Statement of Dionne Thompson Deputy Commissioner for External and Intergovernmental Affairs Bureau of Reclamation U.S. Department of the Interior Before the Committee on Energy and Natural Resources Subcommittee on Water and Power United States Senate on S. 982, the Water Rights Protection Act June 18, 2015 Chairman Lee, Ranking Member Hirono and members of the Subcommittee, thank you for the opportunity to provide the views of the Department of the Interior (Department) on S. 982, the Water Rights Protection Act. I am Dionne Thompson, Deputy Commissioner for External and Intergovernmental Affairs at Bureau of Reclamation. S. 982 threatens the Federal Government's longstanding authority to manage federal lands and associated water resources, uphold proprietary rights for the benefit of Indian tribes, and ensure the proper management of public lands and resources. The legislation is overly broad, drafted in ambiguous terms, and likely to have numerous unintended consequences that would have adverse effects on existing law, tribal water rights, and voluntary agreements. The Department opposes S. 982. The federal government retains the right to regulate government lands under Article IV, Section 3 of the Constitution, which grants the United States authority to reserve water rights for its reservations and its property. Similarly, Article I, Section 8 of the Constitution granted the United States power to regulate commerce with Indian tribes, which courts have cited, along with the treaty power found in Article II, Section 2, as authority to reserve Indian water rights. Although the federal government generally defers to the States in the allocation and regulation of water rights, dating back to 1908 the Supreme Court has held that the establishment of federal reservations – whether by treaty, statute, executive order, or otherwise - impliedly reserved water necessary to fulfill the purposes of those reservations, in what is known as the doctrine of federal reserved water rights. Originally expressed as the power to reserve water associated with an Indian reservation, over time, the Supreme Court and other courts have revisited and built on the doctrine in holding that reserved rights applied to all federal lands. In the West, these reservations come with priority dates that often serve as protection from injurious surface and groundwater diversions by parties with junior priority. Whether to provide a homeland for Indian tribes, protect national parks or wildlife refuges, protect endangered or threatened species, secure safe and reliable drinking water supplies, safeguard public resource values, or maintain access for recreational uses associated with federal lands, the doctrine of federal reserved water rights along with existing federal land management authorities are a critical component in allowing the Department to fulfill its mission to protect and manage the Nation's natural resources and cultural heritage and honor its trust responsibilities and special commitments to American Indians. Section 2 of S. 982 establishes a general definition of “water right” that is unclear and could create uncertainty among water right holders in light of the established doctrine of federal reserved water rights. If enacted, we would interpret this definition as having no applicability to disputes involving federal reserved water rights. Section 3 of S. 982 would prohibit the Secretary of the Interior or the Secretary of Agriculture from: (1) conditioning any permit, approval, license, lease, allotment, easement, right-of-way, or other land use or occupancy agreement on the limitation, encumbrance, or transfer of any water right directly or indirectly to the United States, (2) requiring any water user to apply for or acquire a water right in the name of the United States under State law, (3) asserting jurisdiction over groundwater withdrawals or impacts on groundwater resources, or (4) infringing on the rights and obligations of a State in evaluating, allocating, and adjudicating the waters of the State originating on or under, or flowing from, land owned or managed by the Federal Government. Section 3 would jeopardize the Departments of the Interior and Agriculture's ability to exercise its long-standing authority to establish conditions on the use of public lands and resources, interfering with the Departments' ability to protect the lands and resources they are entrusted to manage. The intent of this Section, along with the savings clauses in Section 5, is unclear and could potentially tie up established practices and lead to extensive and wasteful litigation. For example, the Department is concerned that this provision could lead to parties challenging the renewal of public lands use permits that are conditioned on assurances that water will continue to be available for specific on site purposes, as well as for the purposes of the reservation. This sort of legal ambiguity could hinder ongoing water use in a time where many communities are experiencing significant drought-related hardship. Sections 3 and 4 would create uncertainty for many existing voluntary arrangements that are designed to produce a more efficient operation of U.S. facilities in the wake of ongoing drought, climate change and reduction of water supplies. We are concerned these provisions may prohibit parties from voluntarily entering into agreements with the Department or its bureaus with respect to water rights in order to protect state, federal or third party interests. For example, this bill could prevent the Bureau of Reclamation from partnering with parties who use groundwater to support recreational activities on Reclamation lands, since the recreational users often apply jointly with Reclamation for a state permit since Reclamation is the land owner. Further, there are numerous examples where Reclamation has contracts with water users that include the transfer or relinquishment of pre-existing private water rights in exchange for a license or contract that provides project benefits at Reclamation facilities, e.g. storage or delivery of water. The bill, as written, may prohibit renewal of such contracts, thus interfering with voluntary, mutually-beneficial agreements that improve water resource management. S. 982 could preclude Departmental bureaus from protecting property interests or resource values as mandated by Congress. The bill could result in the transfer of water rights off federal reservations that may impede the Department from managing facilities and resources. For example, the legislation would prohibit the National Park Service from exercising its authority to perfect water rights in the interest of the United States for waters diverted from or used on National Park Service lands, including operations associated with National Park Service concessioners, lessors or permittees. The requirement that all water rights on National Park Service lands be held in the name of the United States is grounded, in part, on the potential damage and disruption that privately held water rights could cause to park resources and operations. The bill could also hinder the U.S. Fish and Wildlife's implementation of the National Wildlife Refuge Administration Act if any conditions pertaining to groundwater flows, whether in or out of a refuge or hatchery, are deemed to be more restrictive than a State's law. S. 982 would restrict the Secretary of the Interior and Secretary of Agriculture from acquiring water rights under State law, which could seriously reduce these agencies' ability to meet the established purposes of federal reserved lands, such as the National Wildlife Refuges or National Fish Hatcheries. The legislation would also put these agencies at a disadvantage, as other federal agencies would not be under similar restrictions. This restriction could also hinder the Bureau of Reclamation's ability to acquire water rights for the purposes of developing future water projects. S. 982 would also impose unnecessary restrictions on the Bureau of Land Management's (BLM) ability to manage water-related resources vital to many multiple uses on public lands and cooperatively mitigate impacts to sensitive water resources. Under the Federal Land Policy and Management Act, the BLM has the authority to consider terms and conditions on right-of-way applications to mitigate impacts to water-related resources. The BLM does not require the transfer or relinquishment of water rights as a condition of authorizations for public land use. However, S. 982 could undermine cooperative arrangements with ranchers and local communities where BLM frequently partners with public land users through collaborative agreements to plan, finance, and develop water resources. BLM also commonly applies for new livestock water rights to the extent allowed by the laws of the State in which the land is located. Where grazing preferences are associated with a water right, the bill could limit BLM's ability to conduct grazing preference transfers. The legislation would not provide additional protections for the holders of water rights beyond current BLM policy, and if enacted, would jeopardize the BLM's ability to manage water-related resources vital to many multiple uses on public lands. In terms of groundwater, Section 3(3) could prevent the Department from protecting against damage to groundwater-dependent resources, such as thermal features, cave-forming process, and springs, located in reserved federal lands and Indian reservations, some of which rely on springs for their daily water needs. Section 3(3) precludes Departmental managers from “asserting jurisdiction” over groundwater withdrawals or impacts, unless such assertion would impose no greater restrictions than state laws, regulations or policies regarding the protection and use of groundwater. Some states allow for unregulated groundwater use and provide no protection for groundwater-dependent resources. Because states have different laws regarding groundwater use and protection, it would be extremely difficult, if not impossible, for federal reservation managers to make such determinations on a state-by-state basis. The bill could lead to inconsistent approaches by federal managers in different states having different laws, and even potentially to litigation as parties attempt to sort out the relative levels of restriction inherent in the laws, regulations or policies of different states. Undermining the Department's ability to manage groundwater resources could lead to significant damages to the purpose of a reservation of federal land. This Section also raises concerns about whether Reclamation can continue to exercise existing rights to return flows, including groundwater returns, at a number of Reclamation projects in various western States. In addition, Section 4(a)(2) would require the Department to “coordinate with the States in the adoption and implementation of … any rulemaking, policy, directive, management plan” [emphasis added] to ensure consistency with State groundwater laws and programs. This has the potential to impose onerous new obligations on Reclamation every time a policy or directive and standard (D&S) is adopted or implemented, given that Reclamation already provides the opportunity for public review of new policies D&S's. The term “coordinate” is unclear in Section 4, and may therefore raise challenges to addressing the tremendous variability in the states' approach to groundwater regulation. In addition, Section 4(b) includes a sweeping prohibition on taking “any action that adversely affects” water rights granted by a State, a State authority over water rights, or specified State definitions related to water rights. This provision would likely generate substantial litigation and would likely interfere with legitimate federal water management activities. It is unclear what the effect of Section 5 would be on Sections 3 and 4 of the bill. Section 5 provides a savings clause that indicates S. 982 does not: limit or expand any existing “legally recognized authority” of the Secretary of the Interior or the Secretary of Agriculture; interfere with Bureau of Reclamation contracts entered into pursuant to reclamation laws; affect the implementation of the Endangered Species Act; limit or expand any existing or claimed reserved water rights of the Federal government; limit or expand certain authorities under the Federal Power Act; and limit or expand any water right or treaty right of any federally recognized Indian tribe. Depending on the interpretation of “legally recognized authority” this provision appears to be in direct conflict with Sections 3 and 4 of the bill, and could lead to future litigation and uncertainty. We appreciate the opportunity to present the Department's views on S. 982. As detailed above, the bill would negatively impact the Department's ability to manage water resources to protect ongoing public lands uses and the environment, allow for maximum beneficial use of Federal water facilities, and ensure adequate water is available for fisheries or threatened or endangered species. For these reasons and the potential for unintended consequences associated with its enactment, the Department opposes this bill. This concludes my written statement. I would be pleased to answer questions at the appropriate time.