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109th Congress                                            Rept. 109-297
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================

 
 TO AUTHORIZE THE SECRETARY OF THE INTERIOR TO CONSTRUCT FACILITIES TO 
PROVIDE WATER FOR IRRIGATION, MUNICIPAL, DOMESTIC, MILITARY, AND OTHER 
USES FROM THE SANTA MARGARITA RIVER, CALIFORNIA, AND FOR OTHER PURPOSES

                                _______
                                

               November 16, 2005.--Ordered to be printed

                                _______
                                

  Mr. Pombo, from the Committee on Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 125]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 125) to authorize the Secretary of the Interior to 
construct facilities to provide water for irrigation, 
municipal, domestic, military, and other uses from the Santa 
Margarita River, California, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. DEFINITIONS.

  For the purposes of this section, the following definitions apply:
          (1) District.--The term ``District'' means the Fallbrook 
        Public Utility District, San Diego County, California.
          (2) Project.--The term ``Project'' means the impoundment, 
        recharge, treatment, and other facilities the construction, 
        operation, and maintenance of which is authorized under 
        subsection (b).

SEC. 2. AUTHORIZATION FOR CONSTRUCTION OF LOWER SANTA MARGARITA 
                    CONJUNCTIVE USE PROJECT.

  (a) Authorization.--The Secretary, acting pursuant to the Federal 
reclamation laws (Act of June 17, 1902; 32 Stat. 388), and Acts 
amendatory thereof or supplementary thereto, as far as those laws are 
not inconsistent with the provisions of this Act, is authorized to 
construct, operate, and maintain the Santa Margarita Conjunctive Use 
Project substantially in accordance with the final feasibility report 
and this Act.
  (b) Conditions.--The Secretary of the Interior may construct the 
Project only after the Secretary of the Interior determines that the 
following conditions have occurred:
          (1) The District has entered into a contract under section 
        9(d) of the Reclamation Project Act of 1939 to repay to the 
        United States appropriate portions, as determined by the 
        Secretary, of the actual costs of constructing, operating, and 
        maintaining the Project, together with interest as hereinafter 
        provided.
          (2) The officer or agency of the State of California 
        authorized by law to grant permits for the appropriation of 
        water has granted such permits to the Bureau of Reclamation for 
        the benefit of the Department of the Navy and the District as 
        permittees for rights to the use of water for storage and 
        diversion as provided in this Act, including approval of all 
        requisite changes in points of diversion and storage, and 
        purposes and places of use.
          (3) The District has agreed that it will not assert against 
        the United States any prior appropriative right the District 
        may have to water in excess of the quantity deliverable to it 
        under this Act, and will share in the use of the waters 
        impounded by the Project on the basis of equal priority and in 
        accordance with the ratio prescribed in section 4(b). This 
        agreement and waiver and the changes in points of diversion and 
        storage under paragraph (2), shall become effective and binding 
        only when the Project has been completed and put into 
        operation.
          (4) The Secretary of the Interior has determined that the 
        Project has economic, environmental, and engineering 
        feasibility.

SEC. 3. COSTS.

  The Department of the Navy shall not be responsible for any costs in 
connection with the Project, except upon completion and then shall be 
charged in reasonable proportion to its use of the Project under 
regulations agreed upon by the Secretary of the Navy and Secretary of 
the Interior.

SEC. 4. OPERATION; YIELD ALLOTMENT; DELIVERY.

  (a) Operation.--The operation of the Project may be by the Secretary 
of the Interior or otherwise as agreed upon by the Secretaries of the 
Interior and the Navy and the District, under regulations satisfactory 
to the Secretary of the Navy with respect to the Navy's share of the 
impounded water and national security.
  (b) Yield Allotment.--Except as otherwise agreed between the parties, 
the Department of the Navy and the District shall participate in the 
water impounded by the Project on the basis of equal priority and in 
accordance with the following ratio:
          (1) 60 percent of the Project's yield is allotted to the 
        Secretary of the Navy.
          (2) 40 percent of the Project's yield is allotted to the 
        District.
  (c) Contracts for Delivery of Water.--
          (1) In general.--If the Secretary of the Navy certifies that 
        the Department of the Navy does not have immediate need for any 
        portion of the 60 percent yield allotted under subsection (b), 
        the official agreed upon to administer the Project may enter 
        into temporary contracts for the delivery of the excess water.
          (2) First right for excess water.--The first right of the 
        Secretary of the Navy to demand that water without charge and 
        without obligation on the part of the United States after 30 
        days notice shall be included as a condition of contracts 
        entered into under this subsection. The first right to water 
        available under paragraph (1) shall be given the District, if 
        otherwise consistent with the laws of the State of California.
          (3) Disposition of funds.--Moneys paid to the United States 
        under a contract under this subsection shall be covered into 
        the general Treasury or to the Secretary of the Navy, as 
        services in lieu of payment for operation and maintenance of 
        the Project, and shall not be applied against the indebtedness 
        of the District to the United States.
          (4) Modification of rights and obligations related to water 
        yield.--The rights and obligations of the United States and the 
        District regarding the ratio or amounts of Project yield 
        delivered may be modified by an agreement between the parties.

SEC. 5. REPAYMENT OBLIGATION OF THE DISTRICT.

  (a) In General.--The general repayment obligation of the District 
shall be determined by the Secretary of the Interior consistent with 
the Water Supply Act of 1958; provided, however, that for the purposes 
of calculating interest and determining the time when the District's 
repayment obligation to the United States commences, the pumping and 
treatment of groundwater from the Project shall be deemed equivalent to 
the first use of water from a water storage project.
  (b) Modification of Rights and Obligation by Agreement.--The rights 
and obligations of the United States and the District regarding the 
repayment obligation of the District may be modified by an agreement 
between the parties.

SEC. 6. TRANSFER OF CARE, OPERATION, AND MAINTENANCE.

  The Secretary may transfer to the District, or a mutually agreed upon 
third party, the care, operation, and maintenance of the Project under 
conditions satisfactory to that Secretary and the District, and with 
respect to the portion of the Project that is located within the 
boundaries of Camp Pendleton, satisfactory also to the Secretary of the 
Navy. If such a transfer takes place, the District shall be entitled to 
an equitable credit for the costs associated with the Secretary's 
proportionate share of the operation and maintenance of the Project. 
The amount of such costs shall be applied against the indebtedness of 
the District to the United States.

SEC. 7. SCOPE OF ACT.

  For the purpose of this Act, the basis, measure, and limit of all 
rights of the United States pertaining to the use of water shall be the 
laws of the State of California. That nothing in this Act shall be 
construed--
          (1) as a grant or a relinquishment by the United States of 
        any rights to the use of water that it acquired according to 
        the laws of the State of California, either as a result of its 
        acquisition of the lands comprising Camp Joseph H. Pendleton 
        and adjoining naval installations, and the rights to the use of 
        water as a part of that acquisition, or through actual use or 
        prescription or both since the date of that acquisition, if 
        any;
          (2) to create any legal obligation to store any water in the 
        Project, to the use of which the United States has such rights;
          (3) to constitute a recognition of, or an admission that, the 
        District has any rights to the use of water in the Santa 
        Margarita River, which rights, if any, exist only by virtue of 
        the laws of the State of California; or
          (4) to require the division under this Act of water to which 
        the United States has such rights.

SEC. 8. LIMITATIONS ON OPERATION AND ADMINISTRATION.

  Unless otherwise agreed by the Secretary of the Navy, the Project--
          (1) shall be operated in a manner which allows the free 
        passage of all of the water to the use of which the United 
        States is entitled according to the laws of the State of 
        California either as a result of its acquisition of the lands 
        comprising Camp Joseph H. Pendleton and adjoining naval 
        installations, and the rights to the use of water as a part of 
        those acquisitions, or through actual use or prescription, or 
        both, since the date of that acquisition, if any; and
          (2) shall not be administered or operated in any way which 
        will impair or deplete the quantities of water the use of which 
        the United States would be entitled under the laws of the State 
        of California had the Project not been built.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated, out of any money in the 
Treasury of the United States not otherwise appropriated, the 
following:
          (1) $60,000,000 (the current estimated construction cost of 
        the Project, plus or minus such amounts as may be indicated by 
        the engineering cost indices for this type of construction); 
        and
          (2) such sums as may be required to operate and maintain the 
        said project.

SEC. 10. REPORTS TO CONGRESS.

  Not later than 1 year after the date of the enactment of this Act and 
periodically thereafter, the Secretary of the Interior and the 
Secretary of the Navy shall each report to the Congress regarding if 
the conditions specified in section 2(b) have been met and if so, the 
details of how they were met.

SEC. 11. SUNSET.

  The authority of the Secretary of the Interior and the Secretary of 
the Navy to carry out any provision of this Act shall terminate 10 
years after the date of enactment of this Act.

                          PURPOSE OF THE BILL

    The purpose of H.R. 125, as amended, is to authorize the 
Secretary of the Interior to construct facilities to provide 
water for irrigation, municipal, domestic, military, and other 
uses from the Santa Margarita River, California, and for other 
purposes.

                  BACKGROUND AND NEED FOR LEGISLATION

    During the early 1900s, agriculture and ranching developed 
in the upper Santa Margarita River basin using water diverted 
from the Santa Margarita River and water extracted from wells 
near the river. By 1940, base flow in the river had been 
reduced to such an extent that water users in the lower basin 
filed a lawsuit against water users in the upper basin. The 
result of this lawsuit was the ``1940 Stipulated Judgment,'' 
which partitioned water between the upper basin and the lower 
basin. Since then, three other major lawsuits over rights to 
this water have taken place, and three planned water supply 
projects have failed to resolve the conflicts.
    The most recent of these projects, the Santa Margarita 
Project, was to use federal money to develop a two dam and 
reservoir project on the river for the benefit of Fallbrook 
Public Utility District and the U.S. Marine Corps Base at Camp 
Pendleton. The estimated cost of the project was $22 million in 
1954 dollars, or $254 million in today's dollars. The effort to 
implement this project stalled in 1984 after almost twenty two 
years of study and significant state and federal agency 
support.
    The lack of adequate water supply poses a serious problem 
for water users in the Santa Margarita River basin. 
Urbanization, especially since 1970, has transformed this area 
in San Diego County from large ranches to tract homes. In the 
lower basin, the modest agricultural use of land and water, 
primarily for citrus and avocado trees, has stayed relatively 
constant. The creation of Camp Pendleton Marine Base, which 
covers most of the lower basin, added a relatively small, 
constant demand for water for base operations. Camp Pendleton 
officials, however, are concerned that future water demands in 
the lower basin could be significantly greater to support a 
major military mobilization or to provide adequate habitat for 
endangered species.
    An issue in the project is three water right permits held 
by Bureau of Reclamation totaling 185,000 acre-feet \1\ on the 
Santa Margarita River. These permits were intended for surface 
water impoundment that, at one time, Reclamation was proposing 
to develop. Under California law, these permits must be 
perfected (be put to beneficial use) by December 31, 2008 or 
the water rights may be lost.
---------------------------------------------------------------------------
    \1\ One acre-foot equals 325,851 gallons of water.
---------------------------------------------------------------------------
    The proposed Santa Margarita Conjunctive Use Project 
authorized by this bill provides for enhanced recharge and 
recovery from the underground basin on Camp Pendleton to 
provide a water supply for both Camp Pendleton and the 
Fallbrook Public Utility District (the District), as resolution 
of the long-standing water rights disputes between the United 
States and the District. The project, as proposed, will develop 
16,000 acre-feet, including Camp Pendleton's existing perfected 
water rights on the Santa Margarita River. As envisioned by the 
bill, 9,600 acre-feet would be used by Camp Pendleton and 6,400 
acre-feet by the District. An ongoing feasibility study being 
conducted by the Bureau of Reclamation is evaluating a 
reasonable range of project alternatives to develop the water 
supply.
    The project will provide a safe, reliable, drought- and 
earthquake-proof water supply--enough for 35,000 families. The 
project would improve and partially privatize the water supply 
system on Camp Pendleton, which will receive better-quality 
water in quantities sufficient to meet water needs up to its 
ultimate planned utilization. The project also sets aside and 
preserves valuable riparian and upland habitats of one of the 
last free flowing rivers in California, using 1,384 acres 
originally purchased for a dam and reservoir.
    The proposed project includes the construction of enhanced 
recharge facilities that contain a new collapsible diversion 
weir and 46 acres of new recharge ponds. The enhanced recharge 
potential is 14,000 acre-feet per year (af/yr), in addition to 
the naturally occurring recharge. The collapsible weir will 
divert flows, facilitate transport of sediments to the lower 
river and estuary, and provide beach replenishment. The project 
will also include the construction of eight or more new 
production wells, monitoring wells, and a collection system to 
provide a total of 18,000 af/yr of extraction capability. The 
project water will be distributed to the existing Camp 
Pendleton and the District distribution systems through 
construction of two pump stations and approximately thirteen 
miles of transmission pipeline. The pipeline will also connect 
Camp Pendleton to the regional water delivery system for 
emergency supply purposes.
    Major activities taking place in preparation for project 
implementation include a prefeasibility study recently 
completed by the Bureau of Reclamation for a joint feasibility 
study and Environmental Impact Report/Environmental Impact 
Statement under the California Environmental Quality Act and 
the National Environmental Policy Act. Funding for this effort 
comes from several federal sources, including Camp Pendleton, 
Military Construction, and a Reclamation Planning account, as 
well as local funding contributed by the Fallbrook Public 
Utility District.
    A similar bill, H.R. 4389, was passed by the House of 
Representatives in the 108th Congress.

                            COMMITTEE ACTION

    H.R. 125 was introduced on January 4, 2005, by Congressman 
Darrell Issa (R-CA). The bill was referred to the Committee on 
Resources, and within the Committee to the Subcommittee on 
Water and Power. The bill was also additionally referred to the 
Committee on Armed Services. On May 18, 2005, the Full 
Resources Committee met to consider the bill. The Subcommittee 
on Water and Power was discharged from further consideration of 
the bill by unanimous consent. Congressman George Radanovich 
(R-CA) offered an amendment in the nature of a substitute. It 
was adopted by unanimous consent. The bill was then ordered 
favorably reported to the House of Representatives by unanimous 
consent.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Definitions

    This section defines various terms in the bill.

Section 2. Authorization for construction of Lower Santa Margarita 
        Conjunctive Use Project

    This section authorizes the Secretary of the Interior to 
construct, operate, and maintain the Lower Santa Margarita 
Conjunctive Use Project for the Fallbrook Public Utility 
District subject to conditions. The Secretary may construct the 
project only after: (1) the District has entered into a 
repayment contract with the federal government; (2) the State 
of California has granted permits for the appropriation of 
water to the Bureau of Reclamation; (3) the District has agreed 
that it will not assert any prior appropriated water right in 
excess of the water developed by this project and that it will 
share in the use of the project water supply according to the 
project yieldallotment prescribed in this Act; and (4) the 
Secretary has determined that the project has economic and engineering 
feasibility.
    It is the intent of the Committee that all environmental 
and regulatory permits will be in place prior to initiating 
project development. The Bureau of Reclamation is expected to 
complete its feasibility investigation and environmental impact 
analysis in 2006.

Section 3. Costs

    The Department of the Navy will not be responsible for 
project costs until the project is complete. It will then be 
responsible to pay project costs in proportion to its use of 
the project.

Section 4. Operation; yield allotment; delivery

    The Secretary of the Interior will operate the project. 
Sixty percent of the project water supply is allotted to the 
Navy and 40 percent is allotted to the District, on an equal 
priority basis. Temporary water delivery contracts may be 
entered into for any unused portion of the Navy's allocation; 
the District is given first right to this water. Moneys paid to 
the United States under the temporary water contracts shall not 
be applied to the District's project repayment obligations.

Section 5. Repayment obligation of the District

    The District's repayment obligation will be consistent with 
the Water Supply Act of 1958. For purposes of calculating 
interest and commencing repayment, pumping and treatment of 
groundwater from the project will be deemed equivalent to the 
first use of water from a water storage project.

Section 6. Transfer of care, operation, and maintenance

    The Secretary of the Interior may transfer the operation 
and maintenance of the project to the District or a third party 
under conditions satisfactory to all parties, including the 
Secretary of the Navy for the portion of the project located 
within Camp Pendleton. If a transfer occurs, the District will 
be credited for costs associated with the Secretary's share of 
the project's operation and maintenance.

Section 7. Scope of Act

    The right to divert and use water by the United States will 
be as permitted and protected by laws of the State of 
California. The intent of the legislation is to recognize the 
soon-to-be completed Santa Margarita River water right 
adjudication by the State of California and the ``1940 
Stipulated Judgment'' which apportions water between the upper 
and lower Santa Margarita River users. Nothing in this 
legislation is intended to affect the water quality, water 
rights or the water rights claims of any Indian tribe, band or 
community located within the Santa Margarita River watershed, 
or of the United States acting on their behalf.

Section 8. Limitations on operation and administration

    The project will be operated to allow free passage, and 
will not be administered or operated in any way that would 
impair or deplete use, of water the United States is entitled 
to use under California law.

Section 9. Authorizations of appropriations

    The bill authorizes an appropriation of $60 million for the 
planning, design, and construction of project facilities and 
additional sums as necessary for project operation and 
maintenance purposes.

Section 10. Reports to Congress

    The Secretary of the Interior and Secretary of the Navy 
will report to Congress, within one year of passage of this Act 
and periodically thereafter, on whether and/or how conditions 
for construction of the project have been met.

Section 11. Sunset

    The authority of this Act will terminate 10 years after 
enactment.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. According to the Congressional Budget Office, 
enactment of this bill could result in an increase in 
offsetting receipts to the federal treasury of approximately $2 
million a year for 40 years beginning in 2011.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to authorize the Secretary of the 
Interior to construct, operate, and maintain facilities to 
provide water from the Santa Margarita River, California, for 
municipal, domestic, military, and other uses and for other 
purposes.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

H.R. 125--A bill to authorize the Secretary of the Interior to 
        construct facilities to provide water for irrigation, 
        municipal, domestic, military, and other uses from the Santa 
        Margarita River, California, and for other purposes

    Summary: H.R. 125 would authorize the Secretary of the 
Interior to participate in the design, planning, and 
construction of facilities to make water available from the 
Santa Margarita River for domestic and military uses. The act 
would authorize the appropriation of $60 million to build the 
project and such sums as are necessary to operate and maintain 
it. H.R. 125 would terminate the authority for this project 10 
years after the date of enactment of this legislation.
    Assuming appropriation of the necessary funds, CBO 
estimates that implementing H.R. 125 would cost $55 million 
over the 2006-2010 period and an additional $9 million after 
that period, including adjustments for anticipated inflation. 
If funds were appropriated to implement this legislation, there 
would be an increase of offsetting receipts to the federal 
government of about $2 million a year for 40 years starting in 
2011. (Such offsetting receipts are a credit against direct 
spending.) Assuming funds are appropriated to build this 
project, local users would be required to repay about 40 
percent of construction costs.
    H.R. 125 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 125 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2006     2007     2008     2009     2010     2011
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.............................        0        6       19       19       20        0
Estimated Outlays.........................................        0        4       14       17       20        7
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
125 will be enacted near the start of fiscal year 2006 and that 
the necessary amounts will be appropriated over the 2007-2010 
period.
    Based on historical spending patterns of similar projects, 
CBO estimates that implementing this act would cost $55 million 
over the 2006-2010 period and an additional $9 million after 
that period, including adjustments for anticipated inflation.
    H.R. 125 would authorize the Bureau of Reclamation to 
construct a water recharge and recovery system that would 
benefit the Fallbrooke Public Utility District and the Marine 
Corps Base at Camp Pendleton in California. Currently, the 
feasibility study for this project is in the early stages of 
development and will not be completed until 2006. For this 
estimate, CBO assumes that construction would begin in 2007 and 
would be completed in 2011.
    Since the scope of the project is unclear, CBO cannot 
estimate the amount of funding needed for operations and 
maintenance. Any funds appropriated for operations and 
maintenance would be offset by payments to the Treasury from 
the district, except for those costs allocated to Camp 
Pendleton. CBO expects that money would not be appropriated for 
this purpose until after 2010. The bureau has the authority to 
transfer the operations and maintenance of the project to the 
district or another entity if an acceptable arrangement can be 
established.
    Once water is first made available, the district would 
begin repaying its share of the capital costs of this project. 
Based on information from the bureau, CBO expects that the 
district would be responsible for repaying about 40 percent of 
the total cost of the project or about $26 million, assuming 
adjustments for anticipated inflation. If funds were 
appropriated to implement this legislation, that would result 
in an increase of offsetting receipts to the federal government 
of about $2 million a year, including interest, for 40 years 
starting around 2011.
    That change in direct spending is not credited to H.R. 125, 
however, because the receipts are contingent upon future 
appropriation action.
    Intergovernmental and private-sector impact: H.R. 125 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Enacting this bill would benefit the 
Fallbrook Public Utility District; any costs that it might 
incur in association with the authorized project would be 
incurred voluntarily.
    Estimate prepared by: Federal Costs: Jule Middleton. Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum. 
Impact on the Private Sector: Craig Cammarata.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.