H.R. 3964 – Sacramento-San Joaquin Valley Emergency Water Delivery Act
Title I: Central Valley Project Water Reliability
H.R. 3964 adds new purposes to the Central Valley Project Improvement Act (CVPIA) that require water dedicated to fish and wildlife be replaced and provided to Central Valley Project (CVP) water users by the end of 2018. H.R. 3964 focuses CVPIA on native species to ensure they receive the full benefit of environmental restoration work.[1]
H.R. 3964 directs the Secretary of the Interior to provide 40-year renewals of existing long-term CVP water service contracts. The bill continues the mandate established by CVPIA that requires the Secretary to only charge for water that is delivered. H.R. 3964 corrects provisions in CVPIA that unduly limit water transfers between water users within the CVP.[2] The bill also repeals the CVPIA tiered pricing scheme—originally intended to encourage water conservation—that has become a punitive tax on water districts expanding conjunctive use.
H.R. 3964 reaffirms Congress’ intent that the 800,000 acre-feet of CVP water designated for fish and wildlife habitat is a cap, and that the water can be reused for contractual obligations. It further provides a safety net for Delta Division contractors in low water years by requiring a 25% reduction in the 800,000 acre-feet designated for fish and wildlife if Delta Division water allocations are below 75% of the water contracted for by March 15th of a given year.
H.R. 3964 restores accountability to the CVPIA Restoration Fund.[3] The bill ensures that funding decisions are transparent by creating a Restoration Fund Advisory Board consisting of 12 members selected by the Secretary representing various stakeholders. The Board will be tasked with providing the Secretary advice on Restoration Fund expenditures and will report to Congress on progress to achieve the goals identified in CVPIA. H.R. 3964 resolves fluctuations of CVPIA Restoration Fund charges to CVP hydropower operators by setting a flat CVPIA Restoration Fund fee at $4 per megawatt-hour for CVP power sold to power contractors. It sets a date of December 31, 2020 as a trigger to reduce Restoration Fund assessments paid by all water users.
The bill requires that the CVP and the State Water Project (SWP) be operated in a manner consistent with the Bay-Delta Accord of 1994.[4] The bill codifies the Bay-Delta Accord’s flows as it relates to the CVP and prevents the State of California from imposing further flow reductions, in order to ensure the Bay-Delta Accord commitments. CVP and SWP projects that comply with the Bay-Delta Accord will be considered to comply with the Endangered Species Act (ESA). H.R. 3964 prioritizes native species over non-native species in the Delta and the Sacramento and San Joaquin Rivers.[5]
Title II: San Joaquin River Restoration
H.R. 3964 directs the Secretary to cease implementation of the San Joaquin River Settlement Agreement, the billion dollar salmon restoration program on the San Joaquin River. It revises the San Joaquin River Restoration Settlement Act and directs the Secretary to stop implementation of the court approved settlement. The bill replaces the salmon restoration program with a more environmentally sustainable and economically feasible habitat restoration program.
H.R. 3964 re-wets the San Joaquin River from Friant Dam to Mendota Pool requiring a target flow of 50 cubic feet per second (except in Critical Water Years[6]), thereby restoring a live fishery. The bill declares that if the flow regime is implemented, it satisfies any obligation under Section 5937 of the California Fish and Game Code that serves as the basis of the lawsuit that created the salmon restoration program. The bill mitigates for the lost water in the new habitat restoration plan by authorizing the recovery of the restoration flows[7] downstream.
Title III: Repayment Contracts and Acceleration of Repayment of Construction Costs
H.R. 3964 incentivizes CVP water users to pay off the remaining balance of their respective federal loans provided to construct the project. The bill authorizes the Secretary, upon request of the water user, to convert existing “water service contracts” to “repayment contracts.” Upon conversion, the “full cost pricing” and “acreage limitation” stipulated by Reclamation law will no longer apply.[8] To qualify for conversion, a contractor must pay, either through lump sum or accelerated prepayment, their remaining balance of capital construction costs. This title will yield increased revenue to the U.S. Treasury over a ten year CBO budget window.
Title VI: Bay-Delta Watershed Water Rights Preservation and Protection
H.R. 3964 secures senior water rights of the Sacramento Valley water users. The bill directs the Secretary to strictly adhere to state water rights law and California Water Code by honoring water rights senior to those belonging to the CVP. In implementing the ESA, the Act also directs the Secretary to do so in a manner that honors the water priorities as outlined previously.[9] The bill also resolves a long standing dispute over area-of-origin rights and CVP water rights by enumerating, based on water year, specific delivery percentages for existing CVP agricultural water service contractors within the Sacramento River Watershed.
Title V: Miscellaneous
H.R. 3964 clarifies that the circumstances in California are unique and the bill is not a precedent for any other State. It further declares that coordinated operations between the CVP and the SWP require the assertion of federal supremacy to protect existing water rights. Nothing in H.R. 3964 restricts the California Governor’s implementation of the January 17, 2014 drought emergency proclamation.[10]
President Obama says he will Veto or has been advised to Veto this bill:
The Administration strongly opposes H.R. 3964, the Sacramento-San Joaquin Valley Emergency Water Delivery Act, because it would not alleviate the effects of California’s current drought and would disrupt decades of work that supports building consensus, solutions, and settlements that equitably address some of California’s most complex water challenges. California is experiencing severe drought conditions and low reservoir storage. The urgency and seriousness of the situation requires a balanced approach that promotes water reliability and ecosystem restoration.
Specifically, H.R. 3964 would undermine years of collaboration between local, State, and Federal stakeholders to develop a sound water quality control plan for the Bay-Delta. And, contrary to current and past Federal reclamation law that defers to State water law, the bill would preempt California water law. Moreover, much of what the bill purports to do could be accomplished through flexibilities in existing law.
The bill also would reject the long-standing principle that beneficiaries should pay both the cost of developing water supplies and of mitigating resulting development impacts, and would exacerbate current water shortages by repealing water pricing reforms that provide incentives for contractors to conserve water supplies.
Finally, H.R. 3964 would repeal the San Joaquin River Settlement Agreement, which the Congress enacted to resolve 18 years of contentious litigation. Full repeal of the settlement agreement would likely result in the resumption of costly litigation, creating an uncertain future for river restoration and water delivery operations for water users on the San Joaquin River.
Californians are facing significant drought-related challenges. This is why the President has directed the Federal agencies to work together to help California and other impacted States prepare for and lessen the impact of the drought. Further, it is why the Administration strongly supports efforts to provide a more reliable water supply for California and to protect, restore, and enhance the overall quality of the Bay-Delta environment. The Administration has taken great strides toward achieving these goals through a coordinated Federal Action Plan, which has strengthened collaboration between Federal agencies and the State of California while achieving results. Unfortunately, H.R. 3964 would undermine these efforts and the progress that has been made.
The Administration looks forward to working with Congress on legislation to address the drought in California and supports efforts that provide water supplies consistent with existing law in the most expeditious manner to address the conditions. These efforts would include reauthorization of the CALFED Bay-Delta Act, the Secure Water Act, and Reclamation States Emergency Drought Relief Act.
For these reasons, if the President were presented with H.R. 3964, his senior advisors would recommend that he veto the bill.