CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Congressional research reportFeb 2, 2005

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CALFED Bay-Delta Program: Overview of

Institutional and Water Use Issues

-name redactedSpecialist in Natural Resources Policy

February 2, 2005

Congressional Research Service

7-....

www.crs.gov

RL31975

CRS Report for Congress

Prepared for Members and Committees of Congress

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Summary

The California Bay-Delta Program (CALFED) was initiated in 1995 to resolve water resources

conflicts in the Sacramento/San Joaquin Rivers Delta and San Francisco Bay (Bay-Delta) in

California. The program planning effort focused on developing a plan to address three main

problem areas in the Bay-Delta: ecosystem health, water quality, and water supply reliability.

CALFED was initially authorized to receive federal funding from FY1998 to FY2000; and since

that time only certain projects supporting CALFED goals received appropriations. The program

was finally reauthorized October 25, 2004.

The Bay-Delta is formed by the confluence of the north-flowing San Joaquin River, the southflowing Sacramento River, and the San Francisco Bay, to which the delta of the two rivers is

linked. This 738,000-acre area contains a vast network of marshes, wetlands, and open water that

supplies water to two-thirds of California’s population and nearly seven million acres of farmland

through a series of pumps, canals, and dams operated by the federal and state governments. The

competing demands for Bay-Delta water have stretched the resource’s capacity to provide reliable

amounts of water to users (e.g., farmers) and the ecosystem. The Bay-Delta ecosystem is being

altered by habitat conversion and water quality degradation, including salt water intrusion. For

example, several fish populations have declined, and some species are on federal threatened and

endangered species lists. Many attribute the deterioration to unnaturally low levels of water in the

Bay-Delta. Listing of these species has affected the timing and use of water pumped from the

Bay-Delta and has created uncertainty in water supplies for water users in southern California.

Allocating water from the Bay-Delta has been the subject of conflicts and disputes among

stakeholders such as farmers, urban water contractors, and environmentalists for years. CALFED

was developed as a response to these conflicts through a series of agreements and revisions that

have involved federal and state legislation, and stakeholder accords. A Record of Decision (ROD)

for the current CALFED Program was issued by a consortium of state and federal agencies in

August 2000; however, legislation to implement the CALFED Program as outlined in the ROD

had not been enacted until recently. CALFED, as described in the ROD, has 12 program

components that range from water quality and supply to ecosystem restoration and governance.

CALFED was planned to be implemented in three phases, of which two are already completed.

The third phase is the implementation of the CALFED program as outlined in the ROD. Stage I

(of three stages in phase III) of CALFED is currently underway and is expected to take seven

years to complete and cost nearly $8.7 billion.

The reauthorization of CALFED funding has been controversial. Specific issues such as

authorization for water storage projects, balance among project and program activities, and water

supplies for the environment, as well as broader issues such as governance and the degree to

which the ROD is implemented, were resolved to varying degrees with the passage of P.L. 108361, which reauthorized the CALFED Program. This report will be updated as events warrant.

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Contents

Introduction ................................................................................................................................1

Background ................................................................................................................................3

Conflicts and Federal Government Involvement ....................................................................5

Implementation of the Federal Endangered Species Act...................................................5

Implementation of the CVPIA.........................................................................................6

Implementation of the Clean Water Act ...........................................................................6

CALFED Bay-Delta Program......................................................................................................7

CALFED Legislative Issues ........................................................................................................8

Funding ..........................................................................................................................9

Water Storage................................................................................................................ 10

Environmental Water Account....................................................................................... 11

Science ......................................................................................................................... 12

Land Acquisition........................................................................................................... 12

Conclusion................................................................................................................................ 13

Figures

Figure 1. The California Bay-Delta Watershed (shaded) ..............................................................4

Appendixes

Appendix. Chronology of Events Relevant to Restoration of the California Bay-Delta............... 14

Contacts

Author Contact Information ...................................................................................................... 15

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Introduction

The 1,153-square mile estuary at the confluence of the San Francisco Bay and the Sacramento

and San Joaquin Rivers Delta—the Bay-Delta—is also the hub of California’s extensive water

supply system. As such, the Bay-Delta has endured decades of competing water demands. During

this time, the Bay-Delta ecosystem has experienced environmental degradation, increasing

regional water demands, and a decrease in reliable water supplies for urban, agricultural, and

natural areas. For example, by the late 1980’s and early 1990’’s fish species declines and water

quality problems had become so severe that continued operation of the state and federal water

supply projects were coming into conflict with state and federal environmental laws. To counter

this trend and to avoid shutdown or severe operational changes to pumps at the heart of the State

Water Project (SWP) and the federal Central Valley Project (CVP), the State of California and

several federal agencies entered into a partnership to resolve resource conflicts. This partnership

resulted in an agreement known as the Bay-Delta Accord, which ultimately led to the

development of the CALFED Bay-Delta Program (CALFED) and the Record of Decision (ROD)

for the CALFED Bay-Delta Final Programmatic Environmental Impact Statement and Report

(EIS/EIR).1 The objectives of CALFED were to restore ecological health, improve water quality,

fortify infrastructure for managing water (e.g. improving Delta levees), and increase water supply

reliability in the Bay-Delta area.

The authorization of an annual federal appropriation of $143 million from FY1998 to FY2000 for

the CALFED program—to develop and implement specific portions of an ecosystem protection

plan and long-term restoration projects for the Bay-Delta—expired September 30, 2000.2

Between 1998 and 2000, $220 million in federal funds was appropriated for the CALFED

program; however, absent an explicit authorization from the authorizing committees,

congressional appropriators have been reluctant to directly fund the program since.

Three bills were introduced in the 108th Congress to authorize appropriations for federal

participation in the CALFED program; H.R. 2828 (introduced July 23, 2003, by Ken Calvert),

H.R. 2641 (introduced June 26, 2003, by George Miller), and S. 1097 (introduced May 21, 2003,

by Dianne Feinstein and Barbara Boxer).3 All three bills would have authorized implementation

of various CALFED program components, action items, and activities identified in the ROD;

however, none of the bills would have authorized the implementation of the ROD in its entirety. 4

The reauthorization of federal participation in the CALFED program was quite controversial. The

controversy stems, in part, from the complex nature of water allocation from the Bay-Delta itself.

For decades, two massive water supply projects—the State Water Project (SWP) and the federal

CALFED Bay-Delta Program, Programmatic Record of Decision, Volume 1 - Record of Decision and Attachments I

through 4 (California: August 28, 2000), hereafter referred to as the ROD.

The initial authorization for CALFED funding (P.L. 104-208, Division E) came on the heels of a 1994 agreement

among state and federal agencies, and urban, agricultural, and environmental interests to protect the Bay-Delta while

satisfying key needs of various involved interests.

For a congressional distribution memo that provides a detailed comparison of all three bills related to the CALFED

Bay-Delta Program, please contact Pervaze Sheikh at 7-.... or Betsy Cody at 7-..... Side-by-side comparisons of

more recent versions of the bills are also available.

CALFED program components as listed in the ROD include governance, ecosystem restoration, watersheds, water

supply reliability, storage, conveyance, Environmental Water Account, water use efficiency, water quality, water

transfers, levee stability, and science.

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Central Valley Project (CVP)—have moved water from northern California, through the BayDelta to water users in southern California. Decisions on who gets how much water and when

they receive it are generally made annually and are based on a myriad of state and federal laws,

historic water rights, contracts, and negotiated agreements. Any proposed change to this complex

water allocation system is met with concern from water users who fear they may lose water,

receive reduced priority for water supplies, or receive water of a degraded quality. On the other

hand, many attribute the Bay-Delta’s deterioration to unnaturally low water supplies resulting

from the management of the state and federal projects and have called for changes in project

operations. In particular, the decline of certain fish species (e.g., winter run chinook salmon) led

to operational changes affecting when and how much water can be pumped from the Bay-Delta to

supply water users south of the Delta. Additionally, environmental groups have advocated

increased water supplies for environmental purposes to stave off the decline of fish and wildlife

species, improve water quality for other uses, and restore the health and vitality of the Bay-Delta

ecosystem.

While the CALFED program is an attempt to balance competing interests and develop a plan for

managing Bay-Delta water resources to meet competing demands, all parties have not been 100%

satisfied in the final goals, programmatic actions, and water management regimes called for the in

the ROD. Specifically, some agricultural stakeholders have expressed concerns over how much

water they will receive and have asked for assurances that they will receive a certain percentage

of their contracted supplies; however, other agricultural and urban contractors fear their water

supplies may be threatened by such assurances. Some of the same groups, and others, are

concerned that the methods of distributing water will disadvantage them, that the program is not

balanced (e.g. between ecosystem restoration and water storage facilities), and that funding levels

and authorization for surface water storage facilities are inadequate. Further, some question the

legitimacy of scientific findings regarding environmental water needs and believe the level of

water allocated for recovering threatened and endangered species in the Bay-Delta may not be

justified.

Others are concerned that legislative efforts to resolve some of these issues could undermine the

ability of the CALFED program to restore fisheries and other resources associated with the BayDelta ecosystem. Some environmental groups argue for greater flows of water to natural areas to

support the recovery of endangered and threatened plant and animal species. Some also advocate

investing in water conservation and new pricing strategies to lower demand for Bay-Delta water,

and using new technologies (e.g. desalination and water recycling) to stretch existing water

supplies. In general, environmental groups oppose development of new surface storage projects

preferring instead to manage existing supplies more efficiently.

Where there was once general agreement, perhaps tenuous, among the stakeholders who

participated in development of the ROD, this agreement was based on a delicate balance of many

interests and nearly a decade of fairly intense negotiations. Consequently, any attempt to

authorize a program departing from the ROD has met with resistance from parties who fear their

interests may not be well served. This report presents the historical progression of conflicts and

agreements that led to the creation of CALFED, and discusses governance, ecosystem restoration,

and water use issues related to the reauthorization of CALFED in the 108th Congress (P.L. 108361). For more information on CALFED oversight in the 109th Congress, see CRS Issue Brief

IB10019, Western Water Resource Issues, by Betsy Cody and Pervaze Sheikh.

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Background

The Bay-Delta is a 1,153 square-mile area located where the Sacramento and San Joaquin Rivers

converge and flow into San Francisco Bay. These rivers along with other tributaries form a

mosaic of sloughs and waterways that surround 57 man-made islands within the Bay-Delta (see

Figure 1). The Bay-Delta is considered the largest estuary on the West Coast and its combination

of fresh and salt water ecosystems provide habitat for a diverse array of plant and animal life. An

estimated 750 species of plants and animals, including over 130 species of fish are found in the

Bay-Delta.5 The Bay-Delta also contains over 700,000 acres of farmland, 6 and is used by

approximately 12 million recreationists per year who among other activities, boat, fish, hike, and

sightsee in the Bay-Delta.

The water regime of the Bay-Delta was significantly altered in the 1930s when the federal

government at the behest of California, began a massive project to divert water from the

Sacramento Valley and Delta to farmland in California’s vast Central Valley. The state, some 20

years later, followed with its own State Water Project (SWP) which in large part parallels the

federal Central Valley Project (CVP), diverting much of the natural inflow into the San Francisco

Bay to agricultural, industrial, and urban consumers mostly in the San Joaquin Valley and

Southern California.7 The Bay-Delta now supplies water to 22 million people and millions of

acres of farmland in California.8 Two networks of pumps, dams, canals, and reservoirs take an

estimated 5.9 million acre-feet (maf) of water from the San Joaquin and Sacramento Rivers and

their tributaries, and distribute it to agricultural and urban water users in the California Central

Valley via the CVP, and to Southern California via the SWP.9 The combined annual amount of

water taken by the CVP and SWP ranges between 20% and 70% of the total annual inflow in the

Bay-Delta region.10

CALFED Bay-Delta Program, 2003 Annual Report, (Sacramento, CA:2003).

The main crops grown in the Bay-Delta are wheat, alfalfa, cotton, corn, and tomatoes.

K. Taylor, K. Jacobs, and S. Luoma, “CALFED: An Experiment in Science and Decision-making,” Environment v.45

(2003), pp. 30-41.

CALFED Bay-Delta Program, 2003 Annual Report, (Sacramento, CA:2003).

ROD.

Ibid.

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Figure 1.The California Bay-Delta Watershed (shaded)

Source: Adapted by CRS Map Resources.

Construction and operation of the CVP and SWP projects over many decades fundamentally

altered the physical environment of the Central Valley as well as the Bay-Delta. Hundreds of

wetland areas were lost or altered, and by the late 1980s, water quality and Endangered Species

Act (ESA) issues threatened the operation of the CVP and the SWP. Today, the Bay-Delta

ecosystem is still generally considered to be unhealthy and unable to provide reliable amounts of

water for water users. Some also believe that the Bay-Delta is unable to sustain viable habitats for

all of its plant and animal life. 11 Water quality has deteriorated in the Bay-Delta partially due to

drainage of freshwater and influx of highly saline water. Further, pollutants originating from

agricultural runoff, cities, and ranches have lowered water quality in the Bay-Delta. The BayDelta has also suffered from fragmentation and loss of native habitat. Of the nearly 350,000 acres

of original tidal marshland in the Bay-Delta, only 8,000 acres remain. Several plant and animal

U.S. Senate Committee on Energy and Natural Resources, CALFED Bay-Delta Authorization Act, 107th Cong., 2nd

Sess. (S.Rept. 107-171), June 24, 2002, (US GPO, Washington, DC: 2002).

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

species are on state and federal endangered and threatened lists, including the steelhead trout and

the winter-run chinook salmon. Problems in the Bay-Delta related to water quality and fish and

wildlife have raised compliance issues with the Clean Water Act (CWA) (P.L. 92-500, as

amended), the Endangered Species Act (ESA; P.L. 93-205, as amended), as well as comparable

state laws. These issues are discussed in more detail below.

Conflicts and Federal Government Involvement

The limited supply of water in California has been the subject of conflicts among competing

interests for decades. The fundamental controversy over water supplies more recently has

centered on the distribution of water supplies to urban areas and agriculture, and their effect on

the environment. In 1986, California and federal government entered into a Coordinated

Operation Agreement (COA) to coordinate operations between the CVP and SWP, and to allow

equitable sharing of surplus water.12 Afterwards, controversy peaked when California was

experiencing a six-year drought (1987 - 1992). Limited water supplies during the drought led to

water rationing in urban and agricultural areas, a reduction in crop productivity and cultivation,

and environmental deterioration in river and marshland habitats. The distribution of water was

further complicated by the implementation of the federal CWA and ESA in the Bay-Delta.

Concerns that annual operations of the CVP and SWP may have been violating federal and state

water quality and endangered species statutes resulted in new efforts to provide baseline water

supplies for environmental purposes. In 1992, the Central Valley Project Improvement Act (Title

34 of P.L. 102-575; CVPIA) for the first time allocated specific water supplies for natural areas

and for fish and wildlife.13 The development of subsequent regulations affected water allocation,

decision making, and infrastructure operation in the Bay-Delta and surrounding areas, and created

new controversies among farmers, urban users, and environmentalists over water supply

distribution.

Implementation of the Federal Endangered Species Act

Several fish species in the Bay-Delta have been listed as either endangered or threatened under

the federal ESA. The ESA generally prohibits actions that involve “taking” (including harming) a

listed species except under certain specified circumstances. It also directs federal agencies to

avoid adverse modification of a listed species’critical habitat. Further, the ESA requires the

designation of critical habitat areas where a species is currently found or which might provide

additional habitat for species recovery.14 Actions implemented under the ESA have resulted in

changes to dam operations, water flow, and pumping facilities in the Bay-Delta. For example,

exports of water out of the Bay-Delta were limited to protect salmon runs of the winter-run

chinook salmon (Onchorhyncus tshawtscha), which was listed as endangered in 1989. As other

fish species, such as the delta smelt (Hypomesus transpacificus) and spring-run chinook salmon

(Onchorhyncus tshawytscha), have been listed as threatened, further restrictions on water exports

The COA received congressional approval in 1986 (P.L. 99-546).

Water was first allocated for fish and wildlife habitat in 1993 by the BOR; however, the accounting method for

calculating the amount of water transferred to fish and wildlife habitat has remained controversial.

For greater detail on implementing ESA, see CRS Report RL31654, The Endangered Species Act: A Primer, by (na

me redacted), (name redacted), and (name redacted). For more information on ESA legislation, see CRS Issue Brief

IB10144,The Endangered Species Act in the 109th Congress: Conflicting Values and Difficult Choices, by (name reda

cted), (name redacted), and Pervaze Sheikh.

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and project modifications have been implemented in the Bay-Delta. Controversy over water

allocated to the environment for recovering fish was exemplified when efforts to protect the then

federally listed threatened Sacramento splittail (Pogonichthys macrolepidotus) resulted in a

lawsuit against the U.S. Fish and Wildlife Service (FWS) by state water contractors. A federal

judge, in 2000, invalidated the decision to list the species, citing the failure of the FWS to

consider the opinions of state game scientists, explain high stocking rates in 1998, and explain

why the splittail was threatened. In September 2003, the FWS withdrew the splittail from the

threatened species list after analyzing the population and determining that it would not become

threatened or endangered in the foreseeable future.

Implementation of the CVPIA

Water allocation for endangered species and the environment in general was to be enhanced with

the enactment of the CVPIA in 1992. The legislation was enacted largely in response to the

decline of fish and wildlife species in the Bay-Delta and the Sacramento and San Joaquin Rivers

system. The CVPIA changed the priorities for water supply for the CVP by ranking fish and

wildlife water needs on par with irrigation and domestic water uses. Refuges are granted the same

high priority given to agriculture; and water reductions to refuges may not exceed 25% during

drought years. CVPIA also reallocates CVP water back to natural areas to benefit salmon,

steelhead trout, and other fish and wildlife.15 Some argue that limited funds appropriated for the

restoration fund, litigation over providing 800,000 acre-feet of water for the environment each

year, and controversy over contract renewal provisions has led to the CVPIA not fully meeting

environmental expectations. At the same time, many farmers and others have called the CVPIA a

disaster, claiming that the priority for allocating water supplies to the environment is too high.

Implementation of the Clean Water Act

Beginning in the late 1980’s, the implementation of the CWA by the U.S. Environmental

Protection Agency (EPA) generated controversy between the State Water Board and the federal

government. The CWA regulates both surface water and groundwater quality and is enforced by

the EPA. In 1987, the EPA notified the State of California that state surface water quality

standards were not in compliance with the CWA. The state responded with new water standards

that were again rejected by the EPA. In 1993, after a lawsuit brought by environmentalists, the

EPA issued a set of federal water quality guidelines for implementation in California. These were

later rejected by the state.

This ongoing struggle to address CWA requirements further threatened continued operation of the

CVP and SWP, particularly operations of Delta pumping facilities. In order to forestall cutbacks

in water project operations, state and federal authorities jointly adopted mutually acceptable water

quality standards and agreed to regulate the CVP and SWP operations to meet these standards, as

well as to develop target flows for ESA listed species. This agreement, known as the Bay-Delta

Accord, included the following elements: provisions to regulate springtime flow and export limits

to benefit fish species; operational flexibility to comply with provisions of the ESA that address

water supply and species monitoring issues among others; and measures to improve

The CVPIA authorizes the allocation of 800,000 acre-ft of water annually for fish and wildlife purposes, provides for

anadromous fish restoration, and creates a restoration fund financed by water and power users.

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

environmental conditions in the Bay-Delta Estuary (e.g., waste discharge control and habitat

restoration). The Accord was in effect until 2000 and then was incorporated in part by the ROD.

CALFED Bay-Delta Program

Controversies surrounding implementation of the federal statutes outlined above fueled the

creation of the Bay-Delta Framework Agreement (a refinement of the Accord), which was signed

in 1995 by state and federal agencies with regulatory responsibilities in the Bay-Delta. This

agreement marked the beginning of the CALFED process and defined three issues that were

deemed important for federal-state coordination and cooperation: the formulation of water quality

standards; coordination of federal and state project operations with regulatory requirements (i.e.,

coordination of CVP and SWP operations to maintain compliance with the ESA, CVPIA, and

state and federal water quality provisions); and development of a joint federal-state process to

develop long-term solutions to environmental, water supply, and water quality problems in the

Bay-Delta. The CALFED Program was created from the Framework Agreement to address these

issues. The initial authorization of federal funding for the CALFED Program came in 1996 with

the enactment of P.L. 104-208 (Division E, Title I). This legislation authorized nearly $430

million for FY1998 to FY2000. Funds appropriated for CALFED under this authorization were

$85 million for FY1998, $75 million for FY1999, and $60 million for FY2000. The funding

authorization expired September 30, 2000; however, some activities that support CALFED

program goals continued to receive federal funding. 16

The CALFED process brought state, federal, and other stakeholders together to develop a

programmatic response to restoration and water supply issues in the Bay-Delta. First, definitions

of the problems to be addressed in the Bay-Delta were listed, and a set of alternative solutions

was developed. Second, to comply with the California Environmental Quality Act (CEQA) and

National Environmental Policy Act (NEPA), an environmental impact statement (EIS) and an

environmental impact report (EIR) were prepared to identify the impacts associated with the

individual solutions being considered. Then, from a set of four alternatives, a “Preferred Program

Alternative” was selected as the long-term plan for improving water quality, stabilizing Bay-Delta

levees, restoring the Bay-Delta ecosystem, and improving water supply reliability. This plan was

announced August 28, 2000, in the Record of Decision for the CALFED Bay-Delta Final

Programmatic Environmental Impact Statement and Report (ROD). The key components of the

plan outlined in the ROD include specific activities in 12 program areas, among them, the

development of an Environmental Water Account and the authority for a CALFED Policy

Group.17 The CALFED Policy Group, as proposed in the ROD, would have consisted of

representatives from 23 federal and state agencies and would have been responsible for

overseeing the implementation of CALFED, assessing its progress (including reports to federal

and state legislatures), and reviewing and coordinating CALFED and related programs.18

For CALFED-related funding requests for FY2005, see CRS Report RL32307, Appropriations for FY2005: Energy

and Water Development, by (name redacted).

Program components include governance, ecosystem restoration, watersheds, water supply reliability, storage,

conveyance, Environmental Water Account, water use efficiency, water quality, water transfers, levees, and science.

The primary or “lead” federal agencies involved in the CALFED process include the BOR and the FWS, both within

the Department of the Interior; the EPA; the NOAA Fisheries (Department of Commerce; formerly the National Marine

Fisheries Service); the U.S. Army Corps of Engineers (Department of Defense); and the Natural Resources

Conservation Service (Department of Agriculture). State agencies include the Resources Agency (Department of Water

Resources, Department of Fish and Game, Reclamation Board, and Delta Protection Commission); the California

(continued...)

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

However, before federal legislation was enacted approving the ROD as a framework for

implementing the CALFED program, the California legislature adopted its own governance

structure for the CALFED program.

The State of California established the California Bay-Delta Authority (CALFED Authority) in

September 2002. This state agency is housed in the California Resources Agency and is

responsible for overseeing the implementation of the CALFED program. Specifically, the

CALFED Authority is expected to oversee the state implementation of the CALFED Program

according to the ROD, develop policies and track timelines associated with CALFED projects,

report annually to state and federal legislatures, manage the science element of CALFED and

establish an independent science board, review and approve program plans and budgets, and

administer the CALFED Program (e.g., hiring staff and approving policies).19 The agency is

expected to consist of representatives from six California State agencies, six federal agencies, and

the Bay Delta Public Advisory Committee, as well as five members of the public (each

representing a program region20), two at-large members appointed by the State Senate and

Assembly, and four non-voting members of the State Legislature. The state law establishing the

CALFED Authority explicitly states that nothing should extend the application of federal law to

actions by state agencies or extend state law to actions by federal agencies.21 Further, the

CALFED Authority will dismantle in 2006 unless federal legislation authorizing the participation

of appropriate federal agencies in the CALFED Authority is enacted. P.L. 108-361 authorized the

Secretary of the Interior and federal agency heads to participate as non-voting members of the

CALFED Authority. It has not yet been determined if this provision will nullify the sunset clause

for the CALFED Authority. The state law requires that the Secretary of the California Resources

Agency make a determination and written notification that “federal legislation has been enacted

authorizing the participation of appropriate federal agencies in the Authority” for the sunset

clause to be removed. 22 This notification has not yet been issued.

CALFED Legislative Issues

The debate over the reauthorization of CALFED in the 108th Congress largely centered on

specific issues such as the authorization for water storage projects, cost allocation, balance among

project and program activities, and water supplies for the environment, as well as broader issues

such as governance and the degree to which the ROD is implemented. Oversight issues during the

109th Congress are expected to include project financing, water storage project programs, and

implementation of the Operations Criteria and Plan and South Delta Improvements Plan.

Three bills were introduced in the 108th Congress to authorize appropriations for federal

participation in CALFED: H.R. 2641, H.R. 2828, and S. 1097. S. 1097 and H.R. 2828 were

approved by respective full committees in the House and Senate (House Resources and Senate

(...continued)

Environmental Protection Agency (including the State Water Resources Control Board); and the Department of Food

and Agriculture.

The California Bay-Delta Authority Act, Chapter 812, Statutes of 2002 (SB 1653, Costa) of California State Law.

The California Bay-Delta Program is divided into five regions including the Sacramento and San Joaquin River

Delta, San Francisco Bay, Sacramento Valley, San Joaquin Valley, and Southern California.

The California Bay-Delta Authority Act, Chapter 812, Statutes of 2002 (California Water Code §79400 et seq.).

Ibid.

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CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Energy and Natural Resources). H.R. 2828 passed the House, as amended, July 9, 2004. The

Senate subsequently took up the House bill, amended it, and passed H.R. 2828 on September 15,

2004. After several weeks of tense negotiations, the House passed the Senate version under

suspension of the rules and without amendment on October 6, 2004. The bill was signed into law

October 25, 2004 (P.L. 108-361).

P.L. 108-361 approves the ROD as a framework for addressing the CALFED Bay-Delta Program

and authorizes under existing and new authorizations, several activities and projects related to the

components of CALFED.

S. 1097, as introduced, would have authorized federal agencies to conduct projects and activities

included under 14 components similar to the 12 components defined in the ROD. These activities

range from the specific, such as the construction of floodway improvements in the Lower

Mokelumne River, to broad categories such as water conservation projects to enhance water

supply reliability, water quality, and ecosystem benefits. S. 1097, as amended on May 20, 2004,

would have authorized $389 million in funding for these activities from FY2005 to FY2010.

As passed by the House in July, H.R. 2828 was similar to S. 1097 in that it would have authorized

federal agencies to conduct projects and activities included under components defined in the

ROD and provided an authorization of $389 million for those activities. H.R. 2828, however,

differed from S. 1097 in some ways. The July version of H.R. 2828 would have (1) approved the

ROD as a general framework; (2) included a provision potentially pre-authorizing the

construction of federal water projects; (3) contained additional requirements for land acquisition

and ecosystem restoration projects; and (4) authorized appropriations from FY2005 to FY2008.23

Thematically, the major areas of bill differences include the degree to which the existing ROD

would have been implemented, the entity in charge of managing program activities, the process

for project approval (e.g., feasibility study and project authorization), cost allocation schemes,

and requirements for land acquisition. Congress is expected to face other CALFED issues in the

next few years, including funding levels, water storage, water supplies for the environment, land

acquisition, and science. A summary of each of these issues is presented below.

Funding

The implementation of CALFED is expected to cost an estimated $10 billion dollars over 30

years; however, during the first seven years (referred to as Stage 1), implementation costs are

estimated to be $8.7 billion. The CALFED program identified in the ROD envisions a three-way

split in responsibility for funding between the federal government, state government, and local

users (e.g., through user fees). However, each program element in the plan may have its own costsharing formula.

Federal appropriations for the CALFED Program are expected in the annual Energy and Water

Development Appropriations bills; however, other federal funding may be provided via

appropriations for other federal programs.24 State funding is expected to come from a

For a Congressional distribution memo that contains a side-by-side analysis of H.R. 2828 and S. 1097, please contact

either Pervaze Sheikh at 7-.... or Betsy Cody at 7-.....

For example, federal appropriations are expected from federal agencies that provide funds to state programs (e.g., a

California State revolving fund for improving drinking water quality that is receiving capitalization grants from the

(continued...)

Congressional Research Service

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

combination of state bond measures, restoration fees paid under the authority of the CVPIA, state

and federal appropriations, and local user fees (e.g., fees for water use). A draft finance plan was

released on December 4, 2004. This plan specifies how funding for the CALFED Program is

expected to be distributed among the federal and state government, water users, and local grant

matching. A final version of this plan is expected in 2005.

In the past few years, Congress funded discrete projects within the CALFED program, but,

lacking an authorizing statute, provided no appropriations for the overall program from FY2001

to FY2005. For example, in the joint explanatory statement to P.L. 108-137 (Energy and Water

Development Appropriations for FY2004), conference managers stated that it would be difficult

for Congress to support the CALFED program without program authorization by Congress. To

date, federal funding has been appropriated to provide fish screens for existing water diversions;

implement pollution control measures; manage fish, riparian, and estuarine habitat; and study

water storage projects. The funding has been in addition to funds already authorized for projects

and programs under the CVPIA and other previously authorized projects and programs. Although,

no federal funds were appropriated for the CALFED Program from FY2001-FY2005,

appropriations were provided for projects that support the goals of CALFED, such as the

continued study of four water supply projects. No federal funds were appropriated for FY2001 for

CALFED or any of its projects. For FY2002, FY2003, FY2004 and FY2005 Congress included

$30 million, $23 million,$9.0 million, and $8.5 million, respectively, in the Water and Related

Resources account of the Bureau of Reclamation (BOR) for projects supporting the goals of

CALFED; however, again, it did not fund the CALFED program per se. As enacted, P.L. 108-361

authorizes $389 million for the CALFED program for FY2005 - FY2010.

Water Storage

Many argue that an increase in water supplies for California is needed due to population growth

in the state and lower supplies from the Colorado River, among other things. One mechanism to

increase the availability of additional water supplies is to increase the capacity for surface water

storage. Several stakeholders, including some Members of Congress, have argued for an increase

in investments for building additional surface water storage capacity in California. Others

contend existing developed water supplies can be stretched through conservation, water reuse and

recycling, conjunctive use (storing water in groundwater basins), water transfers, and changes in

water management policy (e.g.,water pricing). During a House Resources committee hearing on a

CALFED crosscut budget in May of 2003, several Members of Congress expressed concerns that

more money has been spent on environmental activities than on storage. Program officials

countered by explaining that the authorization for feasibility studies for water storage expansion

projects were delayed until early in 2003, when they were authorized in the FY2003 Omnibus

Appropriations (P.L. 108-7) and that over time, funding for water storage will increase relative to

future ecosystem spending. Thus, they contend, the CALFED program is designed to be

implemented in a “balanced” manner over the life of the program. Some supporters of ecosystem

restoration spending note that the federal government has already invested $1.3 billion in the CVP

and that this water supply investment is in part responsible for the critical state of species and

water quality in the Bay-Delta.

(...continued)

EPA), which would be provided under different appropriations bills.

Congressional Research Service

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Both S. 1097 and H.R. 2828 included several provisions designed to provide balance among

program components. H.R. 2828 as originally passed the House, further included a provision to

possibly streamline project approval. The provision would have allowed the Secretary of Interior

to proceed with water storage construction upon completion of a feasibility study, unless

Congress passed a disapproval resolution within 120 legislative days (§103(b)(5)(A)(i)(III)). This

provision was very controversial and was one of the major differences in the House and Senate

bills upon which there was strong disagreement. Ultimately, the provision was dropped from the

bill and replaced with a provision requiring a rebalancing of program elements and re-submission

of options for water storage if Congress does not authorize construction of water storage facilities

within a certain time frame.

Environmental Water Account

To increase water supply reliability, while not adversely affecting the Bay-Delta ecosystem, the

ROD included an Environmental Water Account (EWA), which was established by CALFED

agencies in 2000. The account is seen as a way to add flexibility to the regulatory system to

ensure that fish are protected from water project operations while allowing for greater water

supply reliability for agricultural and urban users. CALFED agencies are to use the EWA to

annually acquire, bank, and transfer approximately 380,000 acre-feet of water and arrange for its

conveyance. The account may use transfers, options, and acquisitions to obtain water to

compensate water users when pumps are shut down to mitigate “fish take.”25 In addition, water

may be obtained through financing conservation or recycling projects. Five CALFED agencies

are partners in the EWA: U.S. Fish and Wildlife Service (FWS), National Oceanic and

Atmospheric Association Fisheries (NOAA Fisheries), BOR, California Department of Fish and

Game, and California Department of Water Resources. These agencies authorize exports from the

account to provide additional water for species protection.

The use of the EWA and the amount of water that is needed or desirable in the EWA has

generated controversy. Prior CALFED bills would have directed that the EWA provide assurances

that actions taken to protect species listed as threatened or endangered under the federal ESA

avoid water delivery impacts and costs to project water users. This language would have

significantly narrow the scope and priorities of the EWA, as compared with the ROD. For

example, the ROD does not limit the scope of the EWA to only species listed under the ESA, nor

does the ROD contain provisions that protect water users from costs associated with the function

of the EWA. While many stakeholders support the EWA, they are divided as to how it should

work. Some participants have expressed concern that the water level prescribed for fisheries is

too low, that baseline water needs are not adequately defined, and that operating rules for the

EWA are unclear. Others believe that too much water is already allocated for the environment and

want assurances that certain quantities of water for farming will be available. Both H.R. 2828 and

S. 1097 included several provisions addressing the EWA, yet they differ in some respects. For

example, the definitions of the EWA under S. 1097 and H.R. 2828 were largely tied to the ROD;

however, S. 1097 noted that the EWA is to provide water in addition to the regulatory baseline

quantity of water to protect and restore Delta fisheries, while H.R. 2828, as reported and enacted,

An environmental consequence of water pumping in the Bay-Delta is the death of fish at the pumping stations (i.e.,

“fish take”). Fish take limits (limit on how many fish may be harmed under the ESA) have been set by fish regulatory

agencies in the Bay-Delta, and when these limits are approaching, an EWA panel consisting of representatives from

five agencies can ask for pumps to be shut down. Water supplies lost during this period can be compensated from the

EWA.

Congressional Research Service

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

defined the EWA as the cooperative management program established under the ROD. As

enacted, P.L. 108-361, also authorizes the use of the existing Central Valley Project Restoration

Fund for EWA purposes (not to exceed $10 million).

Science

Ecosystem restoration is generally undertaken with uncertainties in the restoration process (e.g.,

scientific uncertainty in the ability of some restoration projects to succeed). Specifically,

restoration efforts may require the application of untested technologies, and may uncover

unforeseen circumstances that may indicate a change in the initial restoration strategy. Indeed,

some argue that identifying and eliminating all uncertainties involved with restoration is probably

impossible. Some stakeholders question the level of scientific uncertainty in some restoration

activities and regulations of CALFED. For example, some question the validity of provisions that

specify the level of water needed for the Bay-Delta ecosystem to restore endangered fish species.

They have called for an independent scientific review of the validity of the quantitative

allocations of water to habitats of endangered and threatened fish species. Independent scientific

review and the implementation of adaptive management was addressed under various versions of

H.R. 2828 and S. 1097; P.L. 108-361 contains provisions that call for the establishment of an

independent science board and other panels to provide oversight and peer review of the program;

creation of monitoring and research programs and performance measures; and development and

implementation of adaptive management.26

Land Acquisition

Federal and state land acquisition is expected to be necessary to implement several components of

the CALFED Program according to the ROD. For example, the ROD estimates that nearly

260,000 acres of agricultural land will need to be used for ecosystem restoration, water quality,

water storage and conveyance, and levee system integrity projects and activities. Because land

acquisition may cause conflicts among stakeholders and affect surrounding landowners and local

governments, as recognized by the ROD, land acquisition in the Bay-Delta is controversial. Some

argue that land acquisition is essential for restoring ecosystems and should not be subjected to

extended delays and restrictions; others argue that guidelines and assurances must be established

to minimize potential economic impacts of land acquisition.

S. 1097 and H.R. 2828 would have authorized federal funds to acquire fee title to land only where

consistent with the ROD in implementing the CALFED Program (§4(f) of S. 1097 and §104(e) of

H.R. 2828). This provision would have applied to all components under each bill. H.R. 2828, as

passed by the House in July, included additional requirements for land to be acquired for

ecosystem restoration. For example, it would have directed that potential impacts of acquiring

land be reported and mitigated; preliminary management plans be created to report existing

conditions, expected ecological benefits, cost estimates, and implementation schedules; and

federal land acquisitions be identified. Some fear such language would constrain ecosystem

restoration activities, while others argue that such language is needed to reduce pressure on

acquiring private property and to ensure success in ecological restoration. P.L. 108-361

Adaptive management within the context of CALFED could be described as incorporating new information learned

from experience and scientific studies into restoration and water supply projects or policies that may make these

projects and policies progress more efficiently toward reaching their goals.

Congressional Research Service

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

incorporates much of the language in H.R. 2828, including a provision that requires federal funds

for the implementation of CALFED be used to acquire fee title to land only where consistent with

the ROD. Other provisions require the Secretary of the Interior to identify parcels of land to be

acquired, and provide notice of land acquisitions, 150 days before the project is approved, to

appropriate authorizing committees of the House and Senate and Senators and Representatives

whose districts will be affected. P.L. 108-361 also contains a set of reporting provisions from

H.R. 2828 that are to describe the process and timing of notifying public and local governments

of land acquisitions; describe the measures taken to reduce impacts of land acquisition on

agricultural lands, pursuant to the ROD; and include preliminary management plans for all lands

acquired, including the expected ecological benefits, cost estimates, and implementation

schedules.

Conclusion

A decade-long attempt to address water quality, water supply, and ESA issues in the California

Bay-Delta via the CALFED process ultimately resulted in development of an estimated 30-year,

$10 billion plan to manage water and related resources throughout most of the state. A formal

Record of Decision for the plan and associated program activities was released in August 2000,

shortly before authorization of federal funding for the CALFED process expired. Several attempts

were made to reauthorize federal funding for the program during the 107th Congress; however, no

authorizing legislation was enacted. Failure to reauthorize federal funding and participation in the

CALFED program resulted in piecemeal appropriations for specific projects and activities that

support the goals of the CALFED program for FY2001 - FY2005. Appropriators repeatedly

indicated a reluctance to provide more general program funding until the program was

reauthorized.

The debate to reauthorize CALFED continued in the 108th Congress, ultimately resulting in the

passage of H.R. 2828, as amended in the Senate, and passed by the House, October 6, 2004 (P.L.

108-361). Several issues were debated, including streamlined water supply project approval,

balance among program activities (e.g. water supply and ecosystem restoration), the level of

federal and state funding for the program, and the quality of science used to support policy

decisions.

An emphasis on increasing water supply through surface and ground water storage projects

associated with CALFED has become a priority for California due to population growth,

increasingly limited water supplies, and insecurity of water supplies from the Colorado River.

With diminished water supplies from the Colorado River, added pressure for water could be

placed on the Bay-Delta, which in turn might affect the viability of the CALFED Program.27

Oversight issues before the 109th Congress are likely to include program budgeting and financing,

status of storage projects, and overall program balance.

Editorial Opinion, A Critical Water Deal for California, The San Diego Union-Tribune, April 6, 2003.

Congressional Research Service

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Appendix. Chronology of Events Relevant to

Restoration of the California Bay-Delta

1978—State Board adopts Water Rights Decision 1485 and a water quality control plan for the

Bay-Delta. Decision 1485 set forth conditions for the SWP and CVP operations in the Delta that

included water quality standards, export limitations, and minimum flow rates.

1986—Several lawsuits challenged Decision 1485. In 1986, the “Racanelli ruling” (named after

Judge Racanelli who wrote the opinion) determines 1978 plan inadequate because it only

assessed the effects of the CVP and SWP. Ruling stipulates that the State Board should consider

all beneficial uses, instream and consumptive, when setting water quality standards.

1987—EPA officials notify State Board that the 1978 water quality plan is inadequate under

federal Clean Water Act (CWA).

1989—Winter-run chinook salmon (Onchorhyncus tshawtscha) listed as endangered.

1991—State Board adopts water quality control plan for the Bay-Delta and begins work on a

separate water rights decision. EPA disapproves the plan under the CWA.

1992—State Board releases and later withdraws interim Delta standards, Decision 1630.

Congress passes the Central Valley Project Improvement Act (CVPIA, Title 34 of P.L. 102-575),

which included several fish and wildlife protection and restoration goals, including dedicating

800,000 acre-feet of water to fish and wildlife purposes.

1993—The EPA released draft federal water quality standards after being sued by

environmentalists.

1994—The Bay-Delta Accord is signed, marking an agreement between state and federal officials

on water quality standards, and creating the CALFED Bay-Delta Program. In addition, state and

federal officials announce a framework agreement that will coordinate CVP and SWP operations

to meet water quality standards and protect endangered species; adopt state water quality

standards; and develop a long-term strategy to resolve Delta fish and wildlife, water supply

reliability, levee stability and water quality problems.

1995—State Board adopts water quality plan with objectives similar to those in the accord. EPA

approves plan and withdraws federal standards.

1996—Congress authorizes development of a CALFED plan (program) with $143 million in

annual funding for FY1996 to FY2000 (P.L. 104-208, Division E). CALFED Bay-Delta Program

releases phase I report outlining core programs and three potential solutions.

1998—CALFED Bay-Delta Program releases phase II draft EIS/EIR with three alternatives.

1999—CALFED releases a draft programmatic EIS/EIR.

2000—The Record of Decision (ROD) is signed and CALFED Program begins its

implementation.

2001—CALFED Program enters the first year of a seven-year phase III—implementation of the

preferred alternative.

2002—The CALFED Bay-Delta Authority is established by the state to oversee the

implementation of the CALFED Program according to the principles outlined in the ROD.

2003—The Sacramento splittail is delisted from the threatened species list by the U.S. Fish and

Wildlife Service.

2004—The Water Supply, Reliability, and Environmental Improvement Act is signed into law on

October 25, 2004 (P.L. 108-361) reauthorizing the CALFED Program and authorizing $389

million in federal funds for FY2005 - FY2010.

Congressional Research Service

CALFED Bay-Delta Program: Overview of Institutional and Water Use Issues

Author Contact Information

(name redacted)

Specialist in Natural Resources Policy

/redacted/@crs.loc.gov, 7-....

Congressional Research Service

(name redacted)

Specialist in Natural Resources Policy

/redacted/@crs.loc.gov, 7-....

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