Order Code IB10019
CRS Issue Brief for Congress
Received through the CRS Web
Western Water Resource Issues
Updated September 12, 2003
Betsy A. Cody and Pervaze A. Sheikh
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

---

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Legislative and Oversight Issues
Security of Reclamation Facilities
Klamath River Basin
Title Transfer
Project Construction
California Bay-Delta/CALFED
Rural Water Supply Projects
Title 16 Projects
Colorado River Water and California’s 4.4 Plan
Salton Sea
LEGISLATION
FOR ADDITIONAL READING

---

IB10019
09-12-03
Western Water Resource Issues
SUMMARY
For more than a century, the federal
The 107th Congress considered a number
government has constructed water resource
of bills on western water issues, including
projects for a variety of purposes, including
several title transfer and wastewater reclama-
flood control, navigation, power generation,
tion and reuse bills. One of the most legisla-
and irrigation. While most municipal and
tively active areas involved attempted reautho-
industrial water supplies have been built by
rization of CALFED — a joint federal and
non-federal entities, most of the large, federal
state program to restore fish and wildlife
water supply projects in the West, including
habitat and address California water supply/
Hoover and Grand Coulee dams, were con-
quality issues. Another hotly debated issue
structed by the Bureau of Reclamation (De-
involved management of the Klamath River
partment of the Interior) to provide water for
Project (OR and CA) and impacts on farmers,
irrigation.
fish, and other interests in the Klamath River
Basin.
Growing populations
and changing
values have increased demands on water
The 108th Congress is considering a
supplies and river systems, resulting in water
number of the same issues; however, new
use and management conflicts throughout the
developments involving California’s alloca-
country, particularly in the West, where the
tion of Colorado River water will likely spur
population is expected to increase 30% in the
additional oversight of related issues, such as
next 20-25 years. In many western states,
progress in restoring the Salton Sea. Action is
agricultural needs are often in direct conflict
also expected on CALFED. The federal por-
with urban needs, as well as with water de-
tion of the CALFED program has not been
mand for threatened and endangered species,
authorized since FY2000 and thus federal
recreation, and scenic enjoyment.
participation has been limited. Several other
oversight issues may be addressed, including
Debate over western water resources
oversight of, or changes to, the Central Valley
revolves around the issue of how best to plan
Project Improvement Act, management of the
for and manage the use of this renewable, yet
Columbia, Snake, Klamath, and Colorado
sometimes scarce and increasingly sought
River Systems, implementation of other legis-
after, resource.
Some observers advocate
lation such as the Dakota Water Resources
enhancing water supplies, for example, by
Act, and more broadly, federal water policy
building new storage or diversion projects,
and coordination. The 108th Congress is also
expanding old ones, or funding water reclama-
likely to consider one or more Indian water
tion and reuse facilities. Others emphasize the
rights settlement bills; however, these bills
need to manage existing supplies more effi-
will not be tracked in this issue brief.
ciently — through conservation, revision of
policies that encourage inefficient use of
water, and establishment of market mecha-
nisms to allocate water.
Congressional Research Service
˜ The Library of Congress

---

IB10019
09-12-03
MOST RECENT DEVELOPMENTS
On September 10, 2003 the House Resources Water and Power Subcommittee held
hearings on four water reclamation and re-use bills: H.R. 142, H.R. 1156, H.R. 2960, and
H.R. 2991. On July 24, 2003, the subcommittee held hearings on two CALFED bills (H.R.
2828 and H.R. 2641). The California CALFED Program is a federal and state effort to
coordinate water management and restoration activities at the confluence of the Sacramento
and San Joaquin Rivers and San Francisco Bay (Bay-Delta) in California. Federal funding
for the CALFED Program expired at the end of FY2000, although some activities supporting
the program have been funded. On July 23, Chairman Ken Calvert of the House Resources
Water and Power Subcommittee introduced H.R. 2828 to authorize certain CALFED
activities.
Senators Dianne Feinstein and Barbara Boxer introduced a CALFED
authorization bill, S. 1097, on May 21, and on June 26, Congressman George Miller
introduced H.R. 2641. While the bills are similar in many respects, they differ in several
ways, including how they relate to the current 30-year plan for the CALFED program as
outlined in a Record of Decision in 2000, and how certain projects would be authorized.
During CALFED oversight hearings held by House Resources in June, the issue of
Colorado River water supplies was also raised. On July 2, 2003, the Bureau of Reclamation
issued its Part 417 Review, which approved 91% (2,824,100 acre-feet) of the Colorado River
water ordered for use in 2003 by the largest agricultural user of Colorado River water, the
Imperial Irrigation District (IID). IID challenged the Part 417 Review determination. A re-
evaluation was done after the challenge and approximately 92% was approved (2,835,500
acre-feet). The Review relates to an ongoing struggle among four southern California water
users to agree to a settlement that would quantify how much Colorado River water each
entity gets under a body of law known as the “Law of the River.” A tentative agreement to
transfer water from farmers in the Imperial Valley to municipal water districts in San Diego
was scrubbed on December 31, 2002, when the deadline passed for several water agency
boards to approve an agreement on how California’s portion of Colorado River water will
be apportioned. The Secretary of the Interior subsequently halted deliveries of surplus water
to California and reallocated water supplies among certain California water and irrigation
districts. The Secretary’s decision to reallocate water supplies within California was
challenged by IID and eventually stayed pending a review of water needs for 2003. Although
the four agencies reportedly reached a new deal (or agreement) in early September, a final
agreement is still pending. On September 12, a package of 3 state bills incorporating
portions of the agreement was passed by both the State of California House and Senate and
awaits the signature of the Governor. Some issues, including the on-going lawsuit between
IID and the Department of the Interior, remain unresolved.
On May 2, the Secretary of the Interior announced its “Water 2025” proposal, which
calls for “concentrating existing federal financial and technical resources in key western
watersheds and in critical research and development...,” including desalination and
conservation technologies. The proposal keys off of an effort first announced in the
President’s budget request for the Bureau of Reclamation. The FY2004 request includes $11
million for a new Western Water Initiative to “help develop solutions to the increasing
demands for limited water resources.”
CRS-1

---

IB10019
09-12-03
BACKGROUND AND ANALYSIS
For more than a century, the federal government has been involved in developing water
projects for a variety of purposes, including flood control, navigation, power generation, and
irrigation. Most major water projects, such as large dams and diversions, were constructed
by either the Bureau of Reclamation (Bureau), in the Department of the Interior, or the U.S.
Army Corps of Engineers (Corps), in the Department of Defense. Traditionally, the Corps
has built and maintained projects designed primarily for flood control, navigation, and power
generation, whereas Bureau projects were designed primarily to facilitate settlement of the
West by storing and providing reliable supplies of water for irrigation and “reclamation” of
arid lands. While both agencies supply water for some municipal and industrial uses, they
do so largely as a secondary responsibility in connection with larger multipurpose projects.
Most of the nation’s public municipal water systems have been built by local communities
under prevailing state water laws.
Today, the Bureau operates nearly 350 storage reservoirs and approximately 250
diversion dams — including some of the largest dams in the world, such as Hoover Dam on
the Colorado River and Grand Coulee Dam on the Columbia River. In total, the Bureau’s
projects provide water to approximately 9 million acres of farmland and nearly 31 million
people in 17 western states. The Bureau also operates 58 power plants. Because of the
strategic importance of the Bureau’s largest facilities, the Bureau has heightened security at
all key facilities to protect projects in the wake of the terrorist attacks on New York and the
Pentagon on September 11, 2001.
Most Bureau water supply projects were built under authority granted to the Secretary
of the Interior in the Reclamation Act of 1902, or through individual project authorizations.
The original intent of the Reclamation Act was to encourage families to settle and farm lands
in the arid and semi-arid West, where precipitation is typically 30% to 50% of what it is in
the East. Construction of reclamation projects expanded greatly during the 1930s and 1940s,
and continued rapidly until the late 1960s and early 1970s. By the late 1960s, a combination
of changing national priorities and local needs, increasing construction costs, and the
development of most prime locations for water works contributed to a decline in new
construction of major water works nationwide. Water supply for traditional off-stream uses
— including municipal, industrial, and agricultural uses — was increasingly in direct
competition with a growing interest in allocating water to maintain or enhance in-stream
uses, such as recreation, scenic enjoyment, and fisheries and wildlife habitat.
During the 1970s, construction of new projects slowed to a handful of major works,
culminating in the completion of the Tellico dam project in Tennessee and the Tennessee
Tombigbee waterway through Alabama and Mississippi. These projects pitted conservation
and environmental groups, as well as some fiscal conservatives, against the traditional water
resources development community. New on the scene was the National Environmental
Policy Act of 1970 (NEPA), which for the first time required an assessment of the
environmental effects of federal projects, and provided for more public scrutiny of such
projects. In 1978, President Carter announced that future federal water policy would focus
on improving water resources management, constructing only projects that were
economically viable, cooperating with state and local entities, and sustaining environmental
quality. The Reagan Administration continued to oppose large projects, contending they
CRS-2

---

IB10019
09-12-03
were fiscally unsound. New construction of federally financed water projects virtually
stopped until Congress passed the Water Resources Development Act (WRDA) of 1986,
which addressed Corps projects and policies. Federal water research and planning activities
were also reduced during the early years of the Reagan Administration, which felt that states
should have a greater role in carrying out such activities. Consistent with this outlook,
President Reagan abolished the Water Resources Council, an umbrella agency established
in 1968 to coordinate federal water policy and to assess the status of the nation’s water
resource and development needs.
Congress subsequently scaled back several remaining authorized projects, changed
repayment and cost-share structures, and passed laws that altered project operations and
water delivery programs. For example, in 1982 Congress passed the Reclamation Reform
Act, which altered the Bureau’s water pricing policies for some users. The Act revised
acreage limitation requirements and charges for water received to irrigate leased lands.
Congress soon increased local entities’ share in construction costs for Corps water resource
projects with passage of the 1986 WRDA.
Over the last decade, both the Corps and the Bureau have undertaken projects or
programs aimed at mitigating or preventing environmental degradation due in part to the
construction and operation of large water projects. The agencies have pursued these actions
through administrative efforts and congressional mandates, as well as in response to court
actions. Currently, the federal government is involved in several restoration initiatives,
including the Florida Everglades, the California Bay-Delta, and the Columbia and Snake
River basins in the Pacific Northwest. These initiatives have been quite controversial. Each
involves many stakeholders at the local and regional level (water users, landowners, farmers,
commercial and sports fishermen, urban water suppliers and users, navigational interests,
hydropower customers and providers, recreationists, and environmentalists) and has been
years in the making. At the same time, demand for traditional or new water resource projects
continues — particularly for ways to augment local water supplies, maintain or improve
navigation, and control or prevent floods and shoreline erosion. In addition, demand
continues from some sectors for new or previously authorized large water supply projects
(e.g., Auburn and Temperance Flats dams, and Sites Reservoir in California).
Legislative and Oversight Issues
The 108th Congress is considering several water resource issues in legislation ranging
from transferring title of federal facilities to local project users, to individual project
authorizations and agency policy changes (e.g., reoperation of water project facilities in the
Central Valley of California and in the Colorado and Columbia River Basins). Oversight of
ongoing agency activities, such as water management in the Klamath River Basin, Salton Sea
restoration, allocation of Colorado River water supplies (particularly within California), and
authorization of a program to carry out activities affecting the delta confluence of the San
Joaquin and Sacramento Rivers at the San Francisco Bay (Bay-Delta, or CALFED) are also
being discussed. The broader topic of whether to review federal water activities or establish
a national water policy commission may also be addressed. Funding and policy direction
through the annual Energy and Water appropriations bill also influences the construction and
operation of projects. (See CRS Report RL31807, Appropriations for FY2004: Energy and
CRS-3

---

IB10019
09-12-03
Water Development.) In particular, appropriations language concerning funding (or lack
thereof) for the CALFED program has been the subject of much debate.
Security of Reclamation Facilities
Security remains heightened at Bureau facilities in the wake of terrorist attacks in New
York and Washington D.C. on September 11, 2001. The Bureau initially closed visitor
facilities and cancelled tours at all facilities. While most visitor facilities have reopened,
facilities may close or reopen depending on security alert levels and site-specific concerns
at any time. For example, the Bureau heightened security at many facilities during recent
code orange alerts and is expected to do so in the future. Further, in February, the Bureau
closed the road over Folsom Dam (CA), largely because of security concerns. Legislation
to authorize the Bureau to build a new bridge near the dam has been introduced (H.R. 901).
The Administration opposes the legislation largely on the grounds of its cost — $66 million
(roughly 8% of the Bureau’s annual budget). The bill was marked up and ordered reported
from the House Resources Committee on June 11, 2003; the bill was reported July 14
(H.Rept. 108-202).
Because Bureau facilities were not directly affected by September 11 events, it did not
receive funding in the first two releases of emergency supplemental appropriations following
the attack. However, the agency received $30.3 million for security at Bureau facilities as
part of the third cluster of emergency supplemental funding included in Division B, Chapter
5, of the FY2002 Defense Appropriations bill (H.R. 3338, P.L. 107-117). The Bureau
received $28.4 million for site security for FY2003 in its annual appropriation (Water and
Related Resources Account), and an additional $25 million in supplemental appropriations
for FY2003. The Administration has requested $28.6 million for Bureau site security for
FY2004.
Klamath River Basin
Nearly two years ago, controversy erupted when the Bureau announced it would not
release water from Upper Klamath Lake during the 2001 growing season to approximately
200,000 acres of farm and pasture lands within the roughly 235,000-acre Klamath project
service area. The announcement was made in order to make water available for several fish
species under protection of the federal Endangered Species Act (ESA). The Klamath Project
area straddles the Oregon/California border and has been the site of increasingly complex
water management issues involving several tribes, fishermen, farmers, environmentalists, and
recreationists. Specifically at issue is how to operate the Bureau’s project facilities to meet
irrigation water contract obligations without adversely affecting federally listed fish and
wildlife species.
The Bureau issued a 10-year operations plan in February 2002 and a “biological
assessment” (a process necessary under the Endangered Species Act (ESA)) for operation
of its Klamath Project in Oregon and California. However, subsequent biological opinions
on the Bureau’s 10-year operations plan found that the plan would likely jeopardize the
continued existence of two federally listed suckers and coho salmon, as well as result in the
adverse modification of proposed critical habitat. Although the biological opinions issued
on May 31, 2002, by the U.S. Fish and Wildlife Service (FWS) and the National Marine
Fisheries Service (now called NOAA Fisheries) both included “reasonable and prudent
CRS-4

---

IB10019
09-12-03
alternatives,” the Bureau formally rejected both Final Biological Opinions and opted to
operate under a one-year plan that it asserts complies with the opinions. While met with
enthusiasm from area farmers, the Bureau’s decision was met with much criticism and
concern from environmentalists, fishermen, tribes, and others. On April 10, 2003, the
Bureau issued its Klamath Project 2003 operations plan and noted that planning for multi-
year operations of the project is ongoing. The ESA agencies (FWS and NOAA Fisheries)
have not issued a biological opinion on the one-year operations plan and instead are working
within the biological opinions released in May 2002.
Legislation during the 107th Congress centered on providing funding for conservation
and other activities in the Klamath basin. For example, the 2002 farm bill included $50
million in mandatory spending for water conservation activities in the Klamath Basin (P.L.
107-171; Title II, subtitle D, §2301 (“§1240I”)). The bill also authorizes study of options for
improving fish passage at Chiloquin Dam, including dam removal. On October 24, 2002,
Congressman Thompson introduced H.R. 5698, a bill that would provide conservation and
habitat restoration programs in the Klamath River basin and emergency disaster assistance
to fishermen, Indian tribes, small businesses, and others that were economically affected by
the Klamath River basin fish kill of 2002.1 A new Thompson bill (H.R. 1760) was
introduced in the 108th Congress on April 10, 2003.
Debate over different aspects of water allocation within the Klamath River Basin is
likely to continue. For example, Section 137 of the House-passed FY2004 Interior and
Related Appropriations bill (H.R. 2691) would prohibit federal funding of the Klamath
Fishery Management Council. An amendment that would have limited crops grown on the
Klamath project was defeated during floor debate.
Both provisions have sparked
considerable controversy among interested parties. Additionally, oversight is expected
pending a final report from the National Academy of Sciences’ National Research Council
(NRC). The NRC had released an interim report evaluating the 2001 federal biological
opinions on endangered and threatened fishes in the Klamath River Basin, the latter of which
led to the Bureau’s decision to not deliver water to a majority of farms in the Klamath
Project. In this report, the NRC concluded there was neither sound scientific basis for
maintaining Upper Klamath Lake levels and increased river flows as recommended in those
biological opinions, nor sufficient basis for supporting the contrary assertions included in the
Bureau’s 2001 biological assessment. The Bureau maintains that its current operating plan
is consistent with the NRC findings; others contend that its actions will, and have, harmed
fish. (For more information, see CRS Report RL31098 and CRS Issue Brief IB10072.)
Title Transfer
Congress more and more is considering legislation that would transfer the ownership
(title) of individual Bureau of Reclamation water supply projects to current water users.
These “title transfer” bills vary depending on the circumstances of each project; however,
some general issues apply. Transfer issues range from questions regarding a project’s worth
1 The salmon fish kill occurred in September when the fish were returning to spawn in the Klamath
River. It is unclear as to why the fish died, although some scientists believe that low river flows and
high water temperature may have stressed the salmon and made them susceptible to higher incidence
of disease.
CRS-5

---

IB10019
09-12-03
and valuation to legal and policy questions regarding the transfer’s affect on other area water
users, fish and wildlife, future project operations, and future management of lands associated
with the project. So far, five title transfer bills have been introduced in the 108th Congress:
S. 520 and H.R. 1106 dealing with transfer of title for the Freemont-Madison project; S. 900
and H.R. 2257, dealing with transfer of the Lower Yellowstone Project; and , and H.R. 1648,
dealing with portions of the Cachuma project. Other more limited title transfer bills have
been introduced as well.
The Clinton Administration first actively negotiated title transfer on a voluntary basis
with interested water/irrigation districts beginning in 1995 when it announced a policy
“framework” to establish a process for negotiating title transfers. While some districts
pursued the Administration’s framework process, others sought direct legislative authority
for transfers. In general, Congress must authorize transfer of title to reclamation facilities
(32 Stat. 389; 43 U.S.C. 498), regardless of the process used to get to a transfer agreement.
A central issue with title transfer legislation is whether the transfers should be mandated
or simply authorized. Some argue that the transfers are “minor land transactions” and
advocate that Congress direct they take place within a certain time period. Others strongly
disagree. Debate mostly centers on the role the National Environmental Policy Act (NEPA)
would and should play prior to a project’s transfer. Environmentalists generally fear that a
directed transfer with or without specific NEPA language would effectively allow the Bureau
and project transfer proponents to avoid assessing and/or mitigating environmental effects
of the proposed transfers. Conversely, project proponents have pursued directed transfers
to avoid what they view are unnecessary delays and to ensure the transfers take place. For
example, some title transfer legislation directs the transfer to occur “in accordance with all
applicable law,” while other legislation directs the transfer take place pursuant to an
agreement already negotiated with project water users. Two laws recently enacted (P.L. 106-
220 and P.L. 106-221) authorize the transfers, whereas others (P.L. 106-249, P.L. 106-377,
and P.L. 106-512) direct the transfer.
Other discussions center on the role the Endangered Species Act (ESA) might play on
project operations after the transfer. One of the main concerns for environmentalists appears
to be that once the project is out of federal ownership there will no longer be a legal
obligation for the district to consult with other federal entities on the impact of project
operations on threatened or endangered species, as is now required of the Bureau under
Section 7 of the ESA. Additionally, environmentalists and others fear that once out of
federal hands there will be little if any public scrutiny of project operations. Conversely,
project proponents are likely to favor private operations.
Controversies regarding the application of NEPA and ESA to project title transfers, as
well as the question of whether to direct or authorize the transfers, are likely to remain at
issue. Other issues involve concerns about the overall costs of the transfers, who should pay
for costs associated with the transfer, effects on third parties, liability, the valuation of project
facilities and lands (and treatment of mineral or other receipts), and financial compensation
for the projects. Related to many of the issues outlined above is the question of how these
projects might be operated in the future. Although the House Resources Committee has
noted that it contemplates that facilities would be maintained and managed without
significant changes, and in some cases bill language states that the projects shall be managed
for the purposes for which the project was authorized, transfer bills approved by the
CRS-6

---

IB10019
09-12-03
committees have been silent on enforcement issues and in describing what might occur if the
new owners change operations (other than they must comply with all applicable laws at that
time). Little has been said, for example, about what might occur if new project owners
decided to partition project lands for new homes and convert irrigation water to domestic use.
Project Construction
California Bay-Delta/CALFED. The authorization of an annual appropriation of
$143 million for implementing portions of an ecosystem protection plan and long-term
restoration projects for the San Francisco Bay/San Joaquin and Sacramento Rivers Delta
(Bay-Delta, also known as the CALFED program) expired September 30, 2000. The initial
authorization for CALFED funding (P.L. 104-208, Division E) came on the heels of a 1994
agreement among state and federal agencies, urban, agricultural, and environmental interests
to protect the Bay-Delta while satisfying key needs of various involved interests. The
process was initiated to address critical water quality, water supply, and fish and wildlife
habitat issues in the 738,000 acre Bay-Delta estuary and has grown into a comprehensive
effort to address long-term water supply/quality issues for most of the state.
Appropriators have been reluctant to fund the program absent an explicit authorization
from the authorizing committees. No funds were included for the CALFED program in the
Energy and Water Development Appropriations bill for FY2002; however, appropriators
included $30 million for activities that support the CALFED goals. The money was included
in funding for the Central Valley Project in the Bureau of Reclamation’s Water and Related
Resources Account and provided funds to investigate building the Sites Reservoir and raising
Shasta Dam. For FY2004, the Administration has requested $15 million for “activities for
which authority is in place.” The House and Senate Committee on Appropriations, however,
recommended no funding for CALFED since it has no authority to receive funding. For
more information on funding investigations and other appropriations issues, see CRS Report
RL31308, Appropriations for FY2004: Energy and Water Development; and CRS Report
RL31975, CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues,
by Pervaze A. Sheikh and Betsy A. Cody.
Given increasing pressure on California to live within its entitlement of 4.4 million acre
feet of Colorado River water (see “Salton Sea” and “Colorado River Water and California’s
4.4 Plan,” below), as well as pressure on federal and state agencies to meet environmental
and contractual legal demands in operating water delivery facilities, the 108th Congress is
again considering comprehensive legislation authorizing the CALFED program.
For
example, on May 21, Senators Feinstein and Boxer introduced S. 1097, a bill to authorize
federal funding for the CALFED program using the August 2000 ROD as a framework for
implementation. On June 26, Congressman George Miller introduced another CALFED bill,
H.R. 2641. The Miller bill is largely based on S. 1097; however, it differs in several key
respects, including pumping capacities at Delta pumping plants, refuge water supplies,
beneficiary pay language, and limitations on water storage and groundwater facilities pending
state adoption of a groundwater management plan. Meanwhile, the House Resources
Committee held a series of CALFED oversight hearings, including one in May on cross-cut
budget issues and three field hearings in California, two to discuss the CALFED Program
and water needs in the Central Valley of California and a third to discuss water shortage
problems in southern California. On July 23, Chairman Calvert, of the House Resources
Water and Power Subcommittee, introduced another CALFED related bill (H.R. 2828). Title
CRS-7

---

IB10019
09-12-03
II of H.R. 2828 is similar to H.R. 2641 and S. 1097 in some respects, but differs in how
closely the bill tracks the ROD and how certain projects are authorized. The Subcommittee
held hearings on both H.R. 2828 and H.R. 2641 on July 24, 2003.
Rural Water Supply Projects. Beginning with authorization of the WEB Rural
Water Supply Act in 1980 (P.L. 96-355), Congress has authorized the Bureau to fund the
construction of several “rural water supply” projects and oversee construction of another,
with funding coming from the Department of Agriculture. These projects have individual
authorizations, but all are generally aimed at providing water for municipal and industrial
(M&I) uses in rural areas — a departure from the historical mission of providing water for
irrigation, with M&I use as an incidental project purpose.
These projects have been somewhat controversial, largely due to the relatively large
share of federal construction costs proposed. Typically, the Bureau requires that people
benefitting from a reclamation project repay 100% of the construction costs (plus interest)
attributed to M&I project purposes. For example, if a project’s purpose is 50% irrigation,
30% flood control and 20% M&I, M&I water users would pay (reimburse the federal
government) for 100% of their 20% of construction costs of the project, plus interest (the
federal cost share would be 0% of the 20% cost allocated to M&I purposes). In contrast, the
federal cost share (non-reimbursable component) for the Bureau’s “rural water supply”
projects typically ranges from 75% to 85%. Some have raised concerns that these projects
have the potential to overwhelm the Bureau’s budget. For example, the federal contribution
to the Lewis and Clark project is estimated at $214 million. For perspective, the Bureau’s
budget ranges in the neighborhood of approximately $800 million (net current authority)
annually. Prior to the recent authorizations, the Bureau had approximately 60 authorized
projects in various stages of construction with projected construction costs for completion
of $4.9 billion. Outstanding construction authorizations now total approximately $7 billion
(excluding “deferred” projects such as Auburn Dam).
Some also fear that these projects are outside the realm of those historically constructed
by the Bureau and believe they would be better handled via other existing federal water
quality or water supply programs, such as the USDA’s Rural Utility Service or the EPA’s
state revolving loan fund. However, as designed, the projects do not fit EPA or USDA
criteria, and thus project proponents have looked to the Bureau for funding. An additional
concern with the Lewis and Clark legislation was that it would authorize projects outside of
the Bureau of Reclamation’s historic service area (outside the 17 western states). (For
information on other federal water supply programs, see CRS Report RL30478.) For
FY2004, the Bureau requested a total of $43.5 million for three rural water supply projects.
On May 20, Senator Bingaman introduced S. 1085 to assist states and local
communities in evaluating and developing rural and small community water supply systems
(generally serving no more than 40,000 people) and for other purposes. Meanwhile, the
Bureau of Reclamation is preparing a proposal to coordinate and revamp its rural water
supply activities. The proposal was precipitated by a 2002 Office of Management and
Budget review of the Bureau’s rural water supply projects and actions.
Title 16 Projects. Title 16 of P.L. 102-575 directs the Secretary of the Interior to
develop a program to “investigate and identify” opportunities to reclaim and reuse
wastewater and naturally impaired ground and surface water. The original Act authorized
CRS-8

---

IB10019
09-12-03
construction of five reclamation wastewater projects and six wastewater and groundwater
recycling/reclamation studies. The Act was amended in 1996 (P.L. 104-206) to authorize
another 18 construction projects and an additional study, and again in 1998 (P.L. 105-321)
and 2000 (P.L. 106-554, Division B, Section 106) to authorize two more construction
projects.
Since then, several individual project bills amending the Reclamation and
Wastewater and Groundwater Study and Facilities Act have been passed. To date, 10 bills
authorizing projects or amending the Title 16 program have been introduced in the 108th
Congress (see “Legislation,” below).
Water reclaimed via Title 16 projects may be used for M&I water supply (non-potable
purposes only), irrigation supply, groundwater recharge, fish and wildlife enhancement, or
outdoor recreation. Nine Title 16 bills were introduced in the 107th Congress, three of which
addressed financing of previously authorized projects (H.R. 131, H.R. 685, H.R. 1245, H.R.
1251(increase funding), H.R. 1261 (impose limits on funding), H.R. 1729 (increase ceiling
on funding), H.R. 2115, S. 491, and S. 1385). One project authorization was enacted — the
Lakehaven water reclamation project in Washington state (H.R. 2115, S. 1385). Another bill
authorizing the Secretary of the Interior to redirect unexpended budget authority for the
Central Utah Project for wastewater treatment and reuse and other purposes also became law
(H.R. 4129; P.L. 107-366).
The general purpose of Title 16 projects is to provide supplemental water supplies by
recycling/reusing agricultural drainage water, wastewater, brackish surface and groundwater,
and other sources of contaminated water. Projects may be permanent or for demonstration
purposes. Project construction costs are shared by a local project sponsor or sponsors and
the federal government. The federal share is generally limited to a maximum of 25% of total
project costs and in most cases the federal share is non-reimbursable, resulting in a de facto
grant to the local project sponsor(s). Congress limited the federal share of individual projects
to $20 million beginning in 1996 (P.L. 104-266). The federal share of feasibility studies is
limited to 50% of the total, except in cases of “financial hardship”; however, the federal
share must be reimbursed.
The Secretary may also accept in-kind services that are
determined to positively contribute to the study.
The Bureau’s water reclamation and wastewater recycling program is limited to projects
and studies in the 17 western states authorized in the Reclamation Act of 1902, as amended
(32 Stat. 388), unless specifically authorized by Congress.2 Authorized recipients of program
assistance include “legally organized non-federal entities” (e.g., irrigation districts, water
districts, and municipalities). Construction funding is generally limited to projects where (1)
an appraisal investigation and feasibility study have been completed and approved by the
Secretary; (2) the Secretary has determined the project sponsor is capable of funding the non-
federal share of project costs; and (3) the local sponsor has entered a cost-share agreement
committing to funding its share.
Total funding for the program for FY2002 was approximately $36 million — nearly
$5.5 million more than enacted for FY2001. Final funding for FY2003 was 30.6 million.
2 Section 103(a)(4) of P.L. 106-566 directs the Secretary of the Interior to study recycling,
reclamation, and reuse of water and wastewater for agricultural and non-agricultural uses in the state
of Hawaii.
CRS-9

---

IB10019
09-12-03
The Title 16 program was also subject to the OMB program review, which ultimately led to
a lower request of $12.6 million — 65% less than was enacted for the program for FY2002
and 59% less than was enacted for FY2003.
Colorado River Water and California’s 4.4 Plan. Colorado River water is
apportioned among Upper and Lower Colorado River Basin States pursuant to the Boulder
Canyon Project Act on 1928, Colorado River Compact of 1922, and a host of other legal
instruments and agreements between involved parties. Under this body of law, known as the
“Law of the River,” California is to receive 4.4 million acre feet (maf) of water annually,
while Arizona and Nevada are to receive 1.2 maf and 0.3 maf respectively. Because Arizona
and Nevada were not able to use their full entitlement to Colorado River water until fairly
recently, California for decades has been able to use more than its 4.4 maf share of water and
has been using approximately 5.2 maf annually in recent years. Since 1997, however, both
Arizona and Nevada have been receiving close to their full entitlement to Colorado River
water, thereby increasing pressure on California to reduce its draw of water by approximately
700,000 - 800,000 acre feet.
Under the “Law of the River,” the Secretary of the Interior may determine annually if
and how much “surplus” water is available for use in the lower Colorado River basin. Since
January 2001, and until just recently, the Secretary operated the river under regulations
known as Interim Surplus Guidelines. These interim guidelines were developed in part to
allow California to develop a plan to ease its transition from an approximate 5.2 maf draw
of Colorado River water to the 4.4 maf allocation provided for under the Law of the River.
The guidelines also appear to be related to a proposal to transfer 200,000 acre feet of water
annually from the Imperial Irrigation District in southern California to the City of San Diego.
Under the interim guidelines, a Quantification Settlement Agreement (QSA) — an agreement
among relevant water agencies to quantify, limit, and re-allocate Colorado River entitlements
(within California) — was to be signed and executed by December 31, 2002.
While a tentative agreement had been reached in early December 2002, the parties did
not come to final agreement by the December 31 deadline. Reasons for the impasse
reportedly included disagreement over potential impacts of the proposed transfer on the
Imperial Valley agriculture community and impacts on the Salton Sea. In particular, it was
not clear to all parties who would be held responsible or liable for any negative impacts
reducing agricultural water run-off to the sea. Consequently, on January 1, the Secretary of
the Interior announced that the surplus guidelines would no longer be in effect, reverting
back to surplus guidelines in effect prior to June 2001. Further, the Secretary had determined
that 2003 is a “normal” water year, so there was no surplus water to deliver. The result was
two-fold: (1) the Secretary of the Interior limited California to its 4.4 maf entitlement, and
(2) the Secretary reallocated water among the California water agencies with rights to
Colorado River water.
The Secretary’s reallocation decision was quickly challenged by the Imperial Irrigation
District (IID), which was to receive less water than it had ordered and felt it was entitled to
under the Law of the River. IID filed suit in the U.S. District Court, Southern District of
California, on January 10, 2003 arguing the Secretary did not have the authority to
“unilaterally” reduce IID’s water supply. The suit contends the reduction was carried out as
“punishment” for the district’s failure to agree to a QSA supported by the Department. On
February 24, the United Sates filed a Memorandum of Points and Authorities in Opposition
CRS-10

---

IB10019
09-12-03
to Plaintiff’s (IID’s) Motion for a Preliminary Injunction, arguing that IID’s “‘merits’
arguments ignore the beneficial use limitations to which its diversions of Colorado River
water are subject.”3 On March 18, 2003, U.S. District Judge Thomas Whelan granted IID’s
preliminary injunction preventing Secretary Norton from reducing IID’s allocation from the
Colorado.
Accordingly, Secretary Norton subsequently redistributed supplies of Colorado River
water among relevant rights holders based on the priority established under the 1931 Seven
Party Agreement (described below). On April 17, 2003, an order was issued remanding the
case to the Department of the Interior for a de novo “Part 417” review and staying the
litigation in its entirety pending the de novo Part 417 review. A Part 417 Review requires
the Regional Director of the Bureau of Reclamation’s (Department of the Interior’s) Lower
Colorado River office to conduct consultations with Colorado River contractors to assess
water requirements, conservation measures, and operation practices in the diversion,
delivery, distribution, and use of Colorado River water, essentially to determine if water is
being put to beneficial use.4 In the meantime, several attempts to come to a new QSA have
been made; however, it is not clear when parties to the agreement will finalize their decisions
on how to quantify and settle Colorado River water allocation decisions.
Despite these efforts to come to an agreement on water use, on July 2, 2003, the Bureau
of Reclamation issued its Part 417 Review, which approved 91% (2,824,100 acre-feet) of the
Colorado River water ordered by IID for use in 2003. IID challenged the Part 417 Review
determination. A re-evaluation was done after the challenge and approximately 92% was
approved (2,835,500 acre-feet). IID has 30 days to appeal the determination before it
becomes a final decision. While the four water agencies came to a new agreement to resolve
the controversy in early September, and the California State Legislature has passed a package
of 3 bills addressing the issues, the parties to date have not signed a new agreement. One of
the unresolved issues, according to an IID board member, is the status of the IID suit against
the Department of the Interior over the Part 417 review.
Salton Sea
A tentative agreement to transfer water from farmers in the Imperial Valley to municipal
water districts in San Diego was scrubbed on December 31, 2002, when the deadline passed
for several water agency boards to approve an agreement on how California’s portion of
Colorado River water will be apportioned. The proposed water transfer would have diverted
agricultural water from farms in the Imperial and Coachella valleys to San Diego. This
would have resulted in less water flowing into the Salton Sea, which scientists predicted
would have caused the salinity of the sea to increase to threshold levels in a short amount of
time (less than 10 years). The Salton Sea is a large, inland water body in California that is
3 Available at [http://www.usbr.gov/lc/region/pao/2003orders/declarations/brief.pdf], p. 2.
4 See 43 C.F.R. Part 417, Procedural Methods for Implementing Colorado River Water Conservation
Measures with Lower Basin Contractors and Others. The Department of the Interior published a
notice in the Federal Register on April 29, 2003, seeking input on the recommendations and
determinations authorized by 43 C.F.R. Part 417. See “Colorado River, Notice of Opportunity for
Input Regarding Recommendations and Determinations Authorized by 43 C.F.R. Part 417, Imperial
Irrigation District,” 68 Federal Register 22738 (April 29, 2003).
CRS-11

---

IB10019
09-12-03
saline-rich and is sustained by agricultural run-off from farmlands in nearby Imperial and
Coachella valleys. The Sea provides permanent and temporary habitat for many species of
plants and animals, including several endangered species.5 The Sea also serves as an
important recreational area for the region. The Salton Sea has been altered by increasing
salinity caused by a steadily decreasing water table. High salinity levels have changed
habitats and stressed several populations of plants and animals. The scope and costs of
efforts to restore the Salton Sea was reported in a study done by the Department of the
Interior.6 It estimated that the cost of restoring the Salton Sea would range between $1
billion and $35 billion, depending on the restoration strategy used.
Several proposals have been floated to address Salton Sea issues, including a
controversial proposal to fund restoration in the Salton Sea with $200 million in state funds
for southern California water projects.
The Metropolitan Water District of Southern
California, a party to the Seven-Party Agreement, has voiced its opposition to such a
proposal — which was the subject of inquiry from several California Representatives during
a July 2, 2003, House Resources Water and Power Subcommittee hearing in San Diego. A
set of three bills sent to the Governor of California for signing on September 12, 2003
contains provisions that would allocate an estimated $300 million for restoring the Salton
Sea. As proposals for restoring the Salton Sea and related Colorado River issues continue
to be negotiated, congressional oversight is expected to continue.
LEGISLATION
H.R. 142 (Miller, Gary)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize the Secretary of the Interior to participate in the Inland Empire regional water
recycling project, to authorize the Secretary to carry out a program to assist agencies in
projects to construct regional brine lines in California, and to authorize the Secretary to
participate in the Lower Chino Dairy Area desalination demonstration and reclamation project.
Introduced January 7, 2003; referred to Committee on Resources. House Resources Water
and Power Subcommittee hearings held September 10, 2003.
H.R. 309 (Nunes)
Directs the Secretary of the Interior to conduct a study to determine the feasibility of
increasing the capacity of water storage, increasing power generation, improving water
supply reliability and quality, improving water management efficiency, and improving
ecosystem function and flood control on the San Joaquin River through the construction of
a reservoir at Temperance Flat and other reasonable measures. Introduced January 8, 2003;
referred to Committee on Resources.
5 The Salton Sea is considered an important stopover for birds on the Pacific flyway.
6 U.S. Department of the Interior, Bureau of Reclamation, Salton Sea Study: Status Report, January
2003.
CRS-12

---

IB10019
09-12-03
H.R. 901 (Ose)
Authorizes the Secretary of the Interior to construct a bridge on federal land west of and
adjacent to Folsom Dam in California, and for other purposes. Introduced February 25,
2003; reported by the House Committee on Resources July 14, 2003.
H.R. 1106 (Simpson)
Authorizes the Secretary of the Interior to convey certain facilities to the
Fremont-Madison Irrigation District in the State of Idaho. Introduced March 5, 2003;
referred to Committee on Resources.
H.R. 1156 (Sanchez)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
increase the ceiling on the federal share of the costs of phase I of the Orange County,
California, Regional Water Reclamation Project. Introduced March 6, 2003; referred to
Committee on Resources. House Resources Water and Power Subcommittee hearings held
September 10, 2003.
H.R. 1598 (Cox)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize the Secretary of the Interior to participate in projects within the San Diego Creek
Watershed, California, and for other purposes. Introduced April 3, 2003; referred to House
Resources Subcommittee on Water and Power. On July 17, 2003, a markup session was held
and the bill was forwarded to the full committee for a vote.
H.R. 1648 (Capps)
Authorizes the Secretary of the Interior to convey certain water distribution systems of
the Cachuma Project, California, to the Carpinteria Valley Water District and the Montecito
Water District. Introduced April 7, 2003; referred to Committee on Resources.
H.R. 1732 (Carter)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize the Secretary of the Interior to participate in the Williamson County, Texas, Water
Recycling and Reuse Project, and for other purposes. Introduced April 10, 2003; referred to
Resources Subcommittee on Water and Power. On July 17, 2003, a markup session was held
and the bill was forwarded to the full committee for a vote.
H.R. 1760 (Thompson)
Establishes water conservation and habitat restoration programs in the Klamath River
basin and provides emergency disaster assistance to fishermen, Indian tribes, small
businesses, and others that suffer economic harm from the effects of the Klamath River basin
fish kill of 2002. Introduced April 10, 2003; referred to Committee on Resources.
H.R. 2257 (Rehberg)
Conveys the Lower Yellowstone Irrigation Project, the Savage Unit of the Pick-Sloan
Missouri Basin Program, and the Intake Irrigation Project to the appurtenant Irrigation
Districts. Introduced May 22, 2003; referred to Committee on Resources.
CRS-13

---

IB10019
09-12-03
H.R. 2355 (Abercrombie)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize certain projects in the State of Hawaii and amends the Hawaii Water Resources Act
of 2000 to modify the water resources study. Introduced June 5, 2003; referred to Committee
on Resources.
H.R. 2641 (Miller)
Authorizes the Secretary of the Interior to implement the CALFED Bay-Delta Program.
Introduced on June 26, 2003; referred to Committees on Resources and on Transportation
and Infrastructure. House Resources Committee hearings held July 24, 2003.
H.R. 2828 (Calvertt)
Authorizes the Secretary of the Interior to implement water supply technology and
infrastructure programs aimed at increasing and diversifying domestic water resources. Title
II authorizes implementation of certain CALFED activities. Introduced July 23, 2003;
referred to Committees on Resources and on Transportation and Infrastructure. Resources
Committee hearings held July 24, 2003.
H.R. 2960 (Ortiz)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize the Secretary of the Interior to participate in the Brownsville Public Utility Board
water recycling and desalinization project. Introduced July 25, 2003; referred to Committee
on Resources. On September 10, 2003, the House Resources Subcommittee on Water and
Power held a hearing.
H.R. 2991 (Dreier)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize the Secretary of the Interior to participate in the Inland Empire regional recycling
project and in the Cucamonga County Water District recycling project. Introduced September
3, 2003; referred to Committee on Resources. On September 10, 2003, the House Resources
Subcommittee on Water and Power held a hearing.
S. 520 (Crapo)
Authorizes the Secretary of the Interior to convey certain facilities to the
Fremont-Madison Irrigation District in the State of Idaho. Introduced March 5, 2003;
referred to the Senate Committee on Energy and Natural Resources. Reported by the
Committee on June 9, 2003 (S.Rept. 108-62). The bill was passed by unanimous consent by
the Senate on June 16, 2003, with S.Amdt. 928. Introduced to the House on June 17, 2003;
referred to the House Committee on Resources.
S. 625 (Smith)
Authorizes the Bureau of Reclamation to conduct certain feasibility studies in the
Tualatin River Basin in Oregon, and for other purposes. Introduced March 13, 2003; referred
to the Senate Committee on Energy and Natural Resources. On June 9, 2003, reported with
an amendment and with S.Rept. 108-63. Passed the Senate on June 16, 2003; referred to the
House Committee on Resources June 17, 2003.
CRS-14

---

IB10019
09-12-03
S. 649 (Feinstein)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize the Secretary of the Interior to participate in projects within the San Diego Creek
Watershed, California, and for other purposes. Introduced March 18, 2003; referred to
Committee on Energy and Natural Resources. On May 14, 2003, hearings were held in the
Energy and Natural Resources Subcommittee on Water and Power.
S. 900 (Burns)
Conveys the Lower Yellowstone Irrigation Project, the Savage Unit of the Pick-Sloan
Missouri Basin Program, and the Intake Irrigation Project to the pertinent irrigation districts.
Introduced April 11, 2003; referred to Committee on Energy and Natural Resources.
S. 960 (Akaka)
Amends the Reclamation Wastewater and Groundwater Study and Facilities Act to
authorize certain projects in the State of Hawaii and amends the Hawaii Water Resources Act
of 2000 to modify the water resources study. Introduced April 30, 2003; referred to
Committee on Energy and Natural Resources. On May 15, 2003, hearings were held in the
Energy and Natural Resources Subcommittee on Water and Power.
S. 993 (Smith)
Amends the Small Reclamation Projects Act of 1956, and for other purposes.
Introduced May 5, 2003; referred to Committee on Energy and Natural Resources. On May
14, 2003, hearings were held in the Energy and Natural Resources Subcommittee on Water
and Power.
S. 1058 (Allard)
Provides a cost-sharing requirement for the construction of the Arkansas Valley Conduit
in the State of Colorado. Introduced May 14, 2003; referred to Committee on Energy and
Natural Resources.
S. 1085 (Bingaman)
Provides for a Bureau of Reclamation program to assist states and local communities
in evaluating and developing rural and small community water supply systems, and for other
purposes.
Introduced May 20, 2003; referred to Committee on Energy and Natural
Resources.
S. 1097 (Feinstein)
Authorizes the Secretary of the Interior to implement the CALFED Bay-Delta Program.
Introduced on May 21, 2003; referred to Committee on Energy and Natural Resources.
S. 1211 (Domenici)
Furthers the purposes of Title XVI of the Reclamation Projects Authorization and
Adjustment Act of 1992, the “Reclamation Wastewater and Groundwater Study and
Facilities Act”, by directing the Secretary of the Interior to undertake a demonstration
program for water reclamation in the Tularosa Basin of New Mexico, and for other purposes.
S. 1413 (Boxer)
Authorizes appropriations for conservation grants of the Environmental Protection
Agency, to direct the Secretary of the Army and the Secretary of the Interior to conduct
CRS-15

---

IB10019
09-12-03
expedited feasibility studies of certain water projects in the State of California, and for other
purposes. Introduced July 15, 2003; referred to Committee on Environment and Public
Works.
FOR ADDITIONAL READING
National Research Council, Committee on the Future of Irrigation in the Face of Competing
Demands. A New Era for Irrigation. Washington, DC: National Academy Press, 1996.
Rogers, Peter. America’s Water, Federal Roles and Responsibilities. Cambridge: MIT
Press, 1996.
United States Department of the Interior, Water 2025: Preventing Crises and Conflict in the
West (Washington, DC, May 2003).
Wahl, Richard. Markets for Federal Water, Subsidies, Property Rights and the Bureau
of Reclamation. Washington DC: Resources for the Future, 1989.
Western Water Policy Review Advisory Commission. Water in the West: Challenge for the
Next Century. Springfield, VA: National Technical Information Service, 1998.
United States General Accounting Office, Freshwater Supply: States’ Views of How Federal
Agencies Could Help Them Meet the Challenges of Expected Shortages, (July 2000).
Available at [http://www.gao.gov/].
CRS-16

---