[Federal Register Volume 73, Number 179 (Monday, September 15, 2008)]
[Proposed Rules]
[Pages 53180-53187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21177]


-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

43 CFR Part 419

RIN 1006-AA48


Operation of the Truckee River and Other Reservoirs

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Bureau of Reclamation is proposing this rule to comply 
with the requirements of the Truckee-Carson-Pyramid Lake Water Rights 
Settlement Act. The Settlement Act requires that the operating 
agreement negotiated with the States of California and Nevada for the 
operation of Truckee River Reservoirs (the five Federal reservoirs in 
the Truckee River basin) be promulgated as a Federal Regulation.

DATES: Comments must be received by Reclamation no later than November 
14, 2008.

ADDRESSES: You may submit comments, identified by 1006-AA48, by one of 
the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Search on docket 
identification number BOR-2008-0006 when submitting comments on this 
rule.
    <bullet> Mail: Kenneth Parr, Bureau of Reclamation, 705 N. Plaza 
St., Carson City, NV 89701.

FOR FURTHER INFORMATION CONTACT: Kenneth Parr, Bureau of Reclamation, 
705 N. Plaza St., Carson City, NV 89701; telephone (775) 882-3436; or 
for a copy of the TROA, visit the TROA Web site at http://www.usbr.gov/mp/troa/.

SUPPLEMENTARY INFORMATION: Section 205(a)(2) of the Truckee-Carson-
Pyramid Lake Water Rights Settlement Act, title II of Public Law 101-
618, November 16, 1990 (Settlement Act or Act), directs the Secretary 
of the Interior (Secretary) to negotiate an operating agreement that 
must:
    <bullet> Satisfy all applicable dam safety and flood control 
requirements;
    <bullet> Provide for the enhancement of spawning flows available in 
the Lower Truckee River for the Pyramid Lake fishery (endangered cui-
ui, and threatened Lahontan cutthroat trout) in a manner consistent 
with the Secretary's responsibilities under the Endangered Species Act, 
as amended (ESA);
    <bullet> Carry out the terms, conditions, and contingencies of the 
Preliminary Settlement Agreement between the Pyramid Lake Paiute Tribe 
(Pyramid Tribe) and Sierra Pacific Power Company (Power Company), as 
modified by the Ratification Agreement of the United States (PSA);
    <bullet> Ensure that water is stored in and released from Truckee 
River Reservoirs to satisfy the exercise of water rights in conformance 
with the Orr Ditch and Truckee River General Electric decrees, except 
for any rights voluntarily relinquished by the parties to the operating 
agreement; and
    <bullet> Minimize the Secretary's costs associated with operation 
and maintenance of Stampede Reservoir.
    The Act further provides that the following may be addressed in the 
operating agreement:
    <bullet> Administration of the operating agreement;
    <bullet> Means of assuring compliance with PSA;
    <bullet> Operations of Truckee River system that will not change;
    <bullet> Operations and procedures for using Federal facilities to 
meet the Secretary's responsibilities under ESA;
    <bullet> Methods of reducing likehood that Lake Tahoe will drop 
below its natural rim and improving the efficient use of Lake Tahoe 
during extreme drought situations;
    <bullet> Procedures for managing and operating Federal reservoirs;
    <bullet> Procedures for operating Federal reservoirs for instream 
beneficial uses;
    <bullet> Operation of non-Federal reservoirs in the Truckee River 
basin to the extent owners of affected storage rights become parties to 
the operating agreement; and
    <bullet> Procedures and criteria for implementing California's 
allocation of Truckee River water.
    The Truckee River Operating Agreement (TROA) will, among other 
things: (1) Enhance conditions for threatened and endangered fishes in 
the Truckee River and its tributaries; (2) increase municipal and 
industrial (M&I) water supplies to provide drought protection for the 
Truckee Meadows (the Cities of Reno and Sparks, Nevada, metropolitan 
area); (3) improve river water quality downstream from the City of 
Sparks and below Derby Dam; (4) enhance stream flows and recreational 
opportunities in the Truckee River basin; and (5) provide procedures 
for implementing the interstate allocation of Lake Tahoe basin and 
Truckee River basin waters between Nevada and California. While the 
Settlement Act also confirms the allocation of the waters of the Carson 
River and its tributaries between California and Nevada represented by 
the Alpine Decree, TROA by its terms does not affect the Carson River.
    Section 205(a)(9) of the Settlement Act requires the Secretary to 
satisfy the requirements of the National Environmental Policy Act. 
Because the State of California is a mandatory signatory party, it is 
also necessary to comply with the California Environmental Quality Act. 
Consequently, the Department of the Interior and the California 
Department of Water Resources jointly prepared an Environmental Impact 
Statement/Environmental Impact Report (EIS/EIR). The Final EIS/EIR 
concludes that TROA will:
    <bullet> Provide better conditions for threatened Lahontan 
cutthroat trout and endangered cui-ui in many reaches of the Truckee 
River and its tributaries;
    <bullet> Provide greater potential for enhancing riparian 
vegetation along some reaches of the Truckee River in median hydrologic 
conditions and along all mainstem and tributary reaches under dry and 
extremely dry hydrologic conditions; and
    <bullet> Enhance riparian habitat along some mainstem and tributary 
reaches under wet and median hydrologic conditions and along most 
mainstem reaches in dry and extremely dry hydrologic conditions.
    Section 205(a)(9) also provides that the Secretary may not become a 
party to TROA if the Secretary determines that the effects of TROA, 
together with cumulative effects, are likely to jeopardize any 
threatened or endangered species or be adverse to designated critical 
habitat of such species. The Final EIS/EIR concludes that 
implementation of TROA will not adversely affect LCT or cui-ui, but in 
fact is likely to benefit both species. The U.S. Fish and Wildlife 
Service has concurred in that determination through the consultation 
process required by Section 7 of the Endangered Species Act of the 
1973, as amended, 16 U.S.C. Sec. 1531 at et seq.
    Since TROA is the result of negotiations and agreement among at 
least the five mandatory signatory parties and must be promulgated as a 
Federal regulation, the regulation we are proposing today would 
incorporate by

[[Page 53181]]

reference the agreement exactly as negotiated. After extensive 
discussions with the Office of the Federal Register, we have determined 
that incorporating TROA by reference is the best method to preserve the 
integrity of the Code of Federal Regulations while accommodating the 
negotiating parties and the requirements of the Act. Incorporation by 
reference is a workable solution because the agreement is readily 
available to all of the concerned parties and will be easy for other 
interested parties to consult on various websites or at Reclamation's 
offices.

I. Background

    The United States has been extensively involved in litigation over 
Federal and Indian rights to the use of the waters of the Truckee River 
in California and Nevada since the early 1900's. In 1913 the United 
States filed a suit claiming rights to the use of such waters for 
multiple purposes, including supply for the first Reclamation Project 
in the nation and for use on the Pyramid Lake Paiute Indian 
reservation. The subject matter of Truckee River litigation over the 
years has involved Indian trust and reserved rights, domestic and 
municipal uses of water stored in Federal projects, a proposed 
California/Nevada compact for an interstate allocation of the River's 
water, Endangered Species Act claims, and rights for use in irrigation 
projects. Multiple lawsuits concerning those subjects became very 
active in the early 1970s and continued significantly until the early 
1990s. By that time, it had become clear that the only hope for 
resolution of the many conflicts over the use of Truckee River water 
was through a regional settlement which would provide for cooperative 
uses of the water stored in Federal reservoirs on the Truckee River to 
meet the demands and right of all users. Efforts to effect changes in 
those rights through litigation had proven completely unavailing.
    In November of 1990, Congress enacted the Settlement Act to provide 
authorization for measures which if carried out would serve to resolve 
many of the longstanding disputes and Federal litigation among multiple 
parties concerning the rights to use of the waters of the Truckee and 
Carson Rivers in Nevada and California. Those parties include the 
States of Nevada and California and other parties to the negotiated 
agreement which constitutes this rule.
    The Truckee River originates at the outlet of Lake Tahoe in 
California and flows to Pyramid Lake, a terminal desert lake in 
northwestern Nevada. The flow of the Truckee River was first regulated 
in 1870 by construction of a private timber crib dam at the outlet of 
Lake Tahoe. A number of dams, Federal and private, have since been 
constructed on tributaries to the Truckee River in California to create 
water storage and flood control reservoirs and regulate river flow. 
Flows of the river have historically been utilized for diverse 
purposes, including generation of hydropower, irrigation of 
agricultural lands, and municipal and industrial water supplies.

Newlands Project

    The Newlands Federal Reclamation Project was authorized in 1902 and 
constructed under the Federal Reclamation Act, 32 Stat. 388. Derby 
Diversion Dam diverts water from the Truckee River through the Truckee 
Canal for use on the Newlands Project's Truckee Division. Truckee River 
water diverted at Derby Dam is also stored in Lahontan Reservoir in the 
Carson River basin as a supplemental source of water for the Carson 
Division of the Newlands Project.
    In 1967, the Secretary of the Interior issued regulations called 
Operating Criteria and Procedures (OCAP), referred to in the rule as 
Truckee Canal Diversion Criteria, to limit diversions of Truckee River 
water to the Newlands Project, 32 FR 3098, February 21, 1967. Revised 
versions of OCAP have been in effect since that time.

Court Decrees

    Three Federal court actions, United States v. Truckee River General 
Electric Co., No. 14861 (N. D. Calif. 1915), now designated Case No. 
68-cv-643 (E. D. Calif.) (TRGE), United States v. Orr Water Ditch 
Company, et al., In Equity No. A3, Case No. 73-cv-00003 (D. Nev. 1944) 
(Orr Ditch), and United States v. Alpine Land and Reservoir Co., et 
al., Civ. No. D-183, Case No. 73-cv-183 (D. Nev. 1980) (Alpine) were 
brought to confirm a water supply for the Newlands Project and (in Orr 
Ditch) for use on the Pyramid Lake Paiute Indian Reservation. Each case 
resulted in a decree setting forth the relative water rights in the 
Truckee River and Carson River basins, respectively.
    The TRGE Decree in 1915 granted the United States an easement for, 
and the right to operate, Lake Tahoe Dam. It also required that 
releases of water be maintained to satisfy, but not exceed, certain 
flows in the Truckee River at Floriston, California (Floriston Rates). 
Floriston Rates are rates of flow in the Truckee River at the 
California-Nevada State border of 300 to 500 cubic feet per second 
(cfs) depending on month and elevation of water in Lake Tahoe.
    The 1944 Orr Ditch Decree determined the relative rights to use 
Truckee River water in Nevada and for Power Company's run-of-the-river 
hydroelectric power plants. Floriston Rates, when maintained, satisfy 
water rights confirmed by the Orr Ditch Decree. The Orr Ditch Decree 
also confirmed water rights to the United States for use on the Pyramid 
Lake Paiute Indian Reservation (claims 1 and 2), to the United States 
for use on the Newlands Project subject to water duties and regulations 
of the Secretary of the Interior (claim 3), and to the United States 
for the use of the top six feet of Lake Tahoe as a reservoir (claim 4). 
The Orr Ditch Decree further recognized the 1935 Truckee River 
Agreement (TRA), an operating agreement for the Truckee River among 
Power Company, Truckee-Carson Irrigation District (TCID), Washoe County 
Water Conservation District (WCWCD or Conservation District), the 
United States Department of the Interior, and individual Truckee River 
water users (parties of the fifth part) as binding among those parties.
    The 1980 Alpine Decree determined the rights, relative priorities, 
and water duties for all Carson River water users in California and 
Nevada.

Reservoirs

    There are five Federal reservoirs in the Truckee River basin, 
collectively referred to as Truckee River Reservoirs. They are: The 
reservoir formed by the dam at the outlet of Lake Tahoe, which 
regulates the top six feet of the lake; Boca Reservoir on the Little 
Truckee River, constructed in 1937 and operated under contract by 
WCWCD; Prosser Creek Reservoir, constructed on Prosser Creek in 1967, 
as part of the Washoe Project; Stampede Reservoir, constructed on the 
Little Truckee River in 1970, also as part of the Washoe Project; and 
Martis Creek Reservoir, a United States Army Corps of Engineers flood 
control facility, constructed on Martis Creek in 1971.
    The 1959 Tahoe-Prosser Exchange Agreement (TPEA), executed by 
parties to TRA, provides for an exchange of water between Lake Tahoe 
and Prosser Creek Reservoir to maintain a minimum flow in the Truckee 
River immediately downstream from Lake Tahoe when releases from Lake 
Tahoe would not otherwise be required. This exchange protects water for 
Floriston Rates while providing flows downstream from Lake Tahoe for 
fish purposes.
    The water in Stampede Reservoir is dedicated for the benefit of 
Pyramid Lake fishes (endangered cui-ui and

[[Page 53182]]

threatened Lahontan cutthroat trout) by determination of the Secretary. 
The Secretary's determination was upheld by the Federal courts in 
Carson-Truckee Water Conservancy District v. Watt, 537 F. Supp. 106 (D. 
Nev. 1982), aff'd 741 F. 2d 257 (9th Cir. 1984).
    Martis Creek Reservoir is operated by the U.S. Army Corps of 
Engineers exclusively for flood control purposes.
    In addition to the Federal reservoirs, there are two private 
reservoirs in the Truckee River basin: Donner Lake, formed by a dam on 
Donner Creek, and Independence Lake, formed by a dam on Independence 
Creek. Both Donner and Independence creeks are tributary to the Truckee 
River. The water right for Donner Lake is owned by TCID and the Truckee 
Meadows Water Authority (Water Authority) as tenants in common. The 
water rights for Independence Lake are owned by Water Authority.

Settlement Act

    The Settlement Act was enacted and signed into law in 1990, in part 
to facilitate the resolution of disputes and settlement of litigation 
over use of Truckee River water among multiple parties, including the 
States of Nevada and California. Section 204 of the Act provides for an 
interstate allocation of waters of the Lake Tahoe and Truckee River 
basins between California and Nevada similar to the interstate 
allocation negotiated by the two states in the 1960s and confirms the 
allocation of waters of the Carson River and its tributaries between 
the states represented by the Alpine Decree. Section 205(a) of the Act 
directs the Secretary to negotiate an agreement for operation of 
Truckee River Reservoirs with California and Nevada, and other parties 
as determined appropriate, to among other things, implement the 
provisions of the PSA. Because the Act directs that the negotiated 
agreement (TROA) implement the PSA, the Pyramid Tribe and Water 
Authority are mandatory signatories of the negotiated agreement along 
with the United States, California, and Nevada. Subsequent to the 
Settlement Act, Power Company on June 11, 2001, sold its water utility 
business to Water Authority and assigned to Water Authority all of its 
rights and responsibilities under the PSA and TROA. Accordingly, Water 
Authority is now the mandatory signatory party to TROA.

Water Quality Settlement Agreement

    Also subsequent to the Settlement Act, the 1996 Truckee River Water 
Quality Settlement Agreement (WQSA) was entered into by the cities of 
Reno and Sparks, Nevada, Washoe County, Nevada, the United States 
Department of the Interior, the United States Department of Justice, 
the United States Environmental Protection Agency, the Nevada Division 
of Environmental Protection, and the Pyramid Tribe. In settlement of 
certain litigation over the proposed expansion of the Truckee Meadows 
Water Reclamation Facility, WQSA established a program to purchase and 
dedicate Truckee River water rights for stream flow purposes by the 
United States and the Truckee Meadows communities (Reno-Sparks 
metropolitan area) in Nevada. The purpose of the water rights purchase 
program is to improve water quality in the Truckee River, particularly 
below Derby Dam. A final Environmental Impact Statement on the Federal 
water rights acquisition portion of WQSA was published in October 2002, 
and a Record of Decision was issued in December 2002. Water made 
available to serve the dedicated water rights may, to the extent 
possible, be stored in Truckee River Reservoirs and will be managed for 
water quality purposes by the dedicating parties and by the Pyramid 
Tribe. TROA accommodates implementation of the WQSA and provides for 
the storage of Water Quality Credit Water in Truckee Reservoirs.

II. Overview of Rule

Main Provisions of the Negotiated Agreement

    The negotiated agreement (TROA), which constitutes the rule, will 
be incorporated by reference. It provides the framework, rules, and 
procedures for the operation of Truckee River Reservoirs, Independence 
Lake, and Donner Lake, to the extent Donner Lake is made available, and 
for management of flows in the Truckee River, with more flexibility 
than is available under current operations. It also provides for 
implementation of the interstate allocation of waters of the Lake Tahoe 
and Truckee River basins between California and Nevada, as provided in 
sections 204 and 210(a)(2) of the Act. The maintenance of Floriston 
Rates and Reduced Floriston Rates is the basic foundation of TROA.
    TROA retains most current procedures and management authorities for 
operating Truckee River Reservoirs, including maintaining the storage 
priorities for project water (water associated with the license or 
permit for a particular reservoir) and water dedicated to maintenance 
of Floriston Rates. Applicable flood control and safety of dams 
requirements will continue to be in effect. Perhaps most importantly, 
Truckee River Reservoirs will continue to be operated to satisfy the 
exercise of water rights in conformance with the Orr Ditch and TRGE 
decrees, except for any water rights that are voluntarily relinquished 
by the signatory parties. The Federal Water Master will continue to 
assure that Truckee River operations satisfy the exercise of water 
rights recognized by the Orr Ditch Decree.

How TROA Would Be Different From Current Operations

TROA Provides for the Establishment of Credit Water
    Article Seven of TROA prescribes rules and procedures that provide 
opportunities for signatory parties, as authorized by changes to water 
rights under applicable State law, to retain in storage as credit water 
in Truckee River Reservoirs, Independence Lake, and Donner Lake, to the 
extent Donner Lake is made available, all or a portion of the water 
that the party would otherwise be entitled to divert for use downstream 
under the party's water rights. A person initially not a signatory to 
TROA could also have an opportunity to store credit water, to the 
extent storage space is available, by agreeing to be bound by the same 
rules as a signatory party. Any party storing credit water will be 
required to have a storage contract with the owner of the reservoir in 
which the credit water will be stored unless otherwise provided in 
TROA.
    Two of the various categories of credit water, M&I Credit Water and 
Fish Credit Water, will be created as provided for in the PSA. M&I 
Credit Water will be established by Water Authority for use as a 
drought supply. Fish Credit Water will be established by the United 
States and Pyramid Tribe for the benefit of Pyramid Lake fishes. A 
portion of Fish Credit Water can also be designated as Joint Program 
Fish Credit Water, a category of credit water which will be managed by 
California for purposes of stream flow and reservoir levels in 
California.
    TROA establishes priorities for each category of credit water and 
accounting procedures relative to its storage, release, spill, 
evaporation, and exchange. Relative priorities for various types of 
credit water and credit water operations are important for 
administration of TROA when concurrent uses or potentially conflicting 
operations are scheduled or requested.

[[Page 53183]]

TROA Provides for Exchanges of Credit Water
    Article Eight of TROA provides for water, particularly credit 
water, to be exchanged among Truckee River Reservoirs, Independence 
Lake, and Donner Lake, to the extent Donner Lake is made available, in 
accordance with prescribed rules and limitations. An exchange of water 
between reservoirs can be accomplished in several ways. The provisions 
for exchanging water greatly enhance and increase the flexibility of 
system operations. The increased flexibility provided by TROA through 
the various categories of credit water and opportunities for exchanges 
facilitates more efficient use of the existing available water supply 
to more effectively serve the many, and often competing, beneficial 
uses.

Other Provisions of TROA

    Article Two of TROA establishes an Administrator to administer its 
provisions and a Special Hearing Officer to resolve disputes which may 
arise under TROA. The Administrator is responsible, among other things, 
for: Implementing the provisions of TROA and operating the designated 
reservoirs consistent with stated general operational principles set 
out in Article One; integrating the operational schedules submitted by 
the parties under Article Eleven; and accounting for the various 
categories of water under procedures developed by the Administrator 
under Article Three. The Federal Water Master under the Orr Ditch 
Decree will retain full authority to ensure that Orr Ditch Decree water 
rights are fully enforced, and the Administrator will have authority 
and responsibility to provide an acceptable remedy if the Orr Ditch 
water rights of a person not signatory to TROA are adversely affected 
by a TROA operation. TROA provides that the Federal Water Master for 
the Orr Ditch Decree in office when TROA enters into effect will be the 
first TROA Administrator, and the names of any subsequent nominees for 
the position of Administrator must be submitted to the Orr Ditch Court 
for approval. TROA recognizes that disputes arising under the Orr Ditch 
Decree remain subject to the jurisdiction of the Orr Ditch Court and 
the Federal Water Master.
    TROA also:
    <bullet> Incorporates in Article Four the miscellaneous provisions 
of the PSA not included elsewhere in TROA;
    <bullet> Provides in Article Five for operation of water to 
maintain Floriston Rates and of project water used for the benefit of 
threatened and endangered Pyramid Lake fishes;
    <bullet> Sets forth in Article Six the procedures for implementing 
and accounting for the Truckee River basin and Lake Tahoe basin 
allocations;
    <bullet> Establishes under Article Nine criteria for beneficial 
uses of water in California for stream flows and reservoir levels for 
fish and wildlife, and for recreation;
    <bullet> Establishes in Article Ten criteria for the design and 
location of water wells in the Truckee River basin in California;
    <bullet> Sets forth in Article Twelve conditions which must be 
satisfied for TROA to enter into effect, identifies other provisions of 
the Act which become effective when TROA enters into effect, and 
establishes a date by which TROA, and the other provisions of the Act 
contingent upon TROA, must enter into effect;
    <bullet> Makes clear in Article Thirteen that TROA is the basis of 
reservoir operations, provides for a periodic review of such 
operations, and that any future change to TROA will require the same 
process used for its original negotiation; and
    <bullet> Includes in Article Fourteen standard statements required 
in any contract or agreement signed by the United States or the State 
of California, identification of responsible parties to receive 
notices, and criteria for future assignments of interests.

III. Procedural Requirements

1. Regulatory Planning and Review (E.O. 12866)

    The Office of Management and Budget (OMB) has determined that this 
rule is not a significant rule and has not reviewed it under the 
requirements of Executive Order 12866. We have evaluated the impacts of 
the rule as required by E.O. 12866 and have determined that it is not a 
significant regulatory action. The results of our evaluation are given 
below.
    (1) This rule will not have an annual effect of $100 million or 
more on the economy. It will not adversely affect in a material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities.
    TROA is a mechanism negotiated by its signatories to facilitate 
more flexibility in water use and storage and more effective 
coordination of reservoir operations on the Truckee River. The 
increased flexibility and more effective coordination of operations 
will provide a more stable water supply for Reno, Sparks, and Washoe 
County, Nevada, will enhance stream flow in the Truckee River below 
Derby Dam for threatened and endangered fishes, and will improve water 
quality.
    The credit water and exchange provisions of TROA allow parties to 
more efficiently use the water resource and, more particularly, realize 
more efficient and effective utilization of their own water rights. 
Historically, senior water right holders could not always fully divert 
the water to which they were entitled under their water right because 
of their inability to use or store the water when available. At times 
some junior water right holders, including those on the Newlands 
Project, have been able to benefit from this water, although most has 
ultimately flowed to Pyramid Lake. The additional storage options made 
available under TROA will permit senior water right holders to more 
fully exercise their water rights. To the extent the exercise of senior 
Orr Ditch Decree water rights under TROA makes less water available to 
junior water right holders than has in the past been available because 
the senior rights could not be fully exercised, there is no unlawful 
injury to junior water right holders, including those on the Newlands 
Project.
    The total cost of implementing TROA is estimated to be 
approximately $15.8 million annually ($2.1 million for storage fees, 
O&M, and administration; $1.4 million in lost income from water 
transfers; and approximately $12.3 million annually for the purchase of 
water rights until 10,000 acre feet of water rights have been acquired 
to meet future water demand). Operation of the Federal reservoirs under 
TROA will result in new storage contracts which will reflect average 
storage and operation costs of approximately $1.5 million annually. The 
administration costs associated with implementing TROA by the 
Administrator is estimated to be $600,000 annually to be shared by the 
Federal government and the States of California and Nevada. Under TROA 
irrigation water rights acquired by Water Authority and others are to 
be transferred in accordance with applicable State law to meet water 
conservation and water quality objectives. This reduction of irrigation 
water rights results in a loss of approximately 100 jobs and the loss 
of $1.4 million in personal income. Water rights will also be purchased 
from willing sellers to meet future water demand. The cost of such 
purchases is approximately $12.3 million annually based on current 
market value of water rights. Because TROA implementation actions rely 
on market mechanisms, any

[[Page 53184]]

reductions in economic activity or productivity, including employment 
or income reductions occasioned by the sale of irrigation water rights 
and reduced agricultural activity, will be fully compensated by the 
monetary or other compensation derived from the sale of the water 
rights.
    One of the benefits of TROA would be the avoided costs to the water 
users in the area of developing additional water storage facilities to 
meet increasing water demands in the region. The construction costs and 
O&M for new water storage facilities to meet that demand would be 
approximately $5 million annually. In addition to the avoided costs 
from implementing TROA, there is the additional benefit of supporting 
the Reno-Sparks economy by providing the storage capacity for M&I water 
demand in the future. It is estimated that in 2033, through the 
operation of TROA, the stored M&I water will support approximately 
74,000 jobs and approximately $2.6 billion in associated personal 
income annually. There are also the annual nonmonetary benefits of 
improving water quality, improving fish and wildlife habitat, and 
meeting Indian trust responsibilities. Accordingly, TROA is not an 
economically significant rule under E.O. 12866.
    (2) This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another Federal agency. 
Bureaus within the U.S. Department of the Interior are the only Federal 
agencies directly affected by the agreement. For instance, all TROA 
actions are specifically subordinated to Army Corps of Engineers 
(Corps) flood control criteria so that the Corps is free to adjust them 
as necessary apart from this regulation. In addition, TROA specifically 
provides that any use of the Corps' Martis Creek Reservoir for a TROA 
purpose, e.g., for conservation or credit water storage, would require 
a written agreement with the Corps. Upon TROA taking effect, Section 
206(c) of the Settlement Act, which pertains to water use on the U.S. 
Naval Air Station, Fallon, Nevada, shall also become effective. This is 
a consequence of the Settlement Act, and not a direct effect of the 
provisions of TROA.
    (3) This rule does not alter the budgetary effects of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients. The rule is a negotiated agreement, and it directly 
affects only the signatories of that agreement.
    (4) OMB has determined that this rule does not raise novel legal or 
policy issues. TROA explicitly incorporates or accommodates all 
relevant laws and judicial decisions. By law TROA cannot have an 
adverse effect on any other person's water rights under the Orr Ditch 
or Truckee River General Electric decrees, and any modifications to 
those decrees necessary to implement TROA must be approved by the two 
courts with jurisdiction over the two decrees before TROA can become 
effective. TROA is required to be consistent with the decision in 
Pyramid Lake Paiute Tribe v. Morton, 354 Fed. Supp. 252 (D.D.C. 1973) 
and cannot be inconsistent with the Secretary's responsibilities under 
the Endangered Species Act.

2. Regulatory Flexibility Act

    The Department of the Interior certifies that this document will 
not have a significant economic effect on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
    The rule will not affect a substantial number of small entities. 
TROA directly affects only its signatories. While TCID may be 
considered a small entity, TROA neither directly affects TCID or the 
water rights of the individual water right holders on the Newlands 
Project. Specifically, the parties likely to be directly affected by 
TROA are:
    <bullet> U.S. Department of the Interior;
    <bullet> State of California;
    <bullet> State of Nevada;
    <bullet> Pyramid Lake Paiute Tribe;
    <bullet> Truckee Meadows Water Authority;
    <bullet> Washoe County Water Conservation District;
    <bullet> City of Reno, Nevada;
    <bullet> City of Sparks, Nevada;
    <bullet> City of Fernley, Nevada;
    <bullet> Washoe County, Nevada;
    <bullet> Sierra Valley Water Company;
    <bullet> Carson-Truckee Water Conservancy District;
    <bullet> North Tahoe Public Utilities District; and
    <bullet> Truckee Donner Public Utilities District.
    Sierra Pacific Power Company will join in the execution of TROA for 
a limited purpose through a Special Joinder.
    Water operations of Water Authority, Conservation District, City of 
Reno, City of Sparks, and Washoe County, Nevada, are all intertwined 
within one geographic area in western Nevada. The criterion for a small 
entity is less than 50,000 population. All of these entities are 
located within Washoe County, Nevada. The population of Washoe County 
is approximately 346,000 people (2000 Census). The Reno-Sparks division 
of Washoe County has a population of approximately 256,000. Only if 
Conservation District, a taxing authority water purveyor of M&I and 
irrigation water supplies, were considered a separate entity would it 
be considered small as it has 33,000 people within its taxing 
jurisdiction; Water Authority serves 77,000 customers. The City of 
Fernley, in Lyon County, with a population of approximately 8,600 (2000 
Census), would be considered small.
    Carson-Truckee Water Conservancy District's office is located in 
Reno, Nevada, and the District has no service population. It is 
authorized under Nevada State statutes to collect fees and taxes to do 
conservation work.
    North Tahoe Public Utility District, Tahoe Vista, Placer County, 
California, has a service population of 5,300 and, therefore, is 
considered a small entity. It consists of the Sewer and Water 
Department, Recreation and Parks Department, North Tahoe Beach Center, 
and the North Tahoe Community Conference Center.
    Truckee Donner Public Utilities District, Truckee, California, is a 
non-profit utility providing electric and water service in the Truckee 
area. The District serves 12,000 electric customers and 12,000 water 
service connections. It is considered a small entity.
    Sierra Valley Water Company is a small water purveyor in Sierra and 
Plumas Counties, California. It provides domestic and irrigation water 
to 29 customers. It is, therefore, considered small.
    Pyramid Lake Paiute Indian Reservation is located in Washoe County, 
with approximately 1,734 tribal members residing on the reservation. 
Indian tribes are not covered by the Regulatory Flexibility Act.
    Power Company's service territory covers approximately 50,000 
square miles in northern Nevada including the cities of Reno, Sparks, 
and the Lake Tahoe area of northeastern California. It is a wholly-
owned subsidiary of Sierra Pacific Resources. It employs in excess of 
1,100 people and services approximately 500,000 electric and gas 
customers. It has assets in excess of $2.5 billion and revenue in 
excess of $1 billion. It is not, therefore, considered a small entity.
    Of the most likely signatories, only five are considered to be 
small entities, and all who enter into TROA will be willing 
signatories. There is, therefore, not a significant effect on a 
substantial number of small entities.

3. Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business

[[Page 53185]]

Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. The availability of additional water 
management options is expected in the long term to lower overall 
operation costs.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. TROA 
has only regional effects and will not have national or international 
implications.

4. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments in the aggregate, or on the private sector, of more 
than $100 million per year. The rule does not have a significant or 
unique effect on State, local, or tribal governments or the private 
sector. The costs of the new water management opportunities made 
available by the agreement will only accrue to the signatories, and the 
costs will be small relative to the benefits and will apply only if a 
signatory avails itself of the options under the agreement. Therefore, 
a statement containing the information required by the Unfunded 
Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

5. Takings (E.O. 12630)

    Under the criteria in Executive Order 12630, the rule does not have 
significant takings implications. The provisions of the agreement are 
accepted voluntarily by the signatories and the exercise of water 
rights under existing decrees is expressly provided for. Therefore, 
this rule will not result in a taking of private property, and a 
takings implication assessment is not required.

6. Federalism (E.O. 13132)

    Under the criteria in Executive Order 13132, this rule does not 
have sufficient federalism implications to warrant the preparation of a 
Federalism Assessment. The States of California and Nevada are 
signatories to TROA and participated fully in negotiations that 
culminated in the agreement. TROA would have two principal effects on 
the governments of the States of California and Nevada.
    First, when TROA enters into effect, an allocation of the waters of 
the Lake Tahoe and Truckee River basins, and confirmation of the 
allocation of the Carson River and its tributaries represented by the 
Alpine Decree, automatically enters into effect in a manner similar to 
an interstate compact. Generally, these allocations limit the amount of 
water that can be used or diverted from Lake Tahoe basin for use within 
the basin under procedures of the two States, and the amount of water 
that can be used or diverted from the California portions of the 
Truckee River basin and the Carson River and its tributaries under 
relevant decrees and procedures of the State of California. The balance 
of the water of these two rivers that flows into Nevada can be 
allocated pursuant to the water allocation procedures of the State of 
Nevada and various court decrees. Generally, these allocations were 
negotiated by and agreed to by the two States and, though not required 
by law to do so, both States have voluntarily abided by their 
provisions pending passage of Public Law 101-618, initially, and 
pending implementation of TROA, subsequently. TROA merely aids in the 
implementation of the allocation of the waters of the Lake Tahoe and 
Truckee River basins provided for in the Settlement Act. By signing 
TROA, the two States will, effectively, be binding themselves to this 
interstate allocation.
    Secondly, there are modest (i.e., expected to be approximately 
$600,000 in total) financial requirements for funding the annual 
administration of TROA. Subject to the limits on the authority in the 
constitutions of the two States to commit future appropriations, it is 
reasonable to expect the two States to pay their allocated shares of 
the funding. By signing TROA, the two States would be signaling their 
intention to secure funding for their shares of the administration of 
TROA. Neither of these effects is considered to rise to the level of 
significance requiring a Federalism Assessment. The rule, which governs 
only the responsibilities of the signatories, does not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. The rule 
provides for the application of State law in its implementation in the 
same manner as does the Settlement Act. Therefore, a Federalism 
Assessment is not required.

7. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of Executive Order 12988. 
Specifically, this rule:
    a. Does not unduly burden the judicial system.
    b. Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    c. Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

8. Consultation With Indian Tribes (E.O. 13175)

    Under the criteria in Executive Order 13175, we have evaluated this 
rule and determined that it has no potential effects, within the 
requirements of the Executive Order, on Federally recognized Indian 
tribes.
    Indian trust resources are legal interests in property or natural 
resources held in trust by the United States for Indian Tribes or 
individuals. The Secretary of the Interior is the trustee for the 
United States on behalf of Indian Tribes. Examples of trust resources 
are lands, minerals, hunting and fishing rights, and water rights. 
Indian trust resources have been assessed in consultation with the 
following tribes during the development of TROA: Pyramid Lake Paiute 
Tribe--Pyramid Lake Indian Reservation in Nevada; Reno-Sparks Indian 
Colony--Reno and Hungry Valley, in Nevada; Fallon Paiute Shoshone 
Tribe--Fallon Paiute-Shoshone Reservation and Fallon Colony in Nevada; 
and Washoe Tribe of Nevada and California--colonies in Nevada and in 
California with cultural interests at and near Lake Tahoe.
    For the Pyramid Tribe, flow in the Truckee River below Derby Dam 
and discharge to Pyramid Lake will increase slightly under TROA. With 
increased flow and the increased capacity to manage Truckee River 
water, TROA will: Assist in improving lower river water quality; 
enhance slightly the elevation of Pyramid Lake; enhance the riparian 
canopy; assist in stabilizing the lower river; enhance recreational 
opportunities at Pyramid Lake; enhance spawning opportunities for cui-
ui and LCT; and enhance river habitat for Pyramid Lake fishes. In 
addition, the exercise of Truckee River agricultural and M&I water 
rights below Derby Dam, including those of the Pyramid Tribe, will 
continue to be satisfied. For Reno-Sparks Indian Colony, TROA will have 
no effect on the exercise of Truckee River water rights. The Fallon 
Paiute Shoshone Tribe will receive a full water supply with the same 
frequency as at present. TROA will have no effect on flows of the 
Carson River or on resources of the Washoe Tribe.
    The Federal Government negotiated TROA on a government-to-
government

[[Page 53186]]

basis with the Pyramid Tribe, as well as with the States of California 
and Nevada. As a result, TROA incorporates the principles of 
sovereignty for each sovereign signatory.

9. Paperwork Reduction Act

    This rule does not contain any requirement for information 
collection by a Federal entity or Federal employee, and a submission 
under the Paperwork Reduction Act (PRA) is not required.
    There are several provisions of TROA which require information to 
be submitted by the signatory parties to the TROA Administrator. With 
respect to the Paperwork Reduction Act, it is important to note that 
the TROA Administrator is not a Federal employee and the Office of the 
TROA Administrator is not a Federal entity. The signatory parties have 
agreed to provide to the Administrator the information requested and 
necessary for proper implementation and administration of TROA. Thus, 
even though there are requirements to provide information contained in 
the negotiated TROA and, as required by Congress, are provisions of the 
rule, the information is not sought or requested by a Federal employee 
or a Federal agency. Accordingly, the subject provisions are not 
information collection requirements for purposes of the Paperwork 
Reduction Act.

10. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. The Final EIS/EIR has 
concluded that implementation of TROA would not significantly affect 
the quality of the human environment and that no unavoidable adverse 
impacts are expected as a result of implementing TROA. No mitigation 
measures are identified or required. Because of exchanges and storage 
agreements that are components of TROA, a more assured long-term 
drought water supply for Truckee Meadows would be obtainable, and 
improved flow conditions would be possible for Pyramid Lake fishes and 
aquatic species in general. California's allocation of water for M&I 
purposes in the long run would be assured and could be utilized in the 
short run to improve environmental conditions in the Truckee River. 
Compliance with NEPA will be completed before the final rule is issued.

11. Data Quality Act

    In developing this rule we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554).

12. Effects on Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211. A Statement of Energy Effects is not 
required.
    Analysis contained in the Final EIS/EIR shows that under TROA, 
hydropower generation and gross revenues are about 3.5 percent less 
under wet hydrologic conditions than under current conditions due to 
the increased conservation and improved water quality applications of 
TROA; about 6.0 percent less in median hydrologic conditions, and about 
55.0 percent greater in dry hydrologic conditions. Net reduced 
hydroelectric power generation, if any, resulting from implementation 
of TROA would be compensated consistent with the provisions of the 
Agreement.

13. Clarity of This Regulation

    We are required by Executive Orders 12866 and 12988 and by the 
Presidential Memorandum of June 1, 1998, to write all rules in plain 
language. This means that each rule we publish must:
    a. Be logically organized;
    b. Use the active voice to address readers directly;
    c. Use clear language rather than jargon;
    d. Be divided into short sections and sentences; and
    e. Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ``ADDRESSES'' section. To 
better help us revise the rule, your comments should be as specific as 
possible. For example, you should tell us the numbers of the sections 
or paragraphs that are unclearly written, which sections or sentences 
are too long, the sections where you feel lists or tables would be 
useful, etc.
Public Availability of Comments
    Before including your address, phone number, e-mail address, or 
other personal identifying information in your comment, you should be 
aware that your entire comment--including your personal identifying 
information--may be made publicly available at any time. While you can 
ask us in your comment to withhold your personal identifying 
information from public review, we cannot guarantee that we will be 
able to do so.

 List of Subjects in 43 CFR Part 419

    Agriculture, Irrigation, Natural resources, Endangered and 
threatened species, Reclamation, Reservoirs, Water resources, Water 
supply, Incorporation by reference.

    Dated: August 28, 2008.
 Kameran L. Onley,
Acting Assistant Secretary--Water and Science.

    For the reasons given in the preamble, the Bureau of Reclamation 
proposes to add to title 43 of the Code of Federal Regulations a new 
part 419 to read as follows:

PART 419--OPERATION OF THE TRUCKEE RIVER AND OTHER RESERVOIRS

Sec.
419.1 What is the purpose of this part?
419.2 What are the definitions used in this part?
419.3 What general principles govern implementation of the TROA?
419.4 What are the specific provisions governing operations of the 
reservoirs?

    Authority: Pub. L. 101-618 (104 Stat. 3289, 3294).


Sec.  419.1  What is the purpose of this part?

    (a) This part satisfies the requirement of section 205(a)(5) of the 
Truckee-Carson-Pyramid Lake Water Rights Settlement Act (Settlement 
Act) that the negotiated agreement for operation of Truckee River 
Reservoirs be promulgated as a Federal regulation. The Truckee River 
Operating Agreement (TROA), which is incorporated by reference into 
this part, is the agreement negotiated pursuant to section 205(a). The 
Director of the Federal Register approves this incorporation by 
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may 
obtain a copy of TROA from the Area Manager, Bureau of Reclamation, 705 
N. Plaza St., Carson City, NV 89701. You may inspect a copy at Bureau 
of Reclamation, 705 N. Plaza St., Carson City, NV 89701, or at the 
Office of the Federal Register, 800 North Capitol Street, NW., Suite 
700, Washington, DC.
    (b) This part implements the Settlement Act by providing for 
operation of the Truckee River Reservoirs and other reservoirs in a 
manner that:
    (1) Implements California's allocation of Truckee River basin water 
and the Nevada and California allocations of Lake Tahoe basin water;
    (2) Enhances fish, wildlife, and recreational beneficial uses of 
water in the Truckee River basin;
    (3) Carries out the terms, conditions, and contingencies of the 
Preliminary

[[Page 53187]]

Settlement Agreement, as modified by the Ratification Agreement;
    (4) Ensures that water is stored in, released from, and passed 
through Truckee River Reservoirs to satisfy the exercise of water 
rights in conformance with the Orr Ditch Decree and Truckee River 
General Electric Decree, except for rights voluntarily relinquished by 
any persons, or transferred under State law;
    (5) Provides for the enhancement of spawning flows available in the 
Lower Truckee River for Pyramid Lake Fishes in a manner consistent with 
the Secretary's responsibilities under the Endangered Species Act, as 
amended;
    (6) Satisfies all applicable dam safety and flood control 
requirements; and
    (7) Minimizes the Secretary's costs associated with operation and 
maintenance of Stampede Reservoir.


Sec.  419.2  What are the definitions used in this part?

    Act means the Truckee-Carson-Pyramid Lake Water Rights Settlement 
Act of 1990, title II, Pub. L. 101-618 (104 Stat. 3289, 3294).
    Administrator means the individual appointed in accordance with 
sections 2.A.2 through 2.A.3 of the Truckee River Operating Agreement, 
incorporated by reference into this part.
    Preliminary Settlement Agreement means that Agreement between the 
Pyramid Lake Paiute Tribe and Sierra Pacific Power Company of May 23, 
1989, as subsequently modified and ratified by the United States.
    TROA means the Truckee River Operating Agreement, which is 
incorporated by reference into this part.
    Truckee River basin means the area which naturally drains into the 
Truckee River and its tributaries and into Pyramid Lake, including 
Pyramid Lake, but excluding the Lake Tahoe basin.


Sec.  419.3  What general principles govern implementation of the TROA?

    The following are general operational principles which provide a 
framework for the Administrator in implementing the TROA. These general 
principles are intended to be consistent with the specific provisions 
of TROA, but if they conflict with those specific provisions, the 
specific TROA provisions control. Operations should meet all of the 
following criteria:
    (a) Be conducted, consistent with the TROA and applicable legal 
requirements, so that the available water supply in the Truckee River 
basin satisfies, to the maximum extent possible, multiple beneficial 
purposes, including municipal and industrial, irrigation, fish, 
wildlife, water quality, and recreation purposes.
    (b) Satisfy vested and perfected rights to use the water of the 
Truckee River and its tributaries, to the extent that water rights are 
scheduled to be exercised, and to the extent that water is lawfully 
available. This includes, but is not limited to, the exercise of water 
rights under the provisions of the Orr Ditch Decree, except as 
expressly provided in the Settlement Act and the TROA.
    (c) Maintain minimum releases and, to the extent practicable 
consistent with existing water rights and the TROA, maintain enhanced 
minimum releases, preferred stream flows, and reservoir recreation 
levels as described in Article Nine of the TROA.
    (d) Comply with applicable flood control requirements for Prosser 
Creek, Stampede, Boca, and Martis Creek Reservoirs.
    (e) Comply with all applicable dam safety requirements.
    (f) Use the integrated schedules developed by the Administrator 
through coordination with the scheduling parties.
    (g) Respond to declared Federal, State, or local water-related 
emergencies presenting a clear and immediate danger to public health, 
life, property, or essential public services involving an upset or 
other unexpected occurrence to facilities and resources addressed in 
the TROA.


Sec.  419.4  What specific provisions govern operations of the 
reservoirs?

    The specific provisions governing operations of the Truckee River 
Reservoirs and other reservoirs are contained in the TROA. The 
following table shows the location of the provisions in the TROA.

------------------------------------------------------------------------
                                                  Are in the following
          Provisions governing . . .            sections of the TROA . .
                                                           .
------------------------------------------------------------------------
Recitals, Definitions........................  Recitals 1 through 9,
                                                Definitions (1) through
                                                (106).
Satisfaction of provisions of law, general     Sections 1.A through 1.F
 operational principles, protection of water
 rights, imported water, remaining water of
 the Truckee River, and emergencies.
Administration...............................  Sections 2.A through 2.C.
Accounting, reporting, forecasting, and        Sections 3.A through 3.E.
 monitoring.
Incorporation of certain provisions of the     Sections 4.A through 4.G.
 preliminary settlement agreement.
Operation of Floriston Rate and Project Water  Sections 5.A through 5.E.
Truckee River and Lake Tahoe Basin Allocation  Sections 6.A through 6.E.
 and Accounting.
Credit Water Establishment, Storage, and       Sections 7.A through 7.H.
 Conversion.
Priorities and Rules for Operations Following  Sections 8.A through 8.V.
 Impoundment or Accumulation of Water in
 Reservoirs.
Beneficial Uses of Water for Instream Flows    Sections 9.A through 9.F.
 and Recreation in California.
Design of Water Wells in the Truckee River     Sections 10.A through
 Basin in California.                           10.H.
Scheduling...................................  Sections 11.A through
                                                11.H.
Effectiveness of the TROA....................  Sections 12.A and 12.B.
Relation of TROA to Settlement Act,            Sections 13.A through
 Adjustments to Operations and Changes to       13.E.
 Agreement.
Miscellaneous areas..........................  Sections 14.A through
                                                14.Q.
------------------------------------------------------------------------

[FR Doc. E8-21177 Filed 9-12-08; 8:45 am]
BILLING CODE 4310-MN-P