The 1,153-square mile estuary at the confluence of the San Francisco Bay and the Sacramento and San Joaquin Rivers Delta—the Bay-Delta—is also the hub of California's extensive water supply system. As such, the Bay-Delta has endured decades of competing water demands. During this time, the Bay-Delta ecosystem has experienced environmental degradation, increasing regional water demands, and a decrease in reliable water supplies for urban, agricultural, and natural areas. For example, by the late 1980's and early 1990''s fish species declines and water quality problems had become so severe that continued operation of the state and federal water supply projects were coming into conflict with state and federal environmental laws. To counter this trend and to avoid shutdown or severe operational changes to pumps at the heart of the State Water Project (SWP) and the federal Central Valley Project (CVP), the State of California and several federal agencies entered into a partnership to resolve resource conflicts. This partnership resulted in an agreement known as the Bay-Delta Accord, which ultimately led to the development of the CALFED Bay-Delta Program (CALFED) and the Record of Decision (ROD) for the CALFED Bay-Delta Final Programmatic Environmental Impact Statement and Report (EIS/EIR). The objectives of CALFED were to restore ecological health, improve water quality, fortify infrastructure for managing water (e.g. improving Delta levees), and increase water supply reliability in the Bay-Delta area. The authorization of an annual federal appropriation of $143 million from FY1998 to FY2000 for the CALFED program—to develop and implement specific portions of an ecosystem protection plan and long-term restoration projects for the Bay-Delta—expired September 30, 2000. Between 1998 and 2000, $220 million in federal funds was appropriated for the CALFED program; however, absent an explicit authorization from the authorizing committees, congressional appropriators have been reluctant to directly fund the program since. Three bills were introduced in the 108 th Congress to authorize appropriations for federal participation in the CALFED program; H.R. 2828 (introduced July 23, 2003, by Ken Calvert), H.R. 2641 (introduced June 26, 2003, by George Miller), and S. 1097 (introduced May 21, 2003, by Dianne Feinstein and Barbara Boxer). All three bills would have authorized implementation of various CALFED program components, action items, and activities identified in the ROD; however, none of the bills would have authorized the implementation of the ROD in its entirety. The reauthorization of federal participation in the CALFED program was quite controversial. The controversy stems, in part, from the complex nature of water allocation from the Bay-Delta itself. For decades, two massive water supply projects—the State Water Project (SWP) and the federal Central Valley Project (CVP)—have moved water from northern California, through the Bay-Delta to water users in southern California. Decisions on who gets how much water and when they receive it are generally made annually and are based on a myriad of state and federal laws, historic water rights, contracts, and negotiated agreements. Any proposed change to this complex water allocation system is met with concern from water users who fear they may lose water, receive reduced priority for water supplies, or receive water of a degraded quality. On the other hand, many attribute the Bay-Delta's deterioration to unnaturally low water supplies resulting from the management of the state and federal projects and have called for changes in project operations. In particular, the decline of certain fish species (e.g., winter run chinook salmon) led to operational changes affecting when and how much water can be pumped from the Bay-Delta to supply water users south of the Delta. Additionally, environmental groups have advocated increased water supplies for environmental purposes to stave off the decline of fish and wildlife species, improve water quality for other uses, and restore the health and vitality of the Bay-Delta ecosystem. While the CALFED program is an attempt to balance competing interests and develop a plan for managing Bay-Delta water resources to meet competing demands, all parties have not been 100% satisfied in the final goals, programmatic actions, and water management regimes called for the in the ROD. Specifically, some agricultural stakeholders have expressed concerns over how much water they will receive and have asked for assurances that they will receive a certain percentage of their contracted supplies; however, other agricultural and urban contractors fear their water supplies may be threatened by such assurances. Some of the same groups, and others, are concerned that the methods of distributing water will disadvantage them, that the program is not balanced (e.g. between ecosystem restoration and water storage facilities), and that funding levels and authorization for surface water storage facilities are inadequate. Further, some question the legitimacy of scientific findings regarding environmental water needs and believe the level of water allocated for recovering threatened and endangered species in the Bay-Delta may not be justified. Others are concerned that legislative efforts to resolve some of these issues could undermine the ability of the CALFED program to restore fisheries and other resources associated with the Bay-Delta ecosystem. Some environmental groups argue for greater flows of water to natural areas to support the recovery of endangered and threatened plant and animal species. Some also advocate investing in water conservation and new pricing strategies to lower demand for Bay-Delta water, and using new technologies (e.g. desalination and water recycling) to stretch existing water supplies. In general, environmental groups oppose development of new surface storage projects preferring instead to manage existing supplies more efficiently. Where there was once general agreement, perhaps tenuous, among the stakeholders who participated in development of the ROD, this agreement was based on a delicate balance of many interests and nearly a decade of fairly intense negotiations. Consequently, any attempt to authorize a program departing from the ROD has met with resistance from parties who fear their interests may not be well served. This report presents the historical progression of conflicts and agreements that led to the creation of CALFED, and discusses governance, ecosystem restoration, and water use issues related to the reauthorization of CALFED in the 108 th Congress ( P.L. 108-361 ). For more information on CALFED oversight in the 109 th Congress, see CRS Issue Brief IB10019, Western Water Resource Issues , by Betsy Cody and Pervaze Sheikh. The Bay-Delta is a 1,153 square-mile area located where the Sacramento and San Joaquin Rivers converge and flow into San Francisco Bay. These rivers along with other tributaries form a mosaic of sloughs and waterways that surround 57 man-made islands within the Bay-Delta (see Figure 1 ). The Bay-Delta is considered the largest estuary on the West Coast and its combination of fresh and salt water ecosystems provide habitat for a diverse array of plant and animal life. An estimated 750 species of plants and animals, including over 130 species of fish are found in the Bay-Delta. The Bay-Delta also contains over 700,000 acres of farmland, and is used by approximately 12 million recreationists per year who among other activities, boat, fish, hike, and sightsee in the Bay-Delta. The water regime of the Bay-Delta was significantly altered in the 1930s when the federal government at the behest of California, began a massive project to divert water from the Sacramento Valley and Delta to farmland in California's vast Central Valley. The state, some 20 years later, followed with its own State Water Project (SWP) which in large part parallels the federal Central Valley Project (CVP), diverting much of the natural inflow into the San Francisco Bay to agricultural, industrial, and urban consumers mostly in the San Joaquin Valley and Southern California. The Bay-Delta now supplies water to 22 million people and millions of acres of farmland in California. Two networks of pumps, dams, canals, and reservoirs take an estimated 5.9 million acre-feet (maf) of water from the San Joaquin and Sacramento Rivers and their tributaries, and distribute it to agricultural and urban water users in the California Central Valley via the CVP, and to Southern California via the SWP. The combined annual amount of water taken by the CVP and SWP ranges between 20% and 70% of the total annual inflow in the Bay-Delta region. Construction and operation of the CVP and SWP projects over many decades fundamentally altered the physical environment of the Central Valley as well as the Bay-Delta. Hundreds of wetland areas were lost or altered, and by the late 1980s, water quality and Endangered Species Act (ESA) issues threatened the operation of the CVP and the SWP. Today, the Bay-Delta ecosystem is still generally considered to be unhealthy and unable to provide reliable amounts of water for water users. Some also believe that the Bay-Delta is unable to sustain viable habitats for all of its plant and animal life. Water quality has deteriorated in the Bay-Delta partially due to drainage of freshwater and influx of highly saline water. Further, pollutants originating from agricultural runoff, cities, and ranches have lowered water quality in the Bay-Delta. The Bay-Delta has also suffered from fragmentation and loss of native habitat. Of the nearly 350,000 acres of original tidal marshland in the Bay-Delta, only 8,000 acres remain. Several plant and animal species are on state and federal endangered and threatened lists, including the steelhead trout and the winter-run chinook salmon. Problems in the Bay-Delta related to water quality and fish and wildlife have raised compliance issues with the Clean Water Act (CWA) (P.L. 92-500, as amended), the Endangered Species Act (ESA; P.L. 93-205 , as amended), as well as comparable state laws.