68492 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

43 CFR Part 414

RIN 1006–AA40

Offstream Storage of Colorado River

Water and Interstate Redemption of

Storage Credits in the Lower Division

States

AGENCY: Bureau of Reclamation,

Interior.

ACTION: Notice of proposed rulemaking.

SUMMARY: Under this proposed rule

Colorado River water may be stored

offstream in the Lower Basin to permit

future interstate use of Colorado River

water in the Lower Division States

(Arizona, California, or Nevada). This

proposed rule would establish the

procedural framework under which

authorized entities (for example, a Stateauthorized water bank) in any Lower

Division State could store offstream

Colorado River water to develop storage

credits associated with that water, and

redeem those water storage credits

within the Lower Division. This rule

would increase the efficiency,

flexibility, and certainty in Colorado

River management.

DATES: Comments:

Any comments must be received by

Reclamation at the address below on or

before March 2, 1998.

Request for Public Hearings

Upon request, Reclamation will hold

public hearings on the proposed rule in

Las Vegas, Nevada, Phoenix, Arizona

and Ontario, California. Reclamation

will accept requests for public hearings

until 4:00 p.m. Pacific time on January

30, 1998.

ADDRESSES:

Comments

If you wish to comment, you may

submit your comments by any one of

several methods. You may mail

comments to Bureau of Reclamation,

Administrative Record, Lower Colorado

Regional Office, P.O. Box 61470,

Boulder City, NV 89006–1470. You may

also comment via the Internet at

bjohnson@lc.usbr.gov (see Electronic

Access and Filing Addresses under

SUPPLEMENTARY INFORMATION).

In addition, you may hand-deliver

comments to Bureau of Reclamation,

Administrative Record, Lower Colorado

Regional Office, 400 Railroad Avenue,

Boulder City, Nevada.

Comments, including names and

street addresses of respondents, will be

available for public review at this

address during regular business hours

(7:45 a.m. to 4:15 p.m.), Monday

through Friday, Pacific time, except

holidays. If you wish to request that

Reclamation consider withholding your

name or street address from public

review or from disclosure under the

Freedom of Information Act, you must

state this prominently at the beginning

of your comment. All submissions from

organizations or businesses, and from

individuals identifying themselves as

representatives or officials of

organizations or businesses, will be

made available for public inspection in

their entirety.

Public Hearings

If Reclamation receives a request to

schedule public hearings in Las Vegas,

Nevada; Phoenix, Arizona; or Ontario,

California, Reclamation will hold such

hearings at the following locations:

McCarran International Airport, 5757

Wayne Newton Boulevard,

Commissioner’s Meeting Room, 5th

Floor, Terminal 1, Las Vegas, Nevada;

Bureau of Indian Affairs conference

room, 2 Arizona Center, 400 North 5th

Street, 12th Floor, Phoenix, Arizona;

Red Lion Hotel, 222 North Vineyard,

Ontario, California. Upon request,

Reclamation will consider holding

public hearings in other locations, at

times and on dates that Reclamation

will announce prior to the hearings.

Request for public hearings and request

to participate in public hearings

Submit requests for public hearings

and requests to participate in public

hearings orally or in writing to Mr. Dale

E. Ensminger, Boulder Canyon

Operations Office, Bureau of

Reclamation, P.O. Box 61470, Boulder

City, Nevada 89006–1470, telephone

(702) 293–8659.

FOR FURTHER INFORMATION CONTACT: Mr.

Dale Ensminger, telephone (702) 293–

8659.

SUPPLEMENTARY INFORMATION: This

section provides the following

information:

I. Public Comment Procedures

Written Comments

Electronic Access and Filing Addresses

Public Hearings

II. Background

III. Purpose of this Rule

IV. Prior Rulemaking Proceedings

V. Section-by-Section Analysis of Proposed

Rule

VI. Procedural Matters

Environmental Compliance

Paperwork Reduction Act

Regulatory Flexibility Act

Unfunded Mandates Reform Act of 1995

Executive Order 12612, Federalism

Assessment

Executive Order 12630, Taking

Implications Analysis

Executive Order 12866, Regulatory

Planning and Review

Author

List of Subjects in 43 CFR Part 414

I. Public Comment Procedures

Written Comments

Written comments on the proposed

rule should be specific, should be

confined to issues pertinent to the

proposed rule, and should explain the

reason for any recommended change.

Where possible, comments should

reference the specific section or

paragraph of the proposed rule that the

commenter is addressing. Reclamation

will not necessarily consider or include

in the Administrative Record for the

final rule comments which Reclamation

receives after the close of the comment

period (see DATES) or comments

delivered to an address other than those

listed above (see ADDRESSES).

Electronic Access and Filing Addresses

If you comment via the Internet at

bjohnson@lc.usbr.gov (see ADDRESSES),

please submit comments as an ASCII

file avoiding the use of special

characters and any form of encryption.

Please also include ‘‘attn: AC1006–

AA40’’ and your name and return

address in your Internet message. If you

do not receive a confirmation from the

system that we have received your

Internet message, contact us directly at

(702) 293–8411.

Public Hearings

Individuals who wish to attend but

not testify at any hearing should contact

the person identified under FOR FURTHER

INFORMATION CONTACT beforehand to

verify that Reclamation will hold the

hearing. Reclamation will hold public

hearings on the proposed rule as

specified above if a member of the

public requests a public hearing. Any

person who desires to participate at a

hearing at a particular location should

inform Mr. Dale E. Ensminger under FOR

FURTHER INFORMATION CONTACT either

orally or in writing of the desired

hearing location by 4:00 p.m. Pacific

time January 30, 1998. If no one has

contacted Mr. Dale E. Ensminger to

express an interest in participating in a

hearing at a given location by that date,

Reclamation will not hold that hearing.

If only one person expresses an interest,

Reclamation may hold a public meeting

rather than a hearing, and Reclamation

will include the results in the

Administrative Record.

If Reclamation holds a hearing,

Reclamation will continue the hearing

until all persons wishing to testify have
Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules 68493

had an opportunity to do so. In order to

assist the transcriber and to ensure an

accurate record, Reclamation requests

that each person who testifies at a

hearing give the transcriber a copy of

that testimony. In order to assist

Reclamation in hearing preparation,

Reclamation also requests that each

person who plans to testify submit to

Reclamation at the address previously

specified (see ADDRESSES) an advance

copy of that testimony.

II. Background

The Colorado River serves as a source

of water for irrigation, domestic, and

other uses in the States of Arizona,

California, Colorado, Nevada, New

Mexico, Utah, and Wyoming, and in the

Republic of Mexico. The initial

apportionment of water from the

Colorado River was made by an

interstate compact, the Colorado River

Compact, dated November 24, 1922

(Compact). The Compact became

effective in 1929 following ratification

by six states and approval by the

Congress of the United States. The State

of Arizona became the final State to

ratify the Compact in 1944. The

Compact defined the Colorado River

Basin and divided the seven States into

two basins, an Upper Basin and a Lower

Basin. The Compact apportioned to each

basin, in perpetuity, the exclusive

beneficial consumptive use of 7.5

million acre-feet (maf) of water. Under

the Compact, ‘‘consumptive use’’ means

diversions of water from the mainstream

of the Colorado River, including water

drawn from the mainstream by

underground pumping, less return flow

to the river.

The Lower Basin includes those parts

of the States of Arizona, California,

Nevada, New Mexico, and Utah within

and from which waters naturally drain

into the Colorado River system below

Lee Ferry (Arizona), a point in the

mainstream of the Colorado River 1 mile

below the mouth of the Paria River. The

Compact also grouped the seven States

into two divisions, the Upper Division

and the Lower Division. The Lower

Division consists of the States of

Arizona, California, and Nevada. All

mainstream Colorado River water

apportioned by the Compact to the

Lower Basin is divided among the three

Lower Division States. All mainstream

Colorado River waters apportioned to

the Lower Basin, except for a few

thousand acre-feet apportioned to the

State of Arizona, have been allocated to

specific entities and, except for certain

Federal establishments, placed under

permanent water delivery contracts with

the Secretary for irrigation or domestic

use. These entities include irrigation

districts, water districts, municipalities,

Federal establishments including Indian

reservations, public institutions, private

water companies, and individuals.

The Supreme Court of the United

States, in its Opinion of June 3, 1963,

(373 U.S. 546) and Decree entered

March 9, 1964 (376 U.S. 340) (Decree),

in the case of Arizona v. California, et

al., confirmed that the Secretary was

vested with sufficient authority and

charged with the responsibility to

direct, manage, and coordinate the

operation of dams and related works on

the Colorado River in the Lower Basin.

The Supreme Court concluded, among

other things, that the Secretary derives

significant authority from the contract

authority under section 5 of the Boulder

Canyon Project Act of 1928 (45 Stat.

1057, 43 U.S.C. 617)(BCPA) that

requires water users in the Lower Basin

to have a contract with the Secretary.

The Supreme Court further concluded

that Congress intended the Secretary,

principally through the Secretary’s

section 5 contract power, to carry out

the allocation of the waters of the

mainstream of the Colorado River

among the Lower Basin States and to

decide which water users within each

State would get water and on what

terms. Accordingly, the Secretary acts as

water master of the Colorado River in

the Lower Basin.

The Decree excludes Federal

establishments from the BCPA

requirement for a contract with the

Secretary, but the water allocated to a

Federal establishment is included

within the apportionment of the Lower

Division State in which the Federal

establishment is located. Waters

available to a Lower Division State

within its apportionment but with a

priority date later than June 25, 1929,

have been allocated by the Secretary to

water users within that State after

consultation with the State.

Many Colorado River water rights

originated as ‘‘perfected rights’’ that are

specified in the Decree as rights

acquired in accordance with State law

and exercised by the actual diversion of

a specific quantity of water for

beneficial use on a defined area of land

or to definite municipal or industrial

works, and in addition will include

water rights created by the reservation

of mainstream water for the use of

Federal establishments under Federal

law whether or not the water has been

applied to beneficial use. The highest

priority Colorado River water rights are

present perfected rights (PPR’s) that the

Decree defines as those perfected rights

existing on June 25, 1929 (the effective

date of the BCPA). The Decree also

recognizes Federal Indian reserved

rights for the quantity of water

necessary to irrigate all the practically

irrigable acreage on five Indian

reservations along the Colorado River.

The Decree defines the rights of Indian

and other Federal reservations to be

Federal establishment PPR’s. PPR’s are

important because in any year in which

there is less than 7.5 maf of Colorado

River water available for consumptive

use in the Lower Basin States, PPR’s

will be satisfied first in the order of their

priority without regard to State lines.

In 1996, Arizona enacted a Stateauthorized program establishing an

Arizona State Water bank that would

allow offstream storage of Colorado

River water and subsequent interstate

delivery of such stored water through

redemption of credits pursuant to

Interstate Storage Agreements. In the

future, other Lower Division States may

enact comparable measures.

III. Purpose of this Rule

Arrangements that facilitate more

efficient use of the limited Colorado

River water resource are beneficial to all

water users. This proposed rule

addresses offstream storage of Colorado

River water and development of storage

credits by authorized entities within the

Lower Division States. Authorized

entities include a State water banking

authority, or other entity of a Lower

Division State holding entitlements to

Colorado River water, expressly

authorized pursuant to applicable laws

of Lower Division States to: (1) Enter

into Interstate Storage Agreements; (2)

develop intentionally created unused

apportionment; (3) acquire the right to

use intentionally created unused

apportionment; or (4) develop or redeem

storage credits for the benefit of an

authorized entity in another Lower

Division State.

The rule will establish a framework

for the Secretary to follow in approving

and administering interstate agreements

to allow offstream storage and

contractual distribution of Colorado

River water, and thereby encourage

voluntary interstate water transactions

among the Lower Division States. Such

voluntary water transactions, including

interstate contractual distribution of

Colorado River water consistent with

the BCPA and the requirements of the

Supreme Court of the United States in

its Decree entered March 9, 1964 (3376

U.S. 340) (Decree) in Arizona v.

California, et al., can help to satisfy

regional water demands. The proposed

rule does not deal with intrastate storage

and distribution of water.

The proposed rule will foster prudent

water management in the Lower

Division States by allowing authorized
68494 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules

entities of Consuming States, pursuant

to an interstate agreement, to store

Colorado River water offstream, to

receive storage credits for the stored

water, and to recover this water for

future use. The offstream storage will be

accomplished through an authorized

entity of the Storing State. The water to

be stored will be basic apportionment

from the Storing State or unused basic

apportionment or unused surplus

apportionment of the Consuming State.

The proposed rule is based on the

understanding that this type of

offstream storage is a beneficial

consumptive use of Colorado River

water. The rule is permissive in nature

and is intended to encourage and

facilitate these voluntary water

transactions.

The proposed rule is designed to

improve the Secretary’s ability to fulfill

his responsibilities to manage the Lower

Basin of the Colorado River on a more

efficient basis. This proposed rule is

expected to be a first step toward

improving the efficiency associated with

management of the Colorado River in

the Lower Basin.

While taking action in the form of this

proposed rule to assist the States of the

Lower Division of the Colorado River to

meet their water needs, the Department

also acknowledges its responsibilities to

the Indian Tribes in the Lower Division.

The Department is interested in finding

ways that the Tribes may more fully

benefit from the water rights they hold

in the Lower Basin, and in protecting

the availability of water supplies to

which these rights attach.

The focus in the proposed rule is on

the use of State-authorized entities,

including water banks, as a vehicle for

authorizing interstate storage and

redemption of storage credits associated

with Colorado River water. The

Department believes that the interstate

water storage and deliveries permitted

by these rules can be implemented

without compromising its

responsibilities toward, and in fact may

lead to benefits to, the Indian Tribes.

The Department’s proposed reliance on

State-authorized entities is predicated,

in part, on its expectation that these

entities will be operated in a fashion

that provides an opportunity for Indian

Tribes to participate in storage and

similar activities. In this regard the

Department notes that the State of

Arizona is examining ‘‘mechanisms that

will enable Indian communities that

hold entitlements to Colorado River

water to participate in water banking

with the Arizona Water Banking

Authority.’’ Arizona Laws 1996, ch. 308,

§ 27. The Department encourages

Arizona and the other Lower Division

States to implement programs within

the existing Law of the River that will

allow the Tribes to more fully benefit

from their water rights.

In addition, the Department will be

mindful of the need to protect local

tribal water resources when fulfilling its

role as set forth in these interstate water

banking rules. Tribes as well as other

water rights holders may, for example,

have concerns regarding the potential

impacts of future groundwater

withdrawals from a water bank on their

water rights. The Department wants to

work with Lower Division States and

authorized entities banking Colorado

River water to ensure that water stored

and recovered for interstate delivery

does not adversely impact those local

tribal water resources. Under the

proposed rule the Secretary will, when

determining whether to approve a

proposed interstate transaction, take

into account, among other things, the

potential impacts of a proposed

transaction on water rights holders,

including Indian Tribes. See § 414.3(b).

Finally, this proposal does not

address, and is not intended to govern

the exercise of, whatever authority the

Secretary of the Interior has to consider

and implement, in appropriate

situations, tribal storage and water

transfer activities.

Except as described below, the

Secretary, in reviewing an Interstate

Storage Agreement, will not focus on

the price associated with utilization of

storage credits or other financial details

agreed to by the authorized entities as

willing sellers and willing buyers. The

transaction must leave the United States

in no worse a financial position than if

the transaction had not occurred. When

it is operationally feasible to do so,

United States facilities may be available

for use in storing, delivering, and

distributing Colorado River water

offstream under the proposed rule to the

extent that the United States is fully

reimbursed for relevant capital, interest,

and operation and maintenance costs.

Approval to deliver Colorado River

water cannot obligate the Federal

Government to incur extra nonreimbursable expenses to store water or

deliver it to a new location. Further,

existing Reclamation law requires

adjustment in repayment terms when

use of the water shifts from a noninterest bearing category to an interestbearing category, such as from

agriculture use to municipal and

industrial use. Additionally, if pumping

power is needed to affect a given

transaction, the parties to the

transaction must provide or pay for such

power, and may have to secure it from

non-Federal sources.

The actions and transactions

contemplated in the proposed rule are

within the current authority of the

Secretary, the BCPA, and the Decree.

Under BCPA, with the exception of

Federal Establishments PPR’s, no

authorized entity may receive Colorado

River water except in accordance with

a contract with the Secretary. Where

appropriate to implement the Interstate

Storage Agreement, the Secretary will

contract for water deliveries under

Section 5 of the Boulder Canyon Project

Act. In accordance with specific

approvals, offstream storage and

development of storage credits for

interstate purposes have already taken

place on a limited basis. The proposed

rule will provide a standard set of

procedures to be used in place of the ad

hoc processes that have been used for

previous interstate water transactions.

These procedures will provide greater

flexibility, certainty, and assurance to

all parties potentially interested in

entering into interstate transactions for

storage of Colorado River water and use

or redemption of storage credits. This

increased certainty is expected to

promote more efficient management of

the Colorado River and facilitate

additional voluntary water transactions

of this type among Lower Basin water

users.

The Secretary will consider the

implications of the proposed Interstate

Storage Agreement for the financial

interests of the United States and the

United States will require the parties

who benefit from the transactions to

fund the United States’ reasonable costs

to evaluate, process, and/or approve

transactions entered into under this

rule. In considering a request for

approval of an Interstate Storage

Agreement for offstream storage of

Colorado River water and use or

redemption of storage credits, the

Secretary will consider, among other

relevant factors: applicable law;

applicable contracts; potential effects on

trust resources; potential effects on

contractors or Federal entitlement

holders, including Indian and nonIndian PPR holders and other Indian

tribes; potential effects on other third

parties; environmental impacts and

effects on threatened and endangered

species; comments from interested

parties, particularly parties who may be

affected by the proposed action; and

other relevant factors, including the

implications of the proposed Interstate

Storage Agreement for the financial

interests of the United States.

IV. Prior Rulemaking Proceedings

In 1991, 1992, and 1994, Reclamation

developed draft rules for administering
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Colorado River water entitlements and

distributed drafts to known interested

parties. Among other things, those drafts

included provisions that would have

allowed instream storage of water saved,

interstate transfer of conserved water,

reductions in entitlements due to

nonuse, and proposed water

conservation criteria. Because of the

controversy associated with these

proposals, Reclamation suspended

further work on the rule in late 1994 to

allow the Lower Division States time to

develop a consensus on storage and

interstate transfer issues. While a

consensus on all of these issues has not

been achieved, it appears that there is

strong support and demand for a new,

more narrowly focused rule that will

facilitate offstream water storage and

interstate water delivery programs in the

Lower Basin.

V. Section by section analysis of the

Proposed Rule

Section 414.1. Purpose

Under this proposed rule Colorado

River water may be stored offstream to

permit future interstate use of Colorado

River water. This proposed rule would

establish the procedural framework

under which authorized entities of any

of the Lower Division States (Arizona,

California, or Nevada) could store

offstream through another authorized

entity (for example, State-authorized

water banks) in any Lower Division

State, Colorado River water allocated

but not taken by water entitlement

holders within the State where the

storage occurs, or unused basic

apportionment, or surplus

apportionment of the Consuming State.

The authorized entity of the Storing

State would develop, on behalf of the

authorized entity in the consuming

state, storage credits associated with

that water. When unused apportionment

is intentionally created to satisfy a

request for delivery of water from

storage credits, the authorized entity

must ensure that its State’s consumptive

use is decreased by a quantity sufficient

to offset the quantity of storage credits

that are to be made available as unused

apportionment by the Secretary and

delivered for use in another Lower

Division State in accordance with

Article II(B)(6) of the Decree. This rule

would increase efficiency, flexibility,

and certainty in Colorado River

management.

The proposed rule establishes

procedures for interstate contractual

distribution derived from credits for

Colorado River water stored offstream.

These procedures will apply to all

holders of entitlements to use Colorado

River water in the Lower Division

States. The proposed rule allows

authorized entities of any Lower

Division State to enter into agreements

with authorized entities of another

Lower Division State to store Colorado

River water offstream, develop storage

credits, and redeem storage credits

associated with that water, subject to the

approval of the Secretary.

Section 414.2. Definitions

This section of the rule defines terms

that are used in the rule. The following

terms are defined by or derived from the

Decree: basic apportionment, Colorado

River water, consumptive use,

mainstream, surplus apportionment,

and unused apportionment. Most of the

other terms were defined for the

purposes of this rule to establish a

common understanding of terms

relating to storage of water.

All Interstate Storage Agreements for

offstream storage of Colorado River

water and the interstate redemption of

storage credits under this proposed rule

would be executed by a State water

banking authority, or other entities

holding entitlements to Colorado River

water, expressly authorized pursuant to

applicable laws of Lower Division States

to: (1) enter into Interstate Storage

Agreements; (2) develop intentionally

created unused apportionment; (3)

acquire the right to use intentionally

created unused apportionment; or (4)

develop or redeem storage credits for

the benefit of an authorized entity in

another Lower Division State. States are

encouraged to define the term

‘‘authorized entity’’ broadly so as not to

exclude appropriate entities potentially

interested in entering into arrangements

to develop or acquire water storage

credits on an interstate basis.

Constraints placed on ‘‘authorized

entities’’ will have the likely effect of

reducing the net benefits associated

with the proposed rule.

The proposed rule includes a

definition of intentionally created

unused apportionment of Colorado

River water. As proposed, it does not

specify what measures or actions may

be used to create such apportionment.

In Section 414.3, the Secretary specifies

the information that he will consider in

approving any proposed Interstate

Storage Agreement. Subparagraph (a)(7)

of Section 414.3 directs that any request

for approval of a proposed Interstate

Storage Agreement, ‘‘specify which

action the authorized entity will take to

create intentionally created unused

apportionment.’’ The Department seeks

comment on the issue of whether the

final definition of intentionally created

unused apportionment should specify

what types of measures or actions the

Secretary would approve as

intentionally created unused

apportionment. Comments should

identify actions that would be adequate

to demonstrate the development of

intentionally created unused

apportionment.

Section 414.3. Interstate Storage

Agreements and Redemption of Storage

Credits

The proposed rule would authorize

offstream storage of Colorado River

water in the Lower Division States by

State-authorized entities on the basis of

approved Interstate Storage Agreements.

Under this section of the proposed rule,

a Lower Division State authorized entity

could establish a water bank and store

Colorado River water on behalf of

authorized entities in the other two

Lower Division States. Such water

banks could store water consisting of

water allocated but not taken by water

entitlement holders within the Storing

State, or unused basic apportionment, or

surplus apportionment of the

Consuming State.

The proposed rule assumes that there

are two ways to ‘‘store’’ water in

offstream storage: direct storage or

indirect storage. Direct storage can be

accomplished by putting water into an

underground aquifer at an underground

water storage facility or in a surface

reservoir located off the mainstream of

the Colorado River. Indirect storage can

be accomplished through groundwater

savings that result from replacing

established groundwater use with

Colorado River water.

A central feature of the procedures in

the proposed rule is the Interstate

Storage Agreement. Under this section

of the proposed rule, the authorized

entities of two or more Lower Division

States may enter into an agreement to

store Colorado River water offstream. To

become effective, these agreements

require approval by the Secretary. To

obtain the approval of the Secretary,

each Interstate Storage Agreement must

contain a description of the following:

quantity of water to be stored; location

of storage; type and source of water;

accounting, reporting and use of storage

credits associated with water to be

stored; end use of water to be stored;

and the extent to which Federal

facilities or resources will be used to

deliver or store Colorado River water

stored offstream.

Under the proposed rule, the

Secretary has 120 days to approve or

disapprove such agreements unless the

Secretary determines that additional

time is necessary to review the

agreement because the proposal
68496 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules

involves significant environmental

compliance activities or other issues. In

reviewing any proposed Interstate

Storage Agreement, the Secretary will

consider the following: applicable law;

applicable contracts; potential effects on

trust resources; potential effects on

contractors or Federal entitlement

holders, including Indian and nonIndian present perfected rights (PPR)

holders and other Indian tribes;

potential effects on third parties;

environmental impacts and effects on

threatened and endangered species;

comments from interested parties,

particularly parties who may be affected

by the proposed action; and other

relevant factors, including the

implications of the proposed Interstate

Storage Agreement for the financial

interests of the United States.

Under this section of the proposed

rule, storage credits are developed for

the benefit of the authorized entity for

which Colorado River water is placed in

offstream storage. The storage credits

entitle the entity to recover water at a

later date. The authorized entities

involved in the transaction will account

for the water diverted and stored

offstream under an Interstate Storage

Agreement, and prior to any redemption

of storage credits certify to the Secretary

that water associated with storage

credits has been stored. The Secretary

must be satisfied that necessary actions

have been taken to develop

intentionally created unused

apportionment. Once this determination

has been made, the Secretary will make

available this intentionally created

unused apportionment for use by the

authorized entity of the Consuming

State consistent with the BCPA, Article

II(B)(6) of the Decree, and all other

applicable laws. Also, under this

section, Interstate Storage Agreements

may be assigned in whole or in part to

authorized entities upon the agreement

of the parties to the Interstate Storage

Agreement and approval of the

Secretary.

Section 414.4. Reporting Requirements

and Accounting for Storage Credits

Under this section of the proposed

rule, each authorized entity that has

stored Colorado River water offstream

for interstate purposes must submit a

report to the Secretary by January 31 of

each year. The report will specify the

quantity of Colorado River water that

was stored during the previous year and

is recoverable in future years and the

number of storage credits associated

with that water. Under this proposed

rule, the Department has assumed that

storage credits would be equal to the

quantity of water stored less deductions

and losses from storage that includes

losses attributable to evaporation or

percolation or water required by State

law to remain in an aquifer. Such

reports will also specify the balance of

Colorado River storage credits redeemed

during the previous year and the

balance of such credits that remain

recoverable as of December 31 of the

previous year. This reporting

requirement will not impose a burden

on the authorized entity of a Storing

State because the authorized entity will

need to maintain these records for its

own purposes.

Under the proposed rule, the United

States will continue to fulfill the

requirements of the Decree that requires

the Secretary to prepare and maintain,

at least annually, complete, detailed,

and accurate records of diversions of

water from the mainstream, return flow

of such water to the mainstream, and

consumptive use of such water. Under

the proposed rule, the water diverted

and stored offstream will be accounted

for as consumptively used in that same

year in the Storing State, in accordance

with Article V of the Decree. The

accounting records would also reflect an

equivalent quantity of storage credits in

the Storing State. When unused

apportionment is intentionally created

to satisfy a request for delivery of water

from storage credits, the authorized

entity must take action to ensure that its

State’s consumptive use is decreased by

a quantity sufficient to offset the

quantity of water made available as

unused apportionment by the Secretary

and delivered for use in another Lower

Division State. After the authorized

entity confirms in writing to the

Secretary the quantity of water to be

delivered for use in the Consuming

State and includes documentation of

actions taken to intentionally create a

like quantity of unused apportionment,

the Secretary will declare unused

apportionment available within the

Storing State and allocate that unused

apportionment to the Consuming State

to allow recovery of the storage credits.

The intentionally created unused

apportionment so made available to the

Consuming State by the Secretary will

be accounted for as consumptively used

when Colorado River water in the

amount of the intentionally created

unused apportionment is released for

use in the Consuming State, in

accordance with Article V of the Decree.

Under the proposed rule and in

accordance with Article II(B)(6) of the

Decree, the Secretary may release in any

one year any Colorado River water that

is apportioned for consumptive use in a

Lower Division State but which will be

unused in that State for consumptive

use in another Lower Division States in

that same year. The water so released for

consumptive use in the other Lower

Division States is unused

apportionment.

For example, under the proposed rule,

when storage credits are redeemed,

Colorado River water that would

otherwise be supplied to a water user in

a Storing State could be supplied from

offstream storage in that State. The

Storing State will reduce its Colorado

River water use in accordance with the

approved Interstate Storage Agreement.

Then the Secretary, in accordance with

the terms of Article II (B)(6) of the

Decree, will make the Colorado River

water available to the Consuming State.

No other Lower Division State or other

user in the Storing State will be able to

claim the water since the Secretary is

authorized under Article II (B)(6) of the

Decree to make such water available,

and the Secretary will have agreed to

implement the terms of the Interstate

Storage Agreement. No other Lower

Division State will be eligible to receive

water made available to the Consuming

State under that Interstate Storage

Agreement.

Section 414.5. Water Quality

This section of the rule is a disclaimer

which states that except for specific

water quality responsibilities that are

established for the Secretary by Federal

law, the Secretary does not guarantee

the quality of water released or

delivered through Federal facilities.

Water quality will be monitored by the

Environmental Protection Agency and

the Army Corps of Engineers and will be

subject to State or Tribal jurisdiction, as

appropriate, in accordance with the

Clean Water Act.

Section 414.6 Environmental

Compliance

Under the proposed rule, the

Secretary is responsible for ensuring the

actions taken under the rule comply

with the National Environmental Policy

Act of 1969, as amended (NEPA), the

Endangered Species Act of 1973, as

amended (ESA), and will integrate the

requirements of other statutes, laws, and

executive orders as required for Federal

actions taken under this proposed rule.

Federal actions requiring

environmental compliance may include,

but are not limited to, approval of

transactions that entail changes in the

place or quantity of water diversions

necessary to store a Lower Division

State’s water. In evaluating a proposed

Federal action taken under this part for

compliance with the National

Environmental Policy Act, the Secretary

will consider effects on natural and
Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules 68497

other resources as identified in the

Bureau of Reclamation’s National

Environmental Policy Act (NEPA)

Handbook and other relevant

environmental laws and regulations.

The parties to a proposed transaction

would be responsible for completing

environmental compliance

documentation in accordance with the

standards set forth in the Bureau of

Reclamation’s NEPA Handbook and

subject to Reclamation approval prior to

the Secretary’s approval of the proposed

action.

The Department, through

Reclamation, will collect in advance the

estimated costs incurred by the United

States in evaluating, processing, or

approving the action from the persons

or entities who would benefit from a

proposed action under this rule.

VI. Procedural Matters

Environmental Compliance

Reclamation has prepared a draft

environmental assessment (DEA).

Reclamation has placed the DEA on file

in the Reclamation Administrative

Record at the address specified

previously. The public is invited to

review the DEA by contacting

Reclamation at the addresses listed

above (see ADDRESSES) and suggests that

anyone wishing to submit comments in

response to the DEA do so in

accordance with the Written Comments

section above.

Compliance with NEPA, the ESA, and

other relevant statutes, laws, and

executive orders will be completed for

future Federal actions taken under this

rule to ensure that any action authorized

or carried out by the Secretary does not

jeopardize the continued existence of

any threatened or endangered species,

does not adversely modify or destroy a

critical habitat, and is analyzed by an

appropriate environmental document.

Consultation and coordination between

Reclamation, the Fish and Wildlife

Service, other agencies, and interested

parties will be completed on a case-bycase basis.

Paperwork Reduction Act

The Department believes that this rule

does not contain information collection

requirements that the Office of

Management and Budget (OMB) must

approve under the Paperwork Reduction

Act of 1995, 44 U.S.C. 3501 et seq. This

proposed rule is geographically limited

to the States of Arizona, California and

Nevada. The proposed rule covers

authorized entities that would store

Colorado River water off the mainstream

of the Colorado River. The information

to be reported will be compiled by the

authorized entities in the course of their

normal business and the annual reports

to the Secretary will not impose any

significant time or cost burden. It is

estimated that each respondent would

need one hour at an estimated cost of

$20 to complete the annual reporting

requirement. Moreover, the Department

assumes that there will never be an

industry-wide collection of information

and assumes that there will always be

fewer than 10 entities required to report

information. Notwithstanding these

circumstances, the Department intends

to seek information collection approval

from the OMB, pursuant to the

Paperwork Reduction Act of 1995, 44

U.S.C. 3501 et seq.

Regulatory Flexibility Act

Congress enacted The Regulatory

Flexibility Act of 1980 (RFA), 5 U.S.C.

601 et seq., to ensure that Government

regulations do not unnecessarily or

disproportionately burden small

entities. The RFA requires a regulatory

flexibility analysis if a rule would have

a significant economic impact, either

detrimental or beneficial, on a

substantial number of small entities. An

initial RFA analysis has been

completed. This rule will not impose

any direct cost on small entities. A

benefit-cost analysis was completed and

concludes that the proposed rule does

not impose significant or unique impact

upon small governments (including

Indian communities), small entities

such as water purveyors, water districts,

or associations, or individual

entitlement holders.

Unfunded Mandates Reform Act of 1995

The adoption of 43 CFR part 414 will

not result in any unfunded mandate to

State, local, or tribal governments in the

aggregate, or to the private sector, of

$100 million or more in any one year.

Executive Order 12612, Federalism

Assessment

The proposed rule does not alter the

relationship between the Federal

Government and the States under the

Decree nor does it alter the distribution

of power and responsibilities among the

various levels of government. Therefore,

in accordance with Executive Order

12612, the Secretary has determined

that this proposed rule does not have

sufficient federalism implications to

warrant preparation of a Federalism

Assessment.

Executive Order 12630, Takings

Implications Analysis

The proposed rule does not represent

a government action capable of

interfering with constitutionally

protected property rights. This rule does

not impose additional fiscal burdens on

the public. This rule would not result in

physical invasion or occupancy of

private property or substantially affect

its value or use. The rule would not

result in any Federal action that would

place a restriction on a use of private

property. The rule does not affect a

Colorado River water entitlement

holder’s right to use its full water

entitlement. Under the proposed rule,

an authorized entity may store unused

Colorado River water available from an

entitlement holder’s water rights only if

the water right holder does not use or

store that water on its own behalf.

Under the proposed rule, the only water

that can be used to satisfy storage

credits is unused apportionment created

by the forbearance of a use which

otherwise would have occurred.

Therefore, the Department of the

Interior has determined that the rule

would not cause a taking of private

property or require further discussion of

takings implications under this

Executive Order.

Executive Order 12866, Regulatory

Planning and Review

This proposed rule is a significant

regulatory action under section 3(f)(4) of

Executive Order 12866 because it raises

novel legal or policy issues. Executive

Order 12866 requires an assessment of

potential costs and benefits under

section 6(a)(3) of that Executive Order.

Reclamation’s benefit-cost analysis

determines that the proposed rule does

not impose significant or unique

impacts upon small governments

(including Indian communities), small

entities such as water purveyors or

associations, or even individual water

entitlement holders.

The proposed rule authorizes the

distribution of Colorado River water

storage credits created by off stream

storage on an interstate basis.

California and Nevada are looking for

alternative water supplies to satisfy the

increasing demands of economic

development and population growth.

The proposed rule may provide an

opportunity for Colorado River water

users in Nevada to experience a

marginal costs savings in securing

alternative supplies. Off stream storage

of Colorado River water and interstate

distribution of Colorado River water

storage credits are voluntary actions.

Should the costs of the procedures

proposed in the rule to facilitate these

transactions be greater than the costs of

other alternative water supplies,

California and Nevada would probably

select the lower cost alternatives.
68498 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules

The benefit-cost analysis estimated

net economic benefits of the proposed

rule on a State and regional level using

different water supply models and

discount rates. The different water

supply models represent potential water

supply conditions on the Colorado River

that affect interstate demand for water

from an Arizona water bank and the

magnitude of economic benefits

obtained from that water. The discount

rates used in the analysis were 5.75%

(the average rate on municipal bonds in

1996, which is a rate faced by major

water purveyors in California and

Nevada) and 8.27% (the prime rate in

1996, which more accurately represents

the cost of money).

Under a conservative water supply

scenario characterized by 19 years of

normal conditions on the Colorado

River and one surplus year, discounted

net economic benefits at the regional

level ranged from $12.8 to $61.2 million

at 5.75% and $9.5 to $47.7 million at

8.27%. Under a water supply scenario

characterized by 10 years of surplus

conditions on the Colorado River, the

net economic benefits range from

$550,255 to $4.8 million at 5.75% and

$350,789 to $3.1 million at 8.27%.

Under the scenario characterized by 10

surplus years, demand for banked water

is relatively low because the Lower

Division States can meet most of their

water needs with diversions from the

mainstream.

Reclamation has placed the full

analysis on file in the Reclamation

Administrative Record at the address

specified previously (see ADDRESSES).

Author

The principal author of this rule is

Mr. Dale E. Ensminger, Boulder Canyon

Operations Office, Bureau of

Reclamation, P.O. Box 61470, Boulder

City, Nevada 89006–1470, telephone

(702) 293–8659.

List of Subjects in 43 CFR Part 414

Administrative practice and

procedure, Environmental protection,

Public lands, Reporting and

recordkeeping requirements, Water bank

program, Water resources, Water

storage, Water supply, Water quality.

Dated: December 22, 1997.

Patricia J. Beneke,

Assistant Secretary—Water and Science.

For the reasons stated in the

preamble, the Bureau of Reclamation

proposes to add a new part 414 to title

43 of the Code of Federal Regulations as

follows:

PART 414—OFFSTREAM STORAGE

OF COLORADO RIVER WATER AND

INTERSTATE REDEMPTION STORAGE

CREDITS IN THE LOWER DIVISION

STATES

Sec.

414.1 Purpose.

414.2 Definitions.

414.3 Interstate storage agreements and

redemption of storage credits.

414.4 Reporting requirements and

accounting for storage credits.

414.5 Water quality.

414.6 Environmental compliance.

Authority: 43 U.S.C. 617; 43 U.S.C. 391; 43

U.S.C. 485; 43 U.S.C. 1501; 5 U.S.C. 553; 373

U.S. 546; 376 U.S. 340.

§ 414.1 Purpose.

This part sets forth the procedural

framework for approval by the Secretary

of the Interior of interstate agreements

for the offstream storage of Colorado

River water in the Lower Division States

by State-authorized entities consistent

with State law. In accordance with the

Secretary’s authority under Article II (B)

(6) of the Decree entered March 9, 1964

(376 U.S. 340), in the case of Arizona v.

California, et al. as supplemented and

amended, this part also includes the

procedural framework to develop and

redeem storage credits associated with

Colorado River water stored offstream

by authorized entities consistent with

State law. This part does not address

intrastate storage or distribution of

water not subject to an Interstate Storage

Agreement.

§ 414.2 Definitions.

The following definitions, listed

alphabetically, apply to this part:

Authorized entity means a State water

banking authority, or other entity of a

Lower Division State holding

entitlements to Colorado River water,

expressly authorized pursuant to

applicable laws of Lower Division States

to:

(1) Enter into Interstate Storage

Agreements;

(2) Develop intentionally created

unused apportionment;

(3) Acquire the right to use

intentionally created unused

apportionment; or

(4) Develop or redeem storage credits

for the benefit of an authorized entity in

another Lower Division State.

Basic apportionment means the

Colorado River water apportioned to

each Lower Division State when

sufficient water is available for release,

as determined by the Secretary of the

Interior, to satisfy 7.5 million acre-feet

(maf) of annual consumptive use in the

Lower Division States. The annual basic

apportionment for the Lower Division

States is 2.8 maf of consumptive use for

the State of Arizona, 4.4 maf of

consumptive use for the State of

California, and 0.3 maf of consumptive

use for the State of Nevada.

Colorado River water means water in

or withdrawn from the mainstream.

Consuming State means a Lower

Division State where water made

available by redeeming storage credits is

or will be used.

Consumptive use means diversions

from the Colorado River less such return

flow to the river as is available for

consumptive use in the United States or

in satisfaction of the Mexican treaty

obligation. Consumptive use from the

mainstream within the Lower Division

States includes all consumptive use of

water from the mainstream, including

water drawn from the mainstream by

underground pumping. The Mexican

treaty obligation is set forth in the

February 3, 1944, Water Treaty between

Mexico and the United States, including

supplements and associated Minutes of

the International Boundary and Water

Commission.

Contractor means any person or entity

in the States of Arizona, California, or

Nevada who has a valid contract or

agreement with the United States for the

delivery of Colorado River water.

Decree means the decree entered

March 9, 1964, by the Supreme Court in

Arizona v. California, et al., 373 U.S.

546 (1963), as supplemented or

amended.

Entitlement means an authorization to

beneficially use Colorado River water

pursuant to:

(1) A decreed right,

(2) A contract with the United States

through the Secretary, or

(3) A reservation of water from the

Secretary.

Federal entitlement holder means a

Federal agency or Indian tribe identified

in Article II(D) of the Decree as having

an entitlement for the beneficial use of

Colorado River water.

Intentionally created unused

apportionment means unused

apportionment that is created solely as

a result of an agreement within a Storing

State for the purposes of making

Colorado River water available for use

in a Consuming State in fulfillment of

a request for redemption of storage

credits pursuant to an Interstate Storage

Agreement.

Interstate storage agreement means an

agreement, consistent with this part,

that provides for offstream storage of

Colorado River water in a Storing State

for authorized entities in Consuming

States and for the recovery of the stored

water. An Interstate Storage Agreement

will be among authorized entities of two
Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules 68499

or more Lower Division States and may

include other entities that are

determined to be appropriate to the

performance and enforcement of the

agreement under Federal law and the

respective laws of the Storing State and

the Consuming State.

Lower Division States means the

States of Arizona, California, and

Nevada.

Mainstream means the main channel

of the Colorado River downstream from

Lee Ferry within the United States,

including the reservoirs behind dams on

the main channel, and Senator Wash

Reservoir off the main channel.

Offstream storage means storage in a

surface reservoir off of the mainstream

or in a groundwater aquifer. Offstream

storage also includes indirect recharge

when mainstream water is exchanged

for groundwater that otherwise would

be pumped and consumed.

Present perfected right or PPR means

perfected rights defined by the Decree,

existing as of June 25, 1929, the effective

date of the Boulder Canyon Project Act

(45 Stat. 1057, 43 U.S.C. 617) (BCPA).

All present perfected rights are listed in

the supplemental decrees entered

January 9, 1979, and April 16, 1984, by

the United States Supreme Court in

Arizona v. California, et al., as amended

or supplemented.

Secretary means the Secretary of the

Interior or an authorized representative.

Storage Credit refers to an accounting

device to reflect a quantity of Colorado

River water that is stored offstream.

Storing State means a Lower Division

State in which water is stored off the

mainstream.

Surplus apportionment means the

Colorado River water apportioned to

each Lower Division State when

sufficient water is available for release,

as determined by the Secretary, to

satisfy in excess of 7.5 maf of annual

consumptive use in the Lower Division

States.

Unused apportionment means

Colorado River water within a Lower

Division State’s basic or surplus

apportionment, or both, which is not

put to beneficial consumptive use

during that year within that State.

Unused entitlement means any

Colorado River water that is made

available to but not scheduled and used

by an entitlement holder during the year

for which it is made available.

§ 414.3 Interstate storage agreements and

redemption of storage credits.

(a) Interstate storage agreements. In

accordance with Article II(B)(6) of the

Decree, authorized entities of two or

more Lower Division States may enter

into Interstate Storage Agreements

subject to the approval of the Secretary

in accordance with paragraph (b) of this

section. An Interstate Storage

Agreement will allow an authorized

entity in a Storing State to store unused

entitlement and/or unused

apportionment for the credit of an

authorized entity located in a

Consuming State and will provide for

the subsequent redemption of the credit.

Such an agreement must:

(1) Specify the quantity of Colorado

River water to be stored, by which

authorized entity it will be stored, the

Lower Division State in which it is to be

stored, and the storage facility(ies) in

which it will be stored.

(2) Specify whether the water to be

stored will be basic apportionment from

the Storing State or unused basic

apportionment or unused surplus

apportionment of the Consuming State.

If it is to be unused apportionment, it

may only be made available from the

Consuming State and the agreement

must so specify.

(3) Specify the quantity of storage

credits associated with water stored

offstream that will be available to the

authorized entity in the Consuming

State at the time water is actually stored

under the agreement.

(4) Specify that accumulated storage

credits may not be redeemed within the

same calendar year in which the water

that generated those credits was stored

offstream.

(5) Specify that the authorized entity

in the Consuming State will provide

notice to the Lower Division States and

to the Secretary no later than November

30 of its intention to request delivery of

a specific quantity of Colorado River

water by redeeming accumulated

storage credits in the following calendar

year.

(6) Specify that the authorized entity

of a Storing State, after receiving a

notice of intention to redeem offstream

storage credits, will take actions to

ensure that the Storing State’s

consumptive use of Colorado River

water will be decreased by a quantity

sufficient to develop intentionally

created unused apportionment to offset

the delivery of Colorado River water for

use in the Consuming State in

fulfillment of the storage credits.

(7) Specify which actions the

authorized entity will take to develop

intentionally created unused

apportionment.

(8) Specify that the authorized entity

of the Storing State must certify to the

Secretary that intentionally created

unused apportionment has been

developed that would not otherwise

exist and that the authorized entity will

request the Secretary to make available

that quantity of Colorado River water for

use in the Consuming State pursuant to

Article II(B)(6) of the Decree to redeem

storage credits.

(9) Indemnify the United States, its

employees, agents, subcontractors,

successors, or assigns from loss or claim

for damages and from liability to

persons or property, direct or indirect,

and of any nature whatsoever arising by

reason of the actions taken by the

United States in accordance with this

part.

(10) Identify the extent to which

facilities constructed or financed by the

United States will be used to store,

convey, or distribute water associated

with an Interstate Storage Agreement.

(b) Approval by the Secretary. A

request for approval of an Interstate

Storage Agreement should be made in

writing to the Secretary. The request

will be acknowledged in writing by the

Secretary within 10 business days of

receipt. The request should include

copies of the proposed interstate

agreement and any additional

supporting data that clearly set forth the

details of the proposed transaction. In

reviewing the proposed interstate

agreement, the Secretary will consider,

among other relevant factors: applicable

law; applicable contracts; potential

effects on trust resources; potential

effects on water rights holders,

including contractors, Federal

entitlement holders, Indian and nonIndian PPR holders, and other Indian

tribes; potential effects on third parties;

environmental impacts and effects on

threatened and endangered species;

comments from interested parties,

particularly parties who may be affected

by the proposed action; and other

relevant factors, including the direct or

indirect consequences of the proposed

Interstate Storage Agreement on the

financial interests of the United States.

The Secretary will respond to the

request within 120 days. However, if the

proposal involves significant

environmental compliance activities or

other issues such that 120 days is an

insufficient period in which to respond,

the Secretary will communicate this to

all parties to the proposed request and

set out a schedule by which such work

will be completed or such issues

resolved. In that case, the Secretary will

render a decision within 90 days of

completion of the environmental

compliance activities and resolution of

other issues (if applicable). Where

appropriate to implement the Interstate

Storage Agreement, the Secretary will

contract for water deliveries under

Section 5 of the Boulder Canyon Project

Act.
68500 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Proposed Rules

(c) Stored water. The authorized

entity of the Storing State will account

for the water diverted and stored

offstream under an Interstate Storage

Agreement, and prior to any redemption

of storage credits will certify to the

Secretary that water associated with

storage credits has been stored.

(d) Redemption of storage credits. The

Secretary must be satisfied that

necessary actions have been taken to

develop intentionally created unused

apportionment for redemption of storage

credits. Once this determination has

been made, the Secretary will make

available a quantity of Colorado River

water to redeem those credits consistent

with the BCPA, Article II(B)(6) of the

Decree, and all other applicable laws.

Intentionally created unused

apportionment that is developed by the

authorized entity of the Storing State

will be made available to the authorized

entity of the Consuming State and will

not be made available to other

contractors or Federal entitlement

holders.

(e) Assignment. Interstate Storage

Agreements may be assigned in whole

or in part to authorized entities upon

the agreement of the parties to the

Interstate Storage Agreement and upon

the approval by the Secretary consistent

with the requirements of paragraph (b)

of this section.

§ 414.4 Reporting requirements and

accounting for storage credits.

Each authorized entity will annually

report to the Secretary, by January 31,

the quantity of water it diverted and

stored on behalf of authorized users in

other Lower Division States and the

balance of storage credits remaining in

interstate storage for each entity as of

December 31 of the prior calendar year.

This water will be accounted for, in the

records maintained by the Secretary

under Article V of the Decree, as a

consumptive use in the Storing State for

the year in which it is stored. The

Secretary will maintain individual

balances of storage credits established

by the offstream storage of water under

Interstate Storage Agreements. The

balances will be reduced when

intentionally created unused

apportionment is developed by the

authorized entity in a Storing State and

made available for use in a Consuming

State. In the records maintained by the

Secretary under Article V of the Decree,

the taking of unused apportionment for

use in a Consuming State by an

authorized entity in redemption of its

storage credits will be accounted for as

consumptive use by the Consuming

State of unused apportionment in the

year the water is used, the same as with

any other unused apportionment taken

by that State.

§ 414.5 Water quality.

(a) No guarantee of water quality. The

Secretary does not warrant the quality of

water released or delivered under

interstate agreements, and the United

States will not be liable for damages of

any kind resulting from water quality

problems. The United States will not be

under any obligation to construct or

furnish water treatment facilities to

maintain or improve water quality

standards.

(b) Water quality standards. All

contractors or Federal entitlement

holders, in diverting, using, and

returning Colorado River water, must

comply with all relevant water pollution

laws and regulations of the United

States, the Storing State, and the

Consuming State, and must obtain all

applicable permits or licenses from the

appropriate Federal, State, or local

authorities regarding water quality and

water pollution matters.

§ 414.6 Environmental compliance.

(a) Ensuring environmental

compliance. The Secretary will ensure

that environmental compliance is

completed. The Secretary will be

responsible for ensuring compliance

with the National Environmental Policy

Act of 1969, as amended, and the

Endangered Species Act of 1973, as

amended, and will integrate the

requirements of other statutes, laws, and

executive orders as required for Federal

actions taken under this part.

(b) Responsibility for environmental

compliance work. Authorized entities

requesting Secretarial approval of an

interstate transaction pursuant to this

part may prepare the appropriate

documentation and compliance

document for a proposed Federal action

such as approving a proposed interstate

transaction. Such compliance

documents must meet the standards set

forth in Reclamation’s National

Environmental Policy Act Handbook

before they can be adopted. All costs

incurred by the United States in

evaluating, processing, and/or

approving transactions entered into

under this part must be funded by the

parties that propose the transaction.

[FR Doc. 97–33990 Filed 12–30–97; 8:45 am]

BILLING CODE 4310–94–P