Statement of Larry Todd, Deputy Commissioner Bureau of Reclamation U.S. Department of the Interior Before the Senate Energy and Natural Resources Committee Subcommittee on Water and Power H.R. 1175 August 1, 2007 Mr. Chairman and Members of the Subcommittee, I am Larry Todd, Deputy Commissioner for Policy, Administration and Budget with the Bureau of Reclamation. I am pleased to be here today to give the Department's views on H.R. 1175, a proposal to increase the federal share of the costs of Phase I of the Orange County, California, Regional Water Reclamation Project. The Department cannot support H.R. 1175. H.R. 1175 would amend Section 1631(d) of Title XVI, the Reclamation Wastewater and Groundwater Study and Facilities Act, of Public Law 102-575, the Reclamation Projects and Authorization Adjustment Act of 1992, to authorize the Secretary of the Interior to gradually increase the ceiling on the Federal share of the costs of Phase I to $51,874,849 by Fiscal Year 2016. As you are aware, current federal law limits the Federal share of individual project costs to 25 percent of the total, or a maximum federal contribution of $20 million. This project is being constructed in phases. When completed, the first phase will produce about 72,000 acre-feet per year of recycled water which will be used primarily to recharge the region's groundwater basin. Construction is currently on schedule for completion in November 2007. Reclamation is currently authorized to participate in the first phase of the project, up to the ceiling of $20 million. Through Fiscal Year 2007, Reclamation will have spent approximately $17.4 million on Phase I leaving about $2.6 million in federal funds remaining to be provided. Of this, $1.5 million is included in the President's budget request for FY 2008. While the Department has funded and continues to support this local project, given the costs of other currently active Title XVI projects, we cannot support this $32 million increase in the authorized cost ceiling. Of the 32 specific Title XVI projects authorized to date, 21 have received funding. The remaining estimated total authorized Federal cost share of these 21 active Title XVI projects is at least $328 million. If this bill is enacted, it could increase pressure for higher federal contributions to other currently authorized projects, which would increase the burden on an already strained budget. While Reclamation does not support new authorizations or increasing the ceilings for Federal cost sharing of water recycling projects, we understand that the projects established by Title XVI are important to many water users in the West. To that end, Reclamation has set about revising and improving its Directives and Standards that govern reviews of Title XVI projects. By doing so, we believe that Reclamation can play a more constructive role with local sponsors in weighing the merits and ultimate feasibility of proposed water recycling projects. Mr. Chairman, this concludes my testimony. Thank you for the opportunity to comment on H.R. 1175. I would be happy to answer any questions at this time.