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[Senate Hearing 113-32]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 113-32

 
                  MISCELLANEOUS WATER AND POWER BILLS

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   ON
                                     

                          S. 211                               S. 693

                          S. 284                               S. 715

                          S. 510                               S.J. Res. 12

                          S. 659                               H.R. 316

                          S. 684                               S. Amdt. 579

                                     

                               __________

                             APRIL 16, 2013

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

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                      RON WYDEN, Oregon, Chairman

TIM JOHNSON, South Dakota            LISA MURKOWSKI, Alaska
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            DEAN HELLER, Nevada
MARK UDALL, Colorado                 JEFF FLAKE, Arizona
AL FRANKEN, Minnesota                TIM SCOTT, South Carolina
JOE MANCHIN, III, West Virginia      LAMAR ALEXANDER, Tennessee
CHRISTOPHER A. COONS, Delaware       ROB PORTMAN, Ohio
BRIAN SCHATZ, Hawaii                 JOHN HOEVEN, North Dakota
MARTIN HEINRICH, New Mexico

                    Joshua Sheinkman, Staff Director
                      Sam E. Fowler, Chief Counsel
              Karen K. Billups, Republican Staff Director
           Patrick J. McCormick III, Republican Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                     BRIAN SCHATZ, Hawaii, Chairman

TIM JOHNSON, South Dakota            MIKE LEE, Utah, Ranking
MARIA CANTWELL, Washington           JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             JAMES E. RISCH, Idaho
DEBBIE STABENOW, Michigan            DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      JEFF FLAKE, Arizona
AL FRANKEN, Minnesota                TIM SCOTT, South Carolina

Ron Wyden and Lisa Murkowski are Ex Officio Members of the Subcommittee

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Baucus, Hon. Max, U.S. Senator From Montana......................    18
Johnson, Hon. Tim, U.S. Senator From South Dakota................     2
Katz, John, Deputy Associate General Counsel, Federal Energy 
  Regulatory Commission..........................................     3
Lee, Hon. Mike, U.S. Senator From Utah...........................     2
Quint, Robert, Senior Advisor, Bureau of Reclamation, Department 
  of the Interior................................................     5
Schatz, Hon. Brian, U.S. Senator From Hawaii.....................     1

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    29

                              Appendix II

Additional material submitted for the record.....................    33

                  MISCELLANEOUS WATER AND POWER BILLS

                              ----------                              

                        TUESDAY, APRIL 16, 2013

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Brian Schatz 
presiding.

   OPENING STATEMENT OF HON. BRIAN SCHATZ, U.S. SENATOR FROM 
                             HAWAII

    Senator Schatz. Good afternoon. I'd like to welcome 
everyone here today.
    Today's hearing involves several bills that are pending 
before the Subcommittee on Water and Power. The bills cover 
different aspects of our water and power jurisdiction including 
rural power and hydro power. A majority of them have gone 
through some committee process in the previous Congress.
    I'd like to spend just a few minutes discussing Senate 
joint resolution 12 because it pertains to my home State of 
Hawaii and to the welfare of those in the native Hawaiian 
community, who have land leases under the Hawaiian Homes Land 
Program. This program was established by Congress and enacted 
into law in 1921 when Hawaii was still a territory in order to 
ensure native Hawaiian people would have land set aside where 
their communities could continue to thrive. In 1960 under the 
State of Hawaii Admission Act the United States required the 
State of Hawaii to administer certain portions of this Federal 
trust responsibility.
    The State of Hawaii incorporated that delegated 
responsibility into its own constitution and body of law. The 
program is administered by the Department of Hawaiian 
Homelands, an agency of the State of Hawaii with certain 
oversight responsibilities retained by the United States and 
exercised by the Department of Interior and the Congress. The 
Congress retained the authority to review and consent to 
certain amendments made to this program by the Hawaii State 
Legislature.
    Senator Hirono and I introduced this legislation to provide 
the required consent of Congress to 3 amendments enacted by the 
State of Hawaii to the Hawaiian Homes Commission Act of 1920. 
The Secretary of the Interior has determined that Congressional 
consent and approval is needed for the amendments to become 
effective. These amendments would give a homestead leasee the 
authority to transfer their interest in a lease to certain 
family members and to designate certain family members to 
succeed to the lease hold interest at the time of a death. The 
amendments would also allow the Hawaiian Homes Commission to 
establish an interest rate on loans from Hawaiian home loan 
funds.
    I plan to work with the chairman and others on this 
committee to get congressional consent for these amendments.
    There are a number of other bills on the agenda today. I 
look forward to learning more about them.
    Now I'll turn to our ranking member, Senator Lee, for his 
opening comments.

       STATEMENT OF HON. MIKE LEE, U.S. SENATOR FROM UTAH

    Senator Lee. Senator Schatz, it's a pleasure to be here 
today.
    I thank you for chairing this hearing on a number of water 
and power measures, two of which are integral to my home State 
of Utah, S. 211, the Provo River Project Transfer Act and S. 
510, the Scofield Land Transfer Act. I've co-sponsored both of 
these bills with my colleague Senator Hatch.
    The Provo River Project Transfer Act will enable the full 
transfer of the Provo Reservoir Canal to the Provo River Water 
Users Association.
    As contemplated by a previous bill that was passed in 2004, 
the Scofield Land Transfer Act will resolve long standing 
discrepancies with regard to private property near Scofield 
Reservoir in Carbon County, Utah.
    The bills before us today have had hearings in the previous 
Congress and address many of the issues we'll be examining over 
the next couple years. These issues include mechanisms to 
provide safe and reliable water supplies for rural communities 
and opportunities to improve our power supplies. So while the 
underlying purpose of each bill before us today is different, 
they all attempt to identify tools to ensure that our power and 
our water and our power facilities are both safe and reliable.
    I thank the Federal witnesses for being here today. I thank 
you, Senator Schatz, for conducting this hearing. I look 
forward to the testimony.
    I do note at the outset, I'm also the ranking member on the 
Anti-trust Subcommittee, so I may be having to bounce back and 
forth between these two. So with that understanding, I'll turn 
it back over to you.
    Thank you.
    Senator Schatz. Thank you, Ranking Member Lee.
    Senator Johnson, opening remarks.

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

    Senator Johnson. Thank you, Chairman Schatz and Ranking 
Member Lee. I appreciate this opportunity to speak in support 
of two bills on today's agenda: the Mni Wiconi Project Act 
Amendments, S. 684, and the authorized Rural Water Projects 
Completion Act, S. 715.
    The Mni Wiconi Amendments bill addresses a shortfall in 
construction funding and facilitates key infrastructure 
improvements to ensure that the Mni Wiconi rural water project 
can be completed. This project has brought together 3 tribal 
rural water systems and one non-tribal rural water system to 
deliver quality water to areas that historically faced 
insufficient and, in too many cases, unsafe drinking water. Mni 
Wiconi also offers economic hope to 3 Indian reservations in my 
State that face some of the most challenging levels of 
unemployment and poverty in the Nation. Nearly 25 years after 
it was first authorized, the ball is on the one yard line with 
this project. I remain committed to seeing it through.
    We also need to do more to address the growing backlog of 
Bureau of Reclamation rural water projects. I'm a co-sponsor 
and strongly support the Authorized Rural Water Projects 
Completion Act. The bill will provide substantial, dedicated 
funding to speed construction of congressionally authorized 
projects.
    After historic investments in rural water through the 
Recovery Act, discretionary budget requests for projects like 
the Lewis and Clark Regional Water System have fallen to levels 
insufficient to make any meaningful progress. This legislation 
offers a new approach to get these projects back on track and 
bring economic development opportunities to the communities 
they serve.
    I look forward to working with my colleagues on this 
committee to move this legislation forward, and I thank Senator 
Baucus for all his efforts.
    I would also note that the Lewis and Clark Regional Water 
System will be submitting written remarks in support of this 
bill that I ask be included in the record.
    Thank you, Mr. Chairman.
    Senator Schatz. Thank you, Senator Johnson.
    I'm informed that Senator Baucus is on his way and should 
be with us very shortly. So we'll wait for him before we 
proceed to the witnesses.
    [RECESS.]
    Senator Schatz. I think what we'll do is proceed to the 
FERC testimony so that you can provide your testimony on the 
first bill.
    So could we have John Katz from the Federal Energy 
Regulatory Commission provide his testimony? Thank you.

   STATEMENT OF JOHN KATZ, DEPUTY ASSOCIATE GENERAL COUNSEL, 
              FEDERAL ENERGY REGULATORY COMMISSION

    Mr. Katz. Good afternoon.
    Thank you very much for asking the Commission to appear 
before the subcommittee to testify on Senate Amendment 579 and 
H.R. 316 which are both named the Collinsville Renewable Energy 
Promotion Act. These proposed bills relate to two projects that 
were licensed by the Federal Energy Regulatory Commission some 
time ago to a private developer. The Federal Power Act requires 
the Commission to require a developer to start construction 
within 2 years of receipt of a license and allows the 
Commission to extend that once for another 2 years.
    The Commission did that with respect to this developer. At 
the end of that time, again, as required by the Federal Power 
Act, the Commission revoked the license. So between that period 
and now, which is a period of about 6 or 7 years, I think, 
there's been no interest in developing the site. The proposed 
bills would authorize the Commission to reinstate the licenses 
and to transfer them to the Town of Canton, Connecticut after 
performing an appropriate environmental review and receiving 
appropriate public comment.
    While generally the comments that I give are my own and 
don't reflect the opinions of the chairman or of any 
commissioner. The chairman has authorized me to say that he 
does not oppose this bill because of the lack of competition 
for the site so that the bill in no way adversely affects 
competition and because of the provisions requiring 
environmental review. So there's no question that the 
environmental review done under the previous licensing will be 
stale.
    With that I'll yield back the balance of my time. I'd be 
happy to answer any questions.
    [The prepared statement of Mr. Katz follows:]

  Prepared Statement of John Katz, Deputy Associate General Counsel, 
                  Federal Energy Regulatory Commission

                      ON S. AMDT. 579 AND H.R. 316

    Chairman Schatz, Ranking Member Lee, and Members of the 
Subcommittee:
    My name is John Katz, Deputy Associate General Counsel for Energy 
Projects, Federal Energy Regulatory Commission. I appreciate the 
opportunity to appear before you to discuss S. Amdt. 579 and H.R. 316. 
As a member of the Commission's staff, the views I express in this 
testimony are my own, and not those of the Chairman or of any 
individual Commissioner, other than as specifically noted below.

                             I. BACKGROUND

    On February 23, 2001, the Commission issued original licenses to 
Summit Hydropower for the 373 kilowatt (kW) Upper and the 920 kW Lower 
Collinsville Hydro Projects, to be located at the Upper and Lower 
Collinsville Dams on the Farmington River, in Hartford County, 
Connecticut.
    Section 13 of the Federal Power Act requires that licensees 
commence project Construction by the deadline established in the 
license, which may be no longer than two years from the date of license 
issuance. The Commission may extend the deadline once, for no longer 
than two additional years. If construction does not timely commence, 
section 13 requires the Commission to terminate the license by written 
order.
    Consistent with section 13, Article 301 of the licenses for the 
Collinsville Upper and Lower Hydroelectric Projects required the 
licensee to commence project construction within two years. On November 
26, 2002, at the licensee's request, the Commission issued the maximum 
allowable two-year extension, moving the commencement of construction 
deadline to February 23, 2005.
    Summit did not commence project construction by the deadline. 
Accordingly, by letter dated November 2, 2007, the Commission gave 
Summit notice of probable termination of the licenses. Summit did not 
reply to the notice. By order issued December 4, 2007, the Commission 
terminated the project licensees. The licensee did not seek rehearing 
of the termination order, which therefore became final on January 3, 
2008.

                     II. S. AMDT. 579 AND H.R. 316

    S. Amdt. 579 and H.R. 316 would authorize the Commission to 
reinstate either or both of the licenses for the Upper and Lower 
Collinsville Projects, to extend for two years the commencement of 
construction deadline for the projects, and to transfer the license or 
licenses to the Town. As specified in S. Amdt. 579, the Town would be 
subject to the terms and conditions of the prior license(s) and both 
bills provide that the Commission will add to the license(s) any 
additional terms and conditions the Commission deems to be necessary.
    In addition, both bills provide that the Commission will supplement 
the environmental analysis prepared in connection with the issuance of 
the prior licenses, to examine all new circumstances or information 
relevant to environmental concerns relating to the reinstated licenses.
    Chairman Wellinghoff and the last several Commission Chairmen have 
taken the position of not opposing legislation that would extend the 
commencement of construction deadline no further than 10 years from the 
date that the license in question was issued. Where proposed extensions 
would run beyond that time, there has been a sense that the public 
interest is better served by releasing the site for other public uses, 
that competition in the development of hydropower projects should be 
encouraged, and that environmental information may over time become 
stale.
    In this instance, the proposed extensions would run at least three 
years beyond 10 years from when the licenses for the Upper and Lower 
Collinsville Projects were issued. However, to Commission staff's 
knowledge, in the more than five years since the project licenses were 
terminated, no entity has sought to develop the projects or proposed 
other uses for the project sites, thus ameliorating concerns about 
competition or release of the sites. Moreover, because the bills 
specifically provide for the preparation of an updated environmental 
analysis, staleness of the environmental record will not be an issue. 
In consequence, I am authorized to state that Chairman Wellinghoff does 
not oppose S. Amdt. 579 or H.R. 316.
    I would be pleased to answer any questions you may have.

    Senator Schatz. Mr. Katz, your testimony indicates that 
FERC doesn't oppose this legislation even though it's 
inconsistent with the previously held position that FERC does 
not support extensions of time to develop hydropower projects. 
Has there been a shift in the FERC position to allow for more 
flexibility or is this a one off, in your opinion?
    Mr. Katz. No, I don't think so. It's closer to a one off. 
The past few chairmen have indeed held the position that after 
10 years from when the date a license had been issued is a long 
enough period for a developer to develop a project. But in this 
instance the extension bill is not benefiting the same 
developer. It's benefiting a municipality. As I said, two 
factors, I think, were primary in our thinking.
    One was that there's been no one trying to take the site, 
so that Congress' action would not in any way adversely affect 
competition.
    The second issue that comes up over a period of time is 
that the environmental record may become stale. But both of 
these bills provide that the Commission shall update the 
environmental records. So the Commission's concerns, as a 
general matter, have been assuaged in this case.
    Senator Schatz. Thank you.
    Thank you, Mr. Katz.
    Mr. Katz. Thank you very much.
    Senator Schatz. Senator Heinrich, would you like to make an 
opening statement?
    Senator Heinrich. No, thank you.
    Senator Schatz. I think we'll proceed to the second 
witness, Robert Quint, the Senior Advisor at the Bureau of 
Reclamation.
    Mr. Quint.

     STATEMENT OF ROBERT QUINT, SENIOR ADVISOR, BUREAU OF 
            RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Quint. Thank you, Chairman Schatz and members of the 
subcommittee. I'm Bob Quint, Senior Advisor at the Bureau of 
Reclamation. Thank you for the opportunity to testify on 7 of 
the bills before the subcommittee today.
    I also ask for your consent to submit a Departmental 
statement for the record on Senate Joint Resolution 12 which 
consents to and approves certain technical amendments proposed 
by the State of Hawaii to the Hawaiian Homes Commission Act of 
1920.
    Due to the number of Reclamation bills on the agenda I will 
keep my verbal remarks as short as possible and my full written 
statements have been submitted for the record.
    Let me start with S. 211, Provo River Project Transfer Act. 
S. 211 provides a technical correction to the earlier enacted 
Provo River Project Transfer Act, now Public Law 108-382. Our 
agency supported passage of that earlier titled transfer 
legislation in 2004.
    My written statement provides more detail in the events 
that have transpired since its enactment. But in summary S. 211 
addresses the fact that the Provo Canal was converted into a 
pipeline after the title transfer was enacted and the strict 
language of the original title transfer did not allow for that. 
Reclamation and our partners should have foreseen that 
possibility before the work proceeded, but for reasons 
described in my written statement, we did not.
    We are pleased to support S. 211 to settle the issue and 
fully complete the transfer originally envisioned in 2004.
    Next, S. 284, Fort Sumner Project Transfer Conveyance Act. 
S. 284 provides for the title transfer of the Fort Sumner 
Project in New Mexico as well as a long term provision of water 
for fish flows on the Pecos River.
    In June of last year the United States and the Fort Sumner 
Irrigation District executed a MOA culminating a collaborative 
process to bring about conveyance of title to the Fort Sumner 
Project in the remaining steps required of the Federal and non 
Federal parties. The MOA will facilitate an arrangement between 
FSID and the U.S. Fish and Wildlife Service for actions under 
Section 10 of the Endangered Species Act to be finalized prior 
to the transfer which will protect habitat of the federally 
listed Pecos River bluntnose shiner.
    My written statement provides more detail. But in summary, 
the Department is also pleased to support S. 284.
    Next, S. 510, Scofield Land Transfer Act. S. 510 conveys 
interest in certain lands associated with the Reclamation 
Scofield project in Carbon County, Utah.
    In the 1950s individuals began locating structures on flood 
surcharge lands at Scofield Reservoir without Reclamation 
concurrence. These encroachments pose a dam safety issue 
because a flood event may float debris or structures into the 
spillway and threaten the dam. S. 510 proposes to resolve these 
encroachments on Federal lands by authorizing Reclamation to 
transfer a fee interest or life estate to those who claim 
ownership of the United States? lands within the Scofield 
Reservoir Basin in exchange for fair market value. Structures 
would also be required to be anchored to foundations to prevent 
displacement during flood events and therefore reduce the 
potential for compromising the dam causing harm downstream.
    My written statement addresses the provisions more 
specifically and proposes some technical clarifications of the 
bill.
    In summary, the Department does not oppose S. 510 with the 
improvements recommended in my written statement.
    Next is S. 659, the Emergency Drought Relief 
Reauthorization. S. 659 would reauthorize the Reclamation's 
State's Emergency Drought Relief Act.
    While my written statement details how planning and 
conservation are the most effective means of addressing drought 
we, none the less, recognize that the authorization of Title I 
of the Drought Act as a useful tool in responding to drought 
emergencies. S. 659 allows Reclamation the flexibility to 
continue delivering water to meet authorized project purposes, 
meet environmental requirements, respect State water rights, 
work with all stakeholders and provide assistance.
    We are pleased to support S. 659.
    Next is S. 684, the Mni Wiconi Project Act Amendments. S. 
684 would amend the original Mni Wiconi Project Authorization 
with additional project features and obligations for new 
Federal appropriations.
    The Mni Wiconi Project will be substantially complete with 
the allocation of appropriations provided in the current Fiscal 
Year 2013 budget. We recognize that this legislation has been 
significantly revised since Reclamation last testified it in 
2012. However as stated in testimony on the prior legislation 
Reclamation has a significant backlog of authorized but not 
constructed rural water projects. Therefore we continue to have 
serious concerns about adding to the scope of an existing 
project that is nearly complete.
    For reasons described in my written statement mainly driven 
by the serious budget situation confronting Reclamation and all 
Federal agencies, the Department cannot support S. 684.
    Next is S. 693, Hermiston Title XVI. S. 693 would authorize 
Reclamation to co-fund a water recycling and reuse plant in the 
city of Hermiston, Oregon.
    Working together the city and Reclamation have completed 
specific actions that are necessary for the proposed project. 
This includes environmental compliance, issuance of the license 
to the city, granting authorization to construct and operate a 
facility on Reclamation Fee Title land and issuance of a permit 
allowing this water to be discharged into Reclamation's West 
Main Canal.
    However, for reasons described in my written statement 
standing policy is we do not support new authorizations while 
that backlog remains as high as it is.
    Next is S. 715, Rural Water Project Completion Act. The 
Department testified on a prior version of S. 715 in July 2012. 
Our position remains the same on S. 715. We support the goals 
of the bill and recognize the benefits of the potential 
dedicated rural water construction fund in the United States 
Treasury which would enable earlier completion of projects.
    Section 3B3 of S. 715 provides that the bill's cost would 
be offset so as not to increase the deficit. The Department 
supports such language.
    Finally, Senate Joint Resolution 12 amends the Hawaiian 
Homes Commission Act to allow the interest rate on loans from 
the Hawaiian Home Loan Fund and the Hawaiian Home Loan Fund to 
be set by the Hawaiian Homes Commission through an 
administrative rule rather than by law. Senate Joint Resolution 
12 also changes the qualifications of homestead leasees by 
authorizing a Hawaiian Homes Commission Act Homestead leasee to 
transfer or designate to a successor to their leasehold 
interest to a brother or sister who is at least one quarter 
native Hawaiian.
    The Department supports the United States consenting to and 
approving of Act 107 and remains neutral on the consenting to 
and approval of Acts 12 and 16.
    I'd be happy to follow up with the Department regarding any 
questions you may have.
    That concludes my verbal remarks. I'd be pleased to answer 
any questions you may have.
    [The prepared statements of Mr. Quint follow:]

    Prepared Statements of Robert Quint, Senior Advisor, Bureau of 
                Reclamation, Department of the Interior

                               ON S. 211

    Chairman Schatz and Members of the Subcommittee, I am Bob Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). I am pleased 
to present the views of the Department of the Interior (Department) 
regarding S. 211, an amendment to the Provo River Project Transfer Act 
(Act) authorizing the Secretary of the Interior (Secretary) to convey 
the recently-enclosed Provo Reservoir Canal to the Provo River Water 
Users Association (Association). The Department supports S. 211.
    A principal feature of the Provo River Project is the Provo 
Reservoir Canal (canal). It extends 22 miles from the mouth of Provo 
Canyon to Salt Lake County. Once it meandered through pastures and 
fields. By the late 1990s, suburban development had surrounded it. 
During this time, the Association concluded that owning the canal and 
associated project features would facilitate its ability to obtain 
financing for its eventual enclosure of the canal. Enclosing the canal 
into pipe offered significant potential new benefits in terms of water 
conservation, water quality, in stream flows, public safety and 
upstream recreation.
    In 2004, Congress agreed that transfer of the Provo River Project 
was in the public interest. The Provo River Project Transfer Act 
(Public Law 108-382) was enacted, authorizing the transfer to the 
Association of the Provo Reservoir Canal and the site of the 
Association's Office. It further authorized the transfer of the Salt 
Lake Aqueduct to the Metropolitan Water District of Salt Lake and 
Sandy. The Department supports transferring ownership of certain 
Reclamation project facilities to non-Federal entities in cases where 
transfers create benefits for those who take title as well as for other 
stakeholders and the public. For this reason, the Department supported 
passage of the Act in 2004.
    In the years since enactment of the Act, Reclamation has conveyed 
the Salt Lake Aqueduct to the Metropolitan Water District of Salt Lake 
and Sandy. One of the requirements of the Act was that all of the water 
users--including the Association, the Central Utah Water Conservancy 
District, the Metropolitan District of Salt Lake and Sandy and the 
Jordan Valley Water Conservancy District needed to develop a 
comprehensive agreement to govern the operations, ownership financing 
and improvement of the PRC (Section 3.a.1B of the Act). Consequently, 
following its enactment, the parties began meeting regularly to discuss 
and negotiate the Master Agreement. From late 2004 through mid-2009, 
all of the parties acted on the belief that, after the parties reached 
agreement as required in the Act, Reclamation would transfer title and, 
after transfer, the Association would begin the piping of the PRC. 
However, in May of 2009, the Association determined that the approach 
being considered for title transfer, funding, and enclosure placed the 
Association's tax-exempt status in jeopardy and threatened the entire 
project.
    In response, an alternative strategy for the canal portion of the 
transfer was developed by the parties, whereby the Association, the 
partners and Reclamation proceeded with piping the canal under 
Reclamation's operation, maintenance, and replacement authority in 
2009. Today, crews are constructing a recreation trail on the surface 
of the ground over the piped Provo Reservoir Canal. Below the surface, 
a 10.5-foot-diameter pipe continues to convey Provo River Project 
water.
    Unfortunately, the parties, including Reclamation, moved forward 
with the title-transfer-after-piping option without realizing that this 
sequence was out of compliance with the original statutory authority to 
transfer the Provo Reservoir Canal to the Association ``as in existence 
on the date of enactment[.]''. In retrospect, we all should have more 
carefully considered the potential effects of this change in the title 
transfer/construction sequence on title transfer as provided for in the 
Act. That brings us to the need for the technical amendments provided 
by S. 211. This technical amendment alters the definition of the Provo 
Reservoir Canal to authorize the transfer of the pipeline as well as to 
eliminate any confusion about the facilities to be transferred. The 
amendment authorizes transfer of the newly constructed pipeline by 
removing the term ``canal'' in the definition and replacing it with 
``water conveyance facility historically known as the Provo Reservoir 
Canal'', and by eliminating the phrase ``as in existence on the date of 
enactment of this Act.'' The bill also directs the transfer of ``all 
associated bridges, fixtures, structures, facilities, lands, interests 
in land, and rights-of-way held'', which Reclamation also supports 
since appurtenant facilities are currently used by the Association.
    The majority of the $150 million cost of piping the canal was born 
by the Association, the Central Utah Water Conservancy District, the 
Jordan Valley Water Conservancy District, and the Provo Reservoir Water 
Users Company. Federal funding applied to the project was $39 million 
provided by the Central Utah Project Completion Act Office. This 
amount, provided under the water conservation provisions of the Central 
Utah Project Completion Act, ensured that 8,000 acre-feet of conserved 
water would be made available to the Secretary to provide in-stream 
flows on the lower Provo River. These flows benefit fish and wildlife 
including the endangered June sucker, a species native only to Utah 
Lake and its tributary streams. Reclamation provided no funding to the 
piping project.
    As a condition of title transfer, the 2004 Act (PL 108-382) 
requires the Association to remit to the United States its repayment 
obligation associated with the canal--the amount it continues to owe 
Reclamation for reimbursement of the original costs of construction. 
This obligation does not change under the technical amendment proposed 
by S. 211.
    Reclamation sees the issue being addressed by S. 211 as purely 
technical. Concurrent to consideration of S. 211, Reclamation, the 
Association and the other partners continue to move ahead to complete 
all the other steps necessary to transfer title and believe that with 
passage of this bill, we will be able to move forward expeditiously to 
finalize this title transfer. We continue to support the title transfer 
and the excellent work that has gone on with the enclosure of the 
canal.
    This concludes my written statement. I would be pleased to answer 
questions at the appropriate time.

                               ON S. 284

    Chairman Schatz and members of the Subcommittee, I am Robert Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). I am pleased 
to provide the views of the Department of the Interior (Department) 
regarding S. 284, which would authorize the Secretary of the Interior 
to convey title to all of the works of the Fort Sumner Project 
(including the diversion dam, easements, ditches, laterals, canals, 
drains, and other rights) to the Fort Sumner Irrigation District 
(FSID). The Department supports S. 284.
    In 2011, S. 1225 was introduced in the 112th Congress, which would 
have authorized the United States to convey title to all of the works 
of the Fort Sumner Project to the FSID. At the time of the hearing on 
June 23, 2011 before this Committee on that bill, it was the view of 
the Administration that a number of issues had yet to be resolved 
between the United States and FSID, including a net financial loss to 
the Treasury of approximately $250,000, the need for an open and 
transparent process for the public to provide input prior to conveyance 
of title, and the need for Reclamation and FSID to work through a 
collaborative process to ensure that operational, fiscal, 
environmental, and other issues are identified and addressed. However, 
since that time, Reclamation and FSID have worked together and a number 
of those issues are addressed in S. 284. Specifically, in 2012, the 
``Memorandum of Agreement between the United States and the Fort Sumner 
Irrigation District Concerning Principles and Elements of Proposed 
Transfer of Title to Fort Sumner Irrigation District'' (MOA) was 
executed, which addresses the issues we had with the previous 
legislation as described below.

                               BACKGROUND

    There are two Reclamation projects on the Pecos River located in 
southeastern New Mexico: the Carlsbad and Fort Sumner Projects. The 
Fort Sumner Project was developed by private interests at the turn of 
the last century. In the 1950s, this project was reconstructed and 
rehabilitated by Reclamation. In 1948, in order to make this happen, 
Reclamation and the FSID executed a contract to provide for the 
repayment of construction costs to rehabilitate the project. As part of 
the process, Reclamation law required that Reclamation take title to 
the Project. Currently, the FSID has an annual repayment obligation of 
about $54,500 with an outstanding balance of approximately $597,697.00
    The FSID holds a senior water right for not more than 100 cubic 
feet per second from the natural flow of the Pecos River. Reclamation 
must bypass the FSID's water through Sumner Reservoir prior to storing 
water for the Carlsbad Project. Over the past ten years, Reclamation 
has consulted with the U.S. Fish and Wildlife Service (Service) to 
ensure that Federal actions are not jeopardizing the existence of the 
Pecos bluntnose shiner or adversely modifying its critical habitat 
located below FSID's diversion dam. In these consultations, Reclamation 
has committed to the Service to maintain the shiner population level by 
minimizing river drying. A significant cause of drying on the Pecos is 
due to the FSID diverting its senior water right. The only way 
Reclamation has been able to keep the Pecos River flowing is by 
purchasing water from willing sellers and by paying the FSID not to 
divert water through a forbearance agreement.
    In August 2009, Reclamation and FSID entered into a mutually 
beneficial agreement whereby FSID would forbear the diversion of up to 
2,500 acre-feet of water annually for ten years when they would 
otherwise be in priority. Instead, this water goes into Sumner Lake 
reservoir where it is stored and delivered for Reclamation to prevent 
intermittency of flows on the Pecos River in compliance with the 2006 
biological opinion. Reclamation pays FSID $60,000 annually plus $20 per 
acre-foot for the water. In addition to the forbearance of this water, 
FSID agreed to pursue ESA Section 10 consultation with the Service and 
Reclamation agreed to assist them in this process. Also in this 
agreement, FSID indicated its desire to take title to the facilities 
and Reclamation agreed to work with them on that process. The 
forbearance agreement further provides that the annual payments of 
$60,000 from Reclamation to FSID will cease upon both the passage of 
title transfer legislation and the conveyance of title. To date, this 
has been a mutually beneficial agreement. The forbearance water has 
afforded Reclamation with an additional tool to meet the biological 
opinion to ensure that the Pecos River does not run dry in a cost 
effective manner.
    As drafted, S. 284 protects the financial interests of the 
taxpayers of the United States. Under the terms of the Forbearance 
Agreement that is currently in place, Reclamation pays FSID $60,000 
annually plus $20 per acre-foot for water. Under the terms of S. 284, 
after title transfer, the $60,000 annual payments from the United 
States to FSID would cease. At the same time, FSID's repayment 
obligation of $597,697 to the United States would also cease. These two 
revenue streams--one to FSID and one to the United States would offset. 
Further, the United States would continue to receive, in perpetuity 
rather than just for the ten years, the below-market-cost of $20 per 
acre-foot for up to 2,500 acre feet of water annually that they need in 
order to meet the 2006 biological opinion--thereby saving the taxpayers 
in costs associated with this important water acquisition effort.

                        MEMORANDUM OF AGREEMENT

    On June 22, 2012, the United States and FSID executed MOA, numbered 
11-WC-40-406. This agreement was the culmination of a collaborative 
process between Reclamation and the FSID which articulated the 
principles elements for any legislation to authorize conveyance of 
title to the works of the Fort Sumner Project, as well as the steps 
required to complete the title transfer process, the responsible 
parties for each activity and spelled out the prerequisites to the 
actual conveyance of title to FSID.
    The MOA takes an important step in resolving our concern regarding 
compliance with Federal and state laws--more specifically--with the 
terms of agreement to be developed between FSID and the U.S. Fish and 
Wildlife Service required under Section 10 of the Endangered Species 
Act. While it would be our preference to complete all of the activities 
required under the National Environmental Policy Act, the National 
Historic Preservation Act and the Endangered Species Act prior to 
acting upon legislation to transfer title, as a compromise, S. 284 
requires that all the activities associated with these laws, including 
whatever mitigation may be necessary be completed prior to the transfer 
of title to these facilities. As part of that, before the conveyance of 
title, Reclamation must concur with the ESA Section 10 agreement thus 
ensuring that the United States' interests are not compromised.
    Because S. 284 requires National Environmental Policy Act 
compliance and completion of ESA Section 7 and Section 10 consultations 
as prerequisites to conveyance of title, Reclamation and FSID will have 
the opportunity to complete a public process to determine whether other 
interested citizens of New Mexico have concerns and any issues that 
arise during that public process can be collaboratively be addressed in 
the title transfer agreement that must be prepared to articulate the 
terms and conditions of the title transfer as defined in Section 2(7) 
of the Act.
    S. 284 also authorizes Reclamation to cost-share with FSID for both 
environmental compliance as well as the cost of conveyance of title.
    Lastly, Reclamation believes that S. 284 would assure the 
continuation of the partnership Reclamation has developed with FSID in 
meeting the 2006 Biological Opinion requirements. With the challenges 
of persistent drought in the Pecos River basin and the need for 
Reclamation to consult, in partnership with FSID and the Carlsbad 
Irrigation District, with the Service in obtaining a new biological 
opinion by 2016, this title transfer legislation will enable us to meet 
this critical objective.
    As a result of the efforts, hard work and compromises by both 
Reclamation and FSID, we believe that we have reached an agreement that 
protects the interests of FSID, the citizens of the States of New 
Mexico and the interests of the United States.
    That concludes my written statement. I am pleased to answer 
questions at the appropriate time.

                               ON S. 510

    Chairman Schatz and members of the Subcommittee, I am Bob Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). Thank you 
for the opportunity to provide the Department of the Interior's views 
on S. 510, legislation to authorize the Secretary of the Interior to 
convey certain interests in Federal lands acquired for the Scofield 
Project in Carbon County, Utah. The intent of the legislation is to 
resolve certain issues associated with decades-long encroachment on 
Federal lands in the Scofield Reservoir basin while maintaining the 
safety of the public downstream. If the revisions described below are 
made, the Department would not oppose an amended S. 510.
    The Scofield Project is located on the Price River about 85 miles 
southeast of Salt Lake City, Utah. It provides irrigation and municipal 
and industrial water to Carbon County, Utah. The reservoir is a popular 
fishing destination. Under contract with Reclamation, the State of Utah 
operates a state park at the site.
    At Scofield Reservoir, the vertical distance between the normal 
water surface elevation of the reservoir and the flood surcharge 
elevation (the level to which the water level may rise in a flood 
event) is approximately 19 feet. Given the sloping sides of the 
reservoir basin, this flood surcharge capacity translates into a wide 
band of land around the perimeter of the reservoir above the normal 
water surface elevation and below the flood surcharge elevation. The 
United States owns in fee most of the lands within this band. In a 
flood event, water would inundate these lands. It is Reclamation's 
practice to keep these lands free of structures and chattel that, in a 
flood event, might be floated into the spillway.
    In the 1950s, an individual purported to subdivide and sell some of 
these flood surcharge lands--in spite of United States' ownership. The 
purported ``owners'' (referred to in the Scofield Land Transfer Act as 
``claimants'') began locating mobile homes and building cabins on these 
lands. There are over sixty encroaching cabins and trailers today. 
These encroachments pose a dam safety issue because a flood event may 
float debris or structures into the spillway, creating a logjam that 
would reduce the spillway's capacity and threaten the dam. The sudden 
collapse of such a logjam would create a wall of water, scouring the 
canyon below the dam and flooding the downstream communities of Helper, 
Price, and Wellington. Reclamation recently completed an assessment on 
the risk imposed by this scenario entitled, Scofield Dam--Report of 
Findings Risk Analysis Considerations for Reservoir Surcharge (January 
2013). This assessment revealed that should a logjam of structures and 
chattel in the spillway suddenly give way, it would release a flood 
downstream of up to 8,000 cubic feet per second, which is 40 to 50 
times the normal expected flow in the Price River below Scofield Dam.
    In 2000, Reclamation initiated a quiet title action on lands within 
the band on the east side of Scofield Reservoir and was joined in that 
action by 15 claimants. A 2009 decision by the Tenth Circuit Court of 
Appeals affirmed ownership by the United States. Reclamation has 
removed the encroachments on the lands that were the subject of the 
quiet title action. Because of similar underlying facts, quiet title 
actions associated with the remaining encroachments would likely affirm 
United States' ownership.
    The bill proposes to resolve these encroachments on Federal lands 
by authorizing the Secretary of the Interior to transfer a fee interest 
or life estate to those who claim ownership of United States' lands 
within the Scofield Reservoir basin in exchange for fair market value. 
Claimants have a period of five years during which they may seek a fee 
interest or life estate. If a claimant does not elect to acquire a fee 
interest or life estate, Reclamation will remove the encroachment under 
existing law and policy, including the removal of encroaching 
structures.
    Although the bill addresses in part key objectives for Reclamation, 
the ideal scenario for Reclamation is for no structures or dwellings to 
fall within a facility's flood surcharge elevation. Having said that, 
the bill does address concerns such as improved protection of public 
safety and resolving certain issues of encroachment on United States' 
lands. In addition, the bill imposes conditions on transferred lands. 
First, it limits the number and types of structures to those in place 
on the date of enactment. Second, it requires that structures be 
anchored to foundations to prevent displacement during a flood event 
and thereby reduce the potential for clogging the spillway, 
compromising the dam, and causing harm downstream. Third, it requires 
Reclamation to retain the ability to store flood flows on the 
transferred lands without liability to the United States.
    While Reclamation supports, in general, some specific provisions in 
the bill, the legislation perpetuates occupancy within the flood 
surcharge elevation, which poses public and dam safety concerns. In 
addition, the bill's language raises a number of technical concerns:

          Cost of Implementation--The proposed legislation does not 
        provide any monies to fund Reclamation's work in surveying, 
        appraising, and transferring fee interest or life estates to 
        claimants. The legislation furthermore does not provide any 
        monies to conduct environmental compliance, provide notice to 
        claimants of existing trespasses or encroachments on Federal 
        lands, or enforce deed restrictions. These costs should not be 
        absorbed by the Federal Government.
          Cost of Administration--After the legislation is fully 
        implemented, Reclamation will likely face a patchwork of 
        ownership (private fee interest, private life estates, 
        Reclamation fee interest, and Reclamation flood easements) at 
        the reservoir in the band between the normal water surface 
        elevation and the flood surcharge elevation. On the transferred 
        lands, Reclamation will be required to monitor construction and 
        the retrofitting of structures to ensure that they are properly 
        secured. In addition, Reclamation will be required to preserve 
        public access to Reclamation fee lands that are not encumbered 
        by life estates. The administration costs and enforcement 
        obligations pursuant to any conveyance restrictions are best 
        left to the local government, subject to oversight by 
        Reclamation.
          Scofield Reservoir Fund--The proposed legislation calls for 
        revenues from the sale of fee interests and the sale of life 
        estates to be deposited into a ``Scofield Reservoir Fund.'' The 
        fund would be used to finance ``enhanced recreation 
        opportunities at Scofield Reservoir.'' The Department of the 
        Interior has serious concerns about the establishment and use 
        of the Scofield Reservoir Fund because of the costs associated 
        with administering a small and narrowly focused fund. Also, the 
        fund could better be used to defray administration and 
        enforcement costs associated with these lands rather than being 
        directed toward the beneficiaries of the conveyance.
          Precedent--On one level, the proposed legislation amounts to 
        rewarding encroachment with an opportunity to purchase or 
        acquire private exclusive use of Federal lands. The Department 
        of the Interior is concerned about the bill setting a precedent 
        or expectation that there can be a path from encroachment to 
        ownership; however, the Department also finds merit in amicably 
        resolving encroachment issues on the Scofield Reservoir without 
        embarking on protracted litigation.
          Report to Congress--Reclamation believes the bill's 
        objectives can be accomplished consistent with Congressional 
        intent and with support from the local community. Because of 
        the proliferation of required reports to Congress, and the 
        demand on finite budget resources, the Department in general 
        does not support new and narrow reporting requirements.

    In addition to those issues raised above, Reclamation has a number 
of technical concerns:

          Land Disputes--Among claimants there are disputes about the 
        boundaries of their claims. The resolution of these claims 
        would likely erode the five years that the claimants have to 
        decide whether to submit notice of a desire to acquire a fee 
        interest or life estate. The legislation should direct 
        claimants to accept the result of the Reclamation survey 
        required under Section (3)(a)(1).
          Hold Harmless Clause--The life estate option requires the 
        claimant to hold the United States harmless for damages due to 
        ``design, construction, operation and replacement.'' The list 
        of causes from which damages may arise should also include 
        ``maintenance.'' In addition, there is no requirement for 
        claimants seeking fee interest in claimed land to hold the 
        United States harmless. Reclamation recommends that a hold 
        harmless requirement be added to the fee interest option.
          Payments in Lieu of Taxes (PILT)--The proposed legislation 
        should explicitly state that PILT payments will be discontinued 
        for lands transferred in fee to claimants.
          Mineral Rights--The proposed legislation should state that 
        there will be no conveyance of subsurface or mineral rights.
          Water Rights and Sewer System A number of the claimants have 
        developed wells that are also part of their encroachment. To 
        the extent these wells are supported by valid State of Utah 
        water rights, the legislation should address the fate of these 
        wells under conveyance in fee or life estate. The sewer system 
        serving encroachments is included in a Reclamation license 
        agreement for the State Park. The license agreement is with the 
        Scofield Special Service District for which Carbon County has 
        oversight responsibility.
          Sunset--The proposed legislation requires claimants to submit 
        notification to the Secretary of their interest in a fee 
        interest or life estate in the claimed portion of the Federal 
        land within five years of the date of enactment of the proposed 
        legislation, in order to stay enforcement proceedings on the 
        Federal land. This could allow claimants to submit notice of 
        their intent to receive a fee interest or life estate, without 
        requiring the claimants to take any affirmative steps to 
        effectuate the transfer. The proposed legislation should 
        contain a sunset provision whereby notice and transfer must 
        occur within a reasonable timetable.

    In closing, Reclamation recognizes that, in spite of its serious 
concerns, the proposed legislation does offer an acceptable five-year 
solution to a problem Reclamation has wrestled with for many years. In 
light of this, the Department of the Interior will not oppose S. 510 if 
appropriate clarifying language and revisions are added.
    That concludes my statement. I am pleased to answer questions at 
the appropriate time.

                               ON S. 659

    Chairman Schatz and Members of the Subcommittee, I am Bob Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). I am pleased 
to provide the views of the Department of the Interior on S. 659 which 
reauthorizes Title I of the Reclamation States Emergency Drought Relief 
Act of 1991 until the year 2018, and increases the amount of authorized 
federal appropriations from the current ceiling of $90 million up to 
$110 million. The Department supports extending the authorization of 
this program through 2018; however, as explained below, we do not 
believe an increase to the authorization of appropriations is necessary 
at this time. An April 3rd update to the U.S. Drought Monitor shows 
that 83% of the Western United States, where Reclamation operates, is 
abnormally dry, with 63% being in moderate to exceptional drought 
status.
    Title I of the Reclamation States Emergency Drought Relief Act of 
1991 provides Reclamation the authority for construction, management, 
and conservation measures to alleviate the adverse impacts of drought, 
including mitigation of fish and wildlife impacts. This authority is 
most often implemented through drilling new private wells. Wells are 
the only permanent construction authorized under the Act. All other 
Title I work must be of a temporary nature. No new Reclamation projects 
are authorized under Title I; Reclamation does not own, operate, or 
maintain projects funded under it. S. 659 would extend the expiration 
date as well as increase the authorization for appropriations from $90 
million to $110 million to allow for greater capacity in Reclamation's 
assistance to States, tribes, and local governments in addressing the 
impacts of drought.
    Title I also provides Reclamation with the flexibility to meet 
contractual water deliveries by allowing acquisition of water to meet 
requirements under the Endangered Species Act, benefiting contractors 
at a time when they are financially challenged. We believe that our 
existing WaterSMART Program provides some lessons applicable to the 
communities where Drought Act authorities are used.
    Additionally, Title I authorizes Reclamation to participate in 
water banks established under state law; facilitate water acquisitions 
between willing buyers and willing sellers; acquire conserved water for 
use under temporary contracts; make facilities available for storage 
and conveyance of project and nonproject water; make project and 
nonproject water available for nonproject uses; and, acquire water for 
fish and wildlife purposes on a nonreimbursable basis.
    Reclamation's primary approach to drought is to continue working 
with our stakeholders on a proactive basis to assess the implications 
of water shortages, develop flexible operational plans that account for 
expected periods of drought, and support projects that conserve water 
and improve the efficiency of water delivery infrastructure. Federal 
Drought relief is a ``last resort'' to be employed only in the most 
extreme of cases. Given the extreme weather conditions currently facing 
the nation, we will continue to consider ideas to make drought relief 
even more effective through improved interagency cooperation and other 
changes.
    Title II of the Reclamation States Emergency Drought Relief Act of 
1991 provides Reclamation with permanent authority to assist States, 
Tribes, and local governments with planning and technical assistance 
related to drought planning, preparation, and adaptation strategies. 
This authority allows Reclamation to assist non-Federal entities to 
prepare for drought so that they are less vulnerable when drought 
inevitably happens. This authority for drought-related Federal 
coordination and technical assistance does not automatically expire and 
will remain in effect without the authorities that S. 659 would extend.
    Given that there remains a capacity for over $15 million in 
authorized appropriations for this program, the Department does not 
believe an increase in the authorized appropriations ceiling is 
necessary at this time. If the authorized appropriations ceiling should 
become a more urgent constraint, we will evaluate the need for an 
increase to the appropriations ceiling at that time.
    This concludes my written statement. I am pleased to answer 
questions at the appropriate time.

                               ON S. 684

    Chairman Schatz and members of the Subcommittee, I am Bob Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). I am pleased 
to provide the views of the Department of the Interior (Department) on 
S. 684, the Mni Wiconi Project Act Amendments of 2013. The Department 
recognizes that meaningful changes to this bill have been made since 
prior related legislation was heard during the 112th Congress. However, 
if enacted, this updated version of the bill would still expand the 
scope and authorization ceiling of the Mni Wiconi Rural Water Supply 
Project, and have significant impacts on the budgets of both 
Reclamation and the Bureau of Indian Affairs. For the reasons described 
below, the Department cannot support S. 684.
    The Mni Wiconi Rural Water Supply Project is a municipal, rural and 
industrial project that serves both tribal and non-tribal populations 
of the Pine Ridge, Rosebud, and Lower Brule Indian Reservations and the 
West River Lyman-Jones Rural Water System in seven counties of 
southwestern South Dakota. Responsibilities of the Secretary under the 
Mni Wiconi Rural Project Act (Public Law 100-516) include the operation 
and maintenance of existing water systems, including the core treatment 
plant and pipelines, and appurtenant facilities on the Pine Ridge, 
Rosebud and Lower Brule Indian Reservations. With the funding requested 
in the President's FY 2013 budget, the majority of the population of 
the project will be served. The Lower Brule and West River Lyman-Jones 
portions of the project will be completed. Generally those not 
connected to the project (approximately 2.5% of the population on 
Rosebud and Pine Ridge Reservation) are served by community water 
systems or individual wells. Reclamation would be happy to facilitate 
or coordinate action with other federal agencies to address the needs 
identified by the bill's sponsor. Reclamation has a backlog of 
authorized but not constructed projects. Therefore, we have concerns 
about adding to the scope of an existing project that is nearly 
complete.
    Section 2 of S. 684 directs the Secretary of the Interior to 
develop a plan for completion of the Oglala Sioux Rural Water Supply 
System, the Rosebud Sioux Rural Water Supply System, and the Lower 
Brule Sioux Rural Water System. Planning the completion of the systems 
is dependent on future appropriations as well as Reclamation's need for 
flexibility in decision-making relative to all authorized rural water 
projects. Reclamation must constantly assess and prioritize these kinds 
of projects to maximize the agency's ability to meet its programmatic 
goals, to maximize water deliveries to rural communities as efficiently 
as possible, and to reflect the diverse needs and circumstances facing 
each individual project. The Department would like to work with project 
sponsors of the bill to discuss plans for completion, and clarifying 
the roles, responsibilities, and authorities of Federal agencies 
involved in the project. An interagency agreement, as proposed by 
Reclamation during the August 8, 2012 Joint Consultation Meeting with 
Federal Agencies, has the potential to achieve many of these 
objectives. Further, Reclamation is continuing to evaluate the facility 
improvements needed to transfer and incorporate existing community 
water systems.
    Section 2 also directs the Director of the Bureau of Indian 
Affairs, through the use of existing programs and annual 
appropriations, to assist the Secretary in completing the Oglala Sioux 
Rural Water Supply System, the Rosebud Sioux Rural Water System, and 
the Lower Brule Sioux Rural Water System by constructing, repairing, 
and upgrading plumbing fixtures, skirting, and other necessary 
features, such as septic tanks and drainfields, to ensure that houses 
within the service areas are able to meet the standards for connecting 
to those systems. The Bureau of Indian Affairs has no existing programs 
or annual appropriations for the construction, repair, or upgrading of 
plumbing fixtures or septic systems on private residence. Such function 
has usually been the responsibility of Health and Human Service or 
Indian Health Service.
    Section 3(a) of S. 684 would increase the authorized Mni Wiconi 
cost ceiling by an additional $14,308,000, based on October 1, 2011, 
price levels. Reclamation has worked closely with the project sponsors 
to ensure completed features will be functional and provide intended 
benefits within the currently authorized cost ceiling. The Department 
continues to believe that the FY 2013 President's request of $23 
million for construction provides sufficient funding to meet the 
objectives of the Project as authorized. Recently enacted final 
appropriations for FY 2013 will determine final allocations to the 
project. In FY 2014, the Department is continuing to meet its longer-
term obligation to fund operations and maintenance for the Mni Wiconi 
project's Indian sponsors features through Reclamation's request for 
$12 million in new FY 2014 appropriations.
    Section 3(b)(5) would transfer existing public or tribal water 
systems ``in trust to the applicable rural water system'' upon requests 
from the Tribes or owner of such system. This language leaves some 
uncertainty in ownership as it doesn't identify the nature of the 
``trust''. Language in sections 3A(e) and 3B(e) of the current Act 
identifies that ownership is to be held in trust for the tribe by the 
United States. Section 3(b) also authorizes appropriations for 
operation and maintenance to be used for the improvement, repair, and 
replacement of existing public or tribal water systems prior to and 
after their transfer into the respective project system. Reclamation 
had previously determined that the costs of upgrading existing 
community facilities should be properly allocated to the construction 
component of the project. Since these existing systems were originally 
constructed using funds and authorities of other agencies, Reclamation 
believes any funding for improvements needed to correct deficiencies in 
existing systems should be discussed among the various responsible 
agencies before those systems are accepted into the project.
    This concludes my written statement. I would be pleased to answer 
questions at the appropriate time.

                               ON S. 693

    Chairman Schatz and Members of the Subcommittee, I am Bob Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). I am pleased 
to provide the views of the Department of the Interior (Department) on 
S. 693, the City of Hermiston, Oregon, Water Recycling and Reuse 
Project. For reasons I will discuss below, the Department cannot 
support the bill.
    S. 693 would amend the Reclamation Wastewater and Groundwater Study 
and Facilities Act (Public Law 102-575, 43 U.S.C. 390h et seq.), 
commonly called Title XVI, to authorize the Secretary of the Interior 
to participate in the design, planning, and construction of permanent 
facilities needed to reclaim and reuse water in the City of Hermiston, 
Oregon. The project is being implemented by the City of Hermiston.
    The City of Hermiston (City), located in north central Oregon, is 
one of the largest communities within Reclamation's Umatilla Project 
area. The project proposed by the City includes upgrades and 
construction at their existing wastewater treatment facility and 
construction of a delivery system that would deliver recycled water to 
the West Extension Irrigation District. This recycled water would be 
used by the District to irrigate agricultural lands. By 2031, it is 
estimated that this proposed project would provide the District with 
approximately 2,000 to 3,000 acre-feet of drought resistant water 
supply during the irrigation season. The 2011 total estimated cost for 
this project was approximately $25.8 million.
    In January 2010, the City of Hermiston submitted their feasibility 
report to Reclamation for review under the Title XVI program. In April 
2010, Reclamation's review team completed the review and made the 
certification that the proposed project ``Meets Requirements'' as 
defined under section 1604 of Public Law 102-575, as amended. In 2011, 
Reclamation completed the determination of financial capability and 
communicated the final approval to the City.
    The City and Reclamation's Pacific Northwest Region have completed 
Reclamation specific actions that are necessary for implementation of 
the proposed project. This includes environmental compliance, issuance 
of a license to the City granting authorization to construct, own, 
operate, and maintain their facility on Reclamation fee title land, and 
issuance of a permit allowing this water to be discharged into 
Reclamation's West Main Canal.
    S. 693 would authorize the City of Hermiston's project under Title 
XVI for Federal funding not to exceed 25 percent of the total cost of 
the project.
    While the Department supports efforts to increase local water 
supplies and increase recycled water use, this project would compete 
for funds with other needs within the Reclamation program, including 
other Title XVI projects currently under construction. In general, the 
Department supports the Title XVI Reclamation and Reuse program. The 
2014 budget request includes funding for the Department's WaterSMART 
Program, of which Title XVI is an important element, and the full 2014 
request for WaterSMART is $35.4 million.
    As part of this total, the Department is requesting $14 million to 
fund Title XVI projects selected through competitive funding 
opportunity processes which uses criteria finalized in 2010 to identify 
activities most closely aligned with Title XVI statutory and program 
goals. Reclamation plans to invite sponsors of Congressionally 
authorized Title XVI projects to submit applications for funding under 
the program and will review and rank proposals against those criteria 
to identify projects for funding, subject to appropriations in fiscal 
year 2014.
    We recognize that water reuse is an essential tool in stretching 
the limited water supplies in the West, and I believe the FY 2014 
budget request has demonstrated the emphasis placed by this 
Administration on this Program. However, given that there are 53 
already authorized Title XVI projects and numerous competing mission 
priorities and demands on Reclamation's limited budget, the Department 
cannot support the authorization of new Title XVI projects or 
extensions of existing authorized cost ceilings at the current time. 
Federal budget realities, however, should not detract from the fact 
that the Hermiston Recycling and Reuse Project would prove valuable in 
Oregon's efforts to address current and future water resource 
challenges posed by drought and the competing demand for scarce water 
resources.
    This concludes my written statement. I am pleased to answer any 
questions at the appropriate time.

                               ON S. 715

    Chairman Schatz and Members of the Subcommittee, I am Bob Quint, 
Senior Advisor at the Bureau of Reclamation (Reclamation). I am pleased 
to be here to provide the views of the Department of the Interior 
(Department) on S. 715, the ``Authorized Rural Water Projects 
Completion Act''. My statement today will draw upon the testimony 
provided by Commissioner Mike Connor in July 2012 on S. 3385, prior 
legislation discussed in this Committee during the 112th Congress.
    Like the sponsors of this legislation, the Department supports the 
goals of encouraging vibrant rural economies and ensuring safe, 
reliable sources of drinking water for rural residents. Rural water 
projects help build strong, secure rural communities and are important 
to our non-federal sponsors, which is why the President's FY 2014 
Budget includes $40 million for rural water projects.
    As a threshold matter, the Obama Administration has supported 
Reclamation's rural water program over the last four years, allocating 
$231 million of funding, in the FY 2010-2013 budgets, to construct, 
operate, and maintain authorized rural water projects in addition to 
$232 million provided for these projects in the Recovery Act. Still, 
the rural water program must compete with a number of other priorities 
within the Budget, including aging infrastructure, Indian water rights 
settlements, environmental compliance and restoration actions, and 
other priorities intended to address future water and energy related 
challenges. Notwithstanding the importance of rural water projects, 
current budget constraints have limited the ability to make Federal 
investments that match on-the-ground capabilities.
    Despite such constraints Reclamation has made progress in promoting 
certainty, sustainability, and resiliency for those who use and rely on 
water resources in the West and in supporting the basic drinking water 
needs of rural communities, as directed by the Congress. S. 715 
provides a constant level of mandatory funding to support the 
construction of authorized rural water projects to deliver water to 
smaller, isolated communities. However, the Department believes Federal 
investments in such projects must recognize the current fiscal 
constraints and the need to make tough choices in prioritizing those 
investments. The Administration supports the goals embodied by S. 715 
of advancing the economic security of Americans living in rural areas, 
and constructing these important infrastructure projects will not only 
help provide the economic benefits of a clean, reliable, drinking water 
system that most Americans take for granted, but will also assist in 
creating jobs in the short-term through ongoing construction, but the 
Administration supports discretionary funding for these projects.
    Since the 1980s, Congress has authorized Reclamation to undertake 
the design and construction of specific projects intended to deliver 
potable water supplies to rural communities located in North Dakota, 
South Dakota, Montana, New Mexico, Minnesota and Iowa. These projects 
exist in communities that are experiencing urgent needs for water due 
to poor quality of the existing supply or the lack of a secure, 
reliable supply. For example, in rural Montana, some communities have, 
from time-to-time, been subject to ``boil water'' orders due to the 
unsafe conditions of the existing drinking water supplies. In Eastern 
New Mexico, the existing communities currently rely on the diminishing 
Ogallala Aquifer and the current drinking water systems are projected 
to be depleted within 40 years. Reclamation's Rural Water Program 
provides a resource to rural communities under those circumstances and 
the Congress has authorized federal assistance to meet those needs.
    The Rural Water Supply Act of 2006 (P.L. 109-451) authorized 
Reclamation to establish a program to work with rural communities, 
including tribes, in the 17 Western States to assess rural water supply 
needs and conduct appraisal and feasibility studies without individual 
acts of Congress. Pursuant to the Rural Water Supply Act, Reclamation 
created a rural water program to enable coordinated examination of the 
various options to address rural communities' water supply needs 
through a cost effective, priority-based process.
    In addition to authorizing appraisal investigations and feasibility 
studies, Section 104 of the Rural Water Supply Act required that the 
Secretary of the Interior, in consultation with the Secretary of 
Agriculture, the Administrator of the Environmental Protection Agency, 
the Director of the Indian Health Service, the Secretary of Housing and 
Urban Development and the Secretary of the Army, to develop a 
comprehensive assessment of the status of the existing, authorized 
rural water projects. Section 104 also directs Reclamation to describe 
its plans for completing the design and construction of the authorized 
rural water projects.
    In response to Section 104, Reclamation issued a draft assessment 
report titled ``Assessment of Reclamation's Rural Water Activities and 
Other Federal Programs that Provide Support on Potable Water Supplies 
to Rural Water Communities in the Western United States'' which is 
posted on Reclamation's website (www.usbr.gov/ruralwater/docs/Rural-
Water-Assessment-Report-and-Funding-Criteria.pdf). Comments on the 
draft report were submitted through September 10, 2012. In addition to 
providing a report of the status of the existing authorized rural water 
projects, the assessment report describes how Reclamation's Rural Water 
Supply Program will be carried out and coordinated with other Federal 
programs which support the development and management of water supplies 
in rural communities in the western states and to maximize efficiency 
of the various programs by leveraging Federal and non-Federal funding 
to meet the shared goals of the programs.
    As described in the assessment report, with the exception of Title 
III of P.L. 107-331 that authorized the Jicarilla rural water supply 
system, each of the Acts of Congress authorizing Reclamation's 
involvement in the rural water supply projects required that the cost 
ceilings included in the original authorizing legislation be indexed to 
adjust for inflation which is estimated to be 4% annually. The result 
of these indexing requirements is that the overall cost of the 
authorized rural water projects has risen and continues to rise during 
the time needed for construction, such that the total estimated funding 
that would be required to complete these projects is now $2.6 billion, 
which is substantially higher than the original authorization amounts, 
which totaled $2.0 billion.
    Reclamation has recognized the need to make meaningful progress in 
constructing authorized rural water projects and has budgeted $40 
million in FY2014 toward that effort. At the levels provided in the 
2013 budget, and without additional non-Federal funding, progress would 
be made towards project completion, but some of the currently 
authorized projects would be completed much later, perhaps not until 
well after 2063 despite close to $4.0 billion being invested by that 
time. It is estimated that as of 2063, an outstanding balance of 
approximately $1.1 billion would remain to complete construction of 
currently authorized projects.
    Across the country, state, local, and Tribal governments are taking 
a greater leadership role in water resources investments, including 
financing projects the Federal government would have in the past. 
Constrained Federal budgets do not preclude the ability of non-Federal 
parties to move forward with important investments in water resources 
infrastructure and the Department stands ready to support that effort. 
Even with the additional resources made available through S. 715, we 
would expect that non-Federal entities will likely need to increase 
their share of funding to build these projects in the timeframes they 
have envisioned.
    S. 715 establishes a dedicated Reclamation Rural Water Construction 
Fund in the United States Treasury comprised of funds that would 
otherwise be deposited into the Reclamation Fund established by the 
first section of the Act of June 17, 1902 (32 Stat. 388, chapter 1093). 
This funding source would enable earlier completion of projects. 
Section 3(b)(3) of S. 3385 provides that the bill's cost would be 
offset so as to not increase the deficit. The Department supports such 
language. However, even if an equivalent and acceptable offset is 
identified, use of those funds must be weighed against other priorities 
across the Federal government, including deficit reduction.
    Section 3 of S. 715 provides that for each fiscal year from 2014 
through 2030, $80,000,000 per year will be deposited into the Fund in 
addition to interest earned on invested money that is available in the 
Fund but not utilized for the current withdrawal. Section 3(c) of S. 
715 limits expenditures from fiscal year 2014 through 2035 from the 
Fund to not more than $80,000,000 in addition to interest accrued in 
that same fiscal year, with an allowance for the use of funds carried 
over from prior years.
    S. 715 also provides that if a feasibility study has been submitted 
to the Secretary by September 30, 2012, and those projects are 
subsequently authorized by Congress, they may be eligible to receive 
funding through the Reclamation Rural Water Construction Fund. S. 715 
directs the Secretary of the Interior to develop programmatic goals 
enabling the expeditious completion of construction of the existing 
rural water projects and to establish prioritization criteria for the 
distribution of funds. Reclamation's draft assessment report would meet 
these requirements when complete. Reclamation's first goal is to 
advance the construction of rural water projects that meet the most 
urgent water supply needs in the shortest amount of time, given our 
current budget constraints. The second goal is to give priority to 
rural water projects that address Indian and tribal water supply needs.
    Within the context of the above goals, Reclamation recognizes that 
current and projected funding levels may not be sufficient to 
expeditiously complete the federal funding portion of every project and 
that it must prioritize the allocation of available funding. The draft 
assessment report outlines prioritization criteria to guide 
Reclamation's decision making to maximize the agency's ability to meet 
its programmatic goals, to maximize water deliveries to rural 
communities in as short a period as possible, and to reflect the 
diverse needs and circumstances facing each individual project. The six 
criteria identified by Reclamation for rural water construction 
prioritization are:

   Is there an urgent and compelling need for potable water 
        supplies?
   How close is the Project to being completed and what is the 
        commitment of the project sponsors to making that happen?
   What is the financial need of the communities and what is 
        the relative economic effect of the Project?
   Does the Project fulfill Reclamation's authorized niche for 
        taking a regional and watershed approach to rural water 
        projects?
   Does the project minimize water and energy consumption and 
        encourage the development of renewable energy resources such as 
        wind, solar, hydropower, etc., to meet local needs?
   Does the project serve the needs of tribal communities and 
        tribal members?

    The analysis outlined in the draft assessment report underscores 
that in times of constrained federal budgets, non-federal funding in 
excess of the minimum contributions originally contemplated will be 
required to expedite project completion and reduce the effects of 
indexing over the construction period.
    This concludes my written statement. I am pleased to answer 
questions at the appropriate time.

    Senator Schatz. Thank you very much, Mr. Quint.
    In order to accommodate Chair Baucus' busy schedule, I 
think what we'll do is move to Senator Baucus for a statement 
regarding rural water projects.
    Thank you, Senator Baucus.

          STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR 
                          FROM MONTANA

    Senator Baucus. Thank you, Mr. Chairman. I also thank very 
much other witnesses who are subsequently appearing for letting 
me proceed.
    I'm here on behalf of something that's really important to 
my State. I think the states of most everybody here with the 
possible exception of you, Mr. Chairman, and that's water. In 
our parts of the country it doesn't rain. Now it rains a little 
bit in Hawaii, at least some parts of Hawaii. In other parts it 
does not.
    But in the Western states, generally, we don't have a lot 
of water. West of the 100th meridian it doesn't rain a lot. 
That's why we have section lines and grids. It's not leaps and 
bounds like the Eastern part of the country.
    There's a development of horses and 6 guns and barb wire 
and all that driven and caused by the mere simple fact that we 
don't have a lot of water, and, you know, horses were necessary 
to go great distances because there's no people, because 
there's no water. A 6-gun, as developed, is light to carry on a 
horse. It's required.
    Barbed wire, required. There's nothing like the necessity 
to foster invention. We just don't have a lot of water in the 
West. We're trying to do what we can based upon that.
    This is a support of a bill. It's bipartisan. Senator 
Hoeven has joined me in it. It's the Authorized Water Projects 
Completion Act. Again I thank Senator Hoeven to make it 
bipartisan, also other Senators are a part of this.
    As Justice Oliver Wendell Holmes wrote in the early days of 
the Bureau of Reclamation and I'll quote him. ``A river is more 
than an amenity. It is a treasure. It offers a necessity of 
life that must be rationed among those who have power over 
it.''
    In arid places like Montana we know that water is more than 
an amenity. We treasure water because we don't have much of it. 
Like so many of us who grew up in our part of the world we are 
off the grid. We're off the power grid and we're off the water 
grid. We live unconnected to the centralized systems that most 
Americans take for granted.
    In places like Box Elder and Brockway, my fellow Montanans 
have relied too long on old wells that go dry. You know, folks 
in communities they just have to have wells. There's no water 
system.
    They've spent too many years drinking salty water. It's 
terrible water, believe me. I've had a good bit of it. It fails 
Federal drinking water standards.
    This fellow named Bruce Sunchild. He's the chairman of the 
Chippewa Cree Tribe. He testified before this committee last 
July about all the e-coli in wells on Rocky Boy's Reservation. 
That's his reservation. That was in 2011.
    Today in Eastern Montana, as the Senator from South Dakota 
certainly knows, in Eastern Montana, Western North Dakota the 
Bakken oil boom is providing a lot of good jobs. But there's a 
problem. It's also challenging small towns that barely meet 
their own water standards.
    So this bill, I believe, is an overdue step in using the 
Reclamation fund for its intended purpose and that is making 
the West habitable. The current rate of appropriations from the 
fund it will be twice as expensive as it should be to 
reconstruct Reclamation projects in states like Montana and the 
Dakotas and New Mexico. Investing more water up front will 
result in less spending over time.
    It was just made that the $40 million for the Reclamation's 
rural water projects in the President's budget last week. I 
believe it demonstrated once again why Congress needs to act. 
We can't rely on the Administration.
    My bill will speed up construction, create good paying jobs 
and cost taxpayers less money in the long run. This is about 
one thing. It's about jobs in rural America. It's about people 
who need water.
    The bill supports good paying jobs in the near term and 
allows rural communities to support businesses in the long 
haul. It doesn't add one thin dime to the deficit. I urge you 
to consider it favorably.
    Thank you, Mr. Chairman.
    Senator Schatz. Thank you, Senator Baucus.
    Senator Johnson has questions for the testifiers.
    Senator Baucus, thank you very much.
    Senator Baucus. Thank you.
    Senator Schatz. I don't think we'll have any questions for 
you.
    Senator Baucus. You bet. Thank you.
    Senator Schatz. Senator Johnson.
    Senator Johnson. Mr. Quint, thank you for being here.
    In the authorization statute for Mni Wiconi Congress found 
that the U.S. has a trust responsibility to ensure that 
adequate and safe water supplies are available to meet the 
economic, environmental water supply and public health needs of 
the Pine Bridge Indian Reservation, Rosebud Indian Reservation 
and Lower Brule Indian Reservation. Incorporating the existing 
communities systems into the Mni Wiconi Project is central to 
ensuring these needs are met. My understanding is that BOR will 
not allow these systems to be incorporated into Mni Wiconi 
until they are sufficiently upgraded. Yet BOR has resisted 
using funding for upgrades.
    Although you testified that the BOR is interested in 
working with other agencies I'm not convinced that will happen 
outside of legislation. What assurances can you provide that 
these needs will be addressed?
    Mr. Quint. I want to say that the Department and the Bureau 
of Reclamation takes the tribal trust responsibilities very 
seriously. As part of taking those seriously we try to work 
with the tribes as much as possible to meet the needs that they 
have. It's a complicated system.
    Many Federal agencies have been involved in building these 
systems. Have different levels of responsibilities and funding 
for these systems. We're committed to work with all those 
entities to try to resolve these issues.
    Senator Johnson. Mr. Quint, in last July's report on the 
status of rural water projects BOR indicated that with overall 
construction funding levels of $50 million annually some of the 
authorized projects will extend well beyond 2063 with 
substantial outstanding balance remaining. Taking out the 
operations and maintenance funding, the FY2014 budget request 
for construction on authorized projects is actually down around 
$22 million. How would starting with $80 million annually from 
Reclamation funding impact project timelines and overall costs 
for projects like Lewis and Clark?
    Mr. Quint. Let me find my data here.
    The current information that I have that with an $80 
million annual funding most significant progress can be made 
for all the currently authorized projects. We would expect by 
the year 2039 that at a total cost of $34 billion we could 
finish the currently authorized rural water projects.
    Senator Johnson. That is just about a quarter of a century 
sooner.
    Mr. Quint. That's correct.
    Senator Johnson. I yield back.
    Senator Schatz. Thank you, Senator Johnson.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Mr. Quint, thanks so much for being here. It's good to see 
you.
    You know, Mr. Chairman, I believe that developing water for 
our rural areas is vital to economic growth in the West. In my 
home State of Wyoming I agree completely with Senator Baucus' 
comments about water in the Rocky Mountain West, jobs and our 
economy. I believe that Senator Baucus' bill, S. 715, the 
Authorized Rural Water Projects Completion Act can help achieve 
that goal.
    I do have some concerns regarding some of the language in 
the bill. So I'd like to get some clarification on the 
language. I'm more than willing to work with other Senators to 
address the concerns.
    The first, Mr. Quint, I'd ask you to define what a ``rural 
water project'' is supposed to mean with regard to this bill?
    Mr. Quint. Our definition of a rural water project is a 
project that supplies water for agricultural, municipal and 
industrial uses in a rural community.
    Senator Barrasso. Because as you know in the 2006 Rural 
Water Supply Act that term--they then defined rural water 
supply project to not rural water project. I'm just trying to 
figure how the Bureau of Reclamation is going to define the 
term rural water project because the term really isn't defined 
in the bill. That's why I'm just trying to figure out what 
projects it would actually cover because we know the specific 
words in the bill have a huge impact on some of these things.
    I don't know if we need a little----
    Mr. Quint. I would rather get back to you with more 
specifics for the record.
    Senator Barrasso. OK. That's fine. Now on page 3 of the 
bill with regard to expenditures from the rural water fund it 
says the Secretary may and I emphasize may, expend from the 
fund not more than the sum of $80 million.
    Section two, page four, it states that the Secretary may 
use the amounts from the fund to complete construction of rural 
water projects.
    So I look at that language and say, does this language give 
the Secretary the ability not to spend the money on some of the 
authorized rural water projects that qualify for funding or is 
this mandatory spending? I'm trying to just get a handle around 
that.
    Mr. Quint. I, again, I think I'll have to answer that for 
the record. I'm not a lawyer. So I don't understand the legal 
wills, shalls, mays.
    Senator Barrasso. Yes, because it clearly has an impact. 
Specifically if this is mandatory spending, but it says it 
seems like why are we then giving the Secretary some discretion 
in the mays. So if we could get clarification.
    Mr. Quint. I appreciate that.
    Senator Barrasso. Thank you.
    Also with regard to page 3 under the section entitled, 
``Limitation.'' It states that, ``no amounts may be deposited 
in or made available from the fund under those paragraphs if 
the transfer or availability of the amounts would increase the 
deficit.''
    So I heard Senator Baucus say it wouldn't cost one thin 
dime. So I would ask if you could provide us a list of all the 
projects. I know you don't have this now--or programs that will 
be reduced or revenue accounts that will be increased to make 
sure that this bill actually is deficit neutral.
    Mr. Quint. We'd be glad to provide that. But I can say that 
probably knowing what specific year those projects are it will 
be a case by case basis, year by year.
    Senator Barrasso. Yes, cause you take a look at this and, 
you know, I'm trying to figure out what the differences are and 
the different ways that the Secretary can then use this to make 
these transfers deficit neutral and if this should maybe be a 
formal process to do that.
    Another is, I think you're familiar with the GAO report in 
February 2006 entitled, ``Indian Irrigation Projects.'' It 
continues in the title, under the quote, ``Numerous issues need 
to be addressed to improve project management and financial 
sustainability.''
    I don't know if you're familiar with that project or not. 
OK.
    I just want to point out that the GAO study says that there 
are 16 different irrigation projects initiated, I think, in the 
late 1800s, early 1900s by the Department of Interior. They 
actually were never completed and/or not sustaining themselves. 
All but one of the projects are now managed by the Bureau of 
Indian Affairs, but they were previously, you know, through the 
Department.
    My question is we're looking newer projects and funding 
newer projects in this bill when there are many authorized 
Bureau of Reclamation projects for tribes that are, you know, 
more than 100 years old. I went and visited a number of them 
and had a field discussion and forum in Wyoming in a location. 
They have severe deferred maintenance backlog, not completed, 
but yet we're looking at starting new projects.
    So I just wondered if you have some thoughts on that.
    Mr. Quint. The only thoughts I have right off the top of my 
head, not being aware of the report, is that part of the reason 
we've developed some of our criteria for prioritizing projects 
is hopes to address those types of issues.
    Senator Barrasso. You know, just finally, Mr. Chairman, as 
my time is expired. I just want to say that these Indian 
irrigation projects need to be addressed, I believe, as part of 
this bill so that these tribes can get the assistance that they 
need.
    So, thank you, Mr. Quint.
    Thank you, Mr. Chairman.
    Mr. Quint. Thank you.
    Senator Schatz. Chairman Wyden.
    The Chairman. Thank you very much, Chairman Schatz.
    Senator Heinrich, you were here ahead of me. If I took no 
more than 3 minutes, could I go because I'm trying to get back 
to that other committee you and I share? You want to get there 
too.
    Senator Heinrich. Absolutely. Go right ahead.
    The Chairman. I thank my colleague.
    I'm going to be very brief and will submit a couple of 
questions for the record as well.
    Your hearing today, Mr. Chairman, S. 693, the city of 
Hermiston Water Recycling and Reuse Project, this is 
extraordinarily important to Hermiston, one of our Eastern 
Oregon communities. The City is going to bear the lion's share 
of the cost. If we can put it in place as it's presently 
constituted, agricultural production will go up.
    The local economy will get a boost. It's going to be good 
for fish, the environment, and habitat. You are giving the 
right expression on your face this afternoon, Mr. Quint, and I 
appreciate it.
    The other bill is S. 659, the Reclamation State's Emergency 
Drought Relief Act Authorization. I think we all understand 
what happened last summer with respect to this devastating 
drought. The reason that we're going to try to fast-track this 
legislation, Mr. Quint, is according to the most recent 
information from the Bureau of Reclamation, the Klamath Basin, 
which has really been a flash point for this debate, not just 
in Oregon, but in the country, has experienced the second 
driest January through March period on record.
    So you've got those water users in the basin understandably 
very worried about the prospect of a very difficult and 
treacherous season.
    Mr. Chairman, thank you. Glad to see you in that chair's 
position as well.
    I'll submit some additional questions for the record.
    The Chairman. Also, thank my colleague from New Mexico for 
his courtesy to be able to get that in very briefly. I yield.
    Senator Schatz. Thank you, Chairman.
    Senator Franken.
    Senator Franken. I would also like to thank the Senator 
from New Mexico for his courtesy or for his courtesy, again.
    I'm balancing two committees, so by the early bird--you 
know what we're doing.
    Senator Heinrich. Now just get to your questions.
    Senator Franken. Just get to it. Is that what you're 
saying?
    [Laughter.]
    Senator Franken. Now I might take my sweet time.
    Mr. Quint, the Authorized Rural Water Projects Completion 
Act would spend funds that would otherwise be deposited in the 
Reclamation fund. The average annual surplus in the Reclamation 
fund from fiscal year 2005 through fiscal year 2011 was $960 
million a year. At the end of fiscal year 2011 the fund had 
more than $9.6 billion in it.
    Now compare that to the $40 million, that's 40 with an m 
that your budget would spend on rural water projects next year. 
So there is an existing fund that is intended to fund these 
projects. It has an astronomical surplus, certainly compared to 
what is being budgeted. So I don't understand why this is so 
hard.
    Why does not the Administration's budget simply request 
that we spend the fraction of that surplus that it would take 
to get these projects done? I have a project in mind, by the 
way.
    Mr. Quint. I am sure you do.
    Generally we support the concept of that. The issue that 
the Administration has and the Department has is that the 
mandatory funding requirement from the fund itself takes away 
the discretionary part of being able to decide what the 
priorities ought to be in each budget year.
    Senator Franken. OK. I don't understand. What is the 
mandatory funding requirement?
    Mr. Quint. The bill basically would require that that be 
spent on rural water projects and not, if that wasn't the 
highest priority in that particular budget year, that money 
would still be spent for those rural water projects as opposed 
to that amount being discretionary and put toward other higher 
priority projects in a given year.
    Senator Franken. Let me talk about a project. This is the 
Lewis and Clark Project. Are you familiar with that?
    Mr. Quint. Yes, I am.
    Senator Franken. Secretary Salazar called it a priority 
project. This is a project that starts in South Dakota, in 
Southeastern South Dakota. South Dakota basically has all of 
its water an hour, almost all of its water.
    Minnesota has no water. The local governments have and 
Minnesota has paid in its full share. This year's budget 
request is $3.2 million which doesn't really even pay for the 
inflation on the project. At this rate the thing will never get 
done.
    Minnesota and the local communities have paid their full 
share in this project. Yet, they don't have any. They aren't 
getting any water at all.
    We have Rock County spent $1.75 million on system 
maintenance and upgrades including new wells because the 
project isn't finished.
    Pipes, Lincoln Pipestone spent $6 million to secure an 
interim water supply.
    Laverne spent $650,000 on a water reclamation system and a 
new well.
    We've had economic development projects that have not 
gotten done.
    This is a quote from chairman of the project, Red Arndt. 
``There are no words left but cuss words to describe this 
travesty. This leaves us completely dead in the water.''
    We made a commitment to these communities that we match 
their funding and get them water. After 3 years of extremely 
low budget requests my constituents are wondering if the Bureau 
of Reclamation wants to keep its commitment. What am I supposed 
to tell my constituents? What? Is the Bureau of Reclamation 
ignoring the funding commitment that the Federal Government 
made?
    Mr. Quint. My answer to that is absolutely not. The problem 
is that there's a lot more need than there is supply of funds 
for the projects. We've come up with a prioritization system to 
prioritize projects. We've worked with stakeholders to develop 
that process. We apply that for the amount of funding that's 
available each year.
    Unfortunately every project that's authorized and every 
project that is in a similar situation can't be funded because 
of the difficult financial situation.
    Senator Franken. Last year the request was for $70 million. 
This year it's $40 million.
    The Mni Wiconi Project has received its funding and it's 
done, I guess. So and they received $30 million last year. If 
you subtract what they got from last year you get to $40 
million.
    What happened to the money? I mean, $9.6 billion in the 
Reclamation fund. Where is that money going?
    Mr. Quint. I'm not an expert on the Reclamation fund. I do 
know that that money comes in and then it's used to fund a 
number of other projects, not just rural water projects.
    Senator Franken. OK. Thank you and the last thing I'm going 
to do is go over it now after that stern reproach on my 
colleague.
    [Laughter.]
    Senator Heinrich. You did great once you got started.
    Senator Franken. Thank you.
    Senator Schatz. Thank you, Senator Franken.
    Senator Heinrich.
    Senator Heinrich. Thank you very much. I'll apologize to my 
colleague here. I want to congratulate you on chairing the 
meeting today and for allowing me to sit in on what is not my 
subcommittee. So, thank you very much.
    Mr. Quint, I wanted to ask you a couple of things.
    One, thanks for joining us today, and certainly thank you 
for the Bureau's support of the Fort Sumner Title Conveyance 
Act and for all the diligent work at the Bureau to finalize 
what's really a mutually beneficial agreement with the Fort 
Sumner irrigation district. I'm hopeful that this can possibly 
serve as a model for other basins that are also home to some of 
the drought and endangered species challenges that we face in 
the West.
    Can you talk a little bit about what lessons we can learn 
from this process and how we might implement water forbearance 
and leasing in other basins to aid in the recovery of 
endangered species? In particular, one of the things that I've 
heard a little bit about in recent months is the possibility of 
using forbearance as an option in the middle Rio Grande Valleys 
as well and get your thoughts on that?
    Mr. Quint. We do feel like leasing could be an option for 
other commitments in other basins similar to what's going on 
here.
    Regarding the middle Rio Grande basin my understanding is 
that there are some leases that are already being used on a 
year to year basis to procure water for some of the ESA needs. 
There's also water from Price's Dairy that's being made 
available to try to meet some of those needs. We're looking and 
working with MRGDC to extend some other leasing arrangements to 
try to take care of the issues there.
    Senator Heinrich. Great.
    I'd love to get a little bit of an update on the status of 
that. I appreciate your efforts there.
    Mr. Quint. We'd be glad to do that.
    Senator Heinrich. As you know Senator Baucus' rural water 
project bill has a particular project in New Mexico that's been 
in the works for a long time, a very critical project, the 
Eastern New Mexico Rural Water System. That would build a 
pipeline to provide drinking water to several rural communities 
in my State, as well as Cannon Air Force Base. So far 
Reclamation has contributed just under $5 million to that 
project while the State and local sponsors have spent more than 
$26 million getting that off the ground.
    The communities in that area are in dire need. It's not 
unlike the situation that Senator Franken just described in 
terms of the local community really stepping up and putting 
their money where their mouth is. The long term situation there 
is quite dire.
    Portales is expected to run out of ground water in about 10 
years. That's not a long time in terms of our planning horizon.
    Clovis is projected to run dry in 20 years.
    So when you look at the current funding rate the project is 
on track to be completed by about the year 2200. That's about 
187 years from now. Congress has committed to partnering with 
local communities on this project but the slow pace of Federal 
funding means that these towns may run out of water long before 
the pipeline is ever completed and construction costs, as you 
know, go up every single year making it even more challenging.
    How can we fulfill our commitment to these communities and 
make sure that this project is actually completed in our 
lifetime in particular if we don't pass Senator Baucus' bill?
    Mr. Quint. My answer is going to sound a little generic, 
but we, every project is unique and with the limited amount of 
funding we have we have developed a prioritization list to try 
to get the money, the most bang for the buck for the projects 
that we have in the list. We have a lot more need than we have 
resources to put toward them. So we'll continue to work with 
the locals and we'll work with them on a year by year basis to 
see where they fit in the priority list and get as much money 
to all the projects that deserve it that we can.
    Senator Heinrich. I'm going to, sort of, reiterate what 
Senator Franken touched on because you can prioritize $40 
million all day long, but it's still only $40 million. It is, 
you know, forgive the pun, but it's a drop in the bucket in 
this case. We need to do something to open the tap here.
    Mr. Quint. We would love to work with you to come up with 
options.
    Senator Heinrich. Thank you.
    Senator Schatz. Thank you, Senator Heinrich.
    Mr. Quint, is it true that there's $9.6 billion in this 
fund and that we're pushing out $40 million a year? Are those 
numbers correct?
    Mr. Quint. I have no reason to doubt Senator Franken's 
numbers. But I do not know.
    Senator Schatz. OK, well for the committee's record.
    Mr. Quint. We can get that information for you.
    Senator Schatz. Can we have a better understanding of 
revenue and expenses and the cash balance there. I understand 
there may be a need to keep some cash reserves to make sure 
that projects can be pushed out. But that ratio sounds fat 
especially given that members of this committee has expressed 
such urgency in their various communities.
    So if you could get a more rigorous response to the 
committee for the record, we'd appreciate that.
    Mr. Quint. We would love to.
    Senator Schatz. Thank you very much.
    If there are no further questions I'd like to thank our 
witness for his testimony. Testimony and any statements we 
received related to today's hearing will be made part of the 
official hearing record.
    We will also keep the record open for 2 weeks to receive 
any additional statements.
    With that, this hearing is adjourned.
    [Whereupon, at 3:20 p.m., the hearing was adjourned.]

                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

        Response of Robert Quint to Question From Senator Schatz

    Question 1. Is Congressional approval of these Acts in the best 
interest of the beneficiaries?
    Answer. The Department's positions on the seven bills before the 
Subcommittee was specific to each of their Reclamation-specific 
provisions. In every case, the Department believes its position is in 
the best interest of the United States and taxpayers as a whole.

       Responses of Robert Quint to Questions From Senator Wyden

    Question 1. What I heard the administration say at Tuesday's 
hearing are the same objections from the Bureau that I heard last 
time--namely that the Title XVI list is chock full and there's no room 
for any newcomers. How long will it take at current funding levels to 
get through the current Title XVI backlog?
    Answer. The remaining Federal cost share for all authorized Title 
XVI projects is approximately $568 million. Projects considered active 
have an outstanding Federal cost share of approximately $375 million. 
The President's budget request for the Title XVI Program was $20.2 
million in FY 2013 and is $14 million in FY 2014. Assuming that no 
additional projects are authorized, and assuming annual appropriations 
within the range of recent requests, the time required to provide the 
maximum authorized Federal cost share for active projects would be 
between 18 and 26 years.
    Question 2. I'm concerned the Bureau's self-imposed policy of 
opposing any additions to the list ignores a prospective project's 
individual merit, progress through the process, and expected benefits. 
How does the Bureau take those qualities into consideration when 
evaluating projects on the list? Does the Bureau make similar 
evaluations of prospective projects for which its assistance is 
requested?
    Answer. In 2010, Reclamation developed funding criteria to identify 
Title XVI projects that most effectively stretch water supplies and 
contribute to water supply sustainability; address water quality 
concerns or benefit endangered species; incorporate the use of 
renewable energy or address energy efficiency; deliver water at a 
reasonable cost relative to other water supply options; and that meet 
other important program goals. Reclamation has incorporated these 
criteria into funding opportunity announcements used each year to 
invite sponsors of authorized projects to apply for funding. Proposals 
are evaluated against these criteria to identify projects for funding. 
We believe this process has been successful at allowing Reclamation to 
prioritize the projects that most closely match program goals through a 
process that is transparent to all potential applicants and the public. 
When sufficient program funding is available, Reclamation also uses 
those criteria in funding opportunities that invite sponsors of 
potential new projects to request a small amount of assistance to 
develop new Title XVI feasibility studies.

      Responses of Robert Quint to Questions From Senator Johnson

    Question 1. In response to my question regarding incorporating the 
existing community systems into the Mni Wiconi Project and the trust 
responsibility of the United States, you answered that the BOR takes 
the federal trust responsibility seriously and that BOR will work with 
the other agencies. I would like additional detail, however, on exactly 
how you plan to work with the other agencies, specifically on the 
community upgrades effort? Would not legislation directing the agencies 
to come together with timelines for action work best to ensure true 
coordination and the desired outcomes?
    Answer. Reclamation supports the goal of interagency cooperation 
and efforts to engage other agencies to participate in the Mni Wiconi 
Project utilizing their existing authorities. An interagency agreement, 
as proposed by Reclamation during the August 8, 2012 Joint Consultation 
Meeting with Federal Agencies, has the potential to achieve this 
objective. The draft agreement discussed at that meeting provides that 
the agencies will meet quarterly during the first year to evaluate and 
prioritize the needed system improvements. The agencies then would 
develop a schedule to fund and implement these improvements. By 
coordinating this effort, the agencies, utilizing existing authorities, 
would leverage multiple funding sources, and make more effective use of 
available federal funds to accomplish the system improvements.
    This proposed interagency agreement and effort also meets the 
intent of the ``Memorandum of Understanding Among the Department of 
Agriculture, Department Of Health and Human Services, Department of 
Housing and Urban Development, Department of the Interior, and the 
Environmental Protection Agency to Better Coordinate the Federal 
Government Efforts in Providing Infrastructure and Promoting 
Sustainable Practices to Support the Provision of Safe Drinking Water 
and Basic Sanitation in American Indian and Alaska Native Communities'' 
signed in March 2013.
    Reclamation agrees that language in this amendment to the Mni 
Wiconi Project Act would provide further direction to the agencies to 
work together on this effort.
    Question 2. Given that the existing community systems are in 
operation and many are currently in a fine state [of] repair to 
successfully distribute water, is it not a reasonable approach to 
transfer these systems into the Project as the Act intended so they can 
be eligible for OMR funding and regular maintenance per BOR standards 
while also having other federal agencies assist in the systems' 
improvement, repair and replacement as the legislation would provide?
    Answer. Reclamation's assessment of the existing community water 
systems identified a number of serious deficiencies. The majority of 
the valves and hydrants are inoperable on the older systems. The 
inability to perform regular flushing compromises capabilities of 
disinfectants needed to meet water quality standards. Water reservoirs 
lacked regular cleaning, inspection, and require coating repairs. Water 
service needed to be shut off to an entire community to repair pipeline 
leaks on some systems. Reclamation is also pursuing further 
investigations to ascertain the condition and potential degradation of 
the asbestos cement pipe installed in many of these communities. 
Reclamation had previously determined costs for existing community 
upgrades to be properly allocated to the construction component of the 
project. Since these existing systems were originally constructed using 
funds and authorities of other agencies, Reclamation believes any 
improvements needed to correct deficiencies in existing systems should 
be funded by those other agencies before those systems are accepted 
into the project. These communities are, or will be, connected to and 
provided water from the Mni Wiconi Project which will significantly 
reduce their current and future operating expenses in the interim while 
deficiencies are being addressed. Once existing facilities have been 
upgraded, community water systems may be transferred into, and operated 
and maintained as a part of, the entire Mni Wiconi Project.
    Question 3. The Mni Wiconi Project Act is clear that the existing 
community systems are to be a part of the Oglala Sioux Rural Water 
Supply System, the Rosebud Sioux Rural Water System and the Lower Brule 
Sioux Water System and the Act authorizes the use of operation and 
maintenance appropriations for these systems. Given this and the fact 
that a majority of the population on each of the three reservations is 
served by these existing systems, wouldn't you agree that these 
authorized appropriations need to be used to upgrade these systems 
prior to and after the transfer in order to fulfill the intentions of 
the Act and the trust responsibility of the United States which is 
specifically set forth in the authorizing Act?
    Answer. While the Act authorizes existing water systems to be part 
of the project, it does not authorize the use of O&M funds for the 
initial costs to remedy water system deficiencies. The initial costs to 
remedy the deficiencies in the existing water systems should 
appropriately be allocated to the construction costs of the project. 
However, the Final Engineering Report for the project and the remaining 
construction ceiling does not include funds for the needed improvement 
to integrate some existing community systems into the project. In view 
of this situation, under the existing ceiling most of these communities 
will be connected and served water from the Mni Wiconi Project, thereby 
fulfilling the intent of providing reliable, quality water to the 
residents of these reservations. The communities that will not be 
connected within the existing construction ceiling currently have an 
adequate water supply system. Reclamation estimated the cost to remedy 
the existing water system deficiencies at $29 million. Placing the 
burden of the cost of improving existing water systems on Reclamation's 
O&M program reduces funding needed for ongoing maintenance for 
Reclamation's critical water and power infrastructure (including Mni 
Wiconi) and jeopardizes their reliability and safety. Since authorities 
to address these community water system deficiencies reside under other 
agencies, we believe the interagency agreement, prioritization, and 
funding approach previously described would best address this issue.
    Question 4. You mentioned an interagency agreement proposed by 
Reclamation during an August 2012 Joint Consultation meeting. Could you 
please tell us the progress that has been made in developing such 
interagency agreement and what specifically Reclamation is doing to 
further progress?
    Answer. A draft agreement was distributed and discussed at that 
meeting. The agencies in attendance concurred with the intent of the 
agreement. After that meeting, the Oglala Sioux Tribe requested that 
further discussions and revisions to the agreement be delayed while the 
Mni Wiconi Amendment was introduced and acted upon.

      Responses of Robert Quint to Questions From Senator Barrasso

    Question 1. Can you define what a ``rural water project'' is 
supposed to mean with regard to S. 715? The term that is defined in the 
2006 Rural Water Supply Act is ``rural water supply project'' not 
``rural water project.''

          a) How would the Bureau of Reclamation define the term 
        ``rural water project'' if the term is not defined in this 
        bill?
          b) What projects would this cover?

    Answer. Reclamation defines a ``rural water project'' as a specific 
project that has been authorized by Congress and meets the criteria in 
the Rural Water Supply Act (the Act) of 2006, which became P.L. 109-
451. Although the term in S. 715, ``rural water project'' does not 
exactly match ``rural water supply project'' as defined in the Act, 
Reclamation believes the intent to be the same and would use the 
definition for new projects that meets the Act's criteria. The term 
``rural water supply project'' means a project that is designed to 
serve a community or group of communities each of which has a 
population of not more than 50,000 inhabitants, which may include 
Indian tribes and tribal organizations, dispersed homesites, or rural 
areas with domestic, industrial, municipal, and residential water. It 
also includes incidental livestock watering and noncommercial 
irrigation of vegetation and small gardens of less than 1 acre.
    There are currently seven remaining authorized rural water supply 
projects: Garrison Diversion Unit; Mni Wiconi Rural Water System (RWS); 
Lewis and Clark RWS; Fort Peck Reservation-Dry Prairie; North Central-
Rocky Boys; Jicarilla Apache RWS; and Eastern New Mexico. The bill 
would also cover any projects recommended by the Secretary and 
subsequently authorized by Congress on the basis of a feasibility study 
submitted to the Secretary on or before September 30, 2012. Reclamation 
received two feasibility studies before that date: the C.C. Cragin 
Reservoir Water Supply Project (Payson, Arizona) and Dry Redwater Rural 
Water System (east central Montana) feasibility studies. If authorized 
by Congress, these projects would be eligible for funding.
    Question 2. On page 3 of S. 715, with regard to expenditures from 
the rural water fund, it says the Secretary ``may expend from the fund 
not more than the sum of $80 million.'' In section (2) on page 4, it 
states again that ``the Secretary may use the amounts from the fund to 
complete construction of rural water projects.''

          a) Does this language give the Secretary the ability not to 
        spend the money on some of the authorized rural water projects 
        that qualify for funding in this bill?
          b) Is this mandatory spending? If this is mandatory spending, 
        why would it make sense to give the Secretary this discretion?

    Answer. a) Yes, the Secretary has the discretion to allocate 
appropriations among the authorized projects, including the ability to 
not spend money on some authorized projects. However, the Secretary's 
discretion is limited by the conditions in Section (3) on pages 5 
through 7, which stipulate that appropriations must be used to achieve 
defined programmatic goals and that the Secretary must develop 
prioritization criteria to distribute funds from the rural water 
construction fund.
    In compliance with previous direction from received from Congress 
in 2012, Reclamation developed and applied funding prioritization 
criteria that meet the requirements of this bill. The criteria were 
published in Reclamation's 2012 draft assessment report ``Assessment of 
Reclamation's Rural Water Activities and Other Federal Programs that 
Provide Support on Potable Water Supplies to Rural Water Communities in 
the Western United States'' (www.usbr.gov/ruralwater/docs/Rural-Water-
Assessment-Report-and-Funding-Criteria.pdf).
    Answer. b) No, the spending is discretionary. There are two reasons 
the Administration supports discretionary funding for these projects. 
First, spending on rural water construction projects competes with 
other priorities within Reclamation's budget, including aging 
infrastructure, Indian water rights settlements, environmental 
compliance and restoration actions, facilitating more sustainable water 
supplies, and other priorities intended to address future water and 
energy related challenges. The bill requires offsets for any amount 
expended from this fund. Therefore, use of those funds must be weighed 
against other Federal priorities, including deficit reduction.
    Second, the Secretary's discretion will enable Reclamation to 
prioritize the allocation of funds in a way that will expedite the 
delivery of water and other project benefits as intended, while 
emphasizing program priorities. As noted above, Reclamation has already 
developed and applied project prioritization criteria that meet the 
requirements of the bill. In addition, Reclamation has stated that 
while it would allocate larger amounts of available funding to higher-
ranked projects, all projects would receive some funding unless special 
circumstances dictated otherwise. An example of a special circumstance 
would be a project for which previous years' appropriations had not 
been fully expended. The Secretary's discretion would allow Reclamation 
to direct more funding toward the completion of authorized projects in 
the year funds are appropriated.
    Section 3 (b) (1) of the S. 715 states that the Secretary of the 
Treasury shall deposit in the Fund $80,000,000 of the revenues that 
would otherwise be deposited for the fiscal year in the Reclamation 
fund. This section further states that the amounts deposited in the 
Fund shall be made available in accordance with this section without 
further appropriations. This language clearly removes some discretion 
from the administration for other uses of this funding. The use of the 
term ``may'' as referenced in your question provides some discretion on 
whether the funds are fully expended each year and the timeframe under 
which expenditures occur. If a rural water project did not have plans, 
specifications, and rights-of-way prepared, they may not have the 
capability to expend all of the funds in a specific year, whereby the 
funds would be held until needed.
    Question 3. With regard to page 3 of S. 715 under the section 
entitled ``Limitation'' it states that ``no amounts may be deposited 
in, or made available from, the Fund under those paragraphs if the 
transfer or availability or the amounts would increase the deficit.''

          a) Can you provide me a list of all projects or programs that 
        will be reduced or revenue accounts that will be increased to 
        make this bill deficit neutral?
          b) What are the different ways that the Secretary can use to 
        make these transfers deficit neutral?
          c) Shouldn't there be a formal process to ensure this bill 
        will be deficit neutral?

    Answer. The legislation is silent as to which projects or programs 
should be reduced under its provisions, as well as means to assure that 
there is no impact on the deficit. As such, if the bill were enacted, 
implementation of this language would require the Department to go 
through a process, working with the Department of the Treasury and 
Office of Management and Budget, to transfer the funds called for under 
Section 3(e).

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

      Statement of the Department of the Interior, on S.J. Res. 12

    Thank you for providing the Department of the Interior the 
opportunity to provide its views on Senate Joint Resolution 12 which 
proposes to consent to and approve three amendments, Act 107, 2000 
Hawai`i Session Laws, Act 12, 2002 Haw. Sess. Laws, and Act 16, 2005 
Haw. Sess. Laws., proposed by the legislature of the State of Hawai`i 
to the Hawaiian Homes Commission Act (HHCA), 1920, as amended. 
Specifically, S.J. Res. 12 seeks to amend the HHCA to allow the 
interest rate on loans from the Hawaiian home-loan fund and the 
Hawaiian home general loan fund to be set by the Hawaiian Homes 
Commission through an administrative rule, rather than by law. S.J. 
Res. 12 also changes the qualifications of homestead lessees by 
authorizing a Hawaiian Homes Commission Act homestead lessee to 
transfer, or designate a successor to, their leasehold interest to a 
brother or sister who is at least one-quarter Native Hawaiian.
    By way of background, Congress enacted the HHCA in 1921 to provide 
a homesteading program on approximately 200,000 acres of land, called 
the ``available lands,'' for native Hawaiians. In section 4 of the 
Hawai`i Admission Act, 73 Stat. 4, Congress required ``the consent of 
the United States'' to certain State of Hawai`i enactments amending the 
HHCA. In section 204 of the Hawaiian Home Lands Recovery Act (HHLRA) of 
November 2, 1995, 109 Stat. 361, Congress formalized the role of the 
Department in securing any required congressional consent and approval 
to State enactments.
    The HHLRA provides that the Department is to review proposed state 
amendments to the HHCA to determine whether congressional approval is 
needed to effectuate the United States' consent required under Section 
4 of the Hawai`i Admission Act. If the Department deems that 
congressional approval is not required, it so notifies the State of 
Hawai`i and Congress. If the Department deems that congressional 
approval is required, as the Department has for the three proposed 
amendments that are the subject of S.J. Res. 12, the Department is to 
submit a draft joint resolution approving the amendments to Congress, 
together with a recommendation on whether they should be approved. 
Here, we wish to acknowledge that the introduced bill was a product of 
close collaboration among the Committee on Energy and Natural 
Resources, the Department, and the Hawai`i Senate delegation.
    In carrying out the Department's statutory trust responsibilities 
to the beneficiaries of the HHCA, the Department obtained input from 
participants during a Beneficiary Forum with the Department's Office of 
Native Hawaiian Relations. The forum was held in May 2008 in Hawai`i to 
discuss with leaders of the Native Hawaiian beneficiary community the 
State enactments proposed to amend the HHCA. Due to public request, the 
Department extended the comment period and conducted an electronic 
consultation with the Native Hawaiian community.
    Based upon the Department's review and the criteria listed in 
section 4 of the Hawai`i Admission Act, the Department determined that 
Act 107, 2000 Haw. Sess. Laws, Act 12, 2002 Haw. Sess. Laws, and Act 
16, 2005 Haw. Sess. Laws, require congressional consent before such 
proposed amendments take on the force of law. The Department supports 
the United States consenting to and approving of Act 107 and remains 
neutral on the consenting to and approving of Acts 12 and 16.
    This concludes the Department's prepared testimony on S.J. Res. 12, 
and the Department would be happy to answer any questions the 
Subcommittee may have.
                                 ______
                                 
      Statement of Lennis ``Red'' Arndt, Chairman, Lewis & Clark 
                    Regional Water System, on S. 715

    Mr. Chairman, Ranking Member and Members of the Committee:
    My name is Red Arndt, Chairman of the Lewis & Clark Regional Water 
System. On behalf of our Board of Directors, I am pleased to submit 
this statement in strong support for the Authorized Rural Water 
Projects Completion Act.
    Our Executive Director, Troy Larson, testified in support of the 
bill at last year's hearing. We were disappointed that the bill did not 
become law, but optimistic that with renewed effort S. 715 will pass 
the 113th Congress and be signed by the President. This bill was and is 
perhaps the last, best opportunity for Lewis & Clark and other 
authorized rural water projects to receive the federal funding that is 
due and ensure the estimated 300,000 people in the tri-state region can 
benefit from the Lewis & Clark Regional Water System.
    Authorized and signed into law in 2000, the project is according to 
the Bureau of Reclamation, currently 76 percent complete. Last July we 
began producing treated water from our treatment plant, which is being 
delivered to 11 of our 20 members. Lewis & Clark is now an operational 
system, which is the good news. However, the bad news is the schedule 
to connect the remaining nine members is entirely dependent upon 
federal funding, which for the last four years has been gutted to the 
point where it does not even cover the rate of inflation on the 
remaining federal cost share ($2 million in FY11, $5.5 million in FY12, 
$4.5 million proposed for FY13 and $3.2 million proposed for FY14).
    The three states and 20 local members have pre-paid close to $154 
million, representing 100 percent of the non-federal cost share. Many 
members pre-paid millions a decade before expecting to receive water, 
showcasing the strong local support and importance of Lewis & Clark to 
the region. By contrast the remaining federal cost share increased from 
$194.3 million in 2010 to $200.6 million in 2011. That number will 
increase when the Bureau of Reclamation provides us with the 2012 
number sometime in May of this year. This demonstrates how federal 
funding is not even keeping pace with inflation. We are on a path to 
infinity. Even if Lewis & Clark receives $10 million a year, our 
engineers estimate the project would not be completed until 2050.
    This delay is a double-whammy for taxpayers. Not only does the 
project become more expensive, but it takes longer to realize the 
economic benefits. Lewis & Clark would create thousands of jobs on the 
front end through construction and manufacturing, and more importantly 
many more long-term jobs on the back end through expanded economic 
development. As has been noted by our tri-state congressional 
delegation, Lewis & Clark will pay for itself many times over.
    We have a number of economic impact examples. A large pork 
processing plant in Worthington, Minnesota cannot expand because of the 
lack of water. Ethanol plants have been turned away in northwest Iowa 
and southwest Minnesota. Proposed dairies have been turned away in 
southwest Minnesota.
    When times get tough you go back to the basics. What is more basic 
than drinking water? It's the cornerstone of life and economic 
development. The three states and 20 local members have gone above and 
beyond by pre-paying their share of the project. To be perfectly frank, 
there are no words left but cuss words to describe the members' anger 
and outrage that the federal government is not honoring its commitment. 
Given the drought, the federal government is leaving us high and dry at 
a time when we need water the most.
    Lewis & Clark greatly appreciates the strong bi-partisan support it 
has enjoyed through the years from our tri-state congressional 
delegation. We applaud Chairman Baucus for his leadership on this issue 
and the Senate Energy & Natural Resources Committee for this hearing. 
We respectfully urge Congress to pass this bill so Lewis & Clark and 
the other projects that are languishing on the Bureau of Reclamation's 
plate can be completed in a timely manner, bringing much needed water 
to our nation's heartland. Thank you.
                                 ______
                                 
Statement of Ed Brookshier, City Manager, City of Hermiston, OR, on S. 
                                  693

    Chairman Schatz and Members of the Subcommittee, thank you for 
holding this hearing and allowing me to testify in support of S. 693 
that will authorize the Bureau of Reclamation to participate in the 
construction of the City of Hermiston Water Recycling project. My name 
is Ed Brookshier and I am the City Manager for the City of Hermiston, 
Oregon. I wish to publicly thank Senator Ron Wyden for introducing this 
important piece of legislation that is crucial to the City's 
reclamation and reuse of its municipal wastewater. This reclamation 
effort will provide high quality recycled water for reuse as a source 
of irrigation supply. The City's recycled water production is estimated 
to be 3,600 acre-feet annually, of which 1,800 acre-feet will supply 
irrigation and 1,800 acre-feet will be discharged to the Umatilla River 
in winter. This new partial source of drought proof irrigation water 
will provide an added supply to the Bureau of Reclamation-owned and 
locally operated West Extension Irrigation District (WEID).
    The City has negotiated an easement license with the Bureau of 
Reclamation for the recycled water pipeline that will deliver the 
recycled water to the WEID Main Canal. This license allows the City to 
construct and operate the recycled water pipeline for a period of 25 
years with the ability to extend the license based on mutual agreement 
of the Bureau of Reclamation and the City. The City is also in the 
process of negotiating the NPDES permit to discharge the recycled water 
to the irrigation canal. This permit will establish the water quality 
criteria and operating conditions for the recycled water discharge to 
the irrigation canal. The Bureau of Reclamation and the City met to 
finalize this agreement in June 2011 and the final permit was signed in 
2012. A comprehensive feasibility study has been completed on the 
project and the Bureau of Reclamation has verified that it meets the 
requirements to be eligible for the Bureau's Title XVI Water Recycling 
Program.
    Hermiston, Oregon is a progressive, growth-oriented urban center 
with a total trade area population of 320,900. Located in a relatively 
dry section of the State of Oregon, positioned between the Cascade 
Mountains to the west and the Blue Mountains to the east, Hermiston is 
placed in a unique geographical area that offers an extended growing 
season and a variety of agricultural crops and products. The immediate 
Hermiston area has been able to diversity its economy with food 
processing, cold storage, warehousing, and distribution facilities.
    The benefits of developing a high quality source of recycled water 
followed by its use as a source of irrigation are numerous and extend 
to: the West Extension Irrigation District, the City of Hermiston, The 
Confederated Tribes of the Umatilla Indian Reservation and the region 
as a whole.
    The West Extension Irrigation District benefits from this project 
by obtaining an additional source of supply, which is both high in 
quality and drought proof. Since water is delivered to the District, 
energy required for pumping is also reduced by approximately $13,000 
annually. In addition, the 1,800 acre-feet of irrigation water provided 
annually will supply water to 600 acres, reducing the demand on the 
District's surface water supply sources. Finally, this added source of 
partial irrigation water improves the District's operational 
flexibility.
    The City of Hermiston benefits primarily through meeting its 
upcoming National Pollutant Discharge Elimination System Permit 
(NPDES), which is currently being negotiated with the Oregon Department 
of Environmental Quality (ODEQ). The City has received support for this 
project at the highest levels of ODEQ and has been promised that the 
resources will be made available to complete the permitting process in 
2013. This permit requires the City to both develop high-quality 
recycled water and remove its discharge from the Umatilla River 
continuously from April 1 to October 31 of each year. The West 
Extension Irrigation District provides the long-term, multi-farm 
discharge option that allows the City to remove its discharge from the 
River during this period of each year. If the City is unable to 
discharge to the District, it will be in continuous violation of 
current temperature standards and periodic violation of the ammonia 
standard contained within the City's NPDES Permit. Secondary benefits 
to the City include a reduction in energy cost from reduced pumping, 
estimated to be $42,000 annually, and the certainty that this solution, 
though expensive, will provide service for decades to come.
    The Confederated Tribes of the Umatilla Indian Reservation will 
also benefit from development of high-quality recycled water throughout 
the year. These benefits include a significant improvement in the 
quality of recycled water discharged to the Umatilla River in winter, 
further protection of sensitive salmonid habitat during summer when the 
recycled water is used for irrigation in lieu of River discharge, 
increased environmental monitoring at the recycled water treatment 
facility and long-term nature of this solution.
    The region as a whole also benefits from the treatment that 
develops high-quality recycled water. This water source is protective 
of the environment in both summer and winter and provides an added 
source of irrigation supply to agriculture, which is the backbone of 
the Hermiston economy. The City is planning on beginning construction 
of the Recycled Water Plant in early 2013 to take advantage of a very 
competitive construction-bidding environment. This effort will have an 
immediate economic impact to our local economy as much needed jobs will 
be created through an infrastructure project of this size. More 
importantly, the addition of the new and reliable water source created 
by this project will have a profound long-term impact to the farming 
industry in our area, which faces an uncertain future due to dwindling 
water supplies.
    Mister Chairman, while I understand and appreciate the strict 
budgetary limitations that your Committee and Congress as a whole are 
faced with, I believe that the Hermiston Recycled Water Facility is a 
worthwhile federal investment due to the numerous federal objectives 
that will be advanced through this project. Combined with the serious 
regulatory issues the City of Hermiston is faced with and the need for 
added drought proof sources of recycled water in the Hermiston area for 
irrigation, it is essential that we complete construction of this 
project in a timely manner. The City has secured the necessary local 
matching funds for this project and is prepared to contribute 75 
percent of the total project cost. Federal participation in this 
endeavor is vital to ensure that this becomes a reality.
                                 ______
                                 
            North Central Montana Regional Water Authority,
                                         Havre, MT, April 25, 2013.
Hon. Brian Schatz,
Chairman, Subcommittee on Water & Power, U.S. Senate, Washington, DC.
Hon. Mike Lee,
Ranking Member, Subcommittee on Water & Power, U.S. Senate, Washington, 
        DC.
Re: Comments Submitted to U.S. Senate Committee on Energy and Natural 
Resources; ``Authorized Rural Water Projects Completion Act'' (S. 715)

    On behalf of the North Central Montana Regional Water Authority 
(NCMRWA), we appreciate the opportunity to submit comments to the 
Senate Subcommittee on Water and Power regarding Senate Bill 715, the 
``Authorized Rural Water Projects Completion Act''. The NCMRWA 
appreciates the ongoing efforts of the Montana state delegation, as 
displayed by this legislation, to work within the halls of Congress to 
ensure that such basic necessities as adequate water infrastructure is 
made available to all of the citizens of Montana.
    It is with this sentiment in mind that we draw upon the words that 
Senator Max Baucus used in his official testimony regarding S. 715; 
Senator Baucus referenced the number of Montanans that must still rely 
upon outdated and unreliable wells for their domestic water needs. This 
bipartisan bill will aid in securing the necessary Congressional 
authority and direction to continue the construction and work being 
done to bring water to all of those in Montana and the surrounding 
regions.
    As represented in the President's Fiscal Year 2014 budget, there 
are proposed funds of $5.4 million that, if enacted, will be allocated 
to the Montana water project. However, the uncertainty of today's 
budget environment in D.C. does not lend certainty to this issue moving 
forward, which makes the passage of S. 715 paramount in order to secure 
the establishment of a Reclamation Rural Water Construction Fund within 
the Treasury. Were S. 715 passed, the fund will require a designated 
appropriation of funds within the account for each fiscal year between 
2014 and 2030, to be used solely for the purpose of the completion of 
rural water projects.
    While a reliable water infrastructure system is taken for granted 
by many Americans, those in Montana know the precious nature of such a 
luxury that is not yet made widely available to the population. While 
we appreciate the $40 million that has been proposed as allocated to 
the Bureau of Reclamation within the President's FY 2014 budget, we ask 
that Congress also take action on this issue and provide certainty to 
all Montanans that a permanent and secure water supply be made 
available. Through the passage of S. 715, rural communities across the 
country will be provided not only with the necessary means by which to 
secure such a basic necessity but also the federal support by which to 
do so.
    We appreciate the opportunity to submit comments on this needed 
legislation; if you require any additional information or have any 
further questions regarding S. 715 and its impact on Montana we 
encourage you to contact Larry Bonderud 406-450-5196.
            Sincerely,
                                            Larry Bonderud.
                                 ______
                                 
  Prepared Statement of the Oglala Sioux Tribe, Rosebud Sioux Tribe, 
     Lower Brule Sioux Tribe and West River/Lyman-Jones, on S. 684

                              INTRODUCTION

    Thank you for the opportunity to submit testimony on this most 
important legislation, S.684, the Mni Wiconi Project Act Amendments of 
2013. This testimony has been developed conjunctively and is offered on 
behalf of the Oglala Sioux Tribe, West River/Lyman-Jones, Inc., the 
Rosebud Sioux Tribe and the Lower Brule Sioux Tribe, the four 
beneficiaries and sponsors of the Mni Wiconi Rural Water Supply System 
in southwestern South Dakota (Figure 1)*. S. 684, Re-authorization of 
the Mni Wiconi Project, will:
---------------------------------------------------------------------------
    * Figure has been retained in subcommittee files.

   increase the authorized Project ceiling for construction by 
        $14.308 million (October 2012 dollars) for completing drinking 
        water distribution projects on the Pine Ridge and Rosebud 
        Indian Reservations,
   extend the completion of construction through 2016,
   transfer existing community water systems to the Project 
        within 5 years of enactment of S. 684 and
   provide for interagency agreements between the Bureau of 
        Reclamation and

    --EPA,
    --Department of Agriculture
    --Department of Health and Human Services and
    --Department of Housing and Urban Development
    --Bureau of Indian Affairs

    to assist with completing the tribal rural water systems including 
        the upgrade of existing water systems in reservation 
        communities, and in the case of the Department of Agriculture 
        and Bureau of Indian Affairs, assist in completing the 
        livestock distribution system to reservation rangelands 
        consistent with the original intent of the Project.

    In an effort to reach an agreement with the Bureau of Reclamation 
on the scope of the reauthorization, the Project Sponsors have 
eliminated the following provisions from S. 3464, which was introduced 
in 2012 and is now embraced in S.684:

   extension of the service area of the Oglala Sioux Rural 
        Water Supply System (OSRWSS) to include a small area of 
        reservation trust land in Nebraska;
   recover water costs for Rosebud Sioux tribal members on 
        Trust Land in the community of White River
   the Mni Wiconi Project Emergency Plan
   mitigation of fish and wildlife losses
   feasibility studies of wastewater systems

    The Bureau of Reclamation continues to oppose the reauthorization 
despite our good-faith efforts to reach agreement.
    Since introduction of S. 3464 in 2012 and the hearing of this 
Subcommittee on September 19, 2012, additional construction needs have 
been identified on the Pine Ridge and Rosebud Indian Reservations, but 
no increase in the reauthorization is requested.
    On the Pine Ridge Indian Reservation, for example, the need for a 
new interconnecting pipeline between the east and west side of Pine 
Ridge Village was identified by the Bureau of Reclamation. The facility 
has an estimated cost of $620,000. Parts of the supervisory control and 
data acquisition (SCADA) system for the Reservation may not be covered 
by the authorized construction ceiling. Rural services in the Wounded 
Knee and Rainbow Valley areas may exceed the authorized construction 
ceiling. These costs are in addition to the $8.6 million in additional 
funding needed to serve the Allen/Batesland/Martin service area, which 
is the Pine Ridge part of the $14.308 million construction 
reauthorization request brought forward from S. 3464 to S.684.
    Offsetting the increases in construction costs, the Director of the 
Oglala Sioux Rural Water Supply System (OSRWSS), for example, has been 
identifying real savings in the SCADA system and in the elimination of 
other unnecessary costs. Combined with favorable bidding results since 
last fall, it is contemplated that the Directors (and Tribal 
leadership) of both the OSRWSS and the Rosebud Sioux Rural Water System 
(RSRWS) can re-prioritize construction segments and complete the 
drinking water portion of the Mni Wiconi Project within the $14.308 
million reauthorization request. In the event of surplus funds, they 
will be applied to much needed community system upgrades.
    Individually and collectively, the Project Sponsors support S. 684 
and seek the support of the Subcommittee.

                            PROJECT HISTORY

    The Mni Wiconi Project Act of 1988 (Public Law 100-516) authorizes 
and directs the Secretary of the Interior to construct the Mni Wiconi 
Rural Water Project to provide a safe and adequate municipal, rural, 
and industrial water supply to both Indian and non-Indian residents of 
southwestern South Dakota. The Act recognizes the poverty on the 
reservations and severely poor water quantity and quality on the 
reservations and in the West River/Lyman--Jones service area. 
Significantly, the Act also recognize the United States trust 
responsibility to ensure that adequate and safe water supplies are 
available to meet the economic, environmental, water supply, and public 
health needs of the reservations.
    The Mni Wiconi Project has reached an historic milestone following 
the long struggle beginning in 1988 of the Oglala Sioux Tribe and West 
River/Lyman-Jones to complete this invaluable drinking water project. 
The Rosebud Sioux Tribe began work on their rural water system in 1984 
and became part of the Mni Wiconi Project with the passage of P.L. 103-
434 in 1994. The Lower Brule Sioux Tribe also joined the Project in 
1994 and its water system is completed pursuant to an agreement among 
the Sponsors for early completion which resulted in substantial savings 
for the Project. S.684 provides the means to fulfill the vision of safe 
and adequate water supply for Oglala Sioux and the Rosebud Sioux 
Tribes.
    The Project is a testament to the ability of the tribal sponsors 
and non-Indian neighbors to collaborate to improve the health and 
welfare of our respective constituencies. When the Project was 
initiated, relationships between us were strained at best and governed 
by events many generations before us but still fresh in the minds of 
our peoples. As the Project reaches its conclusion, we have built 
mutual respect and a relationship that evolved from the necessity of 
working together toward a common good. None of this would have been 
possible without the continuous efforts of the Subcommittee and the 
South Dakota delegation, and especially the sponsor of S. 684, the 
Honorable Tim Johnson.
    It is important that the Committee understand the background upon 
which we embarked to build the largest rural water project in the 
world. In the beginning we were joined by our partners in the project, 
West River/Lyman-Jones, for the purpose of bringing good quality water 
from the Missouri River to the Badlands of Western South Dakota. The 
Missouri River as a water source is important to the Lakota people 
because the River is contained within the Great Sioux Reservation 
established by the Treaty of 1868. Our forefathers saw to it that the 
entire Missouri River was included in the lands reserved to us. The 
water users in the West River/Lyman-Jones service area live within the 
boundaries of the Great Sioux Reservation, which includes all of South 
Dakota west of the left high bank of the Missouri River.
    As formulated in the late 1980s, the Project was of great concern 
to the members of the Oglala Sioux Tribe. They felt the history of 
water projects on Indian reservations at that time would be played out 
on the Pine Ridge Indian Reservation: that non-Indian interests would 
receive water and Project benefits quickly and Indians would be left 
with delay and necessary Project features unfinished. They looked at 
the projects authorized on the San Juan River in June 1962, and 
observed that non-Indians received project benefits immediately, but 
the Indians still struggle to get their projects completed decades 
later, even though they were authorized half a century before. They 
also observed opposition to Indian projects from the Office of 
Management and Budget. Based on these concerns, the majority of members 
of the Oglala Sioux Tribe were opposed to the Project in its early 
years.
    The initial concerns were overcome by a better understanding of the 
provisions of the Mni Wiconi Project Act, a reformulation of the 
Project in the Final Engineering Report of May 1993 and amendment of 
the Act to include the Rosebud Sioux Tribe and Lower Brule Sioux Tribe. 
Significantly and of high importance to the Tribe, the United States 
acknowledged in the Act a trust responsibility in the Mni Wiconi 
Project Act to ensure that adequate and safe water supplies are 
available to meet the economic, environmental, water supply, and public 
health needs of the Pine Ridge Indian Reservation. Also, important to 
the comfort level of the Oglala Sioux Tribe was the Act's provision 
that title to the OSRWSS would be held in trust by the United States 
for the Tribe. This includes the principal components of the Mni Wiconi 
Project such as the intake on the Missouri River, the regional water 
treatment plant on the Missouri River and the main transmission 
pipelines from the Missouri River to West River/Lyman-Jones, the 
Rosebud Sioux Tribe, the Lower Brule Sioux Tribe and the Oglala Sioux 
Tribe. Further, pursuant to the Act, the Oglala Sioux Tribe entered 
into a PL 93-638 (Indian Self-Determination and Education Act) 
cooperative agreement with the Bureau of Reclamation to plan, design, 
construct, operate, maintain and replace OSRWSS.
    The Mni Wiconi Act Amendments of 1994 (Public Law 103-434, Title 8) 
added the Rosebud Sioux and the Lower Brule Sioux Rural Water Systems 
to serve their respective reservations, thereby increasing the number 
of Project ``Sponsors'' to four. The amendments also raised the 
authorized appropriation ceiling for the Project from $87.5 to $263.2 
million (1993 dollars), subject to cost indexing, and provided that the 
systems would generally be constructed in accordance with the Project's 
Final Engineering Report, dated May 1993 for the purposes of providing 
domestic, commercial, municipal, rural, industrial, and livestock 
water. Completion of project construction was expected in 2003.
    The overall Project includes a 14.5 million gallon per day regional 
water treatment plant, 4,500 miles of pipeline, 60 booster pump 
stations, and 35 water storage reservoirs. The Project will ultimately 
serve more than 52,000 people, including more than 40,000 on the three 
Indian reservations. It is a monumental endeavor which is providing 
myriad benefits to those most in need. It is a project that must be 
reauthorized to complete the drinking water components on the Pine 
Ridge and Rosebud Indian Reservations.

                  IMPACT ON QUALITY OF LIFE AND HEALTH

    It is respectfully submitted that the Project is unique and that no 
other project in the Nation has greater human needs. The Project 
beneficiaries, particularly the three Indian Reservations, have the 
lowest income levels in the Nation. Poverty in the Indian service areas 
is consistently deeper than elsewhere. At the beginning of the third 
millennium one could not find a region in our Nation in which social 
and economic conditions are more deplorable.
    Before the Mni Wiconi Project, health risks to the Indian people 
from drinking unsafe water were severe. Health effects of water borne 
diseases were consistently more prevalent than elsewhere in the Nation, 
due in part to (1) lack of adequate water in the home and (2) poor 
water quality where water was available. Higher incidences of impetigo, 
gastroenteritis, shigellosis, scabies and hepatitis-A were well 
documented on the Indian reservations of the Mni Wiconi Project area.
    Poverty is the harbinger of the severe health care crisis facing 
the Indian people in the Northern Great Plains. The extra costs of 
health-care during the lifetime of each 24,000 members of the Indian 
population in the Mni Wiconi Project are estimated at $2.25 billion (in 
2010 dollars). This is not total costs of health care; it is the 
present value of the extra cost of life time health care relative to 
the rest of the population off the reservations. Regional data suggests 
clear relationships between income levels and higher mortality rates 
for heart disease, cancer and diabetes with correspondingly higher 
federal health-care costs.
    The Mni Wiconi Project is part of the solution. It brings much 
needed employment, both direct and through economic development 
projects, which, in turn, engages part of our unemployed and 
underemployed and brings about measurable improvement in the health of 
the Lakota Nation, thereby reducing federal health-care costs and, most 
of all, the tragedy in the families affected. Mni Wiconi builds the 
dignity of many, not only through improvement of drinking water, but 
also through increased employment and earnings during planning, 
construction, operation and maintenance and from commercial enterprises 
supplied with Project water.
    The Project has accomplished much improvement of water quality 
using a combination of water from the Missouri River and from the 
Ogallala Aquifer. Homes previously reliant on water laced with unsafe 
levels of arsenic, uranium and nitrite/nitrates have been placed on a 
safe and reliable drinking water system, and we expect reductions in 
mortality.

                         PROJECT FUNDING STATUS

    The authorized construction funds will be 100 percent expended at 
the end of FY 2013. With construction funding at the $23 million level 
as proposed in the President's FY 2013 budget, the project will have 
expended $470,357,000 within the current authorization. The funds will 
not be adequate to complete the Project as originally planned.
    The reauthorization request of $14,308,000 would bring total 
funding to $484,665,000, an increase of 3.0 percent, and would complete 
the drinking water portion of the Project. The livestock portion will 
require programmatic funds from the Bureau of Indian Affairs and 
Department of Agriculture that are not included in the reauthorization 
request. The increase compares with unbudgeted overhead costs of 
$26,696,000 that the Project will incur through 2013 due to inadequate 
levels of funding that delayed the project: a factor completely outside 
the control of the Oglala Sioux and Rosebud Sioux Tribes. These 
necessary overhead costs are 5.7 percent of the authorized Project 
costs and nearly double the amount requested in the reauthorization.
    The extension of the Project from 2008 to 2013 did not provide for 
budgeting of Reclamation oversight, administration or other 
``overhead'' costs, which will have diverted $26.696 million from 
construction. These costs have been and will continue to be incurred at 
the expense of construction elements. The slow pace of budgeting and 
appropriations has extended the Project by seven additional years from 
2008 through 2016. The overhead costs in those years have depleted 
construction funds by $26.696 million. S.684 will restore $14.308 
million of the $26.696 million in diminished construction capability.
    The $23 million remaining in authorized construction funds was 
included in the President's FY2013 Budget Request. The budgeting will 
be adequate to complete the allocation of currently authorized funding 
but will be inadequate to fully complete the drinking water system to 
persons in need. These are residents that were contemplated in the 
Final Engineering Report and included in the Project design.

                     CONSTRUCTION CEILING INCREASE

    Reauthorization of the funding ceiling by $14.308 million and a 
time extension through 2016, the fourth construction sunset date, are 
needed on the Pine Ridge and Rosebud Indian Reservations to complete 
the drinking water systems. The West River/Lyman-Jones and Lower Brule 
Rural Water Systems are complete. Under-budgeting and the slow pace of 
appropriations underlie the need to reauthorize and extend the Project.
    The Project authorization date was extended by PL 110-161 (2008) 
from 2008 through 2013 without accompanying budgeting for 
administration and other overhead costs after FY 2007. The extension 
was necessary because funds had not been appropriated at a rate 
sufficient to complete funding of Project construction within the 
authorized construction ceiling. However, since no additional overhead 
costs were budgeted for with the extension of the date, funds that 
would have gone to construction were necessarily used to cover annual 
overhead costs, and Reclamation encouraged the diversion of 
construction funds allocated for livestock to cover overhead. Overhead 
costs for the OSRWSS ($17.990 million) and the Rosebud Sioux Rural 
Water System (RSRWS) ($8.706 million), a total of $26.696 million, 
severely impacted the funding available for construction.
    Because the budgeting of non-contract costs was not included in 
previous funding authorities after FY 2007, the necessary expenditures 
for Reclamation oversight and Project administration have reduced the 
funds to complete construction projects. The overhead costs for years 
after 2007 have depleted construction funds by $26.696 million. OSRWSS 
would have ended the Project with a surplus in its construction budget 
of $5,101,000 after finishing its construction projects if it had not 
been required to expend unbudgeted funds on non-contract costs after FY 
2007. The surplus could have been applied to community systems upgrades 
or the livestock program. S.684 seeks to restore $14.3 million of the 
$26.696 million unbudgeted overhead costs that diminished construction 
capability.
    The Concept Paper for completing the Project (prepared in several 
versions in 2011 and included for the record as Exhibit A) documented a 
need for an increase in the authorized construction ceiling of $29.369 
million. Since the Concept Paper was completed the Director of OWRWSS , 
Mr. Frank Means, took every possible step to achieve cost savings and 
to limit activities strictly to our first priority of completing the 
drinking water systems to serve the present and future growing 
populations on the Reservation. The Rosebud Sioux Tribe did likewise. 
Lower Brule dropped $1.74 million in reservoir expansions that would 
improve their system, which was completed 5 years ago. The cost 
reductions limit the necessary reauthorization to $14.308 million as 
presented in Table 1 and as shown in Figure 2* on the Pine Ridge Indian 
Reservation.
---------------------------------------------------------------------------
    * Figure has been retained in subcommittee files.
---------------------------------------------------------------------------
    In an effort to be reasonable yet steadfast to complete the 
Project, our request for reauthorization of the Project is focused only 
on completing the drinking water systems. We propose to use other 
avenues to accomplish community system upgrades and livestock watering 
projects:

          1. Funds to upgrade existing community systems on the 
        Reservations, a pre-requisite, according to Reclamation, for 
        transferring them to the Project as contemplated by the Act and 
        the Final Engineering Report (FER) are not requested. The 
        reauthorization requires Reclamation to submit a plan to 
        Congress for upgrades and transfer within two years of the 
        reauthorization and to implement the transfer within 5 years of 
        enactment of S. 624. Upgrades may continue for 15 years. We 
        disagree, but Reclamation requires transfer before making 
        operation, maintenance and replacement funding available. S. 
        684 will resolve the issue by making transfers mandatory and 
        communities eligible for operation, maintenance and replacing 
        funding to avoid further deterioration of those systems
          2. The high level of investment now required by Reclamation 
        for upgrading the community systems was not contemplated by 
        Reclamation in the 2002 reauthorization (PL 107-367), December 
        19, 2002. This high level of cost has prevented the transfer of 
        existing 

        
        
          3. community systems to the Project and enabled their 
        continued deterioration due to absence of funding for 
        operation, maintenance and replacement.
          4. The livestock components of the Project on the Pine Ridge 
        and Rosebud Indian Reservations will be developed outside the 
        new authorization through existing programs of the Bureau of 
        Indian Affairs and the Department of Agriculture, and new 
        funding authorization is not requested. The reauthorization 
        requires Reclamation, Agriculture and the Bureau of Indian 
        Affairs to work together on the livestock components.
          5. While $26.969 million in unbudgeted overhead costs from 
        2007 through 2015 will be spent, an amount that has and will be 
        expended at the expense of construction elements, we are only 
        requesting $14.308 million to complete the drinking water 
        systems on the Pine Ridge and Rosebud Indian Reservations.

    The $14.308 million is necessary to ensure that all intended 
beneficiaries will be served. We support the bill on this ground. We 
also support it for its several other provisions that address the other 
needs for finishing the Project as intended which are not covered by 
the $14.308 million increase.

                       COMMUNITY SYSTEM UPGRADES

    The Mni Wiconi Act clearly states that the OSRWSS, RSRWS, and Lower 
Brule Rural Water System (LBRWS) shall include the purchase, 
improvement and repair of existing water systems, including systems 
owned by individual tribal members and other residents on the 
reservations. Sections 3(a)(4), 3A(a)(4), and 3B(a)(4). Further, 
Sections 3(a)(8), 3A(8), and 3B(a)(8) state that the aforementioned 
authorized rural water systems shall also include other facilities 
deemed necessary to meet the water supply, economic, public health and 
environmental needs of the reservations, including facilities for the 
tribes, reservation villages, towns and municipalities. Finally, 
Sections 3(b)(3), 3A(b)(3) and 3B(b)(3) reference the purchase, 
improvement and repair of existing systems. Congress intended for 
existing water systems to become a part of the Mni Wiconi Project. In 
fact, the objectives of the Mni Wiconi Project cannot be met unless the 
community systems are connected. Without inclusion of such systems, the 
Project as intended by Congress and the Tribe would not be complete.
    Reclamation has determined the costs for community system upgrades. 
Overall, the costs for community system upgrades total $26.657 million. 
Of this, $13.164 million is for OSRWSS. The total for the RSRWS is 
$11.693 million and for the LBSRWS is $1.8 million.
    Upgrades of the cost magnitude proposed by Reclamation for these 
existing systems were not previously contemplated in the FER or by 
Reclamation in PL 107-367, the 2002 reauthorization of the Mni Wiconi 
Project Act. Reclamation's current proposal would have the systems in 
near perfect condition prior to their transfer into the Project rather 
than accepting these currently working systems and improving them as 
needed over a period of time--when the lifetime of a feature has come 
to an end. S. 684 contains language to direct the transfer of existing 
community systems to OSRWSS, RSRWS or LBSRWSS as other federal 
agencies' funds and Project operation, maintenance and replacement 
funds are applied to the upgrade of those systems.
    It does not make sense to hold up completing the Project, which 
must include these existing systems, by requiring the existing systems 
to be in nearly new condition prior to transfer. Instead, systems 
should be transferred into the Project and a schedule for conducting 
priority upgrade work should be established using operation, 
maintenance and replacement (OMR) Project funding.
    An essential new provision in S.684 is the transfer of existing 
community systems to the OSRWSS, RSRWS, and LBRWS within five years of 
the enactment of S.684 or three years after the completion of the 
Secretary's plan for transfer. The purpose of the provision is to 
ensure the operation, maintenance and replacement of those systems at 
the earliest practical date. In the absence of a transfer, the 
maintenance of those systems will languish and deterioration will 
accelerate.
    OSRWSS is working to seek funding from other federal agencies such 
as HUD, Rural Development, IHS and EPA to assist in upgrading the 
existing community systems. Two central issues have arisen: (1) the S. 
684 language on the community system upgrades is needed to direct the 
agencies to assist; and (2) Reclamation cannot evade its 
responsibility. Reclamation is still the responsible federal agency, 
and it must adhere to its trust responsibility and fund the costs of 
community systems upgrades (not funded by other federal agencies), a 
central tenet for ensuring adequate and safe water to the people on the 
reservation, through the operation, maintenance and replacement 
program. We support the continuation of operation, maintenance and 
replacement funding by other agencies that have historically 
contributed, including HUD and BIA, to reduce funding required from 
Reclamation.
    S. 684 would direct the necessary other agency assistance for the 
community systems upgrades and direct that the systems be transferred 
and the operation, maintenance and replacement monies appropriated to 
Reclamation under the Act be used to improve, repair and replace those 
systems. These provisions of S.684 are fundamentally important to the 
completion of the overall Project and for ensuring that the Project can 
function and serve its beneficiaries as intended.

               LIVESTOCK NOT INCLUDED IN FUNDING REQUEST

    Water for livestock on the Pine Ridge and Rosebud Reservations was 
contemplated in the Final Engineering Report and in the original 
Project authorization and subsequent reauthorization.
    OSRWSS has reduced its livestock distribution system from $24.024 
million to $11.380 million, and OSRWSS has removed its diminished 
livestock plan from the funding needed in the amendment of the Mni 
Wiconi Project Act. Likewise, Rosebud prioritized providing water for 
direct human consumption and reduced planned livestock water 
expenditures from $3.930 to less than $150,000. The Rosebud Sioux Tribe 
has developed a collaborative system with operators and the Natural 
Resource Conservation Service to construct individual stock taps. Both 
Tribes intend to work with the Natural Resources Conservation Service 
and the Bureau of Indian Affairs to construct the livestock 
distribution systems over a period of 15 years. However, enactment of 
S. 684 is needed to direct these agencies to undertake the work and 
fund this important and intended component of the Project. As stated 
previously, the Bureau of Reclamation urged that funding intended for 
livestock construction be used to finance the overhead costs after 
2007, and the livestock program was sacrificed for necessary non-
construction activities that had not been budgeted.

    ADEQUATE FUNDING FOR OPERATION, MAINTENANCE AND REPLACEMENT FOR 
                 EXISTING MNI WICONI PROJECT FACILITIES

    In addition to expressing our support for S. 684, we take this 
opportunity to raise a very important concern of the tribal sponsors: 
the need for adequate operation, maintenance and replacement (OMR) 
funding. The Mni Wiconi Act clearly sets forth the trust responsibility 
of the United States to ensure adequate and safe water supplies are 
available to meet the economic, environmental, water supply and public 
health needs of the reservations, and established the framework for 
Reclamation to fund the construction and OMR of the Project, Section 
2(a)(5), Section 10(a) and (b). The Act authorizes, among other things, 
the construction, operation and maintenance of municipal, rural and 
industrial water systems which include the existing water systems, 
Section 3(a), 3A(a) and 3B(a). Reclamation needs to work with the 
OSRWSS, RSRWS and LBRWS to ensure the remaining features of the 
Project, including the work related to existing community systems, are 
completed as planned and the intended beneficiaries are served.
    The Act's trust responsibility provision is applies equally to 
construction and OMR. Anything less than sufficient funding for OMR 
threatens the significant investment of the United States in 
construction.
    Reclamation needs to work with the OSRWSS to adequately fund OMR of 
the core and distribution systems. The OSRWSS core facilities serve all 
Project Sponsors, including the Lower Brule Sioux Tribe, Rosebud Sioux 
Tribe and West River/Lyman-Jones, as well as the Pine Ridge Indian 
Reservation. Reclamation advises us that OMR is its first priority. The 
statutory trust responsibility requires OMR to remain at the forefront 
of Reclamation's funding obligations. Funding should be adequate to 
ensure a safe drinking water supply for all Project Sponsors. As we 
move forward, the Mni Wiconi Project must remain a Reclamation 
priority. Our OMR funding needs should not be affected by other 
authorized projects' construction funding needs or by Indian water 
rights settlements in the years ahead.
    Threatening an unnecessary increase in the costs of OMR for the Mni 
Wiconi Project are the Surplus Water Policies of the Corps of Engineers 
that would require payment for stored water in Lake Oahe. The Corps of 
Engineers proposes a cost of $15-$20 per acre foot of water derived 
from Pick Sloan storage. The Oglala Sioux Tribe believes that the Corps 
of Engineers policy on surplus water is flawed and that the charges 
potentially require Congress to appropriate more OMR funds for the Mni 
Wiconi Project for payment of Corps of Engineers charges.

                               CONCLUSION

    The Mni Wiconi Project is like no other in terms of human needs. 
Mni Wiconi means ``water is life.'' It is unique in that the Act which 
authorized it acknowledges the United States trust responsibility to 
ensure adequate and safe water supplies for the Pine Ridge, Rosebud, 
and Lower Brule Indian Reservations. S.684 will enable the United 
States to carry out this trust responsibility by completing the Project 
as contemplated. Without S.684, intended project beneficiaries, some 
who have been waiting for clean water since 1988, will not be served.
    We thank the Committee for its consideration of this important 
legislation and respectfully request that S. 684 moves forward to 
enactment as soon as possible.

Attachment.--Supplemental Statement of the Oglala Sioux Tribe, Rosebud 
Sioux Tribe, Lower Brule Sioux Tribe and West River/Lyman-Jones, on S. 
                                  684

    The April 16, 2013, testimony of the Bureau of Reclamation 
(Reclamation) on S. 684 has been reviewed and found extremely 
troublesome. The Agency is subtly changing its narrative to not only 
distance itself from funding of remaining construction but, also, 
future operation, maintenance and replacement (OMR) of facilities 
authorized as part of the Mni Wiconi Project. The concern begins with 
the opening statement that S. 684 will ``. . . expand the scope and 
authorization ceiling. . ., and have significant impacts on the budgets 
of both Reclamation and the Bureau of Indian Affairs.''
    First, the $14.308 million in additional construction funds is not 
an expansion of the scope of the Project. It represents an increase in 
Project funding by 3.0 percent or a little more than half of the 
$26.696 million diverted from construction of the Project to cover 
Reclamation oversight and Project administrative costs due to 
inadequate Reclamation budgeting and the extension of the construction 
period from 2007 through 2013 without additional funding. The $14.308 
million in additional funds is required to complete the original scope 
of the drinking water project, not to expand it. The Project is only 
asking to complete the drinking water component as contemplated by the 
Final Engineering Report approved by the Secretary in 1993. The rest of 
the Project scope has been diminished (not expanded) to eliminate 
livestock on the Pine Ridge and Rosebud Indian Reservations. Notably, 
both the drinking water and livestock components of the West River/
Lyman-Jones system were completed without diminishment. By letter dated 
March 27, 2006, Reclamation recommended to our Senate delegation that 
the livestock component would serve as a source of funding for the 
oversight and administrative costs that were not covered when 
Reclamation prolonged project budgeting from 2007 through 2013.
    Second, and consistent with its approach to construction funding, 
Reclamation is for the first time questioning that the Secretary of 
Interior would acquire title to existing public or tribal water systems 
to be held by the United States in trust for the Tribes. This would 
alter congressional intent and our understanding and is an attempt to 
withdraw OMR funding for the existing systems that were and are 
expected to be transferred to the Oglala Sioux Rural Water Supply 
System, Rosebud Sioux Rural Water System and Lower Brule Rural Water 
System. Reclamation's assertion would free Reclamation from OMR 
responsibility as contemplated by Congress in Public Law 100-516.
    Third, Reclamation testified that the Bureau of Indian Affairs has 
no existing programs or annual appropriations for the construction, 
repair or upgrading of private residences. Perhaps the insertion of the 
word ``private'' helps create a half truth. The word ``private'' does 
not appear in S. 684. Section 3(b)(5) is intended for homes eligible 
for the Bureau of Indian Affairs Housing Improvement Program. We 
acknowledge the FY 2014 budget of the Bureau of Indian Affairs proposes 
to eliminate the program, which had a $12.6 million value in FY 2013. 
The Bureau of Indian Affairs proposes that HUD funding could be used in 
the future to replace the former Housing Improvement Program, but we 
deny that the elimination of the program is an effective step and 
recognize that use of HUD funds for the same purpose will divert 
funding from critically needed new housing:

          The budget proposes to eliminate $12.6 million in funding for 
        the Housing Improvement Program. The $650.0 million Housing and 
        Urban Development Native American Block Grant program serves 
        the same population as HIP. Tribes who receive HUD funding are 
        not precluded from using that funding to provide assistance to 
        HIP applicants.

        (Budget Justifications, The United States Department of 
        Interior, Indian Affairs, Fiscal Year 2014, p. IA-0VW-3)

    Finally, as Project Sponsors we support and will work effectively 
with other agencies to assist in funding community system upgrades and 
completion of the livestock components of the diminished Project. S.684 
is needed to facilitate this and is necessary.
    However, the testimony of Deputy Quint convinces us that 
Reclamation will indefinitely hinder the transfer of those existing 
systems to the Project as it hindered the completion of construction in 
a timely manner. Reclamation's purpose is clearly to avoid OMR 
responsibility currently authorized by Public Law 100-516. The 
mandatory provision to transfer existing community or tribal systems 
within 5 years of enactment with title held in trust by the United 
States on behalf of the Tribes in the Mni Wiconi Project is an 
essential provision of S. 684 The current authority for OMR funding of 
existing community systems in Public Law 100-516 (the Mni Wiconi 
Project Act) would not be expanded, and S.684 would set the time frame 
for transfers, assure eligibility for OMR funding and prevent the on-
going deterioration of facilities in the existing systems caused by 
Reclamation delays.
    In conclusion, S. 684 is necessary to confirm, as originally 
intended, that the existing systems will be transferred and upgraded. 
The Mni Wiconi Project Act intends for these systems to be transferred 
into the Project and eligible for Reclamation OMR funding. The Project 
is not a complete Project without them. S. 684 sets forth a mechanism 
to ensure the transfer of the existing systems and includes other 
federal agencies to assist with system upgrades while holding 
Reclamation to its responsibilities under the Act for these systems. 
S.684 would also ensure completion of Project construction and provide 
a path for construction of diminished livestock distribution systems on 
the Pine Ridge and Rosebud Reservations.
                                 ______
                                 
  Prepared Statement of G. Keith Denos, General Manager, Provo River 
                   Water Users Association, on S. 211

    Chairman Schatz and Members of the Subcommittee, I appreciate the 
opportunity to submit this testimony for the record in support of S. 
211, an amendment to the Provo River Project Transfer Act of 2004 
(Transfer Act) authorizing the Secretary of the Interior to convey the 
recently enclosed Provo Reservoir Canal to the Provo River Water Users 
Association (Association).
    The Association is the local sponsor of the Deer Creek Division of 
the Bureau of Reclamation's Provo River Project. The Association is a 
Utah nonprofit corporation organized in 1935 for the purpose of 
providing a supplemental water supply from the Provo River Project to 
its shareholders, comprised of metropolitan water districts, cities, a 
conservation district, and mutual water companies and irrigation 
companies.
    A principal feature of the Provo River Project is the Provo 
Reservoir Canal (canal), which extends 21 miles from the mouth of Provo 
Canyon to Salt Lake County. For many years, the canal meandered through 
pastures and orchards. By the late 1990s, suburban development had 
surrounded it. Enclosing the canal into a pipe offered significant 
potential new benefits in terms of public safety, water conservation, 
water quality, in stream flows and recreation.
    In anticipation of the enclosure of the canal (Project), the 
Association concluded that owning the canal and associated project 
features would be beneficial for many reasons, including the 
facilitation of financing for the Project. For this and other reasons 
consistent with Reclamation's policy regarding title transfer, the 
transfer of title to the Association of the canal was authorized by 
Congress with the passage of the Transfer Act in 2004 [Public Law 108-
382].
    While ownership of the enclosed canal in fact proved crucial to 
obtaining partial state financing for the Project, a number of factors 
combined to delay title transfer until after completion of the Project. 
The Project has proceeded as envisioned, with Reclamation's support, 
but without Reclamation funding. We recently celebrated the completion 
of the construction of the Project on April 5th with a ribbon cutting 
conducted by Senator Orrin Hatch.
    As you can imagine, the Association was extremely surprised to 
learn of Reclamation's decision, both made and communicated to the 
Association after substantial completion, that the Transfer Act of 2004 
did not support title transfer. The Transfer Act calls for transfer of 
the Provo Reservoir Canal, which is defined in the Act as the canal and 
associated land and facilities ``acquired, constructed, or improved by 
the Unites States as part of the Provo River Project, Deer Creek 
Division . . .  as in existence on the date of enactment of this Act'' 
[October 30, 2004]. The Regional Solicitor for the United States 
Department of Interior has advised Reclamation that completion of the 
Project prior to title transfer negates Congress' authority and 
directive to transfer the canal to the Association, as set forth in the 
Transfer Act, because the newly enclosed pipeline itself was not ``in 
existence'' in 2004.
    While the Association strongly disagrees with the Solicitor's 
analysis, we do not consider it profitable to continue debating 
Congress' intent with respect to transfer of the newly constructed 
pipeline. We are confident that Congress with the continued support and 
assistance of the Bureau of Reclamation Commissioner and the Department 
of the Interior will move very quickly with passage of S. 211 to amend 
the Transfer Act to resolve the dispute.
    We look forward to working with Reclamation and our other partners 
to complete the transfer of title of the canal and all associated 
facilities as was contemplated in the Transfer Act.
    We are grateful for the leadership and assistance of the Utah 
Congressional Delegation as well as the Senate Energy Committee in 
expediting consideration of S. 211.
                                 ______
                                 
        Prepared Statements of the Western States Water Council

                                 S. 659

                            I. INTRODUCTION

    The Western States Water Council (WSWC) is a non-partisan policy 
advisory body closely affiliated with of the Western Governors' 
Association (WGA). The WSWC represents eighteen western states and 
WSWC's members are appointed by their respective governors, and 
represent their states. Our membership includes senior state water 
managers and administrators.
    Our testimony is based on WSWC Position #347 (attached)*, which 
strongly supports legislation to reauthorize the Reclamation States 
Emergency Drought Relief Act (the Act), Pub. L. 102-250, providing the 
Bureau of Reclamation with much-needed tools to respond to record-
breaking drought in the West and to work with states, tribes, and local 
communities to plan for future droughts.
---------------------------------------------------------------------------
    * Document has been retained in subcommittee files.
---------------------------------------------------------------------------
                        II. DROUGHT IN THE WEST

    Drought has been, is, and will be an ongoing fact of life in the 
arid West. Currently, as shown in the below map from the U.S. Drought 
Monitor, 47.34 percent of the contiguous U.S. is experiencing moderate 
or worse drought, with abnormally dry to exceptional drought conditions 
covering much, if not all, of every western state except Washington.\1\
---------------------------------------------------------------------------
    \1\ Kelly Helm Smith., Drought Shifts West on April 23 U.S. Drought 
Monitor as Heavy Rains Drench the Midwest, NAT'L DROUGHT MITIGATION 
CTR. NEWS (Apr. 25, 2013), http://drought.unl.edu/NewsOutreach/
NDMCNews.aspx?id=90.
---------------------------------------------------------------------------
    Although recent precipitation has somewhat improved drought 
conditions in the Midwest,\2\ the National Oceanic and Atmospheric 
Administration reports that drought conditions will likely persist in 
much of the West through July, with drought developing or intensifying 
in some parts of Arizona, California, Nevada, New Mexico, Oregon, and 
Texas.
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    These conditions follow the record breaking drought of 2012, which 
was unique in terms of its sudden onset, its persistent dryness and 
warm temperatures, its magnitude of extremes, and the large area it 
affected.\3\ For example, over 60 percent of the contiguous U.S. 
experienced moderate to extreme and exceptional drought during 2012, 
with only 1934 comparable in duration and geographic extent.\4\ Last 
year was also the warmest year on record for the contiguous U.S. over a 
period of record dating back to 1895.\5\
---------------------------------------------------------------------------
    \3\ Hearing on Drought, Fire and Freeze: The Economics of Disasters 
for America's Agricultural Producers before the U.S. Senate Committee 
on Agriculture, Nutrition, and Forestry, 113th Cong., 1 (Feb. 14, 2013) 
(statement of Roger Pulwarty, Director, National Integrated Drought 
Information System).
    \4\ Id. at 3.
    \5\ NAT'L CLIMATIC DATA CENTER, WILDFIRES - ANNUAL 2012 (Jan. 7, 
2013), http://www.ncdc.noaa.gov/sotc/fire/2012/13.
---------------------------------------------------------------------------
    Not surprisingly, these conditions coupled with the ongoing drought 
have adversely impacted a broad spectrum of economic, environmental, 
and other interests across the West and the nation as a whole, the 
effects of which will reverberate for years to come. Examples include:

   According to some estimates, drought costs the U.S. economy 
        between $6 billion to $8 billion per year in direct estimated 
        losses,\6\ with the cost of the 2012 drought possibly exceeding 
        $35 billion.\7\
---------------------------------------------------------------------------
    \6\ W. GOVERNORS ASS'N, CREATING A DROUGHT EARLY WARNING SYSTEM FOR 
THE 21ST CENTURY, preface (2006), http://westgov.org/reports/doc--
download/394-creating-a-drought-early-warning-system-for-the-21st-
century-nidis.
    \7\ Pulwarty, supra note 3 at 2 (citing Aon Benfield Reinsurance 
Group's Annual Global Climate and Catastrophe Report).
---------------------------------------------------------------------------
   Agriculture accounted for much of the economic costs of the 
        2012 drought,\8\ due in part to moderate or worse drought 
        conditions affecting around 70 percent of the nation's crop and 
        livestock production at certain times during the year.\9\
---------------------------------------------------------------------------
    \8\ Id.
    \9\ U.S. DEP'T OF AG., ECONOMIC RESEARCH SERVICE, U.S. DROUGHT 
2012: FARM AND FOOD IMPACTS, http://www.ers.usda.gov/topics/in-the-
news/us-drought-2012-farm-and-food-impacts.aspx#.UXhHzbU4udh
---------------------------------------------------------------------------
   For only the third time in over 50 years, wildfires across 
        the country burned more than 9 million acres in 2012, causing 
        over $1 billion in damage.\10\ The most damaging fires occurred 
        in the West, including the Whitewater-Baldy Complex Fire which 
        burned 297,845 acres in New Mexico's Gila National Forest.\11\
---------------------------------------------------------------------------
    \10\ Pulwarty, supra note 2 at 1; NAT'L CLIMATIC DATA CENTER, supra 
note 5.
    \11\ U.S. FOREST SERV., WHITEWATER-BALDY COMPLEX FINAL COMMUNITY 
UPDATE (June 28, 2012), http://www.fs.usda.gov/detail/gila/news-events/
?cid=STELPRDB5377297.
---------------------------------------------------------------------------
   The Colorado River Basin experienced one of its driest years 
        in the 1895-2012 period of record, with only 44 percent of its 
        annual average runoff.\12\
---------------------------------------------------------------------------
    \12\ Pulwarty, supra note 3 at 1, 5.
---------------------------------------------------------------------------
   Skier visits to the 21 resorts that comprise Colorado Ski 
        Country USA were down 11.5 percent in 2012, compared to 
        2011.\13\
---------------------------------------------------------------------------
    \13\  Id.

    Notwithstanding the severity of these impacts and the relative 
frequency of drought in many parts of the West and the nation, in 
general, we have too often taken a reactive approach to drought, 
responding on an ad hoc basis to each drought crisis as it develops. 
However, over the years, many western states and federal agencies have 
undertaken more proactive approaches to coordinated planning and 
preparedness intended to avoid or mitigate adverse impacts before they 
happen.
    In particular, the WGA set an aggressive goal in 1996 to change the 
way our nation prepares for and responds to drought, with subsequent 
efforts by the WGA and the WSWC to promote a comprehensive, 
coordinated, and integrated response to drought at all levels of 
government. We have worked with federal agencies, including the Bureau 
of Reclamation, to promote, proactive, cooperative drought contingency 
planning and response.

        III. THE RECLAMATION STATES EMERGENCY DROUGHT RELIEF ACT

    The Bureau of Reclamation is the nation's largest wholesale water 
supplier, providing water to over 31 million people and supplying 
irrigation water to one out of five western farmers.\14\ 
Notwithstanding Reclamation's vital role as a water supplier in the 
West, the Act constitutes the whole of its specific drought response 
and planning authority. Consequently, failure to reauthorize the Act 
will limit Reclamation's ability to deliver assistance in response to 
present drought impacts and also limit its ability to provide much 
needed assistance and technical expertise to states, tribes, and other 
stakeholders as they plan for future drought impacts.
---------------------------------------------------------------------------
    \14\ U.S. BUREAU OF RECLAMATION, BUREAU OF RECLAMATION: FACTS AND 
INFORMATION, (Jan. 4, 2013), http://www.usbr.gov/main/about/fact.html.
---------------------------------------------------------------------------
A. Title I--Assistance During Drought
    Title I of the Act authorizes Reclamation to undertake 
construction, management, and conservation measures during drought to 
minimize or mitigate damage or loss, including authority to act as a 
``last resort'' to aid smaller towns, counties, and tribes that lack 
the financial capacity to address drought impacts on their own. It also 
authorizes Reclamation to acquire water to meet diverse requirements 
under the Endangered Species Act, while at the same time benefiting 
water users and water delivery contractors at a time when they often 
face significant financial challenges. Other beneficial drought 
response actions that Reclamation can undertake under Title I include:

   Participation in water banks established under federal law;
   Facilitation of water acquisitions between willing buyers 
        and willing sellers;
   Acquisition of conserved water for use under temporary 
        contracts;
   Making Reclamation facilities available for storage and 
        conveyance of project and non-project water;
   Making project and non-project water available for non-
        project uses; and
   Acquisition of water for fish and wildlife purposes.

B. Title II--Drought Contingency Planning
    Title II of the Act responds to Benjamin Franklin's oft-quoted 
adage: ``By failing to plan, you are preparing to fail.'' Specifically, 
it authorizes Reclamation to assist and participate in the preparation 
of drought contingency plans in all 50 states and U.S. territories to 
help prevent or mitigate future drought-related losses. Title II also 
authorizes Reclamation to conduct studies to identify opportunities to 
conserve, augment, and make more efficient use of water supplies that 
are available to federal Reclamation projects and Indian water resource 
developments to better prepare for and respond to drought conditions.
    States have primary authority over the allocation and protection of 
water resources within their borders. However, the WSWC has long 
supported integrated water resource management and encourages the 
development of comprehensive water plans with state leadership and 
federal assistance. This includes a comprehensive and integrated 
response to drought in which states work with federal agencies, local 
communities, and other stakeholders to develop proactive drought 
preparedness and contingency plans.
    Title II authorizes Reclamation to engage in exactly this type of 
planning, which is critical to the social, environmental, and economic 
well-being of the West. Failure to reauthorize the Act will limit 
Reclamation's ability to carry out this important work. This would 
deprive states, tribes, and local communities of much needed technical 
assistance and expertise at a time when some projections indicate that 
large portions of the West, particularly the Southwest, will become 
hotter and drier in coming years. Many of these areas are also 
experiencing increasing demands on already scarce water supplies due to 
rapidly growing populations, environmental requirements, energy 
resource development, and other factors. As a result, the need for 
effective drought preparedness and contingency plans has never been 
greater.

                             IV. CONCLUSION

    The exceptional drought conditions of 2012 and the ongoing drought 
that covers much of the West underscores the need to reauthorize the 
Act. Reauthorization will provide Reclamation with clearer direction 
and greater flexibility to continue delivering water and much needed 
financial and technical assistance to states, tribes and local 
communities suffering from record-breaking drought impacts. 
Reauthorization will also facilitate more effective state-based and 
other grassroots drought preparedness and mitigation efforts. Absent 
reauthorization, Reclamation will lack this critical authority to 
provide emergency assistance. The WSWC appreciates the opportunity to 
submit this testimony and urges the Committee to favorably report and 
the Congress to pass this legislation to reauthorize the Act.

                                 S. 715

                            I. INTRODUCTION

    The Western States Water Council (WSWC), representing 18 western 
states from Alaska to California and Texas to North Dakota, strongly 
supports the Authorized Rural Water Projects Completion Act (S. 715) as 
an appropriate and a timely federal investment of modest amounts that 
will minimize long-term federal expenditures, create more jobs now, and 
fulfill long-standing promises and trust responsibilities to rural and 
Tribal communities, some of which date back decades. This testimony is 
based primarily on WSWC Position #343 (attached), which we sent to 
former Committee Chairman Jeff Bingaman and Ranking Member Lisa 
Murkowski in the form of a letter on June 8, 2012 in support of similar 
legislation (S. 3385). We also testified in support of that bill and 
wish to reiterate our support for legislative action to establish a 
dedicated funding source for the completion of federal rural water 
projects authorized by Congress for construction by the Bureau of 
Reclamation. Portions of this testimony are also based on WSWC Position 
#333 (attached), which sets forth the WSWC's long-standing policy in 
support of using receipts accruing to the Reclamation Fund for 
authorized projects, including the types of rural water projects that 
would receive funding under S. 715.

           II. THE NEED FOR RURAL WATER PROJECTS IN THE WEST

    Across the West, rural communities are experiencing water supply 
shortages due to drought, declining streamflows and groundwater 
supplies, and inadequate infrastructure, with some communities hauling 
water over substantial distances to satisfy their potable water needs. 
Moreover, those water supplies that are available to these communities 
are often of poor quality and may be impaired by naturally occurring 
and man-made contaminants, including arsenic and carcinogens, which 
impacts their ability to comply with increasingly stringent federal 
water quality and drinking water mandates. At the same time, many rural 
and Tribal communities in the West are suffering from significant 
levels of unemployment and simply lack the financial capacity and 
expertise to finance and construct needed drinking water system 
improvements.
    Since the 1980s, Congress has authorized Reclamation to address 
this need by designing and constructing projects to deliver potable 
water supplies to rural communities in the 17 western states. 
Furthermore, Congress established Reclamation's Rural Water Supply 
Program when it enacted the Rural Water Supply Act of 2006 (Pub. L. 
109-451), authorizing the agency to work with rural communities in the 
West, including Tribes, to assess potable water supply needs and 
identify options to address those needs through appraisal 
investigations and feasibility studies.
    In 2009, the WSWC worked closely with Reclamation to identify 
sources of information on potable water supply needs in non-Indian 
rural areas of the West. Reclamation released a draft assessment report 
on July 9, 2012 (``Draft Report'') that discusses the results of this 
effort, finding that the identified need for potable water supply 
systems in rural areas of the 17 western states ranges from $5 billion 
to $8 billion, not including another estimated $1.2 billion for 
specific Indian water supply projects.\1\
---------------------------------------------------------------------------
    \1\ BUREAU OF RECLAMATION, ASSESSMENT OF RECLAMATION'S RURAL WATER 
ACTIVITIES AND OTHER FEDERAL PROGRAMS THAT PROVIDE SUPPORT ON POTABLE 
WATER SUPPLIES TO RURAL COMMUNITIES IN THE WESTERN UNITED STATES, 8 
(July 9, 2012), http://www.usbr.gov/ruralwater/docs/Rural-Water-
Assessment-Report-and-Funding-Criteria.pdf.
---------------------------------------------------------------------------
    The Draft Report notes that there are currently eight active rural 
water projects located in Montana, New Mexico, North Dakota, and South 
Dakota, including the Lewis and Clark Rural Water Supply Project, which 
is located mostly in South Dakota but encompasses parts of the non-
Reclamation states of Iowa and Minnesota.\2\ The report also notes that 
of eleven rural water projects that Congress authorized Reclamation to 
undertake between 1980 and 2007 (when the Rural Water Supply Act was 
enacted), only four have been completed.\3\
---------------------------------------------------------------------------
    \2\ Id. 3 - 4.
    \3\ Id. at 3.
---------------------------------------------------------------------------
    According to Reclamation, the total amount of Federal funding 
needed to complete the eight authorized projects is now $2.6 billion, 
which is substantially higher than the $2 billion Congress originally 
authorized. This increase is due in part to inflation and the rising 
costs of materials and labor. Nevertheless, the Draft Report estimates 
that these authorized projects could be completed by 2029 at a total 
Federal cost of around $3 billion, so long as Federal funding reflects 
the estimates provided in the original final engineering reports for 
each of the authorized projects--about $162 million annually. However, 
at current funding levels of around $50 million annually for 
construction, Reclamation estimates that some projects could be delayed 
beyond 2063 despite the expenditure of almost $4 billion in Federal 
funds by that point. Moreover, an additional $1.1 billion in Federal 
expenditures would be needed to complete those projects that are not 
completed by 2063.\4\ Notably, Reclamation is seeking only $40 million 
for its rural water program in fiscal year (FY) 2014, a significant 
reduction from current levels.\5\
---------------------------------------------------------------------------
    \4\ Id. at 5.
    \5\ U.S. BUREAU OF RECLAMATION, RECLAMATION'S FISCAL YEAR BUDGET 
REQUEST IS MORE THAN $1 BILLION (April 10, 2013), http://www.usbr.gov/
newsroom/newsrelease/detail.cfm?RecordID=42744.
---------------------------------------------------------------------------
       III. FEDERAL FUNDING FOR RURAL WATER PROJECTS UNDER S. 715

    S. 715 would provide $80 million per year for each of fiscal years 
2014 through 2030 to complete the construction of rural water projects 
that have already received Congressional authorization. Other projects 
may be eligible for funding if: (1) a feasibility study is submitted to 
the Secretary of the Interior by September 30, 2012; and (2) Congress 
authorizes the project's construction after S. 715's enactment.
    This funding represents a relatively modest Federal investment, 
compared to the increased costs that will likely occur due to 
construction delays if funding remains at current levels. We recognize 
that there are Federal budget constraints. Nevertheless, such 
constraints do not negate the Federal responsibility to complete 
authorized rural water projects, particularly those intended to fulfill 
in part a solemn Federal promise and trust responsibility to compensate 
States and Tribes for lost resources as a result of the construction of 
Federal flood control projects.
    For example, the Garrison Diversion Unit, an altered version of 
which would receive funding under S. 715, is intended to compensate the 
State of North Dakota for the loss of over 300,000 acres of prime 
farmland that was lost as a result of the construction of the Pick-
Sloan Missouri River Basin Program,\6\ which also inundated over 550 
square miles of Native American land and displaced more than 900 Native 
American families.\7\ Additionally, the North Central/Rocky Boys rural 
water project will implement the tribe's water rights settlement (as 
codified in Pub. L. 106-163) with the United States and the State of 
Montana.
---------------------------------------------------------------------------
    \6\ GARRISON DIVERSION CONSERVANCY DISTRICT, HISTORY & FEDERAL 
LEGISLATION: THE PICK-SLOAN MISSOURI BASIN PROGRAM, http://
www.garrisondiv.org/about_us/history_federal_legislation/.
    \7\ SENATE REP. NO. 105-146, 4 (1997) (accompanying S. 156 and 
describing the impacts of the Pick-Sloan Missouri River Basin Program 
on the Lower Brule Sioux Tribe), http://www.gpo.gov/fdsys/pkg/CRPT-
105srpt146/pdf/CRPT-105srpt146.pdf.
---------------------------------------------------------------------------
    Authorizing the increased use of Reclamation Fund revenues to 
expedite completion of these projects fulfills a financial and moral 
obligation that some beneficiaries have waited decades to see honored.
    It is also important to note that the Federal expenditures provided 
under S. 715 would generate significant and actual returns on this 
investment, including but not limited to:

   National Economic Impacts: According to a 2008 U.S. 
        Conference of Mayors report, one dollar invested in water and 
        sewer infrastructure increases private output, or Gross 
        Domestic Product, in the long-term by $6.35. Furthermore, for 
        each additional dollar of revenue generated by the water and 
        sewer industry, the increase in revenue that occurs in all 
        industries for that year is $2.62.\8\
---------------------------------------------------------------------------
    \8\ THE U.S. CONFERENCE OF MAYORS: MAYORS WATER COUNCIL, LOCAL 
GOVERNMENT INVESTMENT IN MUNICIPAL WATER AND SEWER INFRASTRUCTURE: 
ADDING VALUE TO THE NATIONAL ECONOMY, i (August 2008), available at: 
http://www.usmayors.org/urbanwater/documents/
LocalGovt%20InvtInMunicipalWaterandSewerInfrastructure.pdf.
---------------------------------------------------------------------------
   Economic Impacts and Job Creation in Rural Communities: 
        Investments in rural water projects have a direct impact on the 
        economies of the communities serviced by those projects. For 
        example, a 2006 study by HDR, Inc. on the economic impacts of 
        constructing the Lewis and Clark Rural Water System, which 
        would be eligible to receive funding under S. 715, found that 
        the total economic impact to South Dakota, Iowa, and Minnesota 
        would total $414.4 million. The report also estimates that the 
        project's construction would directly or indirectly create 
        7,441 jobs. On a yearly basis, this equals the creation of 532 
        direct and indirect jobs with average annual salaries ranging 
        from $25,591 to $33,462. Approximately 72 percent of the 
        economic impacts would be realized in South Dakota, with 17 
        percent in Iowa and 11 percent in Minnesota.\9\
---------------------------------------------------------------------------
    \9\ HDR, INC., THE ECONOMIC AND FISCAL IMPACTS OF CONSTRUCTING THE 
LEWIS AND CLARK RURAL WATER SYSTEM: 2004 STUDY AND 2006 UPDATE, 2 - 3, 
63 - 64 (March 2006), available at: http://www.lcrws.org/pdf/
EconomicImpactStudy/EconomicImpactStudy.pdf . See also BUREAU OF 
RECLAMATION, supra note 1 at 4 (discussing Federal costs for currently 
authorized rural water projects).
---------------------------------------------------------------------------
   Improved Potential for Economic Development in Rural Areas: 
        The economy of every community, especially rural communities, 
        requires sufficient water supplies of suitable quality. Such 
        supplies depend upon adequate water infrastructure. Improving 
        the water infrastructure of the rural and Tribal communities 
        that would be affected by S. 715 will improve their ability to 
        attract business and develop their economies in ways that are 
        not possible with their current water supplies.
   Improved Quality of Life: The types of water projects that 
        would receive funding under S. 715 would meet the same water 
        quality standards as public systems. These projects would 
        therefore provide a higher quality of safe drinking water and 
        associated health benefits than the water supplies upon which 
        these communities currently rely.
   Reduced Costs: Rural communities would no longer need to 
        expend limited resources drilling and maintained wells, 
        softening and treating water, or hauling water. In addition, 
        these communities would see decreased electrical pumping costs.
   Rural Fire Protection: Rural water systems provide water 
        storage that fire trucks can use to assist with rural fire 
        protection.
   Livestock Use:Rural water projects provide a more reliable 
        and better supply of water for livestock. They also have the 
        potential to decrease the impacts of livestock grazing on 
        riparian areas by allowing for the delivery of water away from 
        these sensitive areas.
   Increased Property Values: In some areas, the resale value 
        of property may increase with a more reliable, safe, clean and 
        adequate water supply.

            IV. THE USE OF THE RECLAMATION FUND UNDER S. 715

    Section 3(a) of S. 715 would provide funding for eligible rural 
water projects by establishing a Reclamation Rural Water Construction 
Fund (RRWCF) within the U.S. Treasury that would be financed from 
revenues that would otherwise be deposited in the Reclamation Fund (the 
``Fund''). These funds would not be subject to further appropriation, 
would be in addition to other amounts appropriated for the authorized 
projects, and should not result in corresponding offsets to other 
critical Reclamation and Department of the Interior programs. The 
Secretary of the Interior would also invest the portion of these 
receipts not needed to meet current expenses, and the resulting 
interest and proceeds from the sale or redemption of any obligations 
would become part of the RRWCF. The RRWCF would terminate in September 
2035, at which point its unexpended and unobligated balance would 
transfer back to the Fund.
    Congress established the Fund when it enacted the Reclamation Act 
of 1902 (Pub. L. 57-161) and it was intended to be the principle means 
of financing Federal western water and power projects in the 17 western 
states. As stated in Section 1 of the Reclamation Act, the Fund 
provides monies ``. . .reserved, set aside, and appropriated as a 
special fund in the Treasury.''
    The Fund's receipts are derived from water and power sales, project 
repayments, and receipts from public land sales and leases in the 17 
western states, as well as oil and mineral-leasing related royalties. 
However, the receipts that accrue to the Fund each year are only 
available for expenditure pursuant to annual appropriations acts. Over 
the years, rising energy prices and declining Federal expenditures from 
the Fund for Reclamation purposes have resulted in an increasingly 
large unobligated balance.
    According to the Administration's FY 2014 budget request, actual 
and estimated appropriations from the Reclamation Fund are $872 million 
for FY 2012 and $873 million for FY 2013. While these appropriations 
are projected to decrease to $852 million for FY 2014, the Fund's 
unobligated balance is expected to grow from an actual balance of $10.8 
billion in FY 2012 to an estimated $13.3 billion by the end of FY 
2014.\10\ Contrary to Congress' original intent, instead of supporting 
western water development, much of the unobligated balance has gone 
instead to other Federal purposes.
---------------------------------------------------------------------------
    \10\ THE APPENDIX, BUDGET OF THE UNITED STATES GOVERNMENT, FISCAL 
YEAR 2014, 631 (April 2013), http://www.whitehouse.gov/sites/default/
files/omb/budget/fy2014/assets/int.pdf.
---------------------------------------------------------------------------
    The WSWC has long supported using the Fund for its intended purpose 
of financing western water development, including the types of rural 
water projects that would receive funding under S. 715. As stated in 
WSWC Position #333, Congress and the Administration should:

          [F]ully utilize the funds provided through the Reclamation 
        Act and subsequent acts for their intended purpose in the 
        continuing conservation, development and wise use of western 
        resources to meet western water-related needs--recognizing and 
        continuing to defer to the primacy of western water laws in 
        allocating water among uses--and work with the States to meet 
        the challenges of the future.

    Unlike typical Congressional authorizations that often do not 
specify a funding source and may require more Federal monies in 
addition to current authorizations, the RRWCF would rely on the 
established stream of receipts and associated interest. Furthermore, as 
required by Section 3(b)(3) of S. 715, no amounts may be deposited or 
made available to the RRWCF if the transfer or availability of the 
amounts would increase the Federal deficit.
    It is also important to note that the concept of using receipts 
accruing to the Fund to establish a separate account to finance 
specific water projects is not new. Specifically, Congress established 
the Reclamation Water Settlements Fund (RWSF) under Title X of the 
Omnibus Public Lands Management Act of 2009 (Pub .L. 111-11). Like the 
RRWCF, the RWSF consists of receipts transferred from the Fund and 
provides specified levels of funding starting in FY 2020 for a period 
of 10 years to help finance specified water infrastructure projects 
that are part of Congressional-authorized water settlements, especially 
Indian water rights settlements. The WSWC supports the RWSF for the 
same reason it supported the establishment of the RRWCF as proposed in 
S. 715--the use of these funds furthers the construction of much needed 
water infrastructure in the West in accordance with the Fund's original 
intent and purpose.

                 V. FUNDING PRIORITIZATION UNDER S. 715

    Before expenditures from the RRWCF could be made, Section 3(c)(3) 
of S. 715 would require the Secretary of the Interior to develop 
programmatic goals to ensure that the authorized projects are 
constructed as expeditiously as possible, and in a manner that reflects 
the goals and priorities of the projects' authorizing legislation and 
the Rural Water Supply Act of 2006. The bill would also require the 
Secretary to develop funding prioritization criteria that would 
consider: (1) the ``urgent and compelling need'' for potable water 
supplies in affected communities; (2) the status of the current stages 
of completion of a given project; (3) the financial needs of affected 
rural and Tribal communities; (4) the potential economic benefits of 
the expenditures on job creation and general economic development in 
affected communities; (5) the ability of a given project to address 
regional and watershed level water supply needs; (6) a project's 
ability to minimize water and energy consumption and encourage the 
development of renewable energy resources, such as wind, solar, and 
hydropower; (7) the needs of Indian tribes and Tribal members, as well 
as other community needs or interests; and (8) such other factors the 
Secretary deems appropriate.
    As the WSWC stated in its June 8, 2012 letter, these programmatic 
goals and funding priorities ``. . .should be developed in a 
transparent manner in consultation with the affected communities and 
States--and should consider existing state water plans and 
priorities.'' States and the affected communities have on the ground 
knowledge of the facts and circumstances associated with the authorized 
projects that would receive funding under S. 715, and are therefore the 
most appropriate entities to assist the Secretary in developing these 
goals and priorities.

                VI. RECLAMATION AND RURAL WATER PROJECTS

    Reclamation is well suited to carry out the development and 
construction of the authorized rural water projects that would receive 
funding under S. 715. These specific projects are already authorized 
and under construction by Reclamation, which has a long history of 
planning, designing and constructing water infrastructure projects in 
the West. Most other existing federal water quality and supply programs 
typically provide loans, grants, or loan guarantees. However, many 
smaller and poorer rural communities have very limited capacity and 
little experience to be able to design and construct water projects 
with financial assistance alone. Consequently, they often need the 
experience and assistance that Reclamation can provide to help assess 
needs, design, plan, and construct large water infrastructure projects.

                            VII. CONCLUSION

    The expedited construction of authorized rural water projects 
facilitated by S. 715 will save the Treasury money in the long run, as 
costs continue to rise, and fulfill Federal obligations in a more 
timely manner, including Federal tribal trust responsibilities. 
Postponing spending on this obligation through inadequate or 
insufficient funding levels only increases Federal costs and 
perpetuates hardships to rural and Tribal communities in the West. S. 
715 would not only fulfill solemn Federal obligations, but also provide 
needed economic development and job creation.
    Importantly, the bill would use receipts that are already accruing 
to the Reclamation Fund for their intended purpose of financing the 
construction of western water projects.
    The WSWC appreciates the opportunity to submit this testimony, and 
urges the Committee to approve S. 715 and work with the States towards 
its effective implementation.

                               ATTACHMENT

                              Western States Water Council,
                                          Murray, UT, June 8, 2012.
                                          Position No. 343.
Hon. Jeff Bingaman,
Chairman, Energy and Natural Resources Committee, U.S. Senate, SD-364 
        Dirksen Senate Office Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, U.S. Senate, 
        SD-312 Dirksen Senate Office Building, Washington, DC.
    Dear Senators:

    On behalf of the Western States Water Council, which represents 
eighteen states, I am writing to express our support for legislative 
action to establish a dedicated funding source for the completion of 
federal rural water projects authorized by the Congress for 
construction by the Bureau of Reclamation. These projects include 
components that benefit both Indian and non-Indian rural communities. 
Many of these communities, particularly smaller communities, are 
struggling to provide adequate water supplies to meet the needs of 
their citizens of a quality consistent with federal mandates.
    It is essential that these projects be completed in a timely manner 
for the benefit of these communities in fulfillment of long-standing 
promises and trust responsibilities, some dating back decades. Another 
important consideration is the impact on the federal budget and 
economic growth. Accelerated construction scheduling, made possible by 
a more timely federal investment of modest amounts, will minimize long-
term federal expenditures and create more jobs now.
    With respect to programmatic goals and funding priorities 
established pursuant to directives in any legislation, these should be 
developed in a transparent manner in consultation with the affected 
communities and States--and should consider existing state water plans 
and priorities.
    We appreciate the opportunity to express our interests and look 
forward to working with you to address this important need.
            Sincerely,
                                           Phillip C. Ward,
                                                          Chairman.

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