent of our entire population is drinking Missouri River water. If you add in Lewis and Clark Regional Water 

System, which relies on wells alongside the river, that is about another 225,000 people. They don’t have a surface water intake, but 

their wells are certainly directly influenced by the flow in the Missouri River. 

So, all of those systems are using water that we believe have 

been allocated to them by the State through our existing water 

rights process. Under this system that is being proposed, either the 

Corps would have to approve, basically would have veto power over 

any State water right that we would issue, or would have to find 

some mechanism to try to fit those systems into their new policy. 

Senator ROUNDS. On the other hand, I want to bring this to bear. 

What we are actually getting at here, if I understand it correctly, 

since they basically have purchased land along the river in order 

to create the mainstem dam of the Missouri River, the mainstem 

dam system, the Pick Sloan project, they have purchased land and 

now, in order to get access to the water, you have to have an easement to get across their land. 

32 

There are a couple of miles there in which we have natural flows, 

and which the Corps does not have that particular land right, so 

in those particular cases, since they are in the normal flow area of 

the Missouri, and we probably run 30 to 35,000 cubic foot per second, average year-in, year-out, through the Missouri River system, 

someone could, if they didn’t have to cross Corps land, go directly 

back in with an appropriate State water right or approval, access 

that water. But since the Corps has this access land along it, they 

have prohibited, since 2008, development along the river because 

they were not issuing access across the land, which they had to the 

water, which the State has and is identifying as their responsibility 

to determine water rights for. 

Mr. PIRNER. Yes, sir, that is correct. 

Senator ROUNDS. Thank you. 

Senator BOOKER. 

Senator BOOKER. Keep going. 

Senator ROUNDS. I would. I think this is the crux of the issue, 

and I am just curious. 

Mr. Mulligan, I have a question for you. I appreciated your layout of the history on this. Under the equal footings, all States now 

come in to our Country with equal footings with the other States 

that were there to begin with. The original 13 States making up 

the original United States clearly protected their water sources. 

They clearly issue water rights today. 

In your research, have you found other areas where the Corps is 

restricting access to free-flowing rivers or to other reservoirs in 

which they may have an interest, or are they prohibiting the access 

to those in other States other than on the Missouri River at this 

time? Can you share with us a little bit about their history of trying to do that? 

Mr. MULLIGAN. Thank you, Mr. Chairman. The proposed rule 

here would be a rule of nationwide application, and the changes in 

the Corps’ policy over the last decade or so are also, by and large, 

the ones that have been referenced today are of nationwide application, so these aren’t changes or proposed changes that are just 

being applied in a certain area of the Country. So, just in terms 

of the Corps’ policy, this is something that is not localized. 

In terms of the equal footing doctrine, I think that it has been 

correctly described. When a new State joined the Union, it entered 

with the same rights, the same water rights as the original 13 colonies. In doing research, the Corps has sort of analyzed that, and 

in looking to the water rights of those original 13 colonies, the Supreme Court has said, in certain circumstances, the Federal Government through the Commerce Clause power may exercise rights 

over those original 13 colonies, over their water rights. 

So, when a new State comes in and steps into equal footing, it 

also sometimes gives way to the Federal Government’s Commerce 

Clause powers. 

Senator ROUNDS. I am just curious. In the Flood Control Act of 

1944, which is the authorizing act which created the mainstem 

dams on the Missouri River, there was a discussion at that time, 

and when the law passed Congress, was there specific mention of 

the States’ water rights which were there? Could you kind of go 

33 

through that again with us, a little bit about the folks who wrote 

the law, the 1944 Act, could you share a little bit? 

I know you mentioned it, I believe, and I will come to Mr. Scott 

next, but can you go through and share with us a little bit about 

what the intent was, or at least what was stated within that law 

with regard to the Federal Government utilizing those water resources, or controlling them? 

Mr. MULLIGAN. Thank you, Senator. You are correct that in the 

Flood Control Act of 1944 there was discussion in the congressional 

Record in terms of the debate over how to effectuate the Pick Sloan 

project and how to incorporate that project into legislation. There 

is debate over how to protect, at best, recognize and protect State 

rights. That debate manifests itself in Section 1, to a certain degree 

in Section 1 of the Flood Control Act, which has a statement of congressional purpose that I read in my opening testimony that expressly recognizes Congress’s position to recognize the primacy of 

State rights to control navigable waters within their borders. 

Senator ROUNDS. The primacy of the States’ rights to control the 

water within their borders on these navigable waterways. 

Mr. MULLIGAN. I am not quoting now, I don’t have the language 

in front of me, but a general statement to that effect. 

Senator ROUNDS. I think what I am getting at is the gist is the 

folks who wrote that law to create the dam system appears to me 

to clearly have tried to delineate and to reestablish, for anybody 

that wanted to read it, that they were recognizing the States’ 

rights to access that free flow through that river system. Is there 

anything that gives you pause to that attempt? 

Mr. MULLIGAN. Thank you for the question, Senator. There was 

a discussion of protecting States’ rights. In terms of a discussion 

and use of the term natural flow, that is not something that you 

see in relationship to the Flood Control Act and it is not sort of a 

legal term of art that you see developed doctrinally. So, while there 

is a high level discussion, the term natural flow, trying to separate 

natural flow from surplus waters is not prominent in the record. 

Senator ROUNDS. Thank you. 

Mr. Scott, same question, basically. Within the 1944 Flood Control Act, or the other acts that have been established since then, 

it would appear to me that Congress has worked very hard to try 

to make it clear that the States still maintained their responsibility 

and authority over water rights within their States. Can you elaborate a little bit on what you have been able to determine in your 

research? 

Mr. SCOTT. Thank you, Senator. We feel that the 1944 Flood 

Control Act, as well as several Federal statutes, recognize that 

State authority and try to preserve it. We feel that while surplus 

water is an ambiguous term in that statutory language that the 

Corp does have authority to interpret, they should be guided by 

that clear intent of Congress to preserve State authority over water 

resources and allocation. 

Senator ROUNDS. Thank you. 

Secretary Pirner, same question. With regard to the research 

that you have done and the work that has been decided within the 

activities that you have been involved with, court cases and others, 

and the research with regard to the critical language found within 

34 

the 1944 Act, the other pertinent acts, do you find where there was 

clear evidence that Congress was doing its best to protect the interests of the States in determining water uses along these rivers, regardless of whether or not the Corps had access rights? 

Mr. PIRNER. Yes, Senator. If you look at Section 1, that was 

talked about, of the 1944 Flood Control Act, it states, and I will 

quote, I am using a paraphrase here, but this is a quote: ‘‘It is declared to be the policy of the Congress to recognize the interests 

and rights of the States in determining the development of the watersheds within their borders, and likewise their interests and 

rights in water utilization and control.’’ So, we believe that that 

language clearly preserves the States’ rights that have been talked 

about again. That was, again, Section 1 of the 1944 Flood Control 

Act. 

I think the other issue to consider, and we have touched upon 

it very briefly, is the upper basin States paid a heavy price for 

those reservoirs. You talked about losing 500,000 acres of our best 

fertile bottom and, never to be seen again. We were supposed to get 

irrigation as part of the payment for the permanent loss of those 

lands, but that has never occurred. 

But I think if you take that into account, clearly, I don’t think 

Congress would have passed the 1944 Flood Control Act by giving 

the Federal Government total control, then, over essentially all of 

the flow in the Missouri River that flows through South Dakota. 

Senator ROUNDS. Would it be fair to say that the inflexibility 

that happens at the Federal level when you try to do a one-sizefits-all, would it have been manifested in 2011? In 2011 we had a 

flood on the Missouri River. It occurred because of substantial rain, 

heavy snowfall, and a delay, in my opinion, in the release of water 

trying to save downstream States, and rightfully so, trying to help 

folks by holding as much water as possible in the upper mainstem 

dams. 

We ended up having water flows through the Missouri River system closing in on 160,000 cubic feet per second, which rose probably three to four feet above flood stages throughout the entire system. The damage was significant. 

And the reason why I asked the question, even during this time 

in which we had flood waters flowing through the area, there was 

a request to utilize a limited amount of water out of the mainstem 

dams, which at this point were over flood stage and we had nearly 

a free-flowing Missouri River. 

Secretary Pirner, can you share what the response from the 

Corps was, once again during a time of flooding in which we didn’t 

have enough capacity to even hold the water, as to how inflexible 

the ability to get permission to even access, to get a limited amount 

of water out of the Corps reservoirs? Just for emphasis. 

Mr. PIRNER. Yes, Senator. Again, the Corps would not grant that 

access. And when you talk about a limited amount of water, I 

would call it miniscule. I mean, it would not have helped the flood. 

But here we are in flood stage. We are spending tons and tons of 

Federal, State, and local moneys building levees alongside the 

river, trying to protect the communities that were in harm’s way, 

and to deny access to the river for some pumping for a contractor 

35 

who wanted to use it for a construction project just didn’t make any 

sense. 

Senator ROUNDS. Thank you. 

Senator BOOKER. You have been very patient. Thank you, sir. 

Senator BOOKER. Sir, I, first of all, want to thank the witnesses. 

A lot of people don’t understand how important it is for folks like 

you to come down here and engage in this discussion and dialog on 

issues that are actually really, really important. One of my favorite 

authors is a woman named Alice Walker, and she says the real revolutionaries are always concerned with the least glamourous stuff; 

raising a child’s reading level, filling out food stamp forms because 

folks have to eat, revolution or not. The real revolutionaries are always close enough to the people to be there for them when they are 

needed. 

So it is really an honor to sit next to a man who was a former 

Governor, who is also now a Senator, who is not just about the 

large issues we are all seeing on TV, but really in the weeds on 

issues that are really important to the people in his communities, 

and something as important as this. 

And I am grateful for you all taking some time out, traveling 

long distances to come down here. 

The last thing I will say, Mr. Chairman, is that, as a New Jersey 

Senator, I know that my Governor can’t get into the Western Governors’ Association, but he is from western New Jersey. I don’t 

know if that counts. 

But, in many ways, as different as our topography or our Nation 

is, we actually do share common values and common ideals, and I 

heard that those were expressed today by a lot of people, about 

local folks often know how to make the best decisions for what is 

important to them, so it was refreshing. I learned a lot in this 

hearing. I did not know what surplus water was, sir, before I did 

my reading last night, and I just want to say what an honor it is 

to sit next to you and listen to you talk about such an important 

issue for your community. 

Senator ROUNDS. Thank you, Senator. Look, let me share with 

you. It has been a very busy day and I think most of us have had 

25 to 28 different events, including Senator Booker. He has taken 

time to come in so that we can do this. We don’t do a hearing without having both sides represented on these, and Senator Booker is 

taking time out of his very busy day to come in, recognizing that, 

for many of us, this is a Missouri River issue, as an example. 

So, Senator, I want to thank you for the time that you have 

taken out of a very busy schedule to come and participate so that 

we can share this with the rest of the Country, and I thank you 

for that, sir. 

At this time I would ask unanimous consent to not only include 

all of your statements for the record, but I would also ask unanimous consent that four letters from Governor Dauggaard to the 

Army Corps be submitted and accepted; a letter from Governor 

Dauggaard to the South Dakota congressional Delegation; a letter 

from Governor Dauggaard, Senator Thune, Representative Noem, 

and myself to President Trump; a letter from the South Dakota Department of Game, Fish, and Parks to the Army Corps; a letter 

from the South Dakota Association of Rural Water Systems to this 

36 

subcommittee; a letter from the Western States Water Council to 

the Army Corps; a letter from the National Water Supply Alliance 

to this subcommittee. 

Without objection, so ordered. 

[The referenced information follows:] 

37 


31407.004

STATE oF SouTI -r DAKOTA 

DENI'>:I'i DAuGAARD, GovERNOR 

October 4, 2012 

U.S. Army Corps of Engineers, Omaha District 

CENWO-PM-A 

Attn: Missouri River M & I Water Storage Reallocation Study 

1616 Capitol Avenue 

Omaha, NE 68102-4901 

Dear Sirs, 

Thank you for the opportunity to provide comments as part of the scoping process about the 

proposed reallocation studies for the Missouri River mainstem reservoirs. As was stated on 

August 27,2012, in Pierre at both the public hearing and at the meeting between the Corps and 

state officials, the state of South Dakota is disturbed with the direction the Corps is taking 

regarding their attempt to market water from the Missouri River Reservoirs. I find it especially 

disturbing the Corps is choosing to operate in such an expedited time frame during this process. 

The Corps has waited more than 50 years since the 1958 Water Supply Act and expects 

comments in 30 days. 

The state offers the following comments as part of the scoping process for the proposed 

reallocation studies for each of the mainstem reservoirs and the Corps' water marketing plan in 

general. Please consider these comments and include them in the administrative record. 

The Corps has authority to dedicate pools in the reservoirs to store water for congressionally 

authorized purposes. The Corps Master Manual refers to these authorized purposes as "flood 

control, navigation, hydropower, water supply, water quality, irrigation, recreation, and fish and 

wildlife." 2006 Master Manual 4-02. At present, the storage for authorized purposes is allocated 

to a multiple use pool, excluding the permanent pool (meant for silt storage) and the exclusive 

flood control pool. Municipal and industrial uses are in the multiple use pool. There is no need 

to create separate pools for each type of use; the volume of water in the reservoirs simply does 

not dictate doing so. 

The pending Corps proposal is couched as a plan to ''reallocate" not only storage, but also the 

use of water and exceeds the Corps' legal authority. The Notice of Intent for the pending 

allocation study states "the 1944 Flood Control Act, as amended, directed the USACE to allocate 

the river's resources among the authorized Missouri River project purposes." The 1944 Flood 

Control Act made no such direction. The states have authority to allocate the water resources, 

not the federal government, and the 1944 Flood Control Act, Section 1, recognizes the 

STATE CAPITOL o 500 EA!;T Ct\l'l 1'01 • Pll'l<l<l, SOU Ill D1\Kll lA • 57501-5070 • 605-773-3212 
38 


31407.005

U.S. Army Corp ofEngineers 

October 4, 2012 

Page2 

applicability of state water laws. Similarly, the 1958 Surplus Water Act, Sections 30l(a) and 

301(c) recognize the applicability of state granted water rights. 

The Corps lacks authority to adjudicate water rights or allocate use of the waters of the state 

among appropriators within the state, a function reserved to the state of South Dakota and its 

courts. When the federal government is involved, the McCarren Act applies. 43 U.S.C. § 666. 

The Corps also lacks authority to allocate use of water among the states and tribes, a function 

that it purports to exercise in whole or in part through its attempt to reallocate water in the 

mainstem system. These allocations are undertaken through compacts among states and tribes 

and/or original proceedings in the United States Supreme Court. 

Under this proposal, the Corps would control management of the water used for current and 

future municipal and industrial use; Basin states have long enjoyed the right to issue water 

permits for the use of Missouri River water. The ability for states to manage their own water 

supplies for the benefit of their citizens is a state's right that has long been recognized by the 

federal government. This study must recognize the state's role in granting water rights. 

The Corps' proposed action also exceeds lts legal authority in claiming all water in the mainstem 

reservoirs is project water or stored water while ignoring the natural flow component of the 

Missouri River. Natural flows are those flows that exist in the river absent the reservoirs. The 

Corps' Claim not only ignores the history of water flows in the Missouri River before the 

Missouri River Basin Project, but fails to recognize that natural flows have not ceased. The 

Corps• effort to federalize natural flows ignores the balance of state and federal interests 

articulated in the 1944 Flood Control Act and other federal legislation, as well as longstanding 

state ownership of water stemming from the equal footing doctrine. 

A distinction must be recognized between the nature of nonproject water, such as natural-flow 

water, and project water, and between the manner in wllich rights to use such waters are 

obtained. Right to use of natural-flow water is obtained in accordance with state law.lsrael v. 

Morton 549 F.2d 128, 132 (9lll Cir. 19n). It is not federal project water.Jd. On the other hand, 

federal project water is dependent on federal law to a certain degree, since it would not be 

available for use "but for the fact that it has been developed by the United States." ld., Kittitas 

Reclamatit:m Di.ftrict v. Sunnyside Valley Irrigation District 626 F.2d 95, 99 {1980). Even the 

federal regulation of federal project water is not absolute; the state still has authority to regulate 

withdrawals of water from storage in tederal projects. Id., California v. U.S. 438 U.S. 645 

(1978). 

Tbe allocation of costs for building the reservoirs is done. The 1944 Flood Control Act 

authorized an initial allocation of repayments for building the reservoirs. The 1944 Flood 

Control Act§ 9(c) authorized allocation of costs to "the reclamation and power developments" 
39 


31407.006

U.S. Army Corp of Enginee!'ll 

October 4, 2012 

Page3 

undertaken by the Interior Secretary under the Act (to the "transmission lines and related 

facilities'' that § 5 authorizes the Interior Secretary "to construct or acquire" fur transmitting and 

disposing of electric power). ETSI Pipeline Project v. Missouri, 484 U.S. 495, 108 S.Ct. 805, 98 

L.Ed.2d 898( 1988). It also authorized allocation of costs to the "irrigation works" that § 8 

authorizes the Interior Secretary "to construct, operate, and maintain" under the reclamation 

laws. Jd. As seen Section 9 (c) refers only to allocations of costs and repayments by energy users 

and irrigators and does not include any mention of repayment by other authorized users. Id. 

There is no congressional authority to charge other users fur costs of construction. 

A reallocation of costs cannot occur absent congressional authorization. In 1977 when tbe power 

functions of the mainstem reservoirs were transferred from the Bureau of Reclamation to the 

Department of Energy, Congress was. concerned the ch311ge would prompt an administrative 

reallocation of costs for multiple purpose reservoirs. South Dakota Senator McGovern proposed 

the following amendment which ultimately became part of the Department of Energy 

Reorganization Act: 

Neither the tr31lsfer of functions effected by paragraph (l)(E) of this subsection nor any 

changes in cost allocation or project evaluation standards shall be deemed to authorize 

the reallocation of joint costs of multipurpose facilities. theretofore allocated unless and. to 

the extent that such ch311ge is hereafter approved by Congress." 

42 U.S.C. § 7152(3). Senator McGovern explained that "Congress had carefully evaluated the 

financial aSPects of the total project in previous years," including approval of financial reports 

and recommendations 31ld that it was therefore "proper to protect the allocation of joint costs on 

all projects when they have been made in Congress" including, specifically, those pertaining to 

the Missouri Basin project. 123 Cong. Rec. 815300 (daily ed. May 18, 1977). 

The Notice of Intent cites to the 1958 Water Supply Act as authority to conduct the allocation 

study and to charge fees fur storage, The 1977 McGovern amendment precludes the Corps from 

administratively reallocating the joint costs of multiple use facilities, since the allocations were 

already ''made in Congress." 

The Notice of Intent also indicates the Corps intends to "make a cb31lge in the use of storage" so 

as to invoke the surplus fee requirements of the 1958 Water Supply Act. Such reallocation 

cannot,. of course, require the imposition of fees unless the project is an actual constructed 

modi:fication of the dams and the parties agree to such fees in advance, neither of which applies 

here. The maximum repayment period also bars imposition of costs by the Corps for original construction. 43 U.S.C. 390b. 

If Congress authorizes the Cotps to perform a reallocation study for the Missouri River mainstem 

system, we request the United States Bureau of Reclamation be granted cooperating agency 

status 31ld participation in producing the study. Reclamation has experience and an 

understanding of western water law and how water is managed in large reservoir systems in the 
40 


31407.007

U.S. Army Corp of Engineers 

October 4, 2012 

Page4 

Western states. They are the agency with experience in calculating fees for operations and 

maintenance, having done so for many Reclamation projects throughout the west. They 

routinely distinguish between natural flows and stored water available for contract. 

South Dakota pennanently lost more than 500,000 acres of its most fertile river bottom lands 

when the reservoirs were filled. While we received benefits, we also paid a very high price in 

return for federally promised irrigation which never occurred. This pursuit of Missouri River 

water allocation, ignoring congressional recognition of states' rights to develop water supplies 

and to manage natural flows, is offensive. 

Thank you again for the opportunity to provide comments in regard to the Missouri River 

mainstem reservoir reallocation study. The state of South Dakota asks the Corps continue to 

provide information to the state about the status of this matter if it moves forward. I also ask the 

Corps to provide the state with a draft scope of work and that the state be afforded an opportunity 

to provide input. 

Sincerely, 

I : ' 

Dennis Daugaard ' 

DD:nn 

cc: Senator Tim Johnson 

Senator John Thune 

Representative Kristi Noem 
41 


31407.008

STATE OF SOUTH DAKOTA 

DENNIS DAUGAARD, GovERNOl~ 

October 9, 2012 

Larry Janis 

U.S. Anny Corps of Engineers, Omaha District 

CENWO-OD-T 

Attn: Surplus Warer Report and BA 

1616 Capitol Avenue 

Omaha, NE 68102-4901 

Dear Mr. Janis, 

We thank the Corps for allowing us to provide written comments on the following draft surplus 

water reports for the Missouri River mainstem reservoirs: 

1. Draft Oahe Dam/Lake Oahe Project South Dakota and North Dakota Surplus Water 

Report (and attached Environmental Assessment). 

2. Draft Big Bend Dam/Lake Sharpe Project South Dakota Surplus Water Report (and 

attached Environmental Assessment). 

3. Draft Fort Randall Dam/Lake Francis Case Project South Dakota Surplus Water 

Report (and attached Environmental Assessment). 

4. Draft Gavins Point Dam/Lewis and Cllllk Lake Project Nebraska and South Surplus 

Water Report (and attached Environmental Assessment). 

5. Draft Fort Peck Dam/Fort Peck Lake Project Montana Surplu.' Water Report (and 

attached Environmental Assessment). 

As was stated at the August 27. 2012, public meeting in Pierre, the state of South Dakota is very 

concerned with the direction the Corps has chosen to take in regard to their attempt to market 

water from the Missouri River reservoirs. Below are our comments for all five of the draft 

surplus water reports. Please consider these comments and include them in the administrative 

record for each project. 

Eaeh of the draft surplus water reports is deficient as it fails to allow stakeholders the oppartonity 

to provide meaningful comment. The reports were issued on August 6, 2012. The issues 

presented in the reports involve complex legal and factual issues, prompting lengthy and 

thorough study of a number of issues in order to respond, including: (a) the intent and 

applicability of the surplus water provisions in the 1944 Flood Control Act (''1944 FCA"); (b) 

the intent and applicability of the surplus water provisions in the 1958 Water Supply Act ("1958 

WSA"); (c) the background on the Corps' several previous water marketing proposals in the 

1960s through the 1990s; (d) review and analysis of the quantification of "surplus warer" in each 

S'rATECAl'ITOL • 500 l:!ASTCAPITOL • Pmrntn,SOtm-1 DAKOTA • 57501·5070 • 605-773-3212 
42 


31407.009

U.S. Army Coxps of Engineers Surplus Water Reports 

October 9, 2012 

Page2 

of the draft surplus water studies; and (e) review and analysis of the several repayment 

calculations used for each of the six draft surplus water studies. The ctm"e:trt surplus water 

reports should not be considered unless or until the Corps provides further opportunity for 

response. 

Bach of the environmental asse.ssrncnts fails to comply with the requirements of the National 

Environmental Policy Act ("NEPA"), 42 U.S.C.A. § 4321, et.seq. and rules promulgated 

thereunder. An EIS should be prepared before further considerations. 

Each of the draft Slllplus reports fails to recognize state authority and ownership of water and the 

bed of the Missouri River and its navigable tributaries within the state's boundaries, authority 

which accrued to the state at statehood under the Equal Footing Doctrine. See, PP L Montana, 

LLC v. Montana _u.s.__, 132 S.Ct. 1215, 182 L.Ed.2d 77 (2012). 

The states have the right to issue water permits for use ofMissoori River water. The ability for 

states to manage their own water supplies for the benefit of their citizens is a state's right that has 

long been recognized by the federal government. In fact, the 1944 Flood Control Act, Section 1, 

recognizes the applicability of state water laws. Similarly, the 1958 Surplus Water Act, §§ 

301 (a) and 301(c) recognize the applicability of state granted water rights. While the Corps 

purports to recognize state granted water rights, the actual reports conflict with that requirement 

by federalizing the water itself. Indeed, the Corps now attempts to control management of the 

water used for current and future municipal and indllstrial use. This is contrary to longstanding 

water law. 

The Corps' action is barred by the Conunerce Clause of the United States Constitution and the 

tolh and 14th Amendments to the Constitution. 

The Corps' proposed action wrongly assumes that all water in the mainstem reservoirs is project 

water or stored water while ignoring the natural flow component of the Missouri River. Natural 

flows are those flows that are in the river absent the reservoirs. These flows are subject to state 

jurisdiction alone. 

The Coxps lacks authority to allocate use of water among the states and tribes, a function 

reserved to the United States Supreme Court or compacts authorized by Congress. The Corps 

also lacks authority to adjudicate water rights or allocate use of the waters of the state among 

appropriators within the state, a function reserved to the state of South Dakota and its courts. 

When the fedllral government is involved the McCarren Act applies. 43 U.S.C. § 666. 

The draft surplus reports are intended to "quantify the surplus water available in each of the 

reservoirs" for surplus water agreements "until a permanent reallocation study is compMed." 

(July 7, 2012 News Release). All such, the proposed "surplus water contracts" are intended to 

qUlllltify actual municipal and industrial uses of water from the Missouri Rivet reservoirs so the 
43 


31407.010

U.S. Anny Corps of Engineers Surplus Water Reports 

October9, 2012 

Page3 

quantification can be used in an eventual "reallocation'' of the rights to use water from the 

Missouri River reservoir. However, because the Corps lacks authority to aU ocate the use of 

water, it also lacks authority to develop a system of con1racts for the purposes of undertaking an 

allocation, as it is doing in the present "surplus water" plan. 

The Coxps claims the surplus water reports (and surplus water management system arising from 

them) are authori?.ed by the 1944 FCA and implies that the 1944 FCA authorizes reallocations as 

well. The 1944 FCA does not include this authority. Section 9 (c) refers only to allocations of 

costs and repayments by energy users and irrigators and does not include any mention of 

repayment by other authorized users, let alone reallocation of uses of water in the reservoirs. 

Instead of the foregoing authority pertaining specifically to the Missouri River Basin Project, the 

Corps relies on the 1944 FCA §6 which relates to all projects authorized across the nation for 

the post-war development, not just the Missouri River mainstem reservoirs as is addressed in 

§ 9(c). Section 6 authorizes the Secretary of War to make conttacts "at such prices and on such 

terms as he may deem reasonable for domestic and industrial uses for surplus water that may be 

available at any reservoir under the control of the Water Department: Pruvided, that no contracts 

for such water shall adversely affect the existing lawful uses of water." Section 6 does not 

authorize a reallocation of water or authorize use of surplus water contracts as part of the method 

to reallocate water. 

The definition of surplus water in the 1944 FCA, §6 has been interpreted to mean ''water the 

{Secretary of the Army] determines is not needed to fulfill a project purpose in Army reservoirs." 

ETSI, 484 U.S. at 506, 108 S.Ct. at 812. 

Serious doubts arise on whether the provisions of Section 6 even applies when M&I is already 

authorized for reservoirs. The GAO ha.~ held that Section 6 applies only to surplus water for 

M&I when M&I water supply is not otherwise an authorized reservoir purpose. GAO, Water 

Resources: Corps Lackr Authority for Water Supply ContFacts, p. 2, 11 (August 1991} ("When 

M&l water supply is not an authorized reservoir purpose the Corps may provide surplus water 

for M&I purposes under section 6 of the Flood Control Act of 1944''). Some of the other 

projects authorized under the 1944 FCA do not have either municipal or industrial uses as 

authorized reservoir purposes. This section applies to them. Under this interpretation, Section 6 

would not apply to surplus water for municipal and industrial use from the Missouri River 

maiustem reservoirs since they are already authori7..ed, and therefore, no surplus water fees could 

be charged. 

The 1944 FCA § 6 provides that ''no con1racts for such water shall adversely affect then existing 

lawful uses of such water." Each of the draft surplus reports reveals, however, that the Corps 

intends to prohibit the state, its agencies, and its citizens (all of whom hold quantified or 

pennitted water rights) from using water for beneficial purposes unless or until the Corps issues 

a surplus water con1ract. As such, implementing the current reports would subvert the very 
44 


31407.011

U.S. Army Corps of Engineers Surplus Water Reports 

October 9, 2012 

Page4 

intent of this "no adverse effects'' provision since it would adversely affect the very "existing 

lawful uses" that it is designed to protect-by prohibiting exercise of those lawful uses-until or 

unless th~ water users obtain federal pennission to use them (and enter into lJ!lilateral contracts 

with the Corps). 

The five n."Ports include imposing the costs of the initial construction in suq)Jus water contracts 

under Section 6. The 1944 Act does not contemplate doing so and to do so is contrary to the 

legislative history of the 1944 Act, and, in particular, Section 9. 

In addition, as the Corps apparently recognizes, it also lacks authority over allocatioll or 

contracts fur municipal water supply or rural water projects overseen or funded by the Bureau of 

Reclamation or directly under the Secretary of Interior including, but not limited to the 

following: ActofSeptember24, 1980,94 Stat. 1171, PL 96-355, § 9 (WEB Water System 

under Reclamation); Act of October 30, 1992,106 Stat. 4600, PL 102-575 (Mid-Dakota Rural 

Water System under Reclamation); Act of October 24, 1988, PL l 00-S 16, 102 Stat. 2566 (Mni 

Wiconi Rural Water Supply Project under Interior); Act of July 13,2000, PL 106-246 (Lewis 

and Clark Rural Water System Act undet: Interior and Reclamation). 

In addition to all Bureau projects, no other irrigation (irrigation by private parties or other state 

authorized irrigations entities) is subject to Corps authority over surplus water. 

Although the Corps indicates the basis for its plan is the 1944 FCA, the surplus water reports 

refer at various places to the 1958 WSA, now codified at 43 U.S.C. §390b. :Further, the related 

"reallocation" being undertaken by the Corps (July 19,2012 Notice in Vol. 77 FR 42486-42487) 

is based on the 1958 Act 

There is a serious question as to whether or to what extent that the 1958 WSA constitutes 

sufficient authority for the Corps to reallocate water. In Re: MDL -1824 Tri-State Water Rights 

Litigation 644 F.3d 1160, 1196 (ll'h Cir. 2011). Even the Corps itself bas vacillated as to how to 

approach the issue. Id. 

The surplus water reports directly con~avene the 1958 WSA, which indicates the federal 

goveiillllent is to cooperate with the states and the five reports at issue make it apparent that the 

Corps' intent is to federalize water rather than to cooperate with the state. 

The surplus water reports (and surplus water management system arising :from them) are in 

confljct with the surplus water fee provisions in the 1958 WSA. This provision contemplates 

that prior to construction or modification of a multiple purpose project, the Corps will obtain 

cost-sha:ri.ng payment agreements from local interests that will use water storage in the project. 

Only when such agreements are reached, may the water users be required to pay for costs of 

construction (and only fur 30 years). The surplus water reports do not identity any preexisting 

agreements prior to construction that trigger the use of water supply contracts under the 1958 

WSA. 
45 


31407.012

U.S. Anny Corps of Engineers Surplus Water Reports 

October9, 2012 

PageS 

There is no construction or modification involved in either the present surplus water reports or 

the related "reallocation study" noticed for study in July 2012. As stated by the Comptroller 

General in 1990 and again by the General Accounting Office (GAO) in 1991, the 1958 

provisions that allow for allocating water and imposing costs on "modifications" of reservoirs 

are designed only to address fees for physical construction or expansion of reservoirs. In other 

words, an "allocation" is not a "modification." GAO, Water Resources; Corps Lacks Authority 

for Water Supply Contracts, p. 5 (August 1991 ); Town of Smyrna v. United States Army Corps of 

Engineers, 517 F. Supp.2d 1026 (M.D. Tenn. 2007) (vacated pursuant to settlement). The 

apparent plan is to use surplus water contracts as "preexisting contracts" to serve as a foothold to 

gain authorization wder the 1958 WSA for later unilateral imposition of fees. Neither the 

current surplus water reports nor the related allocation studies can serve such a purpose and this 

idea should. be rejected. 

A reallocation of costs cannot occur absent congressional authori7..ation. In 1977, when the 

power functions of the mainstem reservoirs were transferred from the Bureau of Reclamation to 

the Department of Energy, Congress was concemed the chang(~ would prompt an administrative 

reallocation of costs for multiple purpose reservoirs. Accordingly, South Dakota Senato.r 

McGovern proposed the following amendment which ultimately became part of the Department 

of Energy Reorganization Act: 

Neither the transfer of functions effected by paragraph (l)(E) of this subsection nor any 

changes in cost allocation or project evaluation standards shall be deemed to authorize 

the reallocation of joint costs of multipurpose facilities theretofore allocated unless and to 

the extent that such change is hereafter approved by Congress." 

42 U.S.C. § 7152(3). Senator McGovem explained that "Congress had carefully evaluated the 

financial aspects of the total project in previous y~." including approval of financial reports 

and recommendations and that it was therefore "proper to protect the allocation of joint costs on 

all projects when they have been made in Congress" including, specifically, those pertaining to 

the Missouri Basin project. 123 Cong. Rec. 815300 (daily ed. May 18, 1977). The 1977 

McGovern amendment precludes the Corps from administratively reallocating the joint costs of 

multiple nse facilities, since the allocations were already "made in Congress." 

The Corps has never charged fees fm: natural flows from the Missouri River reservoirs in the 

past. The Corps itself has referred to the fact 1hat natural flows are to be considered differently 

than ·stored water. Among those sources is the 1987 EM Ill 0-2-3600 Management of Water 

Control Systems Engineering and Design manual which states that "M&I water may be 

withd:mwn from reservoirs under contractual arrangement that do not involve a commitment for 

the use of the reservoir's storage space. These withdrawals are considered to be from natural 

flow or from water in excess of the needs for other project functions." While South Dakota does 

not agree contracts for sttrplus water are necessazy for natural flow withdrawals, the "contractual 

arrangements" at issue may speak to easements for land. ]tis apparent from this reference that 

the Corps acknowledges natural flows exist. 
46 


31407.013

U. S. Axmy Corps of Engineers Surplus Water Reports 

October9, 2012 

Page6 

Similarly, the 1958 Chief of Engineers report, Missouri Rlver Main Stem Reservoir System 

Allocation of Costs Section 3-08 states "Since the primary attention in setting operational criteria 

of the Main Stem Reservoir System for main stem water supply and stream sanitation has been 

on preservation of critical minimum flow levels no lower than the lowest ordinarily experienced 

on the river prior to the reservoirs, it is considered that no costs should be allocated to water 

supply andstream sanitation ... The five reports currently being considered contradict this 

understanding that :tlows that would be present absent the reservoir are natural flows not subject 

to Corps fees. 

Upon reviewing the multiple reports, there is an extremely large variation in the amount the 

Corps would charge for surplus water at one reservoir versus another. These amounts varied 

fromabighof$174.66peraore-foot of yield from Lewis and ClarkLake to a low of$17.19 per 

acre-foot of yield from Lake Oahe. This difference is extreme and may lead to contracting 

entities avoiding certain geographic regions due to the cost of obtaining water or penalizing 

existing residents because of where they live. This fault is derived largely from the Corps' 

erroneous decision to include costs of construction in the five reports. Even without the costs of 

construction, the more equitable method would be to equalize the cost for contracted water over 

the entire mainstem system. 

The method shown in the surplus water reports to allocate cost to M&I use is flawed. An 

alternative method the Corps bas used is the Separable Costs Remaining Benefits Method as 

spelled out in the 1958 Chief of Engineers report, Missouri River Main Stem Reservoir System 

Allocation of Costs Section 8-03, which calls for an equitable distribution of costs among the 

functions that the Corps' projects are designed to serve. Overlapping functions were considered 

when calculating repayments; te., that the allocation of costs to energy necessarily considers the 

use of energy for irrigation. In other words, some stored water is used for M&I but it is also used 

for flood control and other purposes. The distribution provides, of course, that coslll for some 

functions are to be absorbed by the federal budget. Others, such as those for energy, are to be 

recovered. 

The Corps' position in the 1958 Report is that the "cost of authorized M&I water supply storage 

in new and existing projects will be the total construction cost allocated to the water supply 

storage space" not the costs for other functions or other storage. This analysis demonstrates the 

Corps itself has related M&T costs to stored·water, not natural flows. The five reports contradict 

theSt: previous considerations. 

In chapter 3 of each of the five reports at issue, the construction costs for each of the reservoirs 

were calculated; however, some specific costs were excluded from the calculations based on use. 

Since the authorizing legislation exempted reimbursement for certain uses such as flood control, 

the surplus water reports excluded specific costs associated with flood control from the cost 

analysis. Flood control works "include channel improvements and major drainage 

improvements." 1944 FCA, § 2. However, not all flood control uses were discounted from this 

analysis. 
47 


31407.014

U. S. Army Corps of Engineers Surplus Water Repods 

October9, 2012 

Page7 

Because the flood control component was paid by the taxpayers at the time of construction, that 

portion of the facilities was "paid fur" in the 1950s and 1960s. However, the current plan is for 

M&I users to now pay a portion of capital expenses such as the main dam, reservoirs, roads and 

bridges, buildings and grounds, pennanent operating equipment, and relocations- even though 

these facilities are an integral part of tbe flood control operations. Also, hydropower users have 

long been required to reimburse the Treasury for their specific costs, including "amorti7..ation of 

capital investment allocated to power over a reasonable period of years." 1944 FCA, §5. Yet, 

the draft surplus water reports indicate that upstream M&I users would now be responsible for 

repayment of a share oftbe costs (as updated with interest) for such capital expenses as the main 

dam, reservoirs, roads and bridges, buildings and grounds, pennanent operating equipment, and 

relocations, even though the hydropower use also requires and has paid in whole or in part for 

such items. This analysis is flawed since it fails to explain or address how the hydropower 

revenue offsets (or does not offset) the capital investment for which repayment is now sought 

from M&I users. 

The upstream states have already paid, and continue to pay, a heavy price for the Missouri River 

reservoirs. Even though we receive many benefits from the construction of the reservoirs, South 

Dakota permanently lost more than 500,000 acres of its most fertile river bottom lands when the 

reservoirs were filled. The federally promised irrigation to help offset this loss never occurred. 

Now requiring only the reservoir M&I users to be responsible for construction, operation, and 

maintenance costs oftbe reservoirs is illegal and illogieal. 

Thank you again for allowing us to provide written comments in regards to the Missouri River 

mainstem reservoir surplus water reports. 

Sincerely, 

DD:nn 

cc: Senator Tim Johnson 

Senator John Thune 

Representative Kristi Noem 
48 


31407.015

STATE OF SourH DAKOTA 

DENNIS DAUGAARD, GoVERNOR 

August 27,2012 

Colonel Anthony C. Funkhouser 

Commander, Northwest Division 

U.S. Army Corps of Engineers 

P.O. Box 2870 

Portland, OR 97208-2870 

Dear Colonel Funkhouser, 

I would like to again oongratulate you for the honor ofbeing selected as the new Commander of the 

Northwestern Division of the U.S. Army Corps ofF.ngineers. I have no doubt your experience and 

leadership win serve the Division well. I bave bad a strong worlting relationship with the Corps of 

Engineers since I have been Governor, and I look forward to wOiking with you and continuing thnt 

relationship. 

hlso write to reiteraw my desire to create a plll'lnerShip through which we can impro~ the plains 

snowpack mo.uitoring system for the Missourl River basin. One of the lessons learned from the 

devastating flooding of 2011 is thnt our current system is inadequate. The flooding to some degreo may 

not have been preventable. However, if we had a better plains snowpack monitoring system, we would 

bsve had earlierwiunings thnt oould bsve given us more time to prepare and mitigate the impact In the 

future, an improved monitoring system win help mitigate flooding. · 

During a meeting between the Governors from the Missouri River basin states and the Corps ofEngineers 

in Bismarck, North Dakota, last May, I expressed my eommitment to improving the plalns snoWpal:k 

monitoring system eapabililies. General McMahon suggested a memorendum for aU interested parties to 

outline shared responsibility. I believe it is now time to develop such a fonnal agreement. 

Doni Kluck fiom the National Oceanic and A1mospheric Adminislntion (NOAA) was also at the 

meeting. Doug reoommended we work through tbe Western Governors' Association (WGA). Tom 

Iseman from the WGA has agreed to be the contact person. 

l realize improving the monitoring system will require sUbstantial funding. The sta111 of South Dakota is 

c;ommitted to sbsring in the cost to improve tbe system. The state is also eommitted to partnering with 

other states, tbe Corps of Engineers; NOAA, and other interested parties to accomplish the objeCtive of 

improving the system. 

I look forward to Working with you on this very important issue. If you bave any questions, please do not 

hesitate to contact me. 

Sincerely, 

~ Dennis Daugaard 

DD:nn 

STATE CAPITOL • 500EASTCAPITOL • PlERRE,SOUTHDAKOTA • 57501·5070 • 605-773-3212 
49 


31407.016

STATE OF SOUTH DAKOTA 

DENNIS DAUGAARD. GovERNOR 

March 15, 2017 

US Army Corps of Engineers 

ATTN: CECC·L 

441 G Street NW 

Washington, DC 20314 

Docket COE-2016-0016 

Proposed rulemaking: Use of Army Corps of Engineers Reservoir Projects for 

domestic, Municipal & Industrial Water Supply 

Dear Sir, 

Please accept this letter of comments from the state of South Dakota on the above 

referenced proposed rulemaking. With the caveat that our primary focus in reviewing 

the rule is the impact of the proposal on the Missouri River reservoirs, the state's water 

law, and the citizens' rights to use Missouri River water, the proposed rule is 

unacceptable to South Dakota. 

Although the US Army Corps of Engineers states throughout the document their overall 

intent of the proposed rule is to avoid interfering with lawful uses of water under state 

law, simply stating this intent does not result in a rule that achieves it. The statement of 

intent is followed by more than 130 pages of information we can only summarize as 

contrary to the stated intent. 

The us Army Corps of Engineers also attempts to write into rule the agency's legal 

authority to expand federal storage right claims and control over the allocation of all of 

the Missouri River water without regard to state water laws or the science and 

engineering of hydrology. They seek to re-write Congressional intent of the 1944 Flood 

Control Act and the 1958 Water Supply Act by attempting to memorialize in rule the US 

Army Corps Engineers' interpretation and wishful thinking of what Congress truly 

intended. 

Below are detailed comments on the proposed rule, and taken collectively, are the 

foundation for South Dakota finding the rule unacceptable for the people of this state. 

1.The proposed rule rejects the concept of natural flow of water in the Missouri River 

through the reservoirs and considers all water in the Missouri River reservoirs as stored 

STATE CAPITOl. • 500 EAST CAPITOL • PIBRRE, SOUTH DAKOTA • 57501-5070 • 605-773-3212 
50 


31407.017

water and under the control of the US Army Corps of Engineers. South Dakota and the 

Western States Water Council have previously presented to the Corps and others why 

natural flows, which can be thought of as the natural flow of the river passing 

underneath water stored in the reservoirs and passing through as if there were no 

dams, must exist if states such as South Dakota which host the reservoirs are to have 

any Missouri River water left to appropriate for beneficial uses. Some of !hes~ . 

documents are listed here and are enclosed to be a part of South Dakota s offiCial 

comments on the proposed rule: 

Besides attempting to mandate a federal take-over of all our unappropriated natural 

flows, much of the existing appropriation of natural flows of the Missouri River by South 

Dakota pre-dates the Pick-Sloan Act and the construction of the Missouri River 

dams. The proposed rule in its current form threatens to strip away those water rights 

through future water supply agreements, renewal of access easements, and other 

processes for which the US Army Corps of Engineers has no authority. 

US Army Corps of Engineers has more recently usurped the state's authority to grant 

the use of Missouri River natural flows by withholding access easements to the 

water. Many water right permits have been issued by the state, but because the permit 

holder lacks a water supply contract with the US Army Corps of Engineers, they cannot 

access the river water because the US Army Corps of Engineers is withholding the 

access easement (re: Real Estate Guidance Policy Letter No. 26). This is contrary to 

past US Army Corps of Engineers protocol because they have not charged fees for 

natural flows from the Missouri River reservoirs in the past. In fact, the US Army Corps 

of Engineers protocol directed the agency to consider natural flows differently than 

stored water in several previous documents. For example, the 1987 EM 1110-2-3600 

Management of Water Control Systems Engineering and Design manual, states "M&I 

[municipal and industrial] water may be withdrawn from reservoirs under contractual 

arrangements that do not involve a commitment for the use of the reservoir storage 

space. These withdrawals are considered to be from natural now or from water in 

excess of the needs for other project functions. " 

' As stated in the document, "tile proposed rule would define 'surplus water' to mean 

water available at any US Anny Corps of Engineers' reservoir that is not required during 

a specified time period to accomplish an authorized purpose or purposes of that 

reservoir." Instead, this rule should direct natural flow be accounted for and factored 

!!!!! when determining surplus water or reallocation water from storage. 

The US Army Corps of Engineers claims the authority to develop this water supply rule 

falls under Section 6 of the 1944 Flood Control Act (Section 6) and the water supply 

provisions in the 1958 Water Supply Act. There is no dispute Section 6 allows the US 
51 


31407.018

Army Corps of Engineers to sell surplus water and although it was a hotly contested 

topic during the congressional hearings on the 1944 Flood Control Act, no definition of 

surplus water was ever established by Congress. While the Corps purports to 

recognize state granted water rights, the proposed rule conflicts with that requirement 

by federalizing the water itself. Indeed, the Corps now attempts to control management 

of the water used for current and future municipal and lndustrlal use. This Is contrary to 

longstanding water law, as the United States Supreme Court found In California v. 

United States (1978): 

'Willie later Congresses have Indeed issued new directives to the Secretary, they have consistemly 

reaffirmed that the Secretary should follow state law in all respects not dlreetly inconsistent with these 

directives. The Flood Control Act of 1944, 58 Stat. 888, for example, which first authorized the New 

Melones Dam, provides that it is the "policy of the Congress to recognize the Interests and rights of the 

States in determining the development of watersheds within their borders and likewise their Interests and 

rights in water utilization and control." Perhaps the most eloquent expression of the need tn observe state 

water law Is found In the Senate Report on the MCCerran Amendment, 43 U.S. C. 666 (a), which subjects 

the United States tn state-court jurisdiction for general stream adjudications: 

"In the arld Western States, for more than 80 years, the law has been the water aboVe and beneath the 

surface of the ground belongs to the public, and the right to the use thereof is to be acquired from the 

State in which It is found, which State is vested with the primary control thereof. 

"Since it Is clear that the States have the control of water within their boundaries, lt Is essential that each 

and every owner along a given water course, including the United States, must be amenable to the law of 

the State,f438 u 8 M~·. 6 '9! if !here Is to be a proper administration ofthe water law as it has 

developed over the years." S. Rep. No. 755, 82d Cong., 1st Sess., 3, 6 (1951) 

States' rights to natural flows of navigable waters within their borders are constitutionally 

founded, and protected, in the Equal Footing Doctrine. The Corps' action is barred by 

the Commerce Clause ofthe .United States Constitution and the 1011' and 14th 

Amendments to the Constitution. In the absence of Constitutional or Congressional 

delegation of authority to the federal government, state authority over its water 

resources is sovereign. 

3.ln the proposed rule, the US Army Corps of Engineers Is expanding the definition of 

domestic and industrial uses beyond the authority Congress granted them In Section 6 

and the Water Supply Act. We do not believe Congress delegated authority to the US 

Army Corps of Engineers to expand the definitiOn of domestic and industrial uses in this 

manner. In this instance the .US Army Corps of Engineers is proposing to expand the 

definition of domestic and industrial uses to include irrigation, which would have the 

effect of giving the Corps authority over irrigatiOn use, rather than under the Secretary of 

Interior as was designated by Congress in Section 8 of the 1944 Flood Control Act. 

4.1f the US Army Corps of Engineers determines either surplus water or reallocated water 

is made available at a Corps facility for a domestic or industrial use, it could potentially 

be for only a short period of time and renewal of a water supply agreement will be at the 

discretion of the sitting Assistant Secretary of the Army at that time. Under the South 

Dakota water rights law water users are issued a water right for as long as they 

continue to put the water to beneficial use. Under the proposed rule, there is no 

guarantee for the water right holder that the Corps will be willing to renew the water 
52 


31407.019

supply agreement upon its expiration. This creates uncertainty for the water right holder 

whose water source is an US Army Corps of Engineers' reservoir and will hinder 

development; this is an uncertainty that does not exist for holders of water rights from 

any other water source in South Dakota. 

5. The rule is being proposed with the US Army Corps of Engineers' intent to coordinate 

surplus water determinations in advance with the applicable federal Power Marketing 

Administrations serving US Army Corps of Engineers' facilities that produce 

hydropower. This gives the Power Marketing Administrations too much authority in the 

determination of whether surplus water or reallocated water will be available and will 

allow them to pass on the cost of providing water to other water users. This is not fair to 

other water users nor has it been authorized by Congress. 

Thank you again for allowing us to provide written comments in regard to the proposed 

water supply rule and your favorable reaction to our request, which is reiterated here: 

South Dakota respectfully requests the US Army Corps of Engineers to reject the 

current proposed rule and end this federal take-over attempt of nearly all the 

Missouri River water in South Dakota. 

Sincerely, 

Dennis Daugaard 

Enclosures: 

cc w/enclosures: 

U.S. Senator John Thune 

U.S. Senator M. Michael Rounds 

U.S. Representative Kristi Noem 

Marty Jackley, South Dakota Attorney General 

Tony Willardson, Executive Director, Western States Water Council 
53 


31407.020

STATE OF SOUTH DAKOTA 

DENNIS DAUGAARD, GovERNOR 

May23, 2018 

President Donald J. Trump 

The White House 

1600 Pennsylvania Avenue, NW 

Washington, DC 20500 

Dear President Trump, 

We want to congratulate you and your team on re-establishing cooperative federalism 

as the way to conduct business with the states. This has been a breath of fresh air. 

However, we are writing to alert you the US Army Corps of Engineers (Corps) is instead 

stili focused on trampling state's rights under a President Obama directive. The 

instruments they are using to federalize our Missouri River water are called the 

proposed Water Supply Rule, Surplus Water Reports, and Reallocation Studies. 

To put our opposition to the proposed Water Supply Rule into context, remember our 

people and Native American Tribes paid a heavy price for the four dams on the Missouri 

River in South Dakota. These large reservoirs permanently flooded more than 500,000 

acres of our most fertile river bottomlands. Many citizens and tribal members were 

forced from their lands, their homes, and their communities. The promise of federal 

irrigation projects to help offset those losses never materialized. 

Unfortunately, another payment was extracted from us In 2008 when the Corps Issued 

Real Estate Guidance Policy Letter No. 2. This policy requires municipal and industrial 

water users to acquire a water storage contract prior to the Corps issuing an access 

easement to a Missouri River reservoir for a pump site, but the Corps had no process 

for Issuing the contracts. Therefore, the effect of the policy was to place a moratorium 

on easements to the Missouri River reservoirs. 

This moratorium hit South Dakota hard, because out of a thousand miles of Missouri 

River shoreline, only about one hundred miles are on the two short free-flowing 

stretches in the state. Therefore, ninety percent of our shoreline became off limits to · 

potential users of Missouri River water, and this moratorium is still being implemented 

STATE CAPITOL • 500EASTCAPITOL • Pll1RRE,SoUTH DAKOTA • 57501-5070 • 605-773-3212 
54 


31407.021

President Trump 

Page 2 

May23, 2018 

by the Corps. Just two months ago, the South Dakota Department of Environment and 

Natural Resources (DENR) Issued a temporary permit to Morris Inc. on March 19 to use 

90,000 gallons of Missouri River water for construction purposes as they redo the 

Department of Game, Fish, and Parks parking lot just above Oahe Dam. When notified 

of the action, the Corps responded as follows: "Afl requests for using water from the 

South Dakota reservoirs are on hold until finalized guidance is received from 

Headquarters. An alternate source of water should be utilized for this project.» 

To develop a process for Policy Letter No.2, the Corps began Surplus Water and 

Reallocation Studies under the authority of Section 6 of the 1944 Flood Control Act and 

the surplus water provisions In the 1958 Water Supply Act. We do not dispute the 

Corps has authorities under those Acts, but we strongly dispute the Corps' resulting 

definition of stored water as being all the water held In the reservoirs. This new 

definition, should It go unchallenged, creates a monumental change to the law and 

would defeat states' rights to natural flows that, by tradition and law, are under the 

jurisdiction of the states. 

To better understand natural flows, visualize the reservoirs of stored water sitting on top 

of a river with natural flow passing underneath; this natural flow represents water under 

the jurisdiCtion of the state. States' rights to natural flows of navigable waters within 

their borders are constitutionally founded, and protected, in the Equal Footing Doctrine. 

Congress acknowledged this states' right in the first sentence of Section 1 of the 1944 

Flood Control Act by stating " ... it is declared to be the policy ofthe Congress to 

recognize the interests and rights of the States in determining the development of the 

watersheds within their borders and likewise their interests and rights in water utilization 

and control, ... v As a consequence of the doctrine and the enacted law, the Corps must 

acknowledge the state's right to natural flows. Its definition of stored water, as 

proposed in the rulemaking, will do exactly the opposite. 

Another concern with the Corps studies Is one of equity. The Corps has documented 

the tremendous benefits the reservoirs supply to people throughout the basin 

controlled water supplies, hydropower, and flood control. Now to require just the 

upstream states to pay the cost through stored water fees with people in the 

downstream states enjoying these benefits at no cost is not fair or equitable. To impose 

all reservoir operation and maintenance costs on upstream states alone adds insult to 

injury. 

A more detailed objection to the proposed rulemaking was submitted to the Corps on 

March 15,2017, and is enclosed for your use. However, the bottom line Is the Corps is 

attempting an Obama-directed federal takeover of nearly all the Missouri River water in 
55 


31407.022

President Trump 

PageS 

May23, 2018 

South Dakota with this proposed rulemaking. It needs to be stopped now before the 

Corps finalizes the rule In September. In the name of cooperative federalism and 

protecting state's rights, we ask for your help. Thank you. 

Sincerely, 

Dennis Daugaard 

Governor 

DD:rg 

Enclosure 

Cc w/enclosure: 

Marty Jackley, South Dakota Attorney General 

Kristi Noem 

United States Representative 

Tony Willardson, Executive Director, Western States Water Council 
56 


31407.023

STATE OF SOUTH DAKOTA 

DENNIS DAUGAARD, GovERNOR 

May 2, 2014 

The Honorable Tim Johnson 

United States Senate 

Washington, DC 20510 

The Honorable John Thune 

United States Senate 

Washington, DC 20510 

The Honorable Kristi Noem 

United States House of Representatives 

Washington, DC 20515 

FAX: 202.228.5765 

FAX: 202.228.5429 

FAX: 202.225.5823 

Dear Senator Johnson, Senator Thune, and Representative Noem: 

I have previously sent you copies of my correspondence to the U.S. Army Corps of Engineers 

regarding my objections to the Missouri River Reallocation Study (dated October 4, 2012) and 

the Missouri River Surplus Water Studies (dated October 9, 2012). I regret that none of my 

objections have deterred the Corps from proceeding. Therefore, I am writing in hopes you 

might find a mechanism in Congress to end the Corps' march toward usurping South Dakota's 

water rights. 

The Corps is pursuing three courses in their water marketing efforts: 

1. the Surplus Water Reports for each of the mainstem reservoirs; 

2. the Reallocation Study for the mainstem reservoir system; and 

3. the Corps' rulemaking effort with respect to both 1and 2. 

The Corps made a similar effort to charge for storage from the reservoirs in the 1980s. There 

was significant disagreement between the states and the Corps specific to both potential water 

contracts and recognition of natural flows, which led to Congressional involvement. The effort 

went into hibernation for 20 plus years until 2008 when the Corps issued Real Estate Policy 

Guidance letter No. 26 which led to the current attempt to market water. Based on that 

guidance, the Corps announced in early 2010 a new policy that prohibits new water withdrawals 

from the Missouri River reservoirs for municipal and industrial uses until the users first obtain a 

storage contract with the Corps. The Corps implements this prohibition by not issuing access 

easements to reach water stored in the reservoirs. 

The Corps claims their authority to proceed in this effort falls under Section 6 of the 1944 Flood 

Control Act and the surplus water provisions in the 1958 Water Supply Act. There is no dispute 

that Section 6 of the 1944 Act allows the Corps to sell surplus water; the crux of this dispute 

hinges on what is meant by surplus water. Albeit a hotly contested topic during the 

congressional hearings on the 1944 Flood Control Act, no definition of surplus water was ever 

established by Congress. 

STATE CAPITOL • 500 EM>I'CAI'IIOL • PIERRE, SOUTH DAKOTA • 57501-5070 • 605-77:1-3212 
57 


31407.024

Senator Johnson, Senator ThUne, and Representative Noem 

May2, 2014 

Page2 

Reallocation of the storage in the mainstem reservoirs requires a full analysis of the entire 

Missouri River system. Because that is a lengthy process, the Corps recognized the need to 

provide a short term me<:hanism to allow potential water users access to water from the 

reservoirs. Thus, under Section 6 of the 1944 Aood Control Act, the Corps drafted six water 

surplus reports, one for each of the malnstem reservoirs. Each report identified an amount of 

water available for temporary use and the cost associated with using water from that particular 

reservoir. The Corps stated temporary contracts for using stored water would be issued for a 

period of five years with an option of extending the temporary contract for an additional five 

years. This would sllow the Corps sufficient time to complete a full reallocation study of the 

mainstem system and Identify water In storage that can be reallocated to municipal and 

industrial use. 

Only one of the surplus water reports is finalized and Issued; the other five reports remain in 

draft 11tatus. The report issued in July 2012 is for the Garrison Reservoir. The need to expedite 

this report was the large demand for industrial use water for tracking oil wells in westem North 

Dakota. The Corps took pubHc comments on the remaining five draft reports and sent the final 

drafts to ASSistant Secretary of the Army Darcy for final review In May 2013. The Assistant 

Secretary was expected to make the flnel decision on these reports in July 2013, but there has 

not yet been any action. 

In 2012, the Corps started the second effort by initiating a tong term reallocation study of 

municipal and industrial uses. They held scoping meetings to take public comments, which 

resulted in my Initial objections submitted by letter dated October 4, 2012. The Corps also 

contacted the states, tribes, and federal agencies to form a Cooperating Agency Team to help in 

the reallocation effort. A normal Cooperating Agency Team process involves dramng the study 

with team members providing tochnical assistance to the Corps and a perspective unique to 

each state, tribe, or agency represented. However, in this effort, the Corps solicited little 

assistance from the Cooperating Agency Team members. The extent of the Corps' 

engagement of the Team was as follows. They hosted a kickoff meeting of the Cooperating 

Agency Team in Yankton in July 2013 to Inform the members of the process and time schedule, 

and held a final Cooperating Agency Team meeting in Kansas City In January 2014 Informing 

the team of the tentative results of the draft study. No assistance from the Cooperating Agency Team was requested by the Corps between the kickoff and fmal meetings. At the final meeting, 

the Team members ware told they would not be allowed to review a draft of the study prior to it 

being sent to Corps headquarters for internal review. The Corps told the Team members their 

first opportunity to review the study will occur after it is released for pubUc comment. tentatively 

scheduled for July 2014. Obviously, this has not been a cooperative effort by any stretch of the 

imagination. 

The Corps' third effort toward water marketing has InvolVed the rulemaking process. Initially, 

the rulemaking effort was targeted at setting the cost schedules for using stored water as per 

the surplus water reports. The draft studies listed projected pricing from a low of $17 per acrefoot of water from the Oahe Reservoir to a high of $175 per acre-foot of water from Gavins Point 

Reservoir. It should be noted that no downstream users of Missouri River water would pay for 

any benefits they receive. In May 2012, Assistant Secretary of the Army Darcy, in a 

memorandum regarding the Lake Sakakawea Surplus Water Report, indicated. the Corps 

rulemaking would immediately begin by setting the cost and policies for use of water stored in 
58 


31407.025

Senator Johnson, Senator Thune, and Representative Noem 

May2,2014 

Page3 

the Missouri River reservoirs. However, that did not happen. At the kickoff meeting of the 

Cooperating Agency Team in 2013, the Corps' rulemaking effort was discussed and the Corps 

indicated they may be expandlfla the ecope of the effort, but no specifics were given. While the 

Corps has not publicly announced they have started the rulemaklng process, the Western 

States Water Council In an August 6, 2013, letter calls on the Corps to recognize and defer to 

the states' legal right to allocate, develop, use, control, and distribute their surface waters to 

include natural flows of the Missouri River. 

The Corps' march toward control over all Missouri River water stored in the reservoirs, if left 

unchecked, will anow the Corps: 

• to control management of all water stored in the reservoirs for current and future 

municipal and industrial use; 

• to usurp the authority of states to manage their own water supplies for the benefit of their 

citizens - a state's right, long recognized by Congress and the federal government; and 

• to usurp the state's right to jurisdiction, access, and use of natural flows in the Missouri 

River system. 

Existing uses from the Missouri River in SoUth Dakota are less than the natural flows, so the 

Corps has no jurisdiction or autllority to charge for water used In South Dakota. The Corps Is 

choosing to ignore both the state's tight to natural flows of the Missouri River and Section 1 of 

the 1944 Flood Control Act, also known as the O'Mahoney-Milliken Amendment Both a plain 

meaning and a historical perspective leave little doubt that the purpose of the O'MahoneyMilliken amendment was to guarantee to the states the right to allocate waters within their • 

boundaries without regard to the impact of such allocation on navigation. Simply put, the three 

efforts Hsted above are a hostile takeover of the state's water and authority to allocate Missouri 

River water. The Corps has said the outcome of the Missouri River studies will be their model 

for use nationwide. I am asking for your help to stop the Corps in all three of their efforts. not 

only here, but nationally. Thank you . 

Sincerely, 

"" . /J/"'-1-''-l 

Dennis Oaugaard 

OD:nn 

... ~--:-:-
59 

Senator ROUNDS. Once again, I want to thank all of you for coming and participating in this, and I hope that this helps to bring 

some focus on what I think is a true injustice that has been started 

and that we would like to see eliminated as quickly as possible so 

that normal people can get access to drinking water once again, 

which is a lot of what this is all about. 

So once again I would like to thank our witnesses for taking the 

time to be with us today, and I would also like to thank my colleague who attended this hearing, and also for your thoughts and 

your questions. 

The record will be open for 2 weeks, which brings us up to 

Wednesday, June 27th. This hearing is adjourned. Thank you. 

[Whereupon, at 3:59 a.m. the committee was adjourned.] 

[Additional material submitted for the record follows.] 

60 


31407.051

August6, 2013 

WESTERN STAT~~S WATER C(lUl\lCll· 

5)96Commerce!Jriw:,Suite202 I Murt~\', !#ulr84107 1 (8111)6H5·2555 I VH(801)4ii.k~559 

Web Page: wwn-~V.'CJttfli!>t«iemma.l;rg 

The Honorable Jo-EIIen Darcy 

Assistant Secretary of the Army (Civil Works) 

108 Army Pentagon 

Washington, DC 20310-0108 

Dear Assistant Secretary Darcy: 

On behalf of the Western States Water Council, representing the governors of 18 western 

states on water policy issues, I am writing to provide the Council's perspective on the U.S. Army 

Corps of Engineers' efforts involving surplus water and storage at Corps reservoirs. In 

particular, it is our understanding that the Corps is pursuing rulemaking intended to clarify 

definitions in its water supply policies and to specify the policies and methodology it will use to 

determine prices for surplus water contracts pursuant to Section 6 of the Flood Control Act 

{FCA) of 1944. We also understand that the Corps is conducting a system-wide analysis of 

storage water reallocation in the Missouri River Mainstern Reservoir System. 

As the Corps pursues these efforts, we respectfully request that you consider the 

following comments and perspectives, as well as the enclosed position regarding the states' right 

to access the natural flows that would exist absent Corps reservoirs and dams. 

A. State Primacy 

Water belongs to the states which have exclusive authority over the allocation and 

administration of rights to the use of surface water within their borders. State granted water use 

permits, once put to beneficial use, also become property rights with constitutional protections, 

including due process and compensation if taken through government action. 

The basis of the states' primary and exclusive authority over their water resources is 

rooted in the Equal Footing Doctrine in Article IV of the U.S. Constitution, under which states 

take title to the navigable waters within their borders upon admission to the Union. As the U.S. 

Supreme Court has noted, Congress has also demonstrated a "consistent thread of purposeful and 

continued deference to state water law" 1 through such Jaws as the Mining Acts of 1866 and 

1870, the Desert Lands Act of 1877, the Federal Water Power Act of 1920, and others. One 

notable example of this deference is found in Section 8 of the Reclamation Act, which states: 

1 California v. U.S., 438 U.S. 645,653-664 (1978). 
61 


31407.052

[N]othing in this Act shall be construed as affecting or intended to affect or to in 

any way interfere with the laws of any State or Territory relating to the control, 

appropriation, use or distribution of water used in irrigation, or any vested right 

acquired thereunder, and the Secretary of the Interior, in carrying out the 

provisions of this Act, shall proceed in conformity with such laws .•. .2 

Congress was well aware of this deference when it enacted the laws that govern 

the use of surplus water and storage at Corps' reservoirs, namely the FCA and the Water 

Supply Act (WSA) of 1958. For example, it specified in the first sentence of the FCA in 

Section l that it is "the policy of the Congress to recognize tbe interests and rights of the 

States in determining the development of the watersheds within their borders .!!llii 

likewise their interests gnd rights in water utilization and cont:rQI.. .. "

3 Similarly, 

Congress specified in Section 301(a) of the WSA that it is the policy ofCongress to: 

[R]ecognize the primary responsibilities of the States and local interests in 

developing water supplies ... and that the Federal Government should 

participate and cooperate with States and local interests in developing such 

water supplies in connection with the construction, maintenance, and 

operation of Federal navigation, flood control, irrigation, or multiple 

purpose projects. 4 

Section 30 I (c) of the WSA further specifies that the taw's water supply section 

"shall not be construed to modifY the provisions" of Section 1 of the FCA or the 

provisions of Section 8 of the Reclamation Act of 1902.5 

In light of the above, the Corps' surplus water rulemaking and storage 

reallocation study must recognize and defer to the states' legal tight to allocate, develop, 

use, control, and distribute their surface waters, including but not limited to state storage 

and use requirements. 

B. Stored Water 

The Corps' efforts must acknowledge the difference between a reservoir's storage 

capacity and stored water. Stored water does not encompass all of the water in a 

reservoir. To the contrary, it represents the difference between water flowing into a 

reservoir and the water flowing out of the reservoir. Stated another way, if more water 

flows into the reservoir than leaves the reservoir, this is captured as stored water. If less 

water flows into the reservoir than leaves the reservoir, this water supply represents the 

release of stored water. In either event, the natural flows that would exist absent the 

Corps' dams and reservoirs should not be considered stored water. Nor should the 

natural flows be subject to interference or require a contract or fee by the Corps to be 

appropriated by the states. 

2 43 U.S.C. § 383. 3 33 U.S.C. § 701·1 (emphasis added) • 

• 43 u.s.c. § 39{)b. s Jd. 
62 


31407.053

C. The Flood Control Act of 1944 

We are especially concerned about the Corps' decision to condition access to the 

natural flows that run through six mainstem reservoirs along the Missouri River by 

requiring a determination that surplus water is available for withdrawal a~d requiring that 

applicants sign a water supply agreement to pay the Corps for the proporttonate cost of 

storing the water. As discussed below, these additional and unnecessary requirements are 

based upon a misinterpretation ofthe Act and should not serve as the basis of any 

rulemaking or study. 

Section 6 of the FCA states that the Corps "is authorized to make contracts ..• at 

such prices and on such terms as (it) may deem reasonable, for domestic and industrial 

uses for~ water that may be available at any reservoir" under the Corps' control. 6 

The Corps has interpreted "surplus water" to mean any water in a Corps reservoir that is 

not required for federally authorized purposes "because the authorized use for the water 

never developed or the need was reduced by changes that occurred since authorization or 

construction."7 Corps officials in the Mi8souri River Basin have further indicated that 

once water reaches a reservoir, aU water within the boundaries of that reservoir is subject 

to the Corps' authority and can be evaluated to determine whether it is "surplus" under 

the above definition, including the natural flows belonging to the states. 

This interpretation ignores the distinction between storage capacity and stored 

water by improperly viewing the Missouri River as a series of reservoirs connected by 

free-flowing rivers. The more correct view is that there are reservoirs sitting on top of 

portions of the River. The Corps can evaluate the reservoir pool to determine whether 

there is water surplus for authorized needs and uses, but the natural flowing-river 

volumes that run beneath the reservoir system should not be considered stored water and 

may be permitted by the respective states without Corps interference or contract and fee 

requirements. Reasoning otherwise would be contrary to the protection qf state "interests 

and rights in water utilization and control" provided under Section 1 of the FCA, as well 

as requirements under Section 6 that storage contracts for surplus water must not 

"adversely affect then existing lawful uses of such water."8 The states' use of natural 

flows was an existing lawful use prior to the Act's enactment and is therefore protected. 

In light of the above, the Corps must recognize the states' rights by ensuring that 

its rulemaking and study do not consider natural flows to be surplus water or stored 

water. As stated in the enclosed position, any definition requiring a storage contract to 

access natural flows within a reservoir boundary would improperly expand the Corps' 

authority and violate the states' rights to develop, use, control, and distribute surface 

water. It would also conflict with state water laws relating to storage for water supply 

and the practices of other federal agencies that recognize western water laws, such as the 

Bureau of Reclamation. 

• 33 {).S.C. § 708 (emphasis added). 1 Engineer Regulation 1105-Z..lOO, Planning Guidance Notebook at E-214 (Apr. 22, 2000}. 

• 33 U.S.C. §§ 701-1, 108 (emphasis added). 
63 


31407.054

D. Water Supply Act of 1958 

We understand that some Corps representatives have cited Section 30 l (b) of the 

WSA as further justification for denying access to natural flows. Section 30 I (b) 

authorizes the Corps to include storage at any planned or existing Corps reservoir for 

municipal and industria! water supply, provided that "State or local interests shall agree 

to pay for the cost of such provisions .... "9 

We recognize the Corps' authority under the WSA to require a contt'actual 

commitment to repay a portion of the cost of providing storage. However, as noted 

above, the amount of water stored in a reservoir does not include all of the water flowing 

through its boundaries. Requiring a fee to access natural flows that would otherwise be 

available absent the Corps' facilities conflicts with the recognition of state primacy over 

water utilization and control found in Sections 30l(a) and 30l(c) of the WSA. Such a 

requirement also runs counter to Section 30l(b)'s stated purpose of recouping expenses 

the Corps iru:urs in providing storage. 

E. Flexibility 

Any rulemaking to address surplus water contracts should be flexible enough to 

accommodate the various state laws, prior appropriation and riparian doctrines, and diverse 

physical conditions found throughout the country. In almost all cases, the most effective way to 

provide this flexibility is on a project-specific basis rather than with a "one-size-fits-all" 

approach. The Corps must also fully understand and follow its specific congressional 

authorizations and their supporting documentation, most of which recognize the unique elements 

of each basin and the differences in state law. 

Additionally, the rulemaking must treat prior appropriation states differently than riparian 

states to account for the differences in their water laws and policies. For example, in riparian 

states, reasonable use of the water belongs to riparian owners. This means that the Corps, as the 

riparian owner, would have a user interest in the water captured in its reservoirs. However, prior 

appropriation states do not vest user rights based on land ownership. This means that the Corps 

has no user interest in the rivers flowing through its reservoirs unless it has received a grant of 

those rights from the state. Thus, while Congress has authorized the Corps to operate its dams 

for specified purposes in prior appropriation states, such authority does not mean that the Corps 

has Congressional authority to capture all water supply in a reservoir without an ownership 

interest or rights to consumptive use. 

Furthermore, any rulemaking that fails to treat prior appropriation and riparian states 

differently could also conflict with Section l(b) of the FCA, which protects beneficial uses in 

states west of the ninety-eighth meridian by stating: 

[T]he use for navigation ... ofwaters §rising in States lying wholly or pp,rtly west 

of the ninety-eighth meridian shall be only such use as dQ¢8 not conflict with any 

'43 u.s.c. § 390b. 
64 


31407.055

· beneficial consumptive use, present or future,jn States lying wholly or partly west 

of the ninety-eighth meridian, of such waters for domestic, municipal, stock 

water, irrigation, mining, or industrial purposes .•.. 10 

Other issues that require flexibility include but are not limited to: 

• Many western states require a permit to impound and divert water, which may 

include the diversion of water from surplus storage. 

• In some states, allocating return flows to all owners or users in a reservoir may 

result in water th.at is permitted to an existing water right being allocated in a way 

that violates state Jaws and state ownership of the water. 

• The use or reuse of return flows may require a permit in some states, as well as a 

determination that the use of the water will not impair existing state-issued water 

rights. 

F. Outreach with States 

We respectfully urge your office and the Corps to engage the states as early as 

possible in its rulemaking and the development of the study. Given the implications 

these efforts could have on state water rights, state input will be most meaningful during 

the preliminary stages of development. Ideally, this engagement should happen before 

the proposed rule and study are published for public comment and too much momentum 

has built towards federal policy decisions that may not account for state rights and needs. 

G. Conclusion 

In sum, the Corps' surplus water rulemaking and storage water reallocation study should: 

(I) be developed with robust and meaningful state participation; (2) recognize and defer to the 

states' primary and exclusive authority over the allocation of surface water; (3) properly 

distinguish between stored water and storage capacity; and (4) ensure that natural flows are not 

considered to be surplus or stored water. 

Moreover, the surplus water rulemaking effort should be flexible enough to accommodate 

the states' differing legal doctrines and physical conditions, and should treat prior appropriation 

and riparian states differently. 

We would greatly appreciate the opportunity to have a dialog about these efforts, and 

invite you or a representative to join us at our upcoming fall meetings on October 2-4, in 

Deadwood, South Dakota. 

10 33 u.s.c. § 701-l(b). 
65 


31407.056

Thank you for considering our comments and concerns, as well as our invitation. We 

look forward to continuing our collaborative relationship with the Corps to address these and 

other water management issues in the West. 

Respectfully, 

Phillip 

~~.JD C. Ward, Chairman 

Western States Water Council 

Encl. 

Cc: Steven Stockton, Director of Civil Works, U.S. Army Corps of Engineers 

David Ponganis, Regional Director of Programs, Northwestern Division, U.S. Army 

Corps of Engineers 

John D'Antonio, WestF AST Representative, U.S. Army Corps of Engineers 

The Honorable Barbara Boxer, Chairwoman, Senate Environment and Public Works 

Committee 

The Honorable David Vitter, Ranking Member, Senate Environment and Public Works 

Committee 

The Honorable John Hoeven, Senator, North Dakota 

The Honorable Heidi Heitkamp, Senator, North Dakota 

The Honorable Tim Johnson, Senator, South Dakota 

The Honorable John Thune, Senator, South Dakota 

The Honorable Bill Shuster, Chairman, House Transportation and .Infrastructure 

Committee 

The Honorable Nick Rahal!, Ranking Member, House Transportation and Infrastructure 

Committee 

The Honorable Markwayne Mullin, Representative, Oklahoma 

The Honorable Kevin Cramer, Representative, North Dakota 

The Honorable Kristi Noem, Representative, South Dakota 
66 


31407.066

WESTERN STATES WATER COUNCIL 

682 Eaw Viue Street. Suite 7 I ,'l/Urrt{l', Utah 84/(}7-5501 I (801) 6{'15-2555 l F1X (lWI) 685-2559 

May 12,2017 

Theodore Brown 

Chief, Policy and Planning Division 

COE/DOD 

441 G Street, NW. 

Washington, DC 20314 

Weh Page: www. westemstateswater.org 

theodore.a.brown.civ@mail.mil 

RE: Proposed Rule on Use of U.S. Army Corps of Engineers Reservoir Projects for Domestic, 

Municipal & Industrial Water Supply 

Dear Chief Brown: 

On behalf of the Western States Water Council, I am writing to comment on the Corps' proposed 

rule on the use of reservoir projects for domestic, municipal, and industrial water supply, 

published in the Federal Register for public comment on December 16,2016. 

As previously expressed in our letter to Assistant Secretary Jo-Eilen Darcy on August 6, 2013, 

our member states have serious concerns over the lack of substantive state participation in the 

development of the rule. State input for such a water supply rule is critical, particularly where the 

Corps policies will result in a disproportionate impact on western water resources, where the 

laws differ significantly from the laws governing riparian water users along rivers in the East. 

The Western States have primary, often exclusive authority over the protection, development, 

and management of waters within their boundaries, including natural surface waters flowing 

through Corps reservoirs and dams. We believe that the Corps' assertions of broad authority over 

surface waters and the potential interference with the lawful exercise of state water rights are 

contrary to over I 00 years of deference afforded state water laws by the Congress and the 

Supreme Court of the United States.' 

The proposed rule tails to distinguish between "surplus waters," defined by the Corps in relation 

to storage and authorized purposes, and the "natural flows," defined as waters that would be 

available for use in the absence of federal dams and reservoirs. Natural flows are under exclusive 

jurisdiction of the states. For those natural flows that are located within a federal reservoir 

(water not stored), the Corps should grant an easement for access to the natural flow as long as 

the easement does not interfere with the Corps authorities. The States' authority allows the states 

to determine whether sufficient natural flows exist when granting state water rights. 

The Corps' definition and quantification of"surplus waters" must explicitly exclude the "natural 

flows." The proposed rule indicates that it is not intended to upset the balance between federal 

1 See. e.g, the 1866 Mining Act (43 USC §661); the 1877 Desert Land Act (43 USC §321); the 1920 Federal Power 

Act (16 USC §§802, 821); the Clean Water Act (33 USC§§ 125l(b) and (g)); the 1902 Reclamation Act (43 USC 

§383); the 1944 Flood Control Act (33 USC §701-1); the 1958 Water Supply Act (43 USC §390b); Martin v. Lessee 

of Wadel/. 4! U.S. 367.410 ( 1842): Pollard v. Hagan. 44 U.S. 212 (1845); Kansas v. Colorado, 206 U.S. 46 

(1907); California Oregon Power v. Beaver Portland Cement Co., 295 U.S. 142 (1935); California v. U.S, 438 U.S. 

645,653-664 (1978): PPL Montana v. ,'vfontana. 565 U.S. 576 (2012). 
67 


31407.067

purposes and state prerogatives to allocate water. However, without making a clear distinction 

between Corps' "surplus waters" and state "natural flows," the rule will do precisely that. The 

Corps must recognize the legal right of the states to develop, use, manage, control, distribute, and 

allocate the states' surface waters. Any Corps policy to require storage contracts subject to 

surplus determinations, time limitations, right-of-way requirements. and fees to access these 

"natural flows" within a reservoir boundary would be a violation of the states' rights. 

The proposed rule also fails to recognize critical differences between the climate, hydrology, and 

water laws of the Eastern and Western States. Unlike the wetter climate of the East, precipitation 

is often scarce in the West, and numerous reservoirs capture and moderate the "natural flows.'' 

Corps' reservoirs primarily provide non-consumptive flood control, hydropower and navigation 

benefits. but may be a significant source of municipal and industrial water. Further. the scale of 

the Corps' projects in the West is often much larger than in the East. Reservoirs capture large 

volumes, which may comprise a greater percentage of the average annual flow, and can cover 

hundreds of square miles. Withdrawals of"natural flows" for consumptive uses by the state or 

state water rights holders may often be de minimus compared to storage and releases for 

authorized federal purposes. 

Water law differences are also substantial. For example, Eastern riparian property owners may 

withdraw waters from adjacent sources without a state permit. In the West, under state-granted 

water rights, water must be appropriated, withdrawn, and often transferred long distances from 

the point of diversion to the point of use. Water users under a prior appropriations legal 

framework also often have vested private property rights in water, granted and administered by 

the states. These may be entitled to Constitutional protections and may not be taken for public 

purposes without just compensation. Securely established water rights are vital to the Western 

States' economies and their ability to grow. By ignoring regional differences, the proposed rule 

threatens to undermine the legal structure long-established in the West to allocate limited water 

resources. 

The proposed rule notes that the Corps intends to initiate a positive dialogue "with all interested 

parties, resulting in a final rule that will more effectively accomplish Congressional intent 

regarding the utilization of Corps reservoirs for water supply." We request that the Corps enter 

into an open and authentic dialogue with the states designed to achieve a mutually acceptable 

policy that retlects the Constitutional division of powers, state primacy over water resources 

allocation, and the realities of western water law, with a flexible but consistent approach that 

accounts for the significant physical, hydrological, and legal differences that exist between the 

states. 

Thank you for considering our comments and concerns, as well as our request to engage more 

fully with the states. We look forward to continuing our collaborative relationship with the Corps 

to address these and other water management issues in the West. 

Sincerely, 

Jerry Rigby, Chairman 

Western States Water Council 
68 


31407.068

WESTERN STATES WATER COUNCIL 

5!96 Ommu:rc~ Drh•e, SuiteJ02 I Murruy, Utah 84107 I (8111) 685-2555 I FAX (801) 685-2559 

Jt'eb Page: www,1-..·esternstateswatr~r.org 

August 6, 2013 

The Honorable Jo-E lien Darcy 

Assistant Secretary of the Army (Civil Works) 

I 08 Anny Pentagon 

Washington, DC 20310-0108 

Dear Assistant Secretary Darcy: 

Via Email: joellen.darcy@us.anny.mil 

On behalf of the Western States Water Council, representing the governors of 18 western 

states on water policy issues, I am writing to provide the Council's perspective on the U.S. Anny 

Corps of Engineers' efforts involving surplus water and storage at Corps reservoirs. In 

particular, it is our understanding that the Corps is pursuing rulemaking intended to clarify 

definitions in its water supply policies and to specify the policies and methodology it will use to 

determine prices for surplus water contracts pursuant to Section 6 of the Flood Control Act 

(FCA) of 1944. We also understand that the Corps is conducting a system-wide analysis of 

storage water reallocation in the Missouri River Mainstem Reservoir System. 

As the Corps pursues these efforts, we respectfully request that you consider the 

following comments and perspectives, as well as the enclosed position regarding the states' right 

to access the natural flows that would exist absent Corps reservoirs and dams. 

A. State Primacy 

Water belongs to the states which have exclusive authority over the allocation and 

administration of rights to the use of surface water within their borders. State granted water use 

permits, once put to beneficial use, also become property rights with constitutional protections, 

including due process and compensation if taken through government action. 

The basis of the states' primary and exclusive authority over their water resources is 

rooted in the Equal Footing Doctrine in Article IV of the U.S. Constitution, under which states 

take title to the navigable waters within their borders upon admission to the Union. As the U.S. 

Supreme Court has noted, Congress has also demonstrated a "consistent thread of purposeful and 

continued deference to state water law" 1 through such laws as the Mining Acts of 1866 and 

1870, the Desert Lands Act of 1877, the Federal Water Power Act of 1920, and others. One 

notable example of this deference is found in Section 8 of the Reclamation Act, which states: 

1 California v. U.S., 438 U.S. 645,653-664 (1978). 
69 


31407.069

[N]othing in this Act shall be construed as affecting or intended to affect or to in 

any way interfere with the laws of any State or Territory relating to the control, 

appropriation, use or distribution of water used in irrigation, or any vested right 

acquired thereunder, and the Secretary of the Interior, in carrying out the 

provisions of this Act, shall proceed in conformity with such laws .... 2 

Congress was well aware of this deference when it enacted the laws that govern 

the use of surplus water and storage at Corps' reservoirs, namely the FCA and the Water 

Supply Act (WSA) of 1958. For example, it specified in the first sentence of the FCA in 

Section 1 that it is "the policy of the Congress to recognize the interests and rights of the 

States in determining the development of the watersheds within their borders and 

likewise their interests and rights in water utilization and control. ... "

3 Similarly, 

Congress specified in Section 30l(a) of the WSA that it is the policy of Congress to: 

[R]ecognize the primary responsibilities of the States and local interests in 

developing water supplies ... and that the Federal Government should 

participate and cooperate with States and local interests in developing such 

water supplies in connection with the construction, maintenance, and 

operation of Federal navigation, flood control, irrigation, or multiple 

purpose projects. 4 

Section 30l(c) ofthe WSA further specifies that the law's water supply section 

"shall not be construed to modify the provisions" of Section 1 of the FCA or the 

provisions of Section 8 of the Reclamation Act of 1902.5 

In light of the above, the Corps' surplus water rulemaking and storage 

reallocation study must recognize and defer to the states' legal right to allocate, develop, 

use, control, and distribute their surface waters, including but not limited to state storage 

and use requirements. 

B. Stored Water 

The Corps' efforts must acknowledge the difference between a reservoir's storage 

capacity and stored water. Stored water does not encompass all of the water in a 

reservoir. To the contrary, it represents the difference between water flowing into a 

reservoir and the water flowing out of the reservoir. Stated another way, if more water 

flows into the reservoir than leaves the reservoir, this is captured as stored water. If less 

water flows into the reservoir than leaves the reservoir, this water supply represents the 

release of stored water. In either event, the natural flows that would exist absent the 

Corps' dams and reservoirs should not be considered stored water. Nor should the 

natural flows be subject to interference or require a contract or fee by the Corps to be 

appropriated by the states. 

2 43 u.s.c. § 383. 3 33 U .S.C. § 701-1 (emphasis added). 4 43 u.s.c. § 390b. 

5 !d. 
70 


31407.070

C. The Flood Control Act of 1944 

We are especially concerned about the Corps' decision to condition access to the 

natural flows that run through six mainstem reservoirs along the Missouri River by 

requiring a determination that surplus water is available for withdrawal and requiring that 

applicants sign a water supply agreement to pay the Corps for the proportionate cost of 

storing the water. As discussed below, these additional and unnecessary requirements are 

based upon a misinterpretation of the Act and should not serve as the basis of any 

rulemaking or study. 

Section 6 of the FCA states that the Corps "is authorized to make contracts ... at 

such prices and on such terms as [it] may deem reasonable, for domestic and industrial 

uses for surplus water that may be available at any reservoir" under the Corps' control.6 

The Corps has interpreted "surplus water" to mean any water in a Corps reservoir that is 

not required for federally authorized purposes "because the authorized use for the water 

never developed or the need was reduced by changes that occurred since authorization or 

construction."7 Corps officials in the Missouri River Basin have further indicated that 

once water reaches a reservoir, all water within the boundaries of that reservoir is subject 

to the Corps' authority and can be evaluated to determine whether it is "surplus" under 

the above definition, including the natural flows belonging to the states. 

This interpretation ignores the distinction between storage capacity and stored 

water by improperly viewing the Missouri River as a series of reservoirs connected by 

free-flowing rivers. The more correct view is that there are reservoirs sitting on top of 

portions of the River. The Corps can evaluate the reservoir pool to determine whether 

there is water surplus for authorized needs and uses, but the natural flowing-river 

volumes that run beneath the reservoir system should not be considered stored water and 

may be permitted by the respective states without Corps interference or contract and fee 

requirements. Reasoning otherwise would be contrary to the protection of state "interests 

and rights in water utilization and control" provided under Section I of the FCA, as well 

as requirements under Section 6 that storage contracts for surplus water must not 

"adversely affect then existing lawful uses of such water."8 The states' use of natural 

flows was an existing lawful use prior to the Act's enactment and is therefore protected. 

In light of the above, the Corps must recognize the states' rights by ensuring that 

its rulemaking and study do not consider natural flows to be surplus water or stored 

water. As stated in the enclosed position, any definition requiring a storage contract to 

access natural flows within a reservoir boundary would improperly expand the Corps' 

authority and violate the states' rights to develop, use, control, and distribute surface 

water. It would also conflict with state water laws relating to storage for water supply 

and the practices of other federal agencies that recognize western water laws, such as the 

Bureau of Reclamation. 

6 33 U.S.C. § 708 (emphasis added). 7 Engineer Regulation 1105-2-100, Planning Guidance Notebook at E-214 (Apr. 22, 2000). 8 33 U.S.C. §§ 701-1.708 (emphasis added). 
71 


31407.071

D. Water Supply Act of 1958 

We understand that some Corps representatives have cited Section 30 I (b) of the 

WSA as further justification for denying access to natural flows. Section 30 I (b) 

authorizes the Corps to include storage at any planned or existing Corps reservoir for 

municipal and industrial water supply, provided that "State or local interests shall agree 

to pay for the cost of such provisions .... "

9 

We recognize the Corps' authority under the WSA to require a contractual 

commitment to repay a portion of the cost of providing storage. However, as noted 

above, the amount of water stored in a reservoir does not include all of the water flowing 

through its boundaries. Requiring a fee to access natural flows that would otherwise be 

available absent the Corps' facilities conflicts with the recognition of state primacy over 

water utilization and control found in Sections 301(a) and 301(c) of the WSA. Such a 

requirement also runs counter to Section 301(b)'s stated purpose of recouping expenses 

the Corps incurs in providing storage. 

E. Flexibility 

Any rulemaking to address surplus water contracts should be flexible enough to 

accommodate the various state laws, prior appropriation and riparian doctrines, and diverse 

physical conditions found throughout the country. In almost all cases, the most effective way to 

provide this flexibility is on a project-specific basis rather than with a "one-size-fits-all" 

approach. The Corps must also fully understand and follow its specific congressional 

authorizations and their supporting documentation, most of which recognize the unique elements 

of each basin and the differences in state law. 

Additionally, the rulemaking must treat prior appropriation states differently than riparian 

states to account for the differences in their water laws and policies. For example, in riparian 

states, reasonable use of the water belongs to riparian owners. This means that the Corps, as the 

riparian owner, would have a user interest in the water captured in its reservoirs. However, prior 

appropriation states do not vest user rights based on land ownership. This means that the Corps 

has no user interest in the rivers flowing through its reservoirs unless it has received a grant of 

those rights from the state. Thus, while Congress has authorized the Corps to operate its dams 

for specified purposes in prior appropriation states, such authority docs not mean that the Corps 

has Congressional authority to capture all water supply in a reservoir without an ownership 

interest or rights to consumptive use. 

Furthermore, any rulemaking that fails to treat prior appropriation and riparian states 

differently could also conflict with Section I (b) of the FCA, which protects beneficial uses in 

states west of the ninety-eighth meridian by stating: 

[T]he use for navigation ... ofwaters arising in States lying wholly or partly west 

of the ninety-eighth meridian shall be only such use as does not conflict with any 

• 43 u.s.c. § 390b. 
72 


31407.072

beneficial consumptive use, present or future, in States lying wholly or partly west 

of the ninety-eighth meridian, of such waters for domestic, municipal, stock 

water, irrigation, mining, or industrial purposes .. , 10 

Other issues that require flexibility include but are not limited to: 

• Many western states require a permit to impound and divert water, which may 

include the diversion of water from surplus storage. 

• In some states, allocating return flows to all owners or users in a reservoir may 

result in water that is permitted to an existing water right being allocated in a way 

that violates state laws and state ownership of the water. 

• The use or reuse of return flows may require a permit in some states, as well as a 

determination that the use of the water will not impair existing state-issued water 

rights. 

F. Outreach with States 

We respectfully urge your office and the Corps to engage the states as early as 

possible in its rulemaking and the development of the study. Given the implications 

these efforts could have on state water rights, state input will be most meaningful during 

the preliminary stages of development. Ideally, this engagement should happen before 

the proposed rule and study are published for public comment and too much momentum 

has built towards federal policy decisions that may not account for state rights and needs. 

G. Conclusion 

In sum, the Corps' surplus water rulemaking and storage water reallocation study should: 

(I) be developed with robust and meaningful state participation; (2) recognize and defer to the 

states' primary and exclusive authority over the allocation of surface water; (3) properly 

distinguish between stored water and storage capacity; and ( 4) ensure that natural flows are not 

considered to be surplus or stored water. 

Moreover, the surplus water rulemaking effort should be flexible enough to accommodate 

the states' differing legal doctrines and physical conditions, and should treat prior appropriation 

and riparian states differently. 

We would greatly appreciate the opportunity to have a dialog about these efforts, and 

invite you or a representative to join us at our upcoming fall meetings on October 2-4, in 

Deadwood, South Dakota. 

10 33 u.s.c. § 701-l(b). 
73 


31407.073

Thank you for considering our comments and concerns, as well as our invitation. We 

look forward to continuing our collaborative relationship with the Corps to address these and 

other water management issues in the West. 

Respectfully, 

4ttlb 

Phillip C. Ward, Chairman 

Western States Water Council 

Encl. 

Cc: Steven Stockton, Director of Civil Works, U.S. Army Corps of Engineers 

David Ponganis, Regional Director of Programs, Northwestern Division, U.S. Army 

Corps of Engineers 

John D'Antonio, WestFAST Representative, U.S. Army Corps of Engineers 

The Honorable Barbara Boxer, Chairwoman, Senate Environment and Public Works 

Committee 

The Honorable David Vitter, Ranking Member, Senate Environment and Public Works 

Committee 

The Honorable John Hoeven, Senator, North Dakota 

The Honorable Heidi Heitkamp, Senator, North Dakota 

The Honorable Tim Johnson, Senator, South Dakota 

The Honorable John Thune, Senator, South Dakota 

The Honorable Bill Shuster, Chairman, House Transportation and Infrastructure 

Committee 

The Honorable Nick Rahall, Ranking Member, House Transportation and Infrastructure 

Committee 

The Honorable Markwayne Mullin, Representative, Oklahoma 

The Honorable Kevin Cramer, Representative, North Dakota 

The Honorable Kristi Noem, Representative, South Dakota 
74 


31407.001

Position No. 388 

Readopted 

(formerly Position No. 348, October 12, 2012) 

POSITION 

of the 

WESTERN STATES WATER COUNCIL 

regarding 

STATES' WATER RIGHTS AND NATURAL FLOWS 

Manhattan, Kansas 

October 9, 2015 

WHEREAS, the Western States Water Council strongly supports preservation of the 

States' inherent right to develop, use, control, and distribute water; and 

WHEREAS, States have exclusive authority over the allocation and administration of 

rights to the use of surface water located within their borders and are primarily responsible for 

protecting, managing and otherwise controlling the resource; and 

WHEREAS, States are in the best position to protect and allow for the orderly and 

rational allocation and administration of the resource through state laws and regulations that are 

specific to their individual circumstances; and 

WHEREAS, the Flood Control Act of 1944 specifically declared the policy of Congress 

to recognize the interests and rights of the Missouri River Basin States in determining the 

development of the watersheds within their borders and likewise their interests and rights in 

water use and control, and to preserve and protect to the fullest extent established and potential 

uses of the rivers' natural flows, those flows being the natural flows that would pass through the 

states in the absence of the U.S. Army Corps of Engineers dams; and 

WHEREAS, the federal government has long recognized the right to use water as 

determined under the laws of the various states; and 

WHEREAS, the various states have the authority and duty to manage permitting of 

stored water to supplement natural flows; and 

WHEREAS, federal agencies in the western states, such as the Bureau of Reclamation, 

generally recognize western water laws and natural f1ows through reservoir operations, with 

releases from storage that supplement natural flows, and water service contracts that supplement 

natural How; and 

WHEREAS, representatives of the U.S. Army Corps of Engineers have indicated that all 

waters entering its Missouri River mainstem reservoirs are stored waters to be allocated and 

controlled by the U.S. Army Corps of Engineers without recognition of the States' rights to 

natural flows being separate from the captured floodwaters stored within those reservoirs. 
75 


31407.002

Position No. 388 

Readopted 

(formerly Position No. 348, October 12, 2012) 

NOW, THEREFORE, BE IT RESOLVED, that the Western States Water Council urge 

the Army Corps of Engineers to recognize the legal right of the States to the development, use, 

control, distribution and allocation of the States' surface waters. 

BE IT FURTHER RESOLVED, that any policy of the U.S. Army Corps of Engineers 

to require storage contracts to access natural flows within a reservoir boundary would be a 

violation of the States' rights to develop, use, control, and distribute surface water. 

BE IT FURTHER RESOLVED, that the Western States Water Council opposes any 

and all efforts that would diminish the primary and exclusive authority of States over the 

allocation of surface water. 

*Nebraska abstained from voting on the position in October 2012. 

F:\POSITION\2015\Manhattan, KS_Oct2015\#388_States Water Rights and Natural Flows_20150ct9.docx 
76 


31407.003

WESTERN STATES WATER COUNCIL 

682 East Vme Street, Suite 7 I Murray, Utah 84107 I (801) 685-25551 FAX (801) 685-2559 

Web Page: www. westernstateswater.org 

June 12.2018 

The Honorable Mike Rounds. Chairman 

Subcommittee on Superfund, Waste Management, and Regulatory Oversight 

Senate Environment and Public Works Committee 

410 Dirksen Senate Office Building 

Washington, D.C. 20510 

Re: Oversight Hearing on the Army Corps' Regulation of Surplus Water and the Role of States' Rights 

Dear Chairman Rounds: 

On behalf of the Western States Water Council (WSWC), a government entity created by the governors 

of western states to advise them on water policy issues, we would like to submit for the record the 

attached resolution calling on the U.S. Army Corps of Engineers (Corps) to recognize the legal right of 

the States to the development, use, control, distribution and allocation of the States· surface waters. 

Further, the resolution declares that any policy to require storage contracts to access natural flows within 

a reservoir boundary would be a violation of the States' rights. The WSWC opposes any efforts that 

would diminish the primary and exclusive authority of States over the allocation of surface water. 

Also attached for the record is a comment letter detailing concerns dated May 12, 2017 from the WSWC 

to the Corps' Policy and Planning Division Chief: and an accompanying letter dated August 6, 2013 to 

the Assistant Secretary of the Army (Civil Works). 

We appreciate your leadership on this important issue. 

Sincerely, 

Jerry Rigby 

Chairman 

Western States Water Council 

Tony Willardson 

Executive Director 

Western States Water Council 
77 


31407.026

April18, 2016 

South Dakota Department of Game, Fish, and Parks 

South Dakota Department of Environment and Natural Resources 

Joe Foss Building 

523 East Capitol Avenue 

Pierre, SD 57501 

Brigadier General Scott A. Spellmon 

Commander, Northwestern Division 

U.S. Army Corps of Engineers 

P.O. Box 2870 

Portland, OR 97208-2870 

Dear General Spellrnon: 

Thank you for corning to Pierre today and allowing us to present our comments on the 2017-2018 

Draft Annual Operating Plan (Draft AOP). We look forward to working with you on the 

management of the Missouri River. 

Current projections for 2018 indicate an above normal runoff year. System storage is currently at 

approximately 59.1 million acre feet, and the U.S. Army Corps of Engineers (USACE) projects the 

annual runoff above Sioux City for 2018 to be 30.5 million acre feet. This is 120% of normal and 

4.3 million acre feet above the long-term average. 

We appreciate the effort you have made in improving communication with-other federal, state, and 

local entities throughout the fall and winter months to ensure awareness of basin conditions. With 

the high mountain snowpack this year and the occurrence of late winter storms, we ask that the 

USAGE be diligent in its efforts to keep Missouri River basin states and stakeholders informed of 

the status of water storage and yield in the reservoir system this spring and summer. 

Following the flood of 2011, an independent review panel recommended improvements to better 

determine pre-runoff conditions pertaining to plains snowpack assessment and soil moisture 

monitoring. Section 4003 of the Water Resources Reform and Development Act of 2014 (WRRDA 

2014) authorized the development of a snowpack and drought monitoring program in the Upper 

Missouri Basin. Section 1179 of !he Water Resources Development Act of 2016 designated the 

USACE as the lead agency in the effort to coordinate and implement the requirements of Section 
78 


31407.027

4003 of WRRDA 2014. We strongly encourage the USACE to proceed with the development and 

implementation of this program and request that funds be included in USAGE Federal Fiscal Year 

2020 budget requests to provide the necessary funding for the program. 

The flood of 2011 changed the physical characteristics of the river channel in the Pierre/Ft. Pierre 

area. As reported at the August 22, 2017, hearing held by the US Senate Subcommittee on 

Superfund, Waste Management, and Regulatory Oversight and Chaired by Senator Rounds in 

Pierre, the 2017 summer higher releases from Oahe had the noticeable effect of impacting 

adjoining property along the river downstream from the dam. As we had requested previously, we 

recommend a post-flood channel morphometry study in the Pierre/Ft. Pierre area be conducted to 

allow assessment of possible flooding issues at various summer and winter release levels out of 

Oahe Dam. The US Army Corps of Engineers (USACE) should also update the inundation maps 

for the river corridor due to changes in channel capacity. As for development of the plains snow 

pack monitoring system, we request the necessary funds for the channel morphometry budget be 

included in the USAGE 2020 budget request. 

While current projections for water yield in 2018 are for above-average runoff, drought conditions 

currently exist in the upper Great Plains. If water yield projections decrease to below normal later in 

2018 because of drought, we request that the USAGE implement discretionary water conservation 

measures. Specifically, we request that the USACE not support navigation targets at locations 

when there is no commercial barge traffic on the reach affected. 

When the four mainstem reservoirs in South Dakota were constructed, our citizens and Tribes paid 

a heavy price. As the reservoirs filled, more than 500,000 acres of our most fertile river 

bottomlands were permanently flooded. Many citizens and tribal members were forced from their 

lands, their homes, and their communities. Therefore, we appreclate the commitment the USACE 

has made toward working with Tribes In South Dakota to protect historic and cultural resources 

under the 2004 Programmatic Agreement for Operation and Management of the Missouri River 

Mainstem System. 

We recognize the efforts the USACE and Western Area Power Administration have made in 

reducing the number of occurrences of zero flow in the river reach immediately below Ft. Randall 

Dam. This past summer there was a marked decrease in the practice of cycling between high and 

low releases below the dam. This reduced the dewatering of riverine backwaters and had positive 

effects on young fish and aquatic insect production, which is vital to fish and bird populations. For 

the FY2017-2018 AOP, we recommend that the USACE continue the practice of reduced cycling 

of releases from Ft. Randall Reservoir throughout the year. 

We support the USAGE's proposed intent to favor Lake Sakakawea during the 2018 spring fish 

spawning period, although if runoff conditions allow, rising pools on all three upper reservoirs 

during the spring fish spawning period would be ideal. A rising pool during the April-to-June 

spawning period greatly increases the likelihood of successful production of rainbow smelt and 
79 


31407.028

other prey fish that support a thriving sport fishery on which so many river communities rely. In 

addition to spring water level increases being important to lake Oahe, a stable to rising water level 

is critical for a successful walleye spawn on Francis Case. We request the USACE contact us if 

there is the potential tor a spring drawdown of Francis Case, to discuss minimizing impacts to the 

fishery. 

We formally request a mechanism be built into the annual AOP process for State fish and wildlife 

and water management agencies to be briefed on the current state of water management on the 

Missouri River system and initial plans for the following year before work on the draft AOP begins 

in early August. The states should be provided an opportunity to more fully understand how 

planned system operations, due to basin conditions and the Missouri River Recovery Management 

Plan, may affect stakeholders within each state and provide this information to the USACE before 

the Draft AOP Is released. 

We want to take this opportunity to reiterate that South Dakota does not support the USACE's 

policy requiring water storage agreements prior to granting access easements for new water 

diversion intakes. A recent example of how this policy does not make sense for South Dakota is 

when the USACE refused to allow 90,000 gallons of Missouri River water to be pumped and used, 

just feet from the Oaha Reservoir, for the reconstruction of a parking lot on state owned land. It Is 

not a permanent diversion, just a short term use of water. This is simply nonsensical. 

We believe the direclion the USACE is taking in regards to the Reallocation Study, the Surplus 

Water Reports, and the Proposed Rule Making is an illegal taking of state water rights by denying 

access to the natural !Iowa of the Missouri River. There are both Constitutional and statutory 

grounds for claiming the natural flows of the Missouri River belong to those states hosting the main 

stem reservoirs and those natural flows need to remain under the jurisdiction of the water laws of 

those states for the benefiCial use of their citizens. Just prior to Christmas of 2016 the USACE 

issued a Notice of Proposed Rulemaking concerning policies governing the use of Its reservoir 

projects within the Missouri River Basin. !n March 2017, Governor Daugaard submitted his formal 

comments concerning the proposed rule stating, "The proposed rule is unacceptable to South 

Dakota". Although the USACE states throughout the document their overall intent of the proposed 

rule is to avoid interfering with lawful uses of water under State law, simply stating this intent does 

not result in a rule that achieves it. States' rights to natural flows of navigable waters within their 

borders are constitutionally founded, and protected, in the Equal Footing Doctrine. Congress 

acknowledged this states' right in Section 1 of the 1944 Flood Control Act. With these directives 

from Congress still in place, the USACE should abandon its efforts on the Surplus Water studies, 

Reallocation Reports, and Proposed Rule Making for Missouri River reservoirs. Furthermore, the 

USACE should lift the moratorium on pump access easements by rescinding Real Estate 

Guidance Policy Letter No. 26 and allow users who have obtained state water rights to pump water 

without further federal interference. 
80 


31407.029

We look forward to the USACE adopting and implementing aH of the recommendations we have 

provided here today. Thank you again for holding this hearing in Pierre. 

C) I 

\\. I 

Kelly R ler, Secretary 

Department of Game, Fish and Parks 

cc: Governor Dennis Daugaard 

Sincerely, 

Senator John Thune 

Senator Mike Rounds 

Representative Kristi Noem 

Lieutenant General Todd T. Semonite 

Colonel John L. Hudson 

Colonel Douglas B. Guttormsen 

Steven M. Pirner P.E.,Secretary 

Department of Environment and 

Natural Resources 

John Remus-USACE-Missouri River Water Management 

Greg Sheehan-FWS Headquarters 

Noreen Walsh - FWS Regional Director 

Tom Melius - FWS Regional Director 

Wayne Nelson-Stastny- MRNRC 
81 


31407.030

Senator Rounds 

1ll W Capitol Ave, Suite 210 

Pien:e, SD 57501 . 

319 Soum Coteau Street 

P.O. Box280 

Pierro, SD 57501 

Phone: 605-224-5825 FU1 605-224-7102 www.rirerla.w.com 

Re: Environment & Public Works Subcommittee on Superfund, Waste Management and 

Regulatory Oversight Committee- Hearing June 13,2018 

Senator Rounds, 

On behalf of the South Dakota Association of Rural Water Systems, Inc. (SDARWS), thank you 

for the opportunity to submit comments for the record in reference to the above referenced 

hearing. SDARWS continues to oppose the Corps of Engineer! efforts to charge for surplus 

water and most recently, the federal rulemaking (Docket COE-2016-0016 ·Use of Army Corps 

of Engineers Reservoir Projects for Domestic, Municipal, and Industrial Water Supply) currently 

pending. I have enclosed herein a letter dated May 8, 2017 which includes the cilmments filed in 

the Rulemaking Docket and a letter dated October 10,2012 which includes the written 

comments submitted by this Association on the Draft Surplus Water Reports and Environmental 

Assessments. We would request that these documents be included in the official record of the 

hearing. On behalf of the Association, we thank you for your continued efforts regardhig this 

important issue. 

Thank you, 

MDN/gs 

enclosure 

Robert C. Rinor, Jr 

Mugo D. Nonhmp 

Very truly yours, 

RITER, ROGERS, WATTIER & 

NORTHRUP, LLP 

BY: ~~0 ~ f{_dUivufJ 

Margo D. Northrup 

Riror, Rogers, Warner &: Northrup. UP 

Jenyi. Wattier 

K<x!y R. r:.y.,, .lwociatc 
82 


31407.031

REGULAR AND CERTIFIED MAIL 

U.S. Army Corps of Engineers 

Atln: CBCC-L 

441 G. Street NW 

Washington, DC 20314 

May8,2017 

319 South Coteau Stteet P.O. Box280 

Pierre, SD 57501 

Phone 605-224-5825 

Fax: 605-224-7102 

www.ritedaw.corn 

Re: Docket COB-2016-0016-(Proposed rulemaking: Use of Army Corps 

of Engineers Reservoir Projects for Domestic, Municipal, and Industrial 

Water Supply) 

Dear Sir: 

On behalf of the South Dakota Association of Rural Water Systems, Inc. (SDARWS), 

please accept this letter of comments in regard to the above-referenced rulemaking. 

SDARWS represents nearly thirty rural Willer systems, who serve approximately 265 

municipalities, various sanitary districts and many other smaller systems that provide water to 

the people of South Dakota. Our members are opposed to the proposed rulemaking to the extent 

it intetferes with the rightful property of the citizens of the State of South Dakota. Our members 

provide water to rural customers, numerous communities, municipalities and industrial users. 

The impacts of the proposed rule will directly impact many. South Dakotans and their ability to 

receive quality drinking water from the Missouri River. 

In addition to the various legal issues and concerns that have been identified by other 

comments, including those of our Governor, SDARWS has some very important questions and 

concerns and respectfully requests that the Corps of Engineers does not move forward with this 

rulemaking. 

1. Sgope. Despite the claim that the purpose of the rule is to provide greater clarity and 

consistency to the Corps' implementation of Section 6 and the WSA, it is very 

difficult to ascertain the impact of the proposed rule on individual rural water 

systems. I have provided a map attached hereto as Exhibit A that identifies the rural 

water systems that utilize Missouri River water directly or indirectly (by being under 

the influence of the Missouri's surface water in South Dakota.) As you can tell, this 

covers a good portion of the state and any proposed rule will directly impact a 

significant number of citizens in South Dakota. The proposed rule does not clearly 

identify how rural water systems and organizations will be impacted. 

Rob.tt c. ru..., Jr 

Margo D. Nordtrup 

Darla Po!lman RDgm 

Lindsey Riter-Rspp 

Riter, Rogers, Wattier & Northrup, ll.P 

Jerry L. Wattier 

Robon D. Ho&:r, Of Counsel 
83 


31407.032

2. ~ SDARWS has consistently opposed having a fee imposed by the Corps of 

Engineers for the use of the water by the rural water systems. The proposed rule 

contemplates imposing a fee on the rural water systems for use of water. SDARWS 

does not support any methodology to determine a "reasonable" price. Any fee will be 

a financial burden on the rural water systems and ultimately the systems' users. 

As you are certainly aware, on August 27, 2012, many of the impacted rural water 

systems testified in a public meeting regarding the draft Surplus Water Reports and 

specifically the proposal to charge a fee to the rural water systems. SDARWS also 

filed written comments following the hearing. I have enclosed those comments 

herein and requ~ that they be included as part ofSDARWS's official comments on 

the proposed rule (Exhibit B). As was the case in 2012, the Corps of Engineers bas 

not given adequate consideration or study to the socio-economic impacts a mandated 

fee would impose and its negative impact on rural water customers. 

3. Duration of Agreements. The proposed rule contemplates that if the Corps of 

Engineers determines either surplus water or reallocated water is made available at a 

Corps facility for a domestic or industrial use, it could potentially be for only a short 

period of time and renewal of the water supply agreement is at the discretion of the 

sitting Assistant Secretary of the Army. This is not workable fur the rural water 

systems. Collectively millions of dollars of plant have been invested in the State of 

South Dakota to serve our customers with quality water. It is impossible to make 

sound business decisions on agreements that are not long term and agreements that 

may not be renewed at a later date. 

f\ccordingly, the SDARWS submits that the Corps of Engineers should reverse its position and 

not pursue the proposed rulemaking. 

Thank you. 

MDN/aee 

enclosures 

Very truly yours, 

RITER, ROGERS, WATTIER& 

NORTIIRUP, LLP 

By:JD~o Margol;;. t¥'rthrup J) ~ 

cc: Dennis Davis, Executive Director ofSDARWS 
84 


31407.033

EXHIBIT A 
85 


31407.034

I 

I 

I 

I 

. I I l 

l I 

I 

~ i 

a, i 

·L J ~pI f 

n . I 1 

1!1 i I 
86 


31407.035

EXHIBITB 
87 


31407.036

~Riter Rogers .I.. K} Law Office 

October 10,2012 

REGULAR AND CERTIFIED MAIL 

U.S. Anny Coxps ofEngineexs, 

Omaha District CENWO..OD-T 

ATIN- SUIPlUS Water Report and EA 

1616 Capitol Avenue; 

Omaha, NE 68102-4901 

Re: M&I Reallocation Study and SU!Plus Water Reports 

Dear Colonel Cross: 

(J.-I'f 

319 South Coteau Street 

P.O.Ililx280 

Plene, SO 57501 

Phone: 605-224-5825 

Fax: 605-224-7102 

www.ricerlaw.com 

On behalf of the South Dakota Association ofRural Water Systems (SDARWS}, I want 

to thank you fur allowing us to provide public comment in Pierre, South Dakota on August 27, 

2012, and the opportunity to provide written comments on the Draft SUIPius Water Reports and 

Environmeotal Assessments released by the U.S. Army Coxps ofEngineers on the four Missouri 

Riv¢r Reservoirs in South Dakota. 

SDARWS represents nearly thirty rural water systems, who serve appro'Ximately 265 

mtmicipalities, various sanitary districts and many other smaller systems that provide water to 

the people of Solllh Dakota. Our members are opposed to the Coxps of Engineers' plan to charge 

a fee or surcharge upon domestic users ofMissouri RiV¢1' Water fur water or storage of water 

thst is the rightful property of the ci~ ofthe State of South Dakota. Our members provide 

water to rural eostomers, numerous communities, mtmicipalities and industrial users. The 

impacts of any fee mandated by the Coxps ofBngineers will directly impact many Solllh 

Dakotans and the fees they pay to receive quality drlaking water. 

fn addition to the various legal issues and concerns that have been identified by other 

comments, including those of our Oovemor, Attorney General, and Congressional Delegation, 

SDAR.WS has some very important questions and concerns thst :militate against approval of the 

proposed plan. 

1. ~. It is very difficult to ascertain the impact on individual rw:al water systems 

pUI:Suant to the current SU!Plus Wat¢r Reports. I have provided a map attached hereto 

as Exhibit A that identifies the rural water systems that utilize Missouri River water 

directly or indirectly (by being under the influence of the Missouri's surface water in 

South Dakota.) As you can tell, this covers a good portion of the state and any 

proposed fee will directly impact a significant number of citizens in South Dakota. 

The plan lacks clear definition on which systems and organizations will he impacted. 

llobett C. run:r, Jr Darlo Pollman Rogtu Jerr;y L. Wattil'!l' Margo D. Northrup IJndscy ru..,..Rapp Thomas Han:, Aswciate 

llobert D. Hokr, Of Counel 

ruw. Roll""' Wattitr &: Northrup, LLP 
88 


31407.037

!R) 

2. ~ As a few of our managers shared on August 27, 2012, any mandated storage 

fee will be a financial burden on the J:Uial water systems and ultimately the system's 

users. I have attached their comments to this letter and request that the comments be 

extended into the official record. (See Attachment B). Our members had received 

differing information from Corps officials as to how any mandated fee would be 

calculated and assessed against the rural water systems, which ranged from this is a 

one-time fee, this is a fee that will be paid over a number of set years, or this is a fee 

that will be assessed llllllually fur an infinite amount of time. There bas not been 

~tdequate consideration. or study given to the socio-economic impacts a mandated fee 

would impose and its negative impact on rural water customers. 

3. Unfair treatme.nt. We do not agree that any stomge fee or any fee fur that matter 

should be charged for the water. However, it is very troubling that a different rate 

structure has been proposed for the di:fferent reservoirs. As an example the rural 

water S)'lltems that are associated with Lewis Clark orB-Y Rural Water would be 

fOrced to absorb a m.uch higher mandated fee for the same water utilized upstream. 

Equally concerning is that the citizens of South Dakota. wiU be forced to pay a 

mandated fee for water or its storage, but the benefits of the water will be enjoyed by 

downstream states that do not pay any fees. 

Accordingly, the SDARWS submits that the Corps of Engineers should reverse its position and 

not pursue charging a fee to the South Dakotans for water utilized from South Dak:ota reservoirs. 

Thank you. 

:MONied 

cc: Denny Davis 

Very truly yours, 

RITER. ROGERS, WATTIER& 

NORlHR.UP, LLP 

By:J1ha~ 

Mar~~b~~~ 
89 


31407.038

EXHIBIT A 
90 


31407.039

: .... c·-.--............ ~ J~ w.-~-.< 

'll I I 
91 


31407.040

EXHIBITB 
92 


31407.041

Randall Community 

Water District 

445 Main Street-PO Box 37 • Lake Andes, SD 57356 

605-487-7823 Fax: 487-7824 email: rcwd@rcwd.org 

Corps of Engineers 

Lake Francis Case/Lewis & ClarkLake Project 

South Dakota & North Dakota Swplus Water Report 

August27,20!2 

Wrilllln Testimony of: Alvin Van Zeo, General Msnager 

Randall Community Water Dilllrict 

My name is Alvin Van Zee and llllll the General Manger far the Rruulall Community Water 

District (RCWD) ofLake Andes, SD drawing waterftom Lake Francis Case. RCWD began in 

1976. The Dlstrlct's service area is Charles Mix, AU1'0111, Davison and Douglas Counties. This 

service area consists of more !han 15 bulk users as towns and villages in these counties, except 

the city of Mitchell. We also have over 1600 rural fann users. Our population of service is 

17,000. 

The proposed action ofwarer storage fees imposed for water RCWD diverts :from Lake Francis 

Case will significantly and negatively impact our users, especially our rural farms having daizy 

operations, fat cattle yards and hog operations. These operalors mly only on RCWD to provide 

water and will see an increase of$80 per MON'IH because of this new fue. These are farms that 

have been handed to 3.U and 4lh generations and were involved when the Pick Sloan Project was 

developed. The residents gave up rich farroland on the Missouri because tho COB promised !hem 

the benefit of having latge dams along their property. In imposing this storage fee this same COB 

ls asking tho Sllllle property owners ll> again Pl\Y fur that which was ro be a benefit to them and all 

Sonth Dakolans. 

The communities in our service area will also be severely affected by these edditiooal increases. 

A significant rste increase will stifle community development and growth in an already down 

economy. Communities wete inundated with :flooding damages 1o personal and inftasiructure 

problems last year, and cummtly are suffering anolher blow to their economies by tho unrelieved 

drought of this year. 

The Missouri River is not only important to residents of1his area. it is a National Resource. The 

hllpplln.ings here impact the nation as a wholo. When the bread basket of the nation is under 

duress, the nation suf&rs, 
93 


31407.042

WEB WATER DEVELOPMENT 

Public Hearing August 27, 2012 

Pierre SO 

WEB Water Development started construction in 1983 and started serving water to Its first 

customer on May 24, 1986. WEB Water now covers about 5500 square miles while maintaining 

nearly 6,800 miles of underground pipeline. WEB Water currently delivers water to approx. 

8,100 meters at an average rate of 6.2 million gallons per day. Based on last years water 

production and the proposed rate of $17.19 per acre foot of water used out of Lake Oahe, this 

will cost the customers of WEB Water on excess of $120,000 per year. Our customers are made 

up of rural residents, Including many farmers and ranchers. We also provide water to 28 

communities In northeast South Dakota, to include: 

Faulkton Forbes Frederick Grenville 

Groton Herried Hosmer Ipswich 

Leola Longlake Mansfield Mellette 

Mlna Lake Sanitary Dlst Northville Onaka Pollock 

Redfield Roscoe Roslyn Selby 

seneca Stratford Warner Webster 

Wecota Westport Wetonka Zeeland 

WEB Water also serves water to 77 other bulk customers as weB as 5 ethanol plants. This fee 

not only effects WEB Water but thousands of residents and many businesses in Northeast 

South Dakota. 
94 


31407.043

IntroductJon: 

Corps of Engineers 

Qahe Dam /lake Oahe Project 

South Dakota & North Dakota 

Surplus Water Report 

Public Hearing 

August 27, 2012 -4:30PM (COT) 

Testimony of: 

Kurt Pieifle, General Manager 

Mld·Dakota Rural Water System, Inc. 

My name Is Kurt Pfeifle. I am the General Manager of the Mid-Dakota Rural Water System, and 

we are headquartered in Miller, SD. The Mid-Dakota Rural Water System is a potable rural and 

regional water supply system, providing treated drinking water to all or portions of 14 counties 

in central South Dakota. Lake Oahe Reservoir on the Missouri River is the only water source we 

currently use. Mlti~Dakota annually diverts over 1.7 billion gallons of water; we treat it and 

deliver the potable water through over 4,000 miles of pipeline to 5,400 metered customers 

representing service to thousands of farms and ranches, plus we provide drinking water to 28 

communities through Individual or bulk service. We supply water to a population of 32,000 

South Dakotans as well as an unquantlfiable number of livestock. The results of decisions of the 

Corps of Engineers and the proposals contained in the Surplus Water Report will have a huge 

effect on Mid-Dakota and the people we serve. 

Opposition to the plan: 

I appear here today in opposition of the Draft Surplus Water Report. There are a myriad of 

legal reasons why we oppose the plan, ranging from the Corps' failure to consider "natural 

flows" of the River to challenges of the state's sovereign authority. I will focus my comments 

on how the proposals of the draft report will affect Mid-Dakota specifically and let our 

Governor, Attorney General and the State's Congressional Delegation focus on the larger Issues 

of the 1944 Flood Control Act and sovereignty Issues presented therein. Mid-Dakota 
95 


31407.044

specifically voices strong opposition to the Idea that entitles like Mid-Dakota should be charged 

a water storage fee of $17.19 per acre foot, or any fee for that matter. Using the figure of 

10,000 acre feet which Is the amount of water reserved In our State water right, this will burden 

the System with another $171,900 per year in expense. This is an expense that will have to be 

passed down to our customers, and It's an expense they should not have to bear. The MidDakota Rural Water System is a congressionally authorized water project.H Authorized by Public 

Law 102-575. To avoid a protracted explanation of the Act that Authorized Mid-Dakota, I wlll 

simply state that the Act provided subsidies to Mid-Dakota to build an expansive water supply 

system. The reason the Project was subsidized by nearly 75% federal grant was to make the 

water affordable to the end users. The fees Imposed by the Surplus Water Agreements will 

place a burden upon the Water Users of Mid-Dakota that the United States Congress did not 

envision and did not Intend. Furthermore the authorizing Act references the Mid-Dakota Final 

Engineering Report... a report that clearly delineates the withdrawal and use of Missouri Rlver 

water for domestic and livestock purposesm In short the United States Congress speciflcally 

authorized the use of Lake Oahe as Mid-Dakota's water source. Additionally the authorizing 

law has an entire section (section 1909) devoted entirely to the recosnitlon and preservation of 

the State's water rights. In part the law states "Nothing In this tltfe shall be construed to-(1} 

Invalidate or preempt State water law... presumably If an entity was to refuse to pay the 

storage fee the Corps could Invalidate or preempt state water law by disallowing the withdraw 

of water from the reservoir. 

Full-time equivalent employees: 

Mid-Dakota is a frugal not-for-profit company; we are overseen by an elected board of nine 

directors that demands their staff carefully scrutinize each and every expense. Mid-Dakota has 

since its beginning operated with a staff that we consider "bare-bones" -the least amount of 

bodies needed to perform the necessary duties and tasks inherent of a water delivery system. 

As manager of the company, I tend to view much of our expense in terms of "full-time 

equivalent employees" or FTEs. The expense the Corps would place on Mid-Dakota is roughly 
96 


31407.045

the equivalent of about three FTEs for our system. The fees proposed would have the effect of 

telling Mid-Dakota that this fee, (one ostensibly envisioned nearly 70 years ago and nm.t 

implemented), is now so pressing and important that Mid-Dakota should put off hiring 

additional staff and pay the governmentfor storing water Instead. Moreover, and more Rkely, 

the action may result In Mid-Dakota reevaluating its operation and having to decide If we can 

get by with three FTEs fewer. I'm at a loss deciding which of our 23 employees we should do 

without? 

Legacy Farms: 

1 would also point out that decades ago the Federal government began building the dams on 

the Missouri River. Once completed the dams began filling up, and using the figures In the 

Surplus Water Report, over 312,000 acres of land was inundated by lake Oahe. Many of the 

farms and ranches of this era did not wish to give up their land for this purpose but were given 

no choice in the matter. Many found themselves having to relocate their homesteads to 

continue their operations or worse found themselves having to abandon thelr life of farming or 

ranching altogether. In the ensuing 5(J-60 years, many of these farms and ranches did change 

hands, but I submit that most of the chanses were legacy transactions •.• a passing of the farms 

and ranches to their heirs. Today these same farms and ranches are faced with our 

government, through the proposal of the Surplus Water Report, charging them directly or 

Indirectly for the costs associated with taklng their lands and flooding it. Many of these people 

and the legacy farms and ranches they operate are members of the Mid-Dakota system. If the 

Corps Imposes the water storage fees contained In the Surplus Water Report, then most 

assuredly these folks will be faced with paying a portion of this fee. From my perspective, 

Implementation of a water storage fee would become the ultimate nunfunded mandate". The 

owners of the property had little to say back In 1944ln the taking of their land ... hence 

"mandate" ... and now those very landowners or their heirs are being told they will have to pay 

the costs of development. 
97 


31407.046

Fairness: 

The unfairness of the water storage fee In a framework outside of Mid-Dakota Is very apparent. 

ihe "Secretary of War" envisioned back In 1944 that someday a reason or need may present 

itself for the Federal government to start charging for water. I don't believe that the Corps has 

presented a compelhng reason for this to be done. It appears to me as l read the draft report 

that the prevailing reason the Corps Is proposing the fees Is because of a perceived mandate 

contained In the Act and direction from the Corps' upper echelons that fees are required to 

comply with the Act. l disagree with that and would note that the word "MAY.:, ... not~ is 

used in this context in the Act. The Act also states that "these agreements "JDD: (note the 

word «may") be for domestic, municipal and Industrial uses, but oot for lrrlgat!on [emphasis 

added). This statement Is vague; besides using the word "may" which is hardly a mandate, the 

statement can be interpreted to encompass many things ... MR&.I water supplies, storage for 

production of hydro-power, storage for flood control, recreation, etc. .. etc ... the only thing I see 

specifically left out of this equation is "Crop lrrigationn. For any other supposed Nbeneflclarles 

of stored water" that may be listening to or following these public hearings, if they believe their 

"use" of stored water !sin some manner Immune from consideration ... 1 submft they may be 

unaware of the military term "mission creep"! Also on the thesis of fairness, I would point out 

that a short, easily overlooked part of the Report states "The Bureau of Reclamation fndlcated 

that there could be fairly large BOR MR&I proJects In the next 10 years, but they wouldn't 

require water agreements with the Corps, as they will be spedflcally authorized by Congress to 

use Missouri River water.'' Mid-Dakota was designed with this use In mind, we a few other BOR 

Projects could be considered "exempt" from the water use agreements and therefore the water 

storage charge. While I agree with that statement and feel strongly that Mid-Dakota should not 

have to bear these charges, I add that Mid-Dakota cares about Its neighbors as well. .. whether 

they be another rural or regional water supplier or a municipality ... they too should be 

recognized as legitimate authorized users of the Missouri River and not subject to a water 

storage charge. 
98 


31407.047

Decisions already made: 

I view this public meeting today not so much a "Public Hearing" -a gathering of data and 

opinions of the public, but more as a "Public Lecture," an effort of the Corps :trul!r!& the public 

what they Intend to do ... I explain my reasoning for this view with an excerpt from the 

Jamestown, ND • S1!.f!-News article from Janwry 2~ 2011. ... where the Sun reported on a 

hearing much like this one today: 

[Quoted from the~ "'North Dakotans shouldn't [eel singled out though, according to corps 

spokeswoman Monlque Farmer. The plan includes users of each of the reservoirs throughout the 

Mfssourl River Basin within the Omaha District boundary. Although It's never been done before, 

Farmer said corps officials have been told by their superiors that they must be In compDance 

with the 1944 Flood Control Act, which the corps said gives the agency the outhorizatlon to 

charge a fee tor water agreements with states, municiPfJ/Ities and others. 

7ftere is goioq to be q fee [emphasis added) far taldng water out Of the lake," Farmer said. 

The statement "there Is going to be a fee for taking water out of the lake" sounds pretty 

definitive to me, sounds like decisions have already been made! Finally, I would call upon the 

Corps of Engineers to put an end to this process ... to admit the mistake and fallacy of the 

Interpretation that Implementing a water storage charge for water uses on the Missouri River Is 

something mandated by the Act and that the Corps must and Is simply complying; to put it 

simply ..• ! don't believe ltl 

ihank you for allowing me to comment here today. 
99 


31407.048

CQrps of l!nglneers 

Gavins Point Dern /l.lilWIS and Clark Lake Project 

South Dakota & North Dakota 

Surplus Water Report 

Public Hearing 

August 27, 2012- 4:!10 PM (COT) 

Testimony of: 

Terry Wootton, General Manager 

Bon Homml!!-Yankton water District 

My name Is Terry Wootton and I am the General Manager for the B-Y Water District based out 

of Tabor, South Dakota. The Bon Homme-Yankton (B-Y) Water District began sel'lllce In 1979. The 

District's core service area Is comprised of Bon--Homme, Yan.kton and Hutchison Counties as well as 

northwest Douglas and southwest Turner Counties. This service area encompasses in excess: of 2,200 

square miles. The system consists of more than 2,500 miles of various sized pipe, 36 pumping stations 

and 19 storage tanks or elevated tanks. The District serves 13 communities bulk quantities of water. 

These communities are Utica, Irene, Mission Hill, Volin, Avon, SCotland, Lesterville, Tabor, Tyndall, 

Parkston, Menno, Freeman and Mitchell. This short list does not take Into account the numerous 

smaller communities where B-Y provides the water directly to the citfzens. The District also provides 

bulk water delivery to the rural water systems of Hansen and Tumer-McCook. Within the service area 

described B-Y has a total of 4,650 IndiVIdual service connections supplying water to a population In 

excess of 27,000 lndivlcluals. 

What will this Action by the Army Corps of Engineers mean to aU of these citizens of the State 

of South Dakota and membersofthe B·YWater District? In an average year B·Y draws 1,949,566,533 

gallons or 5,983 Acre feet of water from the lewis and Clark Lake.. When using the current Army COE 

proposed rate for "Surplus Water" of $174.66 per· Acre foot of water drawn, B·Y would have to pay 

approximately $1,045,000 annually to the COE. last year across our system an average Individual user 

consumed approximately 8,000 gallons per month or 96,000 gallons per year. With this consumption 

the COE proposed rate would cost the Individual user approximately $52 annually, or as a whole these 

users would pay $240,000. The remaining $805,000 will have to be adsorbed by the 13 communities 

and 2 rural water systems previously mentioned. As you can see these figures quickly add up and have 

the potential to be a devastating Impact on the economies and the future growth of these areas. 
100 


31407.049

Another point of interest Is mentioned on page 2-11 of the Gavins Point/lewis and Clark Lake 

Project report. The report discusses the unprecedented runoff and record rainfall that occurred in 

2011. This In turn caused the COE to release 160,000 ~/sec through the Gavlns Point facility. When 

extrapolating this 160,000 ft:'/sec ~ure to a daily release number It can be found that over 

103,410,662,400 gallons/day were released. This converts to 317,355.7 Acre feet of water per day. 

This daily average is more than B-Y Water District could use In 52 vears of drawing water from Lewis 

and Clark lake. 

In closing. just over 50 years ago, on August 17, 1962, PresidentJohn F. Kennedy was at the 

oahe Dam to dedicate the powerhouse and lake. He commented, "There could be no view ofthis 

country more erroneous than Members of the Congress, or the Executive, or the citizens of different 

States to believe that what happens here In South Dakota Is Important on£yto the people of South 

Dakota".".and that "What happens In this basin helps all the people of all the country. We take for 

granted these miracles of engineering and too often we see no connection between this dam (Oahe) 

right out here and our Nation's prosperity and our Nation's security and our leadership all around the 

world. The facts of the matter are that this dam, and many more like It, are as essential to the 

expansion and growth of thls American economy as any measure that Congress Is now considering and 

this dam and others llke it are as essential to our national strength and security as any military ·alliance 

or missile complex." He continued, "We cannot prevent other people in this co~ntry from developing 

their resources".lf we do that, we shall stand still and forget the lesson that our history has told us/ 1 

believe these comments ring true yet today, especially In regards to the local economies. B-Y Water 

District Is only one (;og fn the South Dakota economy or even the greater mid-west economy and this 

action will have a negative effect on all. · 

My goalls the same as others here presenting this evening. I Implore you listen to all the 

Information presented, not only at this meeting but all the public meetings. Review all the written 

responses that wiD be flooding Into the COE offices. Then hopefully you will reconsider thls action and 

emerge with the decision that Instead of putting restrictions on the people and economies of the 

Missouri River Basin by enacting these proposed "Surplus Water" charges, Instead you will decide to 

place these studies on the shelf next to many other ilkonceived end abandoned government 

programs. 
101 


31407.050
102 


31407.057

June 13,2018 

Honorable Senator Mike Rounds 

Chair, Subcommittee on Superfund, Waste Management and Regulatory Oversight 

Hart Senate Oft1ce Bldg., Suite 502 

Washington, DC 20510 

RE: Oversight of the Army Corps' Regulation of Surplus Water and the Role of States' Rights 

Chairman Rounds, 

Thank you for the opportunity to provide information to the Subcommittee regarding the Army 

Corps of Engineers' Regulation of Surplus Water and the Role of States' Rights. These comments are 

provided on behalf of the National Water Supply Alliance (NWSA). which is a newly-formed 

organization consisting of local, regional, State, and interstate agencies with an interest in the Corps' 

water supply program. Many of our members hold storage contracts, and all have a strong interest in 

integrating the storage service provided by the Corps into their water supply plans. 

As you are aware, in November 2017, the Corps closed the comment period on a proposed rule 

that would define how and under what conditions states and water suppliers would be able to access 

storage in Corps reservoirs for water supply purposes. The Corps is currently reviewing comments 

received and preparing to respond to those comments with a final rule. As described below, we strongly 

oppose the rule's intrusion on States' authority to allocate water and to manage water resources within 

their borders--especially the provisions relating to the definition of surplus water, storage accounting, 

and made inflows. We recognize the unique role the Corps serves in water storage and reservoir 

management. However, water rights, allocation, and management are reserved powers of the States under 

federal law. The Corps' storage and operation of storage can have significant impact on the water supply 

of a State and individual citizens. As such, the Corps must engage state water right and water 

management agencies to ensure Corps actions do not impede a State's ability to carry out its duties. 

As sovereign entities in our federal system, States have inherent authority to regulate the use of 

water within their borders. The Supreme Court has called this "power to control ... public uses of water ... 

an essential attribute of sovereignty." United States v. Alaska. 521 U.S. I, 5 (1997). States' rights in this 

respect are absolute, subject only to the rights since surrendered by the Constitution to the general 

government. 

Given the importance of states' control over water, the proposed rule. and numerous historic 

examples. has substantial "federalism implications:' The crux of the issue lies in the necessary 

distinction between storage and water. Properly differentiated, the Corps rightly develops and manages 

storage within a given reservoir. Allocation of water, and management of that water within a broader 

system, is a right and responsibility reserved to the states. 

Numerous examples exist where Corps' action has crossed the federal/state responsibility line. 

As the purpose of the hearing correctly establishes, the application of the surplus water authority is a 

prime example. The Corps' development of reservoir impoundments on natural flowing rivers does not 

eliminate the river itself. This distinction was emphasized in Congressional debates about the federal 
103 


31407.058

water programs from the earliest days. For example, in the debates in Congress that preceded the 

Reclamation Act of 1902, the Chairman of the House Committee on Public Lands and sponsor of the bill 

(Rep. Lacey) found it necessruy to put members at ease by emphasizing the distinction between the 

control of a reservoir and the control of water rights: 

A reservoir site without water is entirely useless. The water is the particular thing in 

question, and the waters are controlled by the States througb which they flow, and not by 

the United States of America. These are surface waters, the waters of small streams not 

navigable, and the States control them. 

Recent application of the surplus water authority has strayed from this Congressional intent. 

Corps insistence on the sale of the water, or the entering into a long term water supply contract, for an 

entity to access a water source that prior to the reservoir was an adequate and free flowing river oversteps 

the federal role to provide flood protection or navigation. 

Application of storage accounting methods at Corps' reservoirs has also extended beyond its 

appropriate role. Across the nation, from Washington to Texas to Georgia, the Corps has developed 

reservoir accounting procedures that clearly allocate water. In more than one of these cases, the state in 

which the reservoir resides has taken action to determine how water flowing into the reservoir sites should 

be allocated. The state action also recognizes and protects the purpose for which the federal infrastructure 

has been developed, but does so in a way that promotes efficient use of the water and local investment in 

infrastructure. 

The proposed water supply rule would also require that storage contracts include "appropriate 

mechanisms for accounting for actual storage usage and available water supply storage on a continuing 

basis." This statement again encroaches on states' authority to allocate water rights. Any mechanism 

employed by the Corps today or in the future should track the use of storage-how much space in a 

reservoir is being used to store water for a particular user or use-as opposed to the uses of water itself. 

Such storage accounting should be based on actual measured reservoir levels, streamflow, withdrawals 

and releases, and return flows where possible. Additionally, both the accounting methods and results 

should be clear, transparent, and readily available to all interested parties. 

The appropriate federal role in water related matters has been debated and legislated for more 

than a century. The common and consistent thread, however, has been that states retain the right and 

responsibility to allocate and manage water within their boundaries. While the pressure on the Corps to 

balance various water using interests is significant, it does not pennit nor excuse federal action that 

crosses this legal boundary. Previous action to limit federal authority related to water allocation was wise 

and well-reasoned. The interests served by water vary greatly across our nation, and between individual 

states. Water allocation and management is best accomplished when it is left to individual states. 

Thank you for the opportunity to provide input to the Subcommittee. NWSA stands ready to 

provide additional information or assist as you continue your work on this important issue. 

Sincerely, 

~:~4/ President 

National Water Supply Alliance 
104 


31407.059

October 17, 2017 

U.S. Army Corps of Engineers 

ATTN: CECW-CO-N 

441 G Street. N.W. 

Washington, D.C. 20314 

Re: COE-2017-0004- Review of Existing Rules 

Dear Sir or Madam: 

The U.S. Army Corps of Engineers has issued a Request for Comment as part of its Regulatory 

Reform Task Force, Review of Existing Rules in accordance with Executive Order 13777, Enforcing 

the Regulatory Reform Agenda.l Section 3(e) of Executive Order 13777 requires each agency's 

Regulatory Reform Task Force, in evaluating an agency's regulations, to "seek input and other 

assistance, as permitted by law, from entities significantly affected by federal regulations, including 

state, local, and tribal governments, small businesses, consumers, non~governmental organizations, 

and trade associations."2 

Statement of Interest 

The Western Governors' Association (WGA) represents the governors of 19 western states and 

three Pacific territories, and is an instrument of the governors for bipartisan policy development, 

information exchange, and collective action on issues of critical importance to the western United 

States. The elected and appointed officials of the western states have a long history of responsible 

land and resource management and of working collaboratively with federal administrative 

agencies. States have an historic and unique relationship with the Corps. largely due to states' 

inherent authority over water resources, as well as their statutorily-delegated authorities under the 

federal Clean Water Act (CWA). 

WGA Policy Resolution 2017-01, Building a Stronger State-Federal Relationship, observes that the 

strength of the federal·state partnership in resource management has diminished in recent years.3 

ln many cases, agency rules and regulations have encroached on state legal prerogatives, neglected 

state expertise. and diminished the statutorily-defined role of states in managing federal 

environmental protection programs. Western Governors appreciate the Corps' recognition of the 

need for a comprehensive review of agency policies and regulations and welcome the opportunity 

to provide the Corps with their insights and perspective. 

'Request for Comment, 82 Fed. Reg. 33470 (jul. 20, 2017); Extension of Comment Period, 82 FR 43314 (Sep. 

15, 2017). 2 Exec. Order No. 13777 (Feb. 24, 2017), published in 82 Fed. Reg. 12285 (Mar. 1, 2017). 3 Western Governors' Association Policy Resolution 2017-01. Building a Stronger State-Federal Relationship. 

Available at: .hll.u.JL.west:;ov.ore/imapes/cditor/PR 2017-0.1 SlJlt' Fedenl HP!auonship.pdf. 
105 


31407.060

U.S. Army Corps of Engineers 

October 17, 2017 

Page 2 

Proper Consultation with State Officials in the Rule making Process 

As stated in WGA Policy Resolution 2017-01, federal agencies, "should be required to have a clear 

and accountable process to provide each state- through its Governor as the top elected official of 

the state and other representatives of state and local governments as he or she may designate 

with early, meaningful, and substantive input in the development of regulatory policies that have 

federalism implications."4 Similarly, in WGA Policy Resolution 2017-04, Water Quality in the West, 

Western Governors urge the Corps "to engage the states as co-regulators and ensure that state 

water managers have a robust and meaningful voice in the development of any rule regarding CWA 

jurisdiction, particularly in the early stages of development before irreversible momentum 

precludes effective state participation."5 

The Corps has contemplated the concept of consultation in the context of its engagement with 

federally-recognized Indian tribes. In this particular context, the Corps has defined "consultation" 

as an: 

Open, timely, meaningful, collaborative and effective deliberative communication 

process that emphasizes trust, respect and shared responsibility. To the extent 

practicable and permitted by law, consultation works toward mutual consensus and 

begins at the earliest planning stages, before decisions are made and actions are 

taken; an active and respectful dialogue concerning actions taken by the USACE that 

may significantly affect tribal resources, tribal rights (including treaty rights) or 

Indian lands. 6 

This consultation policy is based upon the principle that federally-recognized Indian tribes possess 

sovereign status and are to be afforded government-to-government, pre-decisional consultation in 

the development of any Corps' rule which may significantly affect tribal resources, rights, or lands. 

The Corps' tribal consultation policy also recognizes that "each of the 565 federally recognized 

American Indian and Alaska Native Tribes are distinct and separate governments, requiring a 

consultation process that may be completely unique to them." 

States- possessing sovereign authorities under the U.S. Constitution, as well as delegated 

authorities under federal statute should be afforded a similar opportunity for robust and 

complete consultation as part of any agency rulemaking which may have significant impacts on 

states' resources, rights, or lands. The Corps should develop rules and policies to establish 

comprehensive procedures for consultation with states, recognizing states' sovereignty and 

requiring agency officials to conduct pre-decisional government-to-government state consultation. 

Respecting States' Primary Authority over Water Resources 

Nowhere is effective state consultation more important than in the context of water resources. 

States possess primary authority for managing, allocating, administering, protecting, and 

developing their water resources and are primarily responsible for water supply planning within 

4Jd. 
106 


31407.061

U.S. Army Corps of Engineers 

October 17, 2017 

Page3 

their boundaries. State water laws have developed over the course of decades to reflect local 

customs and necessities. Accordingly, these state laws- and the regulatory frameworks within 

which they operate- are complex and diverse. Deference to states' primacy in water management 

and allocation decisions is a well-established principle of federal case law and is unambiguously 

repeated throughout federal statutory authority. The U.S. Supreme Court has consistently held that 

states established their sovereign authority over water resources upon their admission to the 

Union under the Equal Footing Doctrine of the Constitution and continue to rightfully exercise such 

authority under their own laws.7 States' authority over water resources, and the legal structures 

under which such authority is executed, must receive effective and express deference where any 

Corps action threatens any type of federal preemption. 

Two rules currently being developed by the Corps exemplify the need to clearly recognize and 

respect this important balance of powers: 

• Defining "Waters of the United States" 

States should be consulted and engaged in any Corps rulemaking which defines "waters of 

the United States" or affects states' authority under the CWA, which expressly provides that 

"the authority of each state to allocate quantities of water within its jurisdiction shall not be 

superseded, abrogated, or otherwise impaired by this Act:•a Western Governors previously 

expressed their concerns to the Corps regarding the lack of substantive state consultation 

during the promulgation of the 2015 Clean Water Rule.9 Renewed rulemakingefforts 

addressing this critical subject have been encouraging, as the Corps and EPA have 

conducted early outreach with states. Importantly, these efforts have involved direct 

communications with individual states through their Governors. WGA strongly urges the 

Corps to pursue ongoing consultation with Governors throughout the substantive 

development of any new rule affecting the scope of the CW A. 

"Surplus Water" Rule 

On December 16,2016, the Corps issued a Notice of Proposed Rulemaking (NPRM) to 

address its policies governing the use of Corps reservoir projects within the Upper 

Missouri River Basin and the treatment of purported "surplus water" within that system. to 

In response to the NPRM, Western Governors submitted comments expressing their 

concerns regarding both the substance of the proposed rule and the process by which it 

had been developed. Specifically, the governors' cited: (i) the Corps' failure to conduct 

adequate consultation with potentially-affected states, or to include a proper assessment of 

the proposed rule's potential federalism implications as required by Executive Order 

13132; (ii) the various potential preemptive effects of the proposed rule on states' primary 

and federally-delegated authorities over their water resources; and (iii} the Corps' overly· 

1 See, California Oregon Power Co. v. Beaver Portland Cement Co., 295 U.S. 142 (1935); California v. United 

States, 438 U.S. 645 (1978); Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 

U.S. 159 (2001); Rapanos v. United States, 547 U.S. 715 (2006) . 

• 33 u.s.c. § 1251(g). 

'Western Governors' Assoc. Letter, Nov. 14, 2015. Available at: 

hllp:/lwestgov,or~/images/editnt'/LTR Waters of the US Comments Final l.pdf 

1o 81 Fed. Reg. 91556 (Dec. 16, 2016). 
107 


31407.062

U.S. Army Corps of Engineers 

October 17, 2017 

Page4 

broad definition of the term "surplus waters" to include natural, historic river flows over 

which states possess primary legal authority.11 Western Governors are concerned that the 

procedural, legal, and technical issues which arose under this rule making process remain 

unaddressed in Corps' rulemaking policies. 

Conclusion 

WGA appreciates the opportunity to provide this assessment of areas in which the communication 

and collaboration between the Corps and state governments can be reinforced and strengthened. 

Western Governors are excited to work in true partnership with federal administrative agencies 

toward positive and productive outcomes. By operating as authentic collaborators on the 

development and execution of agency rules and policy, states and federal agencies can 

demonstrably improve their service to the public. 

We look forward to working with the Corps in this effort and appreciate your attention to these 

important matters. 

Sincerely, 

,, ,oo£H E e utive Director 

nwestern Governors' Assoc. Letter, Feb. 27, 2017. Available at: 

http://wcst~ov.org/imagQ::Jggitor/USACE Sm:.!lllli_ Waters Rule - finai,J;>Qf. 
108 


31407.063

june 6, 2018 

The Honorable R.D. james 

Assistant Secretary for the Army for Civil Works 

U.S. Army Corps of Engineers 

441 G Street, N .W. 

Washington, D.C. 20314 

Dear Assistant Secretary james: 

We are writing to express the continued concerns of Western Governors regarding the U.S. Army 

Corps of Engineers' proposed rulemaking, Policy for Domestic, Municipal, and Industrial Water 

Supply Uses of Reservoir Projects Operated by the Department of the Army, U.S. Army Corps of 

Engineers (RlN 0710-AA72, Docket 10: COE-2016-0016). The proposed rule, which would affect 

Corps water reservoir projects located in western states, threatens to interfere with those states' 

primary authority to manage and allocate water resources within their boundaries. The Spring 

2018 Unitlec\ Agenda of Regulatory and Deregulatory Actions schedules "Final Action" on the 

proposed rule for january 2019 and "Final Action Effective" for March 2019. It remains unclear to 

Western Governors how the Corps plans to engage with, and respond to, states as it moves forward 

in its rulemaking process. 

On December 16, 2016, the Corps issued a NnJicc of Proposed Rulemaking (NPRM) to address its 

policies governing the use of Corps reservoir projects within the Upper Missouri River Basin and 

the treatment of"surpius water" within that system. In response to the NPRM, the Western 

Governors' Association (WGA) submitted comments expressing concerns about both the substance 

of the proposed rule and the process by which it had been developed. 

Specifically, the Governors' comments cited: (i) the Corps' failure to conduct adequate consultation 

with potentially-affected states, or to include a proper assessment of the proposed rule's potential 

federalism implications as required by Executive Order 13132, Federalism; (ii) the various 

potential preemptive effects of the proposed rule on state authority over water resources; (iii) the 

Corps' overly~broad definition of the term "surplus waters" to include natural, historic river flows 

over which states possess primary legal authority: and (iv) the denial of, or interference with, 

access to Corps projects for the lawful diversion and appropriation of water under state law. 

Several other western states also submitted comments to the Corps in response to its NPRM, largely 

reiterating and expanding upon the concerns expressed by WGA. 1 

t Western States that submitted comments to the Corps in response to the NPRM include: The State of fdaho· 

the State of Nebraska; the Stqte of North Dakota; the ~-Q.[.Ql\.lli.boma: and the State of South Dalwta. 

Comments were also submitted by the Western States Water Council: North Dakota Water Commission; 

North Dakot<1 Water !Jsers Associatiow Association of California Water Agencies; and the Texas Commission 

on Fnvironment<ll Ou;-~lity. 
109 


31407.064

The Honorable R.D. James 

june 6, 2018 

Page 2 

Western Governors' concerns regarding this issue were initially raised in an August 21, 2013letter 

to then-Assistant Secretary of the Army (Civil Works) Jo-Ellen Darcy. We cited the Corps' failure to 

adequately engage with states in its then-pending rulemaking relating to surplus waters. Similarly, 

on August 6, 2013, the Western States Water Council (WSWC) sent a letter to Assistant Secretary 

Darcy citing shortcomings in the rulemaking process and a lack of regulatory clarity on several 

critical implementation issues. Western Governors are concerned that the procedural, legal, and 

technical issues cited in comments and letters, as well as the views and concerns expressed by 

individual states, have still not been addressed by, or incorporated in, the Corps' decision-making 

processes in the development of the proposed rule. 

States have an historic and unique relationship with the Corps and a vital role in the 

implementation of several Corps programs, due to states' inherent and sovereign authority over 

water resources, as well as their statutory role as co-regulators under the federal Clean Water Act. 

As stated in WGA Policy Resolution 2.0JLJ)J, Building a Stronger State-Federal Relationship, federal 

agencies "should be required to have a clear and accountable process to provide each statethrough its Governor as the top elected official of the state and other representatives of state and 

local governments as he or she may designate- with early, meaningful, and substantive input in the 

development of regulatory policies that have federalism implications." 

In its 2016 NPRM, the Corps states that the proposed rule is "intended to enhance the Corps' ability 

to cooperate with state and local interests in the development of water supplies in connection with 

the operation of its reservoirs," and that it "endeavors to operate its projects for their authorized 

purposes in a manner that does not interfere with the States' abilities to allocate consumptive 

water rights, or with lawful uses pursuant to State, Federal, or Tribal authorities." As of this date, 

the Western Governors are unaware of any meaningful outreach on the part of the Corps to engage 

with states- or respond to their expressed concerns -as part of this rulemaking effort. 

Western Governors have a history of responsibly exercising their authority for comprehensive 

water management within their states and of working cooperatively with various federal agencies 

in connection with that responsibility. We reiterate our concerns about the Corps' proposed rule, 

as described in its NPRM, for the following reasons: 

Western Governors continue to believe that the proposed rule does, in fact, have federalism 

implications which trigger the expanded state consultation requirements of Executive 

Order 13132. 

As the primary authority over water management and allocation within their borders, 

states must not be required to relinquish or subordinate their sovereign authority over the 

natural flows of rivers impounded by the Corps or any other federal agencies. 

Legally, the Corps must define "surplus water" to expressly exclude natural flows (and any 

quantification of such flows) which would have occurred without the development of 

federal water projects. Natural flows must remain subject to states' authority to allocate 

water resources for beneficial uses. 
110 

Æ 


31407.065

The Honorable R.D. james 

june 6, 2018 

Page 3 

The Corps should not deny, or interfere with, access to divert and appropriate natural flows 

(i.e., water which would have been available without the construction of Corps 

impoundments) in its reservoir projects. Similarly, the Corps should not charge storage fees 

to water users where such users are making withdrawals of natural flows within Corps 

reservoirs. 

Western Governors strongly urge you to engage in meaningful, substantive, and ongoing 

consultation with states before moving forward with any efforts to develop the proposed rule and 

to respond to our consistently expressed concerns regarding this matter. 

Sincerely, 

Lrl~4v) Dennis Daugaard ~~r Governor of South Dak t 

Chair, WGA 

~+ Governor of Hawa1 1 

Vice Chair, WGA