Lower Rio Grande Valley Water Resources Conservation and Improvement Act of 2005 Statement of William Rinne Deputy Commissioner of Reclamation U.S. Department of the Interior Before the Committee on Energy and Natural Resources Subcommitte on Water and Power United States Senate On S. 519 To amend the Lower Rio Grande Valley Water Resources Conservation and Improvement Act of 2000 (Act)to authorize additional projects and activities April 19, 2005 Madam Chairman, I am William Rinne, Deputy Commissioner of Reclamation, and I am pleased to present the Administration's views on S. 519, Senator Hutchison’s bill to amend the Lower Rio Grande Valley Water Resources Conservation and Improvement Act of 2000 (Act) to authorize additional projects and activities. The bill authorizes an additional 19 water conservation projects, which include the replacement of canals and laterals with pipelines, the lining of canals and laterals, the installation of water measurement and telemetry systems, the renovation and replacement of pumping plants, and other activities that will result in the conservation of water. The legislation would enable the Secretary to participate in the funding of these projects, up to 50 percent of the total project cost, once they had met the review criteria and project requirements set forth in the Act. S. 519 aims to provide water saving measures to areas in Texas that have recently suffered drought. The Department lauds local and state efforts to improve and encourage water efficiency and to responsibly manage water quantity in the border region. The Department testified in general support (with some suggested revisions) of the original legislation that became P.L. 106-576 and of the subsequent amendment (P.L. 107-351). Together, these laws authorized 19 projects with a cost ceiling of $47,000,000. The amendments offered in S. 519 appear to maintain the intent of the existing law while authorizing an additional 19 projects with a cost ceiling of $42,356,145. However, Reclamation must continue to direct limited resources toward constructing ongoing projects, and toward operation, and maintenance, and rehabilitation of existing projects. Therefore we cannot support adding these additional projects to the long list of already authorized projects awaiting Federal funding. Reclamation has several additional concerns with the legislation, which we will mention later in this testimony. Since late December 2000, when P.L. 106-576 was enacted, Reclamation has been working with local entities in the Lower Rio Grande Valley, the Texas Water Development Board, and the Texas Agricultural Extension Service of Texas A&M University. The first requirement of the public law was issuance of criteria by which Reclamation would administer the law and determine project eligibility for federal funding. These criteria were prepared, shared with state, local and other federal entities and issued in late June 2001, within the six month timeframe required by the law. Next, the irrigation districts involved with the 19 currently authorized projects and the Texas Water Development Board have worked with Reclamation to begin planning, designing and construction of authorized projects. To date, Reclamation has approved 15 Project Reports and 11 of the projects have initiated construction, five of which are substantially complete and under operation. The 19 presently authorized projects, if constructed, could save a projected 79,000 acre-feet of water, 6.1 million kilowatt hours of energy, and $742,000 of operation and maintenance expense annually. Reclamation is administering this program on a reimbursable basis, with each District submitting quarterly requests for payment. To date, Congress has appropriated $7,625,000 for implementation of this program ($1.5 million in FY 2003, $4.5 million in FY 2004 and $1.625 million in FY 2005). Of this amount, Reclamation has obligated a total of $6,438,000 to reimburse Districts for project costs, which represents all available funding appropriated to date. As of the end of March 2005, Reclamation has received reimbursement requests for completed work that exceeds our available funds by approximately $2.94 million. The emphasis placed by the Act on the initial 19 authorized projects is primarily on a project's scope, not upon its costs. For example, the scope of each authorized project is defined by the language in the Act itself and in the cited engineering report. In some cases, the specificity of this language has limited the authorization of (and therefore Reclamation's participation in) a project to only a portion of what an irrigation district has proposed to construct. The total project costs of each of these projects are not, however, specified in the legislation or in the cited engineering reports, but are determined once the authorized components are sufficiently developed in the Project Report and a project budget developed. In accordance with Section 4(b) of the Act, the Federal share of each project is then determined to be 50 percent of this total project cost. In contrast, the emphasis that would be placed by S. 519 on the second 19 projects considered for authorization would be on the project's cost, not upon its scope. Without changing the conditions for implementation of the first 19 projects, S. 519 imposes different conditions for implementation on the proposed 19 projects. For example, unlike the previous two bills, Section 2(b) of S. 519 would amend the Act to authorize virtually any project component that would result in the conservation of water or an improved supply of water, whether or not this component lies within the scope of the cited engineering report for that project. Also unlike the Act, S. 519 would identify a maximum total cost for each project, half of the sum of which equals the identified ceiling. Furthermore, Section 3 of S. 519 maintains separate ceilings for each of the groups of projects; namely, $47,000,000 (2001 dollars) for projects 1 thru 19, and $42,356,145 (2004 dollars) for projects 20 thru 38. These differences, while not affecting the requirements for project qualification, would require somewhat different treatment of projects with regard to determining scope and cost, depending upon specific project authorizations. Another concern is that the proposed legislation pre-authorizes projects that have had limited, if any, involvement from the Bureau of Reclamation in the project planning and development process, and which have not undergone Administration review. Although the Administration supports the efforts of local project beneficiaries to address their local water needs, we cannot support either authorization or funds for projects that have not undergone rigorous Administration review. Madam Chairman, this concludes my testimony. I am pleased to answer any questions.