H.R. 3964: Sacramento-San Joaquin Valley Emergency Water Delivery Act

H.R. 3964

Sacramento-San Joaquin Valley Emergency Water Delivery Act

Date
February 5, 2014 (113th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Wednesday, February 5, 2014, the House will begin consideration of H.R. 3964, the Sacramento-San Joaquin Valley Emergency Water Delivery Act, under a rule.  H.R. 3964 was introduced on January 29, 2014 by Rep. David Valadao (R-CA).  H.R. 3964 substantially reflects the provisions contained in the H.R. 1837, the Sacramento-San Joaquin Valley Water Reliability Act, which passed the House in the 112th Congress, with certain additions. 

Bill Summary

Title I: Central Valley Project Water Reliability

H.R. 3964 adds new purposes to the Central Valley Project Improvement Act (CVPIA) that require water dedicated to fish and wildlife be replaced and provided to Central Valley Project (CVP) water users by the end of 2018.  H.R. 3964 focuses CVPIA on native species to ensure they receive the full benefit of environmental restoration work.[1]    

H.R. 3964 directs the Secretary of the Interior to provide 40-year renewals of existing long-term CVP water service contracts. The bill continues the mandate established by CVPIA that requires the Secretary to only charge for water that is delivered.  H.R. 3964 corrects provisions in CVPIA that unduly limit water transfers between water users within the CVP.[2]   The bill also repeals the CVPIA tiered pricing scheme—originally intended to encourage water conservation—that has become a punitive tax on water districts expanding conjunctive use.

H.R. 3964 reaffirms Congress’ intent that the 800,000 acre-feet of CVP water designated for fish and wildlife habitat is a cap, and that the water can be reused for contractual obligations.  It further provides a safety net for Delta Division contractors in low water years by requiring a 25% reduction in the 800,000 acre-feet designated for fish and wildlife if Delta Division water allocations are below 75% of the water contracted for by March 15th of a given year. 

H.R. 3964 restores accountability to the CVPIA Restoration Fund.[3]  The bill ensures that funding decisions are transparent by creating a Restoration Fund Advisory Board consisting of 12 members selected by the Secretary representing various stakeholders.  The Board will be tasked with providing the Secretary advice on Restoration Fund expenditures and will report to Congress on progress to achieve the goals identified in CVPIA.  H.R. 3964 resolves fluctuations of CVPIA Restoration Fund charges to CVP hydropower operators by setting a flat CVPIA Restoration Fund fee at $4 per megawatt-hour for CVP power sold to power contractors. It sets a date of December 31, 2020 as a trigger to reduce Restoration Fund assessments paid by all water users.

The bill requires that the CVP and the State Water Project (SWP) be operated in a manner consistent with the Bay-Delta Accord of 1994.[4] The bill codifies the Bay-Delta Accord’s flows as it relates to the CVP and prevents the State of California from imposing further flow reductions, in order to ensure the Bay-Delta Accord commitments. CVP and SWP projects that comply with the Bay-Delta Accord will be considered to comply with the Endangered Species Act (ESA).  H.R. 3964 prioritizes native species over non-native species in the Delta and the Sacramento and San Joaquin Rivers.[5]  

Title II: San Joaquin River Restoration

H.R. 3964 directs the Secretary to cease implementation of the San Joaquin River Settlement Agreement, the billion dollar salmon restoration program on the San Joaquin River.  It revises the San Joaquin River Restoration Settlement Act and directs the Secretary to stop implementation of the court approved settlement.  The bill replaces the salmon restoration program with a more environmentally sustainable and economically feasible habitat restoration program. 

H.R. 3964 re-wets the San Joaquin River from Friant Dam to Mendota Pool requiring a target flow of 50 cubic feet per second (except in Critical Water Years[6]), thereby restoring a live fishery.  The bill declares that if the flow regime is implemented, it satisfies any obligation under Section 5937 of the California Fish and Game Code that serves as the basis of the lawsuit that created the salmon restoration program. The bill mitigates for the lost water in the new habitat restoration plan by authorizing the recovery of the restoration flows[7] downstream.

Title III: Repayment Contracts and Acceleration of Repayment of Construction Costs

H.R. 3964 incentivizes CVP water users to pay off the remaining balance of their respective federal loans provided to construct the project. The bill authorizes the Secretary, upon request of the water user, to convert existing “water service contracts” to “repayment contracts.”  Upon conversion, the “full cost pricing” and “acreage limitation” stipulated by Reclamation law will no longer apply.[8]  To qualify for conversion, a contractor must pay, either through lump sum or accelerated prepayment, their remaining balance of capital construction costsThis title will yield increased revenue to the U.S. Treasury over a ten year CBO budget window.

Title VI: Bay-Delta Watershed Water Rights Preservation and Protection

H.R. 3964 secures senior water rights of the Sacramento Valley water users.  The bill directs the Secretary to strictly adhere to state water rights law and California Water Code by honoring water rights senior to those belonging to the CVP. In implementing the ESA, the Act also directs the Secretary to do so in a manner that honors the water priorities as outlined previously.[9]  The bill also resolves a long standing dispute over area-of-origin rights and CVP water rights by enumerating, based on water year, specific delivery percentages for existing CVP agricultural water service contractors within the Sacramento River Watershed.

Title V: Miscellaneous

H.R. 3964 clarifies that the circumstances in California are unique and the bill is not a precedent for any other State. It further declares that coordinated operations between the CVP and the SWP require the assertion of federal supremacy to protect existing water rights.  Nothing in H.R. 3964 restricts the California Governor’s implementation of the January 17, 2014 drought emergency proclamation.[10]



[1] It removes American shad and striped bass, which are both non-native species, from the definition of ‘anadromous fish’.

[2] First, to speed-up transfers, the bill gives the contracting district or the Secretary 45 days to make a determination if a written transfer proposal is complete. Second, the Act prevents the Secretary from mandating mitigation on the transfer. Finally, it exempts historic transfers that occurred before enactment of CVPIA from conditions imposed by CVPIA. 

[3] The CVPIA, as enacted, established a restoration fund (Central Valley Project Restoration Fund) to pay for fish and wildlife restoration, enhancement, and mitigation projects and programs.

[4] “The Bay-Delta Accord was a three-year interim agreement intended to coordinate and clarify how various environmental laws and regulations would affect pumping of water from the federal CVP and SWP.”  Betsy A. Cody, H.R. 1837 – The Sacramento-San Joaquin Valley Water Reliability Act, Congressional Research Service (Feb. 29, 2012) at FN 2. 

[5] Scientists have identified that predatory nonnative species are one of the primary stressors on salmon smolts and Delta smelt. With the goal of protecting native species, the Act removes “take” limits on non-native species that are preying on native species.

[6] “Critical Water Year” means when the total unimpaired runoff at Friant Dam is less than 400,000 acre-feet, as forecasted as of March 1 of that water year by the California Department of Water Resources. 

[7] Restoration Flows are “increased water flows for restoring fisheries.”  Cody, H.R. 1837 – The Sacramento-San Joaquin Valley Water Reliability Act at 7.

[8] “Under a CVP water service contract, a water user pays for only the water allocated and delivered, whereas a capital repayment contract is for the cost of the water and the appropriate facility (capital) being used to store and convey the water.  When the CVP water user enters a capital repayment contract . . . the water user has the ability to pay off that contract early to the federal government. That early payment increases short-term revenue to the U.S. Treasury, but also releases the water user from acreage and pricing limitations imposed under the [Reclamation Reform Act of 1982]. This will allow farmers to put more acreage in production when they have water supplied under the bill.”  Committee Report 112-403 at 19.

[9] The bill clarifies the Sacramento River Settlement Contracts to ensure that any limitations on the operation of the CVP are done in a manner that adheres to the water rights priorities for “Project Water” and “Base Supply.”

[10] The bill also increases water storage in Lake McClure by narrowly adjusting the Wild and Scenic River boundary on the Merced River.

Background

“California has experienced drought twelve times since 1850.”[1]  These conditions, as well an increase in farms and an expanding population “led to an innovative and complex water storage and delivery system designed by the federal and state governments.”[2]  The CVP, authorized in 1935, is the major federal project that transfers water throughout California.  The multipurpose system of dams, reservoirs, and canals collects and delivers water to “6 of the top 10 agricultural counties in the nation’s leading farm state.”[3]  “In normal water years, the CVP can deliver a total of seven million acre feet[4] . . . of water.  Most water is used to irrigate over three million acres of farmland while about 15 percent . . . serve[s] over two million urban and industrial customers.  The [SWP] serves similar purposes, providing supplemental water to approximately 25 million Californians and about 750,000 acres of irrigated farmland. . . .  Since northern California contains over two-thirds of the water . . . and southern California has two-thirds of the . . . population and needs irrigation water, [the CVP and SWP] deliver water to over 27 million humans south of the Delta pumps and around the San Francisco Bay area.”[5]

In 1992, Congress passed the CVPIA, adding a new purpose to the CVP: the “protection, restoration, and mitigation of fish and wildlife.”  CVPIA allocated 800,000 acre-feet per year of CVP water “for fish and wildlife purposes.”  Because the new use was given no less emphasis than CVP’s original uses, water was diverted away from farmers and cities to fish and wildlife.  Since then, “many have questioned whether the flows have had any positive impact on fish and wildlife flows compared to other factors . . . .  [and] many have accused the Department of the Interior (DOI) of allocating more than 800,000 acre feet due to vague language in the statute.”[6]

“The CVPIA and the [ESA] have contributed significantly to water supply uncertainty and instability.  Environmental organizations blaming the water pumps as the main cause of endangered Delta smelt declines successfully used the federal court system to achieve many of their objectives.”[7]  Biological Opinions issued by the Department of the Interior in 2009 and 2010 on Delta smelt, salmon, and orcas caused more water to be diverted “during the time farm communities in the west side of the San Joaquin Valley needed it most.”[8]  According to the Natural Resources Committee, “The results of the water restrictions were devastating.  Over one million acre feet of water were lost due to the smelt and salmon Biological Opinions.  Although jobs estimates differ, thousands of jobs were lost and hundreds of thousands of acres of land were fallowed in 2010.”[9]  H.R. 3964 addresses these issues by facilitating the delivery of California’s water supply.



[2] Id.

[4] One acre foot is about 326,000 gallons, or enough water for two families for a year.

[5] Committee Report 112-403 at 16.  The west side of the San Joaquin Valley, which is south of the pumps, is a prime recipient of water delivered from the CVP pumps.  The valley is often called “the salad bowl of the world, providing the majority of fruits and vegetables for the entire nation.” http://naturalresources.house.gov/issues/issue/?IssueID=5921

[6] Committee Report 112-403 at 16.

[7] Id. at 16-17.

[8] Id. at 17.

[9] Id.

Cost

According to CBO estimates, implementing H.R. 3964 would reduce the deficit by $222 million over the 2014-2019 period and by $162 million over the 2014-2024 period.

Amendments

1)         Rep. Napolitano (D-CA) Amendment #14 – Amendment removes the subsidy to agricultural loans and requires that interest be repaid on the capital costs of a project.  Currently, agriculture has 40 years to repay capital cost, interest free. Other constituencies, such as municipal entities, are required by law to pay interest.

2)         Rep. Matsui (D-CA) Amendment #5Amendment prevents Section 107 of the bill from suspending "b2” water (800,000 acre feet of CVP water which was designated for environmental purposes) that was allocated in the 1992 Central Valley Project Improvement Act.  Amendment also waives the responsibility of senior water rights holders in the Delta or north of Delta for the project yield allocation or B2 water.

3)         Rep. Bera (D-CA) Amendment #12 – Amendment delays implementation of the act until it is determined that it will not have a negative impact on the quantity, quality, and safety of drinking water in the California Delta region.

4)         Rep. Capps (D-CA) Amendment #15 – Amendment requires GAO to conduct a study on the resiliency and adaptability of all Bureau of Reclamation projects and facilities to any ongoing or forecasted changes to the quality, quantity, or reliability of water resources.

5)         Rep. DeFazio (D-OR) Amendment #13 – Amendment establishes the Governor of California’s emergency drought declaration, issued January 17, 2014, as a formal request to the Secretary of Commerce to issue a determination, using her authority under Section 312 of the Magnuson-Stevens Act, that a fishery resource disaster has occurred for fisheries that originate in the State of California.

6)         Rep. Huffman (D-CA) Amendment #11 – Amendment prohibits provisions of this act or the amendments from interfering with the State of California’s Delta and Water Management Reform and Funding Acts of 2009, including SB7x-1, SB7x-2, SB7x-6, and SB7x-7.

7)         Rep. McNerney (D-CA) Amendment #8 – Amendment prevents several provisions of the Act from taking effect until it is determined that it will not harm water quality or water availability for agricultural producers in California’s Delta region (Contra Costa, Sacramento, San Joaquin, Solano, and Yolo Counties).

8)         Rep. Peters (D-CA) Amendment #9 – Amendment stipulates that the bill cannot go into effect until the Secretary confirms that the act does not adversely affect any community's water supply or water budget.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.