[Federal Register: November 1, 1999 (Volume 64, Number 210)]
[Rules and Regulations]
[Page 58985-59009]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no99-16]
[[Page 58985]]
_______________________________________________________________________
Part V
Department of the Interior
_______________________________________________________________________
Bureau of Reclamation
_______________________________________________________________________
43 CFR Part 414
Offstream Storage of Colorado River Water; Development and Release of
Intentionally Created Unused Apportionment in the Lower Division
States; Final Rule
[[Page 58986]]
DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
43 CFR Part 414
RIN 1006-AA40
Offstream Storage of Colorado River Water and Development and
Release of Intentionally Created Unused Apportionment in the Lower
Division States
AGENCY: Bureau of Reclamation, Interior.
ACTION: Final rule.
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SUMMARY: This rule establishes a procedural framework for the Secretary
of the Interior (Secretary) to follow in considering, participating in,
and administering Storage and Interstate Release Agreements among the
States of Arizona, California, and Nevada (Lower Division States). The
Storage and Interstate Release Agreements would permit State-authorized
entities to store Colorado River water offstream, develop intentionally
created unused apportionment (ICUA), and make ICUA available to the
Secretary for release for use in another Lower Division State. This
rule provides a framework only and does not authorize any specific
activities. The rule does not affect any Colorado River water
entitlement holder's right to use its full water entitlement, and does
not deal with intrastate storage and distribution of water. The rule
only facilitates voluntary interstate water transactions that can help
satisfy regional water demands by increasing the efficiency,
flexibility, and certainty in Colorado River management.
EFFECTIVE DATE: December 1, 1999.
FOR FURTHER INFORMATION CONTACT: Mr. Dale Ensminger, (702) 293-8659 or
Ms. Erica Petacchi (202) 208-3368.
SUPPLEMENTARY INFORMATION:
I. Background
II. Final Rule as Adopted
III. Tribal Issues
IV. Responses to Comments
V. Procedural Matters
I. Background
This final rule was preceded by a proposed rule that we published
in the Federal Register on December 31, 1997 (62 FR 68491). The
proposed rule provided for a public comment period that ran from
December 31, 1997 through April 3, 1998. In addition to oral comments
submitted at one public hearing and one public meeting, we received 47
letters during the comment period on the proposed rule. Two letters
commented only on the draft programmatic environmental assessment
(DPEA). The respondents included two irrigation districts, three water
districts, two water authorities, two water user associations, three
individuals, one municipal utility, one city, one farmer's
organization, one safe drinking water organization, four environmental
organizations, 11 State agencies, nine Indian tribes, and seven Federal
agencies. We reviewed and analyzed all comments and revised the final
rule based on these comments.
The DPEA provided for a comment period that ran from December 31,
1997 through April 3, 1998. Oral comments on the DPEA were submitted at
the same public hearing and the same public meeting for the proposed
rule. In addition to those oral comments, we received 25 letters from
26 respondents during the comment period. The respondents included one
water district, one water authority, one individual, five environmental
organizations, five State agencies, six Indian tribes, and seven
Federal agencies. As with the rule, we reviewed and analyzed all
comments and revised the final programmatic environmental assessment
based on these comments.
As a result of receiving differing comments on the definition of
authorized entity and several other technical matters, we reopened the
comment period on September 21, 1998 (63 FR 50183) for a 30-day period
ending October 21, 1998. We asked interested parties to comment on
three specific questions. We received 10 letters from 11 respondents
during the reopened comment period. The respondents included three
State agencies, three water districts, one water authority, one water
users association, and three environmental organizations. We reviewed
and analyzed all comments and revised the final rule based on these
comments.
Following the apportionment of water between the Upper and Lower
Basins in the Colorado River Compact, Congress, by passing the Boulder
Canyon Project Act of December 21, 1928 (BCPA), made a permanent
apportionment of Colorado River water among the Lower Division States
for use within those States. Congress also authorized the Secretary to
allocate and distribute Colorado River water within these
apportionments to users in the Lower Division States through contracts.
Congress put the Secretary in charge of managing and operating the
Colorado River in the Lower Basin of the Colorado River system (Lower
Basin). This rule establishes a framework under which the Secretary
will implement the contractual distribution of Colorado River water in
the Lower Division States on an interstate basis.
If water apportioned for use in a Lower Division State is not
consumed in that State in any year, the Secretary may release the
unused water for use in another Lower Division State. Offstream storage
of Colorado River water and release of intentionally created unused
apportionment (ICUA) can help the Lower Division States use available
Colorado River water more effectively. This rule establishes a process
for the Secretary to release ICUA. The Secretary's authority to issue
this final rule stems from various Federal laws and executive orders,
court decisions, and decrees, particularly the BCPA, the Supreme Court
opinion (Opinion) rendered June 3, 1963 (373 U.S. 546) and the decree
entered March 9, 1964 (376 U.S. 340) (Decree), in Arizona v.
California, as supplemented and amended. A thorough description of
these authorities may be found in the Background section of the
proposed rule published December 31, 1997, at 62 FR 68493.
Several State agencies commented that the narrative should be
changed. In response to these comments, we are correcting two
statements that were contained in the first paragraph of the preamble
to the proposed rule under II. Background.
First, the statement that: ``The compact defined the Colorado River
Basin and divided the seven States into two basins, an Upper Basin and
a Lower Basin,'' was incorrect and should have read: ``The compact
defined the Colorado River Basin and divided it into two sub-basins, an
Upper Basin and a Lower Basin. The compact further specified which
States are Upper Division States and which States are Lower Division
States.''
Second, the proposed rule preamble cited the Colorado River
Compact, approved August 19, 1921, as the source of the definition for
``consumptive use.'' The correct source of this definition is the
Decree.
Several respondents, particularly State agencies, expressed concern
that some of the terms in the preamble and the proposed rule could be
interpreted in ways that are contrary to existing law because of
imprecise wording. These respondents stated the rule should facilitate
more efficient use of unused apportionment and surpluses within the
existing authority of the Secretary under the Law of the River. We
agree that this rule only formalizes the procedures for the Secretary
to follow in considering, participating in, and administering Storage
and Interstate Release Agreements and does not expand or
[[Page 58987]]
create authority to do so. The Secretary has the authority, under the
Law of the River, to allocate and distribute waters of the mainstream
of the Colorado River in the Lower Basin consistent with the Decree.
II. Final Rule as Adopted
Changes Made in This Final Rule
We have concluded that a number of changes from the proposed rule
are necessary and appropriate to respond to comments. These revisions
clarify the basic intent of the proposed rule and are summarized in the
following paragraphs.
<bullet> Restatement of Title and Purpose of the Rule. We have
clarified the purpose of this rule in Sec. 414.1. This rule establishes
a procedural framework for the Secretary to follow in considering,
participating in, and administering Storage and Interstate Release
Agreements among the Lower Division States that would permit State-
authorized entities to store Colorado River water offstream, develop
ICUA, and make ICUA available to the Secretary for release and use in
another Lower Division State utilizing Storage and Interstate Release
Agreements. Colorado River water stored in order to develop ICUA will
always be put to use in the Storing State.
Under this rule, the authorized entity in the Storing State
(storing entity) will not redeem storage credits for delivery to the
Consuming State. For this reason, the terms ``storage credits'' and
``redemption'' are not necessary and have been deleted. Instead, when
the authorized entity in the Consuming State (consuming entity)
requests water under a Storage and Interstate Release Agreement, the
storing entity will reduce the Storing State's consumptive use of
Colorado River water, thereby developing ICUA. The Secretary will
release the ICUA to the consuming entity for use in the Consuming
State.
<bullet> Definitions. We added several definitions from the
Compact, including ``Colorado River Basin,'' ``Colorado River System,''
and ``Upper Division States,'' and added, deleted, or modified several
other definitions in this rule to clarify the intent where necessary.
New definitions were also added for ``BCPA,'' ``consuming entity,''
``storing entity,'' and ``water delivery contract.'' The following
definitions were deleted: ``Contractor,'' ``Federal entitlement
holder,'' ``Present perfected right or PPR,'' ``storage credit,'' and
``unused entitlement.'' The definition for ``Interstate Storage
Agreement'' was revised and the term used in the rule was renamed
``Storage and Interstate Release Agreement.''
We redefined ``authorized entity'' creating a two-part definition.
As to a Storing State, for purposes of this rule, an authorized entity
is defined as an entity in the Storing State that is expressly
authorized by the laws of that state to enter into Storage and
Interstate Release Agreements and to develop ICUA. As to a Consuming
State, for purposes of this rule, an authorized entity is defined as an
entity in the Consuming State that has authority under the laws of that
State to enter into Storage and Interstate Release Agreements and to
acquire the right to use ICUA.
<bullet> Storage of Water. In the proposed rule, we did not clearly
describe the type of water that is eligible to be stored under a
Storage and Interstate Release Agreement. This rule, in
Sec. 414.3(a)(2), explains that the water stored within a Storing State
for future use under a Storage and Interstate Release Agreement is
water that would otherwise be unused in the Storing State, but that is
within the Storing State's basic or surplus apportionment. It is
important, as a policy matter, that water be offered to all entitlement
holders in a Storing State before it is stored for interstate purposes
so that, as one commenting State noted, a State-authorized entity will
not be put in a position of ``competition with the legal right to
deprive lower priority entitlement holders (in the Storing State) of
their Colorado River water.'' Accordingly, in order to qualify as
unused apportionment, the water within the Storing State's basic or
unused apportionment that is stored for interstate transactions under
this rule must be offered first to all entitlement holders within the
Storing State.
The rule, in a new Sec. 414.3(a)(3), explains that the Consuming
State's unused basic or unused surplus apportionments may also be
stored in the Storing State to support an interstate water transaction.
We also clarified in this section that unused apportionment of the
Consuming State may be made available for storage in the Storing State
only in accordance with Article II(B)(6) of the Decree. If unused
apportionment from the Consuming State is to be stored under a Storage
and Interstate Release Agreement, the rule provides that the Secretary
will make unused apportionment of the Consuming State available to the
storing entity in accordance with the terms of a Storage and Interstate
Release Agreement. This rule also has a new Sec. 414.3(a)(6) that
provides that a Storage and Interstate Release Agreement must identify
a procedure for the Secretary to follow to verify and account for the
quantity of water stored in accordance with the Storage and Interstate
Release Agreement.
<bullet> Development of ICUA. We added a requirement in
Sec. 414.3(a)(9) that the Storage and Interstate Release Agreement must
describe the notice given to entitlement holders, including Indian
tribes, of opportunities to participate in the development of ICUA. We
added a requirement in Sec. 414.3(a)(10) that the storing entity must
identify the quantity, the means, and the entity by which ICUA will be
developed. We also added a paragraph in Sec. 414.3(a)(11) to require
the Storage and Interstate Release Agreement to specify the procedure
for verification of the development of the ICUA. Both the means by
which ICUA will be developed and the method of verification will be set
forth in the Storage and Interstate Release Agreement and may vary
according to the transaction. However, the means to develop ICUA must
be consistent with the laws of the Storing State. Finally, under the
final rule, nothing in the Storage and Interstate Release Agreement
shall limit the Secretary's authority to use independent means to
verify the existence of ICUA.
<bullet> Release of ICUA. We modified Sec. 414.3(a) to reflect that
the Secretary will be a party to Storage and Interstate Release
Agreements. We added a new Sec. 414.3(a)(12) that states that the
Storage and Interstate Release Agreement will specify that the
Secretary will only release ICUA to the consuming entity and will not
release it to other entitlement holders. This section requires the
release of ICUA be done in accordance with the terms of the Storage and
Interstate Release Agreement, the BCPA, Article II(B)(6) of the Decree,
and all other applicable laws and executive orders. We added a
requirement in Sec. 414.3(a)(13) that the Storage and Interstate
Release Agreement specify that ICUA will be released to the consuming
entity only in the year and to the extent that ICUA is developed by the
storing entity. We added a requirement in Sec. 414.3(a)(14) that the
Secretary would only release ICUA after determining that all necessary
actions have been taken under the rule. We added a requirement in
Sec. 414.3(a)(15) that the Secretary, before releasing ICUA, must first
determine that the storing entity stored water in sufficient quantities
to support the development of ICUA requested by the consuming entity
and be satisfied that the storing entity either (i) has developed the
quantity of ICUA requested by the
[[Page 58988]]
consuming entity, or (ii) will develop the quantity of ICUA requested
by the consuming entity under Sec. 414.3(f). We renumbered
Sec. 414.3(a)(9) as Sec. 414.3(a)(16) and changed the indemnification
to relate to actions of the non-Federal parties to a Storage and
Interstate Release Agreement. We renumbered Sec. 414.3(a)(10) as
Sec. 414.3(a)(17).
This final rule also includes a new Sec. 414.3(e) that addresses
the need for a valid contract with the Secretary in accordance with
Section 5 of the BCPA. The release or diversion of Colorado River water
for storage under this part must be supported by a Section 5 water
delivery contract, except for the storage of Article II(D) (of the
Decree) water by Federal or tribal entitlement holders. The release or
diversion of Colorado River water that has been developed or will be
developed as ICUA under this part must also be supported by a Section 5
water delivery contract. This section states that the Section 5 water
delivery contract requirement of the BCPA may be satisfied by direct
contracts with the Secretary, or by valid subcontracts with entitlement
holders authorized to enter into subcontracts, or in the case of a
consuming entity, by the Storage and Interstate Release Agreement
itself. When a valid contract is in place to support the release or
diversion of Colorado River water for storage, no additional authority
will be required by the Secretary to authorize the storage, through a
Storage and Interstate Release Agreement or otherwise.
We also have added a new Sec. 414.3(f) that allows anticipatory
releases of ICUA before the actual development of ICUA by the storing
entity. This addition was made based on comments received that the
demand patterns for Colorado River water in the lower basin vary
widely. The times when the storing entity and the consuming entity
demand water will not necessarily be concurrent. Thus, the consuming
entity may have a need for ICUA before the storing entity would
decrease its diversions of Colorado River water in order to develop the
ICUA. We added Sec. 414.3(f) to the rule to allow the consuming entity
to have the use of ICUA before its development by the storing entity.
These anticipatory releases can only be made in the same year in which
ICUA will be developed. Additionally, before an anticipatory release,
the storing entity must certify to the Secretary that ICUA will be
developed before the end of the year in order to support an early
release.
<bullet> Financial considerations. We added a new Sec. 414.3(b)
which states that the Secretary will not execute a Storage and
Interstate Release Agreement that has adverse impacts on the financial
interests of the United States. This section also provides that
financial arrangements between and among non-Federal parties relating
to the Storage and Interstate Release Agreement need not be included in
the Storage and Interstate Release Agreement. Those financial
arrangements can be set forth in separate agreements to which the
Secretary will not be a party, should the parties so desire.
<bullet> Involvement of the Secretary. As noted above, we modified
Sec. 414.3(a) to provide that the Secretary will be a party to Storage
and Interstate Release Agreements. We modified Sec. 414.3(c) to
specify:
(1) That the Regional Director for the Bureau of Reclamation's
Lower Colorado Region (Regional Director) has the authority to execute
a Storage and Interstate Release Agreement on behalf of the Secretary;
(2) That the Secretary will notify the public of the Secretary's
intent to participate in negotiations to develop a Storage and
Interstate Release Agreement and provide a means for public input;
(3) That the factors to be considered in reviewing a proposed
Storage and Interstate Release Agreement include potential impacts on
tribal interests, including trust resources, and potential impacts on
the Upper Division States and comments from the State agency
responsible for Colorado River matters; and
(4) That after consideration of the listed factors, the Secretary
may execute or decide not to execute a Storage and Interstate Release
Agreement.
<bullet> Stored water. We modified former Sec. 414.3(c) to conform
the wording to changes made in other parts of the rule and separated
the concepts that now appear in Sec. 414.3(a)(6) and Sec. 414.3(a)(10).
Section-by-Section Analysis of the Rule
Section 414.1 Purpose
This section explains that part 414 contains the procedures for
authorized entities in the Lower Division States to follow for entering
into Storage and Interstate Release Agreements with the Secretary for
offstream storage of Colorado River water and for the development and
release of ICUA on an interstate basis in the Lower Division States.
This rule is expected to be a first step toward improving the
efficiency associated with management of the Colorado River in the
Lower Basin. The rule is intended to be permissive in nature and
facilitate voluntary water transactions.
Section 414.2 Definitions of Terms Used in This Part
This section defines terms that are used in part 414. The following
terms are based on and are to be interpreted consistent with the
Decree: basic apportionment, Colorado River water, consumptive use,
Decree, mainstream, surplus apportionment, and unused apportionment.
The terms Colorado River Basin, Colorado River System, Lower Division
States, and Upper Division States are defined in the compact. Most of
the other terms were defined for the purposes of this rule to establish
a common understanding.
Section 414.3 Storage and Interstate Release Agreements
This section identifies the details that must be specified in a
Storage and Interstate Release Agreement regarding the storage of
Colorado River water off of the mainstream and the development and
release of ICUA. This section provides for verification of the quantity
of water stored under a Storage and Interstate Release Agreement and
verification of the quantity of ICUA developed. It also commits the
Secretary to release ICUA to the consuming entity after the storing
entity has certified to the Secretary, and the Secretary has verified,
that the quantity of ICUA requested by the consuming entity has been
developed or will be developed in that year. The release must be in
accordance with the terms of the agreement and as permitted by law.
This section also specifies the factors that the Secretary will
consider in determining whether to execute a Storage and Interstate
Release Agreement. This section allows the assignment of all or a
portion of an authorized entity's interest in a Storage and Interstate
Release Agreement to other authorized entities and provides for the
satisfaction of the water delivery contract requirement of Section 5 of
the BCPA.
This section prescribes the limited circumstances under which ICUA
can be released to a consuming entity before the development of ICUA by
the storing entity.
Section 414.4 Reporting Requirements and Accounting Under Storage and
Interstate Release Agreements
This section specifies the reporting requirements that storing
entities must follow and stipulates that this water will be accounted
for in the records maintained under Article V of the Decree.
[[Page 58989]]
Section 414.5 Water Quality
This section states that the Secretary does not guarantee the
quality of water released under Storage and Interstate Release
Agreements and further states that the United States is not liable for
damages that result from water quality problems. The section states
that the United States is not responsible for maintaining or improving
water quality unless Federal law provides otherwise. This section also
states that any entity who diverts, uses, and returns Colorado River
water must comply with all applicable water pollution laws and
regulations of the United States and the Storing and Consuming States,
and must obtain all applicable permits or licenses regarding water
quality and water pollution matters.
Section 414.6 Environmental Compliance
This section states that the Secretary will ensure environmental
compliance with the National Environmental Policy Act (NEPA), the
Endangered Species Act (ESA), and other applicable laws and executive
orders. This section states that authorized entities must prepare and
fund all necessary environmental compliance documents. This section
also specifies that the authorized entities must fund the costs
incurred by the United States in considering, participating in, and
administering the proposed agreement.
III. Tribal Issues
As explained in more detail in the following section of the
preamble (Responses to Comments), a number of Indian tribes have
expressed reservations and/or opposition to this rule. In particular,
the Colorado River Tribal Partnership, often referred to as the Ten
Tribe Partnership, composed of ten Indian tribes (Chemehuevi Indian
Tribe, Cocopah Indian Tribe, Colorado River Indian Tribes, Fort Mojave
Indian Tribe, Jicarilla Indian Tribe, Navaho Nation, Quechan Tribe,
Northern Ute Indian Tribe, Southern Ute Indian Tribe and Ute Mountain
Indian Tribe) with decreed and/or claimed water rights in the Colorado
River, has expressed opposition to this rule on the ground that it does
not provide specific and express protection of the Tribes' interests
both in making water transfers and developing tribal water on or off
their reservations.
The Department believes that this rule should and will benefit
Indian tribes, but it acknowledges that the rule has a limited scope.
The final rule provides a framework under which State-authorized
entities can request Secretarial approval to implement voluntary
interstate water transactions. The rule does not address or preclude
independent actions by the Secretary regarding Tribal storage and water
transfer activities. With regard to the activities covered by this
final rule, the Department encourages Lower Division States to enact
measures and take actions that will allow Tribes to participate in
opportunities covered by this rule. Also, the Secretary's approval of
specific transactions under the rule will be based, in part, on an
analysis of the impacts that such a transaction may have on the
interests of Indian tribes. The Department provides a fuller discussion
of these issues in the Responses to Comments section below.
IV. Responses to Comments
The following is a discussion of the comments received on the
proposed rule and the DPEA, and our responses. First, we will address
general comments and our responses. Second, we will address comments on
specific provisions in the proposed rule. Third, we will address
comments on the DPEA. Fourth, we will respond to specific comments
received during the second comment period.
Public Comments on Proposed Rule and Responses on General Issues
The following section presents public comments on the proposed rule
that are general in nature. This section includes comments on the scope
of the rule, Secretarial discretion, eligibility to be an ``authorized
entity,'' the method for development of ICUA, the timing for the
completion of the rule, tribal water rights, ground water issues,
subsidies, power issues, concerns of California entities, potential
impacts on the Upper Division States, concerns over deliveries to
Mexico, environmental concerns, and economic impacts of the rule.
Scope of the Rule
Comment: Reclamation did not hold public scoping meetings on the
rule.
Response: We have conducted this rulemaking in accordance with the
Administrative Procedure Act. The Department expanded the public
comment period for the proposed rule from 61 to 93 days. In addition to
oral comments submitted at one public hearing and one public meeting,
we received 49 comment letters from 47 respondents. Of these letters,
24 commented only on the rule, 23 commented on both the proposed rule
and the draft programmatic environmental assessment (DPEA), and 2
commented only on the DPEA.
As a result of receiving differing comments on the definition of
authorized entity and several other technical matters, we reopened the
comment period on September 21, 1998 (63 FR 50183) for a 30-day period
ending October 21, 1998. We asked interested parties to provide
comments on three specific questions. The Department received 10
letters from 11 respondents during the reopened comment period. The
respondents included three State agencies, three water districts, one
water authority, one water users association, and three environmental
organizations. We reviewed and analyzed all pertinent comments and
revised the rule based on these comments. Thus, the public has
influenced the scope and formulation of this rule.
Secretarial Discretion
Comment: Does the Secretary of the Interior have the authority to
enter into an agreement that binds future Secretaries to commit unused
apportionment to a specific user in a particular State over a multiple-
year period?
Response: Yes. The Secretary's release of ICUA in any year will be
under Article II(B)(6) of the Decree. The Decree does not preclude the
Secretary from releasing unused apportionment to a specific user in a
particular State. The Secretary will agree to release ICUA only during
the year in which it is developed by the storing entity. Moreover,
under Sec. 414.3(a)(12) of the rule, the Secretary will commit in the
Storage and Interstate Release Agreement to release ICUA after the
storing entity has certified to the Secretary, and the Secretary has
verified in accordance with Sec. 414.3(a)(15), that the quantity of
ICUA requested by the consuming entity has been developed or will be
developed in that year. Further, the ICUA released by the Secretary
will be limited to the quantity developed by a storing entity during
that year.
Eligibility To Be an Authorized Entity
Note: There is also a discussion on the contractual requirements
necessary to qualify as an authorized entity in the section of this
preamble addressing comments received during the reopened comment
period.
Comment: The most frequently mentioned comment concerned the
definition for the term ``authorized entity.'' Some thought
``authorized entity'' should be defined broadly to enable the widest
possible participation and others thought the term should be defined
very narrowly to limit participation to State agencies. Indian tribes
commented that the definition
[[Page 58990]]
should be expanded to include the tribes pursuant to the Secretary's
authority under the BCPA. Tribes further commented that the proposed
definition of ``authorized entity'' will give State government a
virtual monopoly on water marketing.
Response: We agree with the general suggestion made by a State
agency that ``authorized entity'' should be a two-part definition. This
concept was supported by several other State agencies and water
districts. As to a Storing State, for purposes of this rule, an
authorized entity is defined as an entity that is expressly authorized
by the laws of that State to: (i) Enter into Storage and Interstate
Release Agreements; and (ii) develop ICUA. As to a Consuming State, for
purposes of this rule, an authorized entity is defined as an entity
that has authority under the laws of that State to: (i) enter into
Storage and Interstate Release Agreements; and (ii) acquire the right
to use ICUA. In this way the rule is intended to be permissive in
nature but consistent with State law. We believe this two part
definition captures comments from several State agencies that while
express authority is needed to store water for use in interstate water
transactions and make ICUA available, express authority is not
necessary for a consuming State to receive and use ICUA. We reiterate
that we fully expect the Lower Division States to enact measures that
will allow the tribes to participate in opportunities covered by this
rule. Moreover, this rule does not specifically address or preclude
independent actions by the Secretary regarding tribal storage and water
transfer activities under other authorities.
We have also expanded this rule to require that non-Federal parties
to the Storage and Interstate Release Agreement provide at the
Secretary's request any additional supporting data necessary to clearly
set forth the details of the proposed transaction and the eligibility
of the parties to participate as State-authorized entities in the
proposed transaction.
Comment: It is important to acknowledge that the apportionments of
Colorado River water are made specifically to the individual States.
Therefore, it is important for the States to specifically designate the
authorized entities who are entitled to enter into Interstate Storage
Agreements (now termed ``Storage and Interstate Release Agreements'')
to ensure use of Colorado River water remains within a State's
apportionment during any year.
Response: Apportionments of Colorado River water are made for use
within each specific Lower Division State. This rule requires that the
authorized entity in the Storing State be an entity that is expressly
authorized under the laws of that State to: (i) enter into Storage and
Interstate Release Agreements; and (ii) develop ICUA. As to an
authorized entity in a Consuming State, the rule requires that it be an
entity that has authority under the laws of that State to: (i) enter
into Storage and Interstate Release Agreements; and (ii) acquire the
right to use ICUA.
Method for Development of ICUA (Forbearance)
Comment: Several respondents commented on whether the final
definition of ICUA should specify what types of measures or actions the
Secretary will approve for the development of ICUA.
Response: The measures that will be used to develop ICUA are to be
specified in each Storage and Interstate Release Agreement and must be
verifiable. The method used to develop ICUA and the appropriate method
of verification may vary according to the transaction.
The Timing for the Completion of the rule
Comment: Several respondents asked for additional time to review
the proposed rule and DPEA and questioned why the completion of the
rulemaking process appeared to be on a ``fast track.''
Response: In developing this rule we have followed the mandates of
the Administrative Procedure Act. In fact, we extended the time for
public review and comment from 61 to 93 days despite the fact that this
rule only formalizes the existing authority of the Secretary to enter
into Storage and Interstate Release Agreements and does not expand or
create this authority. Moreover, we reopened the comment period for an
additional 30 days to obtain further comments. This extended review
period has given the public numerous opportunities to review this rule.
In addition, we reviewed and analyzed the comments submitted during the
reopened comment period and revised the rule as needed. Finally, the
Secretary will notify the public of the Secretary's intent to
participate in negotiations to develop a Storage and Interstate Release
Agreement and give the public further opportunity to comment before any
specific transaction is implemented.
Tribal Water Rights
Comment: The rule should include an introductory section that
recognizes Indian holders of present perfected rights are not required
to beneficially use their water, are not subject to a loss or reduction
in their water for non-use or non-beneficial use, and are not subject
to State law or State regulatory control for the on-reservation use of
their entitlements.
Response: We recognize the unique status of present perfected
rights holders under the Decree and agree that tribal present perfected
rights holders are not subject to a loss or reduction in their water
rights for non-use. The 1979 supplemental decree entered March 9, 1979
(439 U.S. 419) by the Supreme Court in Arizona v. California quantifies
and prioritizes tribal rights to the use of Colorado River water. The
1979 supplemental decree states that: ``Any water right listed herein
may be exercised only for beneficial uses.'' We do not believe it is
necessary that the information be included in an introductory section
for the rule. We agree that Indian holders of present perfected rights
are not subject to State law or State regulatory control for the on-
reservation use of their entitlements.
Comment: Indian tribes should be permitted to enter into intrastate
or interstate agreements for offstream storage and marketing of their
unused water off the reservation under the statutory and contractual
authority vested in the Secretary.
Response: This rule does not apply to intrastate transactions. This
rule applies only to interstate transactions. As explained in more
detail below, we believe that Storage and Interstate Release Agreements
under this rule can be implemented in a manner that will provide
opportunities for tribes to benefit.
Comment: Several tribes commented that they have been unable to
fully benefit from their water rights because of the Federal
government's failure to provide the tribes with the necessary
financial, technical, and political assistance to fully develop their
water resources.
Response: We acknowledge this concern and recognize that a number
of tribes have been unable to use their entitlement due to the lack of
distribution and delivery systems. We are committed to making progress
to help tribes make better use of their water rights. For example, a
Central Arizona Project (CAP) distribution system has been built for
the Ak-Chin Tribe. A distribution system for the Fort McDowell Tribe is
under construction and we have entered into a repayment contract with
the Gila River Indian Community for construction of a CAP distribution
system. Five of the ten
[[Page 58991]]
Indian tribes with contracts for delivery of CAP water have utilized
their statutory right to lease or transfer water. More specifically,
the Ak Chin, Fort McDowell, Tohono O'odham, Salt River, and Yavapai
Prescott tribes have leased or transferred CAP water.
Comment: Indian tribes should receive compensation for their unused
or undeveloped tribal water resources because of the Federal
government's failure to provide the tribes with the necessary
assistance to fully develop their water resources.
Response: The issue of compensating the tribes in connection with
the development of tribal water rights is beyond the scope of this
rule.
Comment: The Department should permit tribal governments to market
their Central Arizona Project allocations on the same basis as the
State. Central Arizona Water Conservation District's (CAWCD) non-Indian
subcontractors have the capability to take direct delivery of CAP water
but have not taken delivery of substantial quantities, primarily for
economic reasons. Tribes with CAP allocations, with the exception of
the Ak-Chin Indian Community, are not able to take delivery or put to
use any substantial quantity of CAP water because the distribution and
delivery systems that are needed to allow the tribes to put this water
to use have not been constructed.
Response: We reiterate that we are encouraging the Lower Division
States to enact measures and take actions that will allow the tribes to
participate in opportunities covered by this rule. One such example of
tribal participation in a Storage and Interstate Release Agreement
would be affording tribes the opportunity to develop underground
storage facilities where Colorado River water could be stored. In
addition, we note that the State of Arizona is exploring the use of
facilities on tribal lands for storage of Colorado River water. Thus,
tribes could participate by leasing the use of these facilities to the
storing entity. Moreover, this rule does not specifically address or
preclude independent actions by the Secretary regarding tribal storage
and water transfer activities. As stated above, we feel that there has
been progress in helping the tribes create irrigation infrastructure or
otherwise put their CAP water to use and is committed to moving forward
with this program. Only authorized entities can store water under this
rule to support an interstate water transaction. No holders of CAP
allocations have a right to store this water for an interstate
transaction unless they can qualify as an authorized entity under this
rule. Only unused water that is not requested by an entitlement holder
(including tribes) can be stored to support a Storage and Interstate
Release Agreement. With respect to the development of ICUA, the rule
requires the Storage and Interstate Release Agreement to describe the
notice given to entitlement holders, including Indian tribes, of
opportunities to participate in the development of ICUA.
Ground Water Issues
Comment: Because banked water is fungible, the rule should address
both intrastate and interstate water storage to preclude a Storing
State from circumventing any restrictions that the Department might
impose on the storage or recovery of water stored under an Interstate
Storage Agreement (now termed a ``Storage and Interstate Release
Agreement''). Several respondents expressed concern that an authorized
entity may store water in an aquifer that is hydraulically connected to
an aquifer that holds tribal water.
Response: The rule specifies in Sec. 414.3(c) that the Secretary
will consider various factors in reviewing a proposed Storage and
Interstate Release Agreement, including potential effects on trust
resources, potential effects on entitlement holders, which includes
Indian tribes, and environmental impacts. We reiterate that intrastate
transactions are not covered under this rule.
Comment: One respondent stated that the rule should expressly
address the legal status of banked CAP water. The respondent is
concerned that the banked water will be considered CAP water under
Federal law and non-Indian water users in Arizona will accrue millions
of acre-feet of credits with the sanction of Reclamation. The
subsequent recovery of the stored water will result in significant
increases in ground water pumping over and above that currently
authorized in accordance with State law and the tribes might be
precluded from pumping the remaining ground water reserves because
those reserves will increasingly take on the character of CAP water.
Response: As noted in Sec. 414.3(c), the potential effects of the
proposed measures on the environment, the economy, and trust resources
are among the factors the Secretary will consider when reviewing the
proposed Storage and Interstate Release Agreement.
Comment: Revise the rule to incorporate the acre-foot for acre-foot
ground water pumping restrictions from the amended CAP master repayment
contract and the CAP agricultural subcontracts. Reclamation has a trust
responsibility to protect Indian ground water from continued ground
water mining by non-Indian interests.
Response: Nothing in this regulation modifies the ground water
protections found in the CAP contracts or limits the Department's
ability to protect trust resources. Also, as noted in Sec. 414.3(c),
the potential effects of the proposed measures on the environment, the
economy, and trust resources are among the factors the Secretary will
consider when reviewing a Storage and Interstate Release Agreement.
Subsidies
Comment: Several respondents stated that the Department should not
allow extra non-reimbursable expenses to occur in storing water or
delivering it to a new location. There were also suggestions that, with
respect to Arizona, revenue from the Interstate Storage Agreement (now
termed a ``Storage and Interstate Release Agreement'') should be
collected to help repay CAWCD's debt to the United States for the CAP.
Response: We agree that a proposed Storage and Interstate Release
Agreement cannot obligate the United States to incur extra non-
reimbursable expenses to store water or deliver it to new locations.
The Secretary will review the provisions of every proposed Storage and
Interstate Release Agreement for its financial impacts on the United
States and will not execute any agreements that may have adverse
financial impacts on the United States. In addition, the United States
is currently seeking to resolve the recovery of CAWCD's debt to the
United States.
Power Issues
Comment: Several respondents stated that Reclamation should analyze
the impacts of the rule on power customers in the State of Arizona.
When water passes through the Hoover and Davis generators on the way to
storage in Arizona, there will be additional power production but CAWCD
will incur increased pumping costs to move the water to storage. When
stored water is withdrawn by a Nevada entity in the future, less water
will pass through the Hoover and Davis generators, resulting in less
power production at those dams. When Arizona ground water pumpers who
take CAP water through in-lieu storage are required to go back to
ground water pumping, they may require more power during years when
stored water is withdrawn from the bank and generation is reduced at
Hoover and Davis Dams. The rule should provide for compensation of
power customers to protect them from subsidizing water banking.
[[Page 58992]]
Response: Under this rule, the offstream storage of Colorado River
water and the Secretary's release of ICUA may influence the timing of
power generation at the Hoover, Parker, and Davis powerplants.
Reclamation conducted an analysis to evaluate the potential impacts of
this rule on Hoover and Parker-Davis power customers. The analysis
reflects that under this rule the quantity of energy foregone in any
one year between 1998 and 2017 will result in a loss of less than 0.5
percent. Between 1998 and 2017, the quantity of Colorado River water
released from mainstream reservoirs will be equivalent to the quantity
that otherwise would have been released without the implementation of
this rule.
Section 6 of the BCPA notes ``That the dam and reservoir provided
for by section 1 hereof shall be used: First, for river regulation,
improvement of navigation, and flood control; second, for irrigation
and domestic uses and satisfaction of present perfected rights in
pursuance of Article VIII of said Colorado River compact; and third,
for power.'' The Secretary manages and operates these reservoirs for
multiple, often conflicting purposes, through powers vested by
Congress. The principal source of the Secretary's power is the contract
power under Section 5 of the BCPA to allocate and distribute mainstream
water within the boundaries established by that Act. Each year, the
Secretary develops and adopts an Annual Operating Plan (AOP) for the
Colorado River reservoirs. During the AOP process, the Secretary
consults with the Basin States and other interested parties, including
the power users. The Secretary is mindful of the Federal contracts with
power users for supply of electric service from hydroelectric
powerplants on the Colorado River and will seek to minimize changes in
power production that result from the Secretary's activities regarding
river operations. However, because of Section 6 of the BCPA, power
users are a junior priority for use of Colorado River water.
Concerns of California Entities
Comment: Several California entities expressed concern that the
rule should acknowledge and be consistent with the comprehensive plan
being developed by California water agencies to reduce California's
future use of Colorado River water (California 4.4 Plan).
Response: The Department places great emphasis on the necessity for
the implementation of a California 4.4 Plan. We do not, however,
believe that this rule needs to address the California 4.4 Plan. This
rule is intended to be of general application and to apply equally to
each of the three Lower Division States.
Comment: Some respondents asked for assurance that the rule will
provide for storage of conserved water, such as water that is
anticipated to result from water conservation in the Imperial
Irrigation District (IID) that is proposed to be transferred to the San
Diego County Water Authority (SDCWA).
Response: The proposed transfer of water from IID to SDCWA is an
intrastate transaction that is not covered by the rule. For conserved
water to be stored by an authorized entity for purposes of an
interstate water transaction under this rule, it must first be offered
to all entitlement holders in the State in which it was conserved.
Comment: In years when surplus water is needed to keep Metropolitan
Water District's Colorado River Aqueduct full, a conflict will arise
among entities who claim surplus water if the Secretary does not make a
sufficient level of surplus water available to satisfy both
Metropolitan Water District's demand and diversions for offstream
storage under Interstate Storage Agreements (now termed ``Storage and
Interstate Release Agreements'').
Response: Surplus is divided among the Lower Division States under
the Decree. Surplus apportioned to the State of California under the
Decree, and thus available for use consistent with the priority system
applicable to California, is not subject to storage under this rule by
authorized entities in Nevada or Arizona unless entitlement holders in
California choose not to exercise their rights to use surplus water.
Potential Impacts on the Upper Division States
Comment: The rule should not be allowed to impact the water
supplies available to the Upper Basin and the Upper Basin should not
lose any yield or take increased risks because of increased
equalization that might occur as a result of interstate water storage
agreements.
Response: We agree with this comment from a State agency and notes
that this rule will not be used to justify more liberalized surplus
determinations that will allow an increase in equalization releases
from Lake Powell. Section 414.3(b) of this rule was modified to include
potential impacts on the Upper Division States among the factors that
the Secretary will consider in considering, participating in, and
administering a Storage and Interstate Release Agreement.
Comment: The rule should be modified to include a statement that
the rule does not change or expand the authorities under the Law of the
River or the apportionments made to the individual States under the Law
of the River. The rule should also state that its intent is to provide
for efficient use of unused apportionment and surpluses but that each
State should keep its consumptive use of Colorado River water within
the apportionments made to it under the Law of the River.
Response: We agree with this comment from a State agency that this
rule does not change or expand existing authorities under the Law of
the River or change the apportionments for use of water within the
individual States. We modified Sec. 414.1 Purpose to state this. We
also agree that each Lower Division State must operate within the
limits of the apportionment of Colorado River water made for use within
that State but do not believe it is necessary to include this statement
in the rule.
Concerns over Deliveries to Mexico
Comment: The DPEA states that a minor reduction will occur in the
quantity of surplus water available for delivery to Mexico over the
long term without explaining what a minor reduction is or what studies
have been done to quantify this.
Response: The quantity of water available for delivery to Mexico is
expected to decrease by an average of 23 thousand acre-feet (kaf)/year
from 1999-2015 when storage is occurring with the rule. This is about a
one percent decrease annually in the total quantity of water projected
to reach Mexico (2.487 million acre-feet (maf) without this rule and
2.464 maf with this rule). In addition, this decrease would affect
flood control releases only during this same time and would have only a
very minimal effect on projected surplus flow in years beyond 2015.
These projections are based on analysis completed by Reclamation
using the Colorado River Simulation Model, which is used to project
long-term conditions relating to water supply on the Colorado River
from Lake Mead to Mexico. The analysis used historical virgin runoff
data from 1906-1995 and water use or demand schedules that have been
provided by the Colorado River Basin States for the simulated future
period 1999-2015. In addition the model includes requirements in the
long-range operating criteria for the Colorado River.
Environmental Concerns
Comment: Efficiency improvements in river management and the
storage of
[[Page 58993]]
Colorado River water in underground aquifers means less water is
available for environmental purposes, such as the riparian and aquatic
ecosystems of the river, including the river and delta region in
Mexico.
Response: Offstream storage of Colorado River water under Storage
and Interstate Release Agreements should not have a measurable effect
on riparian and/or aquatic ecosystems of the river or the delta region
of Mexico. During the next few years, releases from Hoover Dam are
expected to continue to be about 10 maf/year for downstream use in the
United States and Mexico. In addition, flood control releases are
projected to average 788 kaf/year during the period 1999-2015.
Offstream storage could decrease flood control releases reaching Mexico
by an average of 23 kaf/year.
At present, Reclamation has no authority or discretion over the
type of use or location of use of Colorado River water once it reaches
Mexico. The Mexican Water Treaty of 1944 and the Opinion and Decree
control and limit Reclamation's releases from Hoover Dam to amounts
that meet the conditions within each. Water delivered to meet Treaty
requirements is diverted at Morelos Dam where Mexican law governs how
it is put to use. In times of flood control operations, Colorado River
water entering Mexico in excess of treaty requirements is under
Mexico's jurisdiction. Once flows reach the Republic of Mexico, any
uses for environmental purposes would have to be authorized by Mexico.
It is possible that implementation of this rule may create
additional flexibility to potentially make water available for fish and
wildlife purposes as part of the ongoing Lower Colorado River Multi-
Species Conservation Program (MSCP). Under this concept, water stored
offstream one year could potentially be used to meet fish and wildlife
purposes in a later year.
Comment: The level of environmental compliance proposed by
Reclamation is inadequate and Reclamation should complete a full
environmental impact statement (EIS) on the proposed rule as well as
the entire operation of the Colorado River.
Response: The programmatic environmental assessment (PEA) was
prepared to identify and clarify issues, describe the level of
environmental impacts associated with implementation of the proposed
rule, and to determine whether to prepare a Finding of No Significant
Impact (FONSI) or to prepare an Environmental Impact Statement (EIS).
Compliance for each Storage and Interstate Release Agreement will
reference and tier off from the PEA for this rule. Based on the
analysis in the PEA, consultation and coordination with the Fish and
Wildlife Service, and public input and comments, we have concluded that
implementation of the proposed rule will not have a significant effect
on the human environment. As a result, a FONSI has been prepared to
complete NEPA compliance for the rule.
As explained previously, this rule develops a framework that the
Secretary will utilize in reviewing and evaluating whether to execute a
specific transaction for offstream storage of Colorado River water
under a Storage and Interstate Release Agreement. This rule does not
increase nor abrogate the existing authority of the Secretary. When the
storing and consuming entities enter into negotiations with the
Secretary for the development of a Storage and Interstate Release
Agreement, the Secretary will have the specific details needed to
determine the potential impacts of the proposed action and can then
determine the appropriate level of NEPA compliance required for that
action.
In addition, the Department believes the preparation of an EIS on
the entire operation of the Colorado River is not required. Movement of
water will be through existing facilities on the Colorado River and is
within the current and projected routine operations of the lower
Colorado River. Thus, it is not necessary to complete a comprehensive
EIS on river operations.
Comment: Implementation of the rule may potentially impact fish and
wildlife resources along the Colorado River downstream from Lake Mead.
Response: The DPEA evaluated the potential impact to fish and
wildlife resources for a proposed scenario in which 1.2 maf would be
stored in Arizona under a Storage and Interstate Release Agreement to
allow an authorized entity in Nevada to meet its future water needs.
The effects of placing Colorado River water in offstream storage were
evaluated at two incremental storage rates, 100 kaf/year and 200 kaf/
year with future development of ICUA and the associated release of
water from Lake Mead limited to a maximum of 100 kaf, in accordance
with Arizona law, in any year.
No significant impacts were identified on fish and wildlife
resources as a result of this analysis. Consultation with the Fish and
Wildlife Service concluded that fluctuations in water surface
elevations associated with the most likely case storage and retrieval
scenarios are not likely to adversely affect listed species or their
designated critical habitat.
Economic Impacts of the Rule
Comment: The Initial Regulatory Flexibility Analysis states that
the future cost burden of obtaining alternative supplies for Southern
California water users is not attributable to or the result of the
proposed rule. The rule may reduce the quantity of Colorado River water
available for diversion to Southern California that is apportioned for
consumptive use in Arizona and/or Nevada but not consumed in those
States, making California expend funds sooner than planned to obtain
alternative water supplies.
Response: Absent the rule, each Lower Division State may store its
unused basic apportionment and surplus apportionment offstream for
future intrastate use. Arizona is currently taking all of the 2.8 maf
basic apportionment of Colorado River water available for use in
Arizona. Therefore, the only water that California may no longer be
able to use is Nevada unused basic apportionment. Nevada's consumptive
use was 245.3 kaf in 1998, resulting in 54.7 kaf of unused
apportionment. Projections show Nevada utilizing its full basic
apportionment by 2007. This rule may impact southern California in that
it enables Nevada to store its declining quantity of unused
apportionment in Arizona for the short period it may be available. To
the extent surplus is available during this time, impacts on California
are lessened. In the long run, the rule should have little net impact
on the expenditure of funds by California water users to obtain
alternative water supplies.
We reiterate that California must reduce its reliance on the
Colorado River by conserving water or obtaining alternative water
sources. California must continue moving forward in its efforts to
implement a California 4.4 Plan to live within the 4.4 maf of Colorado
River water apportioned for use in California and this rule will add
flexibility that may be of help in implementing the California 4.4
Plan.
Comment: Some tribes asserted that the rule allocates to the States
water that is reserved to the tribes and has a disproportionate,
significant, and detrimental economic impact on the tribes in the Lower
Basin.
Response: We do not agree with this view. Under the rule, only
water within a State's apportionment that is not used by entitlement
holders within that State may be stored offstream for interstate
purposes. Nothing in this rule precludes
[[Page 58994]]
any entitlement holder, including a Tribe, from using its Colorado
River water entitlement. The potential effects of the proposed measures
on the environment, the economy, and trust resources are among the
factors the Secretary will consider when evaluating the Storage and
Interstate Release Agreement. This review process will help ensure that
tribal rights will be protected under this regulation.
Comment: The Benefit-Cost Analysis shows that the overall impact of
the proposed rule is not significant. Please explain how this was
determined and what the threshold was or refer the reader to a specific
page of the Benefit-Cost Analysis for the information.
Response: The threshold for whether a proposed rule is significant
is defined in both the Small Business Regulatory Enforcement Fairness
Act and the Unfunded Mandates Reform Act of 1995. The Benefit-Cost
Analysis reflects that the proposed rule is not a major rule (impacts
are not significant) because the economic impact upon the regional and
United States economy in any one year does not exceed the threshold;
i.e., it is never greater than or equal to $100 million. However, even
though the rule does not have a significant annual economic effect on
the economy, it is still considered a significant rule because it
raises novel legal or policy issues. See pages 38-42 and 44-46 of the
Benefit-Cost Analysis to see the findings that led to the determination
of no significant economic impact.
Comment: The Executive Summary of the Benefit-Cost Analysis refers
to two water supply models, ``A70'' and ``P80.'' To better understand
the potential effects of both A70 and P80 criteria, state the water
supply benefits resulting from the P80 criterion and indicate the
incremental quantity of additional surplus water made available under
P80.
Response: The benefit-cost analysis shows that the benefits of
AWBA's banking program are smaller under P80 (a more liberal surplus
criterion that will tend to increase the risk of shortages) than A70 (a
more conservative surplus criterion that will tend to reduce the risk
of shortages). Under P80 surplus criteria, it is more likely that all
valid water demands within the Lower Division States will be met from
instream flows. Therefore, demand for ICUA by a Consuming State is
lower than under A70. Total net economic benefits for the study period
(1998-2017) at the regional level are shown at the bottom of page 2 of
the executive summary for the Benefit-Cost Analysis. Because surplus
conditions are likely to continue for several years, we did not further
analyze that alternative in the Biological Assessment (BA) that we
prepared for the proposed rule.
Comment: There were a number of editorial comments on the Benefit-
Cost Analysis and the Initial Regulatory Flexibility Analysis.
Response: We have reviewed and considered the comments submitted by
a water district and have adopted many of the suggestions into the text
of the final Benefit-Cost Analysis and the final Regulatory Flexibility
Analysis.
Comment: Some tribes commented that allowing States to use ``unused
tribal water'' and imposing limitations on the tribes'' ability to use
their reserved water potentially interfere with the tribes' protected
property rights.
Response: We do not agree with this statement. All Colorado River
water available to the Lower Division States is apportioned for use in
the individual States. Any water within a State's apportionment that is
unused by tribes or non-Indian entitlement holders is available to
junior entitlement holders in that State under the Secretary's priority
system for the Colorado River. Only water that is not used by
entitlement holders is eligible to be used for an interstate
transaction under this rule. Thus, there is no interference with tribal
property rights.
Comment: One tribe asserted that the tribes' lack of opportunity to
participate in interstate transactions on the same basis as the States
under the rule violates Title VI of the Civil Rights Act of 1964, which
states that ``No person in the United States shall, on the ground of
race, color or national origin, be excluded from participation in, be
denied the benefits of, or be subjected to discrimination under any
program or activity receiving Federal financial assistance.''
Response: We do not agree that the tribes will be denied an
opportunity to participate under this rule or that this rule results in
discrimination within the meaning of the Civil Rights Act. We will
require that all entitlement holders, whether tribal or non-tribal, are
treated equally under the rule. We will monitor efforts by the States
and authorized entities to extend benefits to the tribes under this
rule and will, in the future, assess whether we need to review or
revise this rule to provide additional opportunities to the tribes.
Public Comments on Proposed Rule and Responses on Specific
Provisions
The following section presents public comments on the proposed rule
that apply to specific provisions in the rule.
Comments Concerning the Title of the Rule
Comment: The title of the rule should not mention the ``redemption
of storage credits'' because this term lack clarity and is ambiguous.
The rule should provide that Colorado River water stored offstream
under an Interstate Storage Agreement (now termed a ``Storage and
Interstate Release Agreement'') will be used in the State in which the
water is stored and that the Secretary will release ICUA rather than
deliver storage credits.
Response: We agree with the concept suggested by several State
agencies, a water district, and a water authority and have modified the
title to read, ``Offstream Storage of Colorado River Water and
Development and Release of Intentionally Created Unused Apportionment
in the Lower Division States.''
Comments Concerning Sec. 414.1--Purpose
Comment: The purpose section should not use terminology that is
vague and implies that a Storing State will create and redeem storage
credits because the Colorado River water that is stored offstream will
always belong to the Storing State. Amend the language to establish the
intent that Storage credits will be redeemed in the State in which
water will be stored and the Secretary will release ICUA rather than
deliver storage credits under an Interstate Storage Agreement (now
termed a ``Storage and Interstate Release Agreement'').
Response: We have adopted the suggestions from several State
agencies, a water district, and a water authority to describe the
proposed transactions under this rule in terms that are clear and
unambiguous. In lieu of developing and redeeming storage credits, we
have changed this rule to reflect that the Secretary will release ICUA
to consuming entities under Storage and Interstate Release Agreements.
Comment: Because the Secretary's approval of Interstate Storage
Agreements (now termed ``Storage and Interstate Release Agreements'')
could delay approvals, the Secretary's authority for the Department's
responsibilities under the rule should be delegated to Reclamation,
subject to the right to appeal the Regional Director's decisions
through the Department.
Response: Under the rule, the Secretary will not approve the
Storage and Interstate Release Agreement but will instead be a party to
the agreement. The rule provides that the Regional Director for the
Bureau of Reclamation's Lower Colorado Region (Regional
[[Page 58995]]
Director) shall have the authority to develop, negotiate, and execute a
Storage and Interstate Release Agreement on behalf of the Secretary.
Comment: The rule should use precise terminology that cannot be
interpreted in ways that are contrary to existing law. The rule should
contain a narrative that states the actions contemplated under this
rule are deemed within the authority of the Secretary under the Law of
the River and that the rule does not change or expand the Secretary's
authorities. This narrative should emphasize the intent of the rule is
to provide for more efficient use of unused apportionment and surpluses
within the ``Law of the River.''
Response: We revised this rule in several places to clarify the
intent. In addition, we agree with the suggestion from several State
agencies and clarified the rule to state that it does not change or
expand the Secretary's authority under the Law of the River. This rule
only formalizes the existing authority of the Secretary to develop,
negotiate, and execute Storage and Interstate Release Agreements and
does not expand or create this authority. As stated in the preamble to
the proposed rule that was published on December 31, 1997, this rule
will increase the efficiency, flexibility, and certainty in Colorado
River management.
Comments Concerning Sec. 414.2--Definitions
Comment: As addressed above in the discussion of general issues,
the most frequently mentioned comment was regarding the definition for
the term ``authorized entity.''
Response: As discussed previously under general issues, we have
changed the definition of ``authorized entity'' to consist of two
parts, with different definitions for Consuming States and Storing
States. Please refer to that discussion. As a result of receiving
differing comments on the definition of authorized entity and several
other technical matters, we reopened the comment period for a 30-day
period. We requested interested parties to provide comments on three
specific questions. We received 10 letters from 11 respondents during
the reopened comment period. The respondents included three State
agencies, three water districts, one water authority, one water users
association, and three environmental organizations. We reviewed and
analyzed all comments and revised the rule based on these comments.
Please refer to that discussion.
Comment: Modify the rule to include the definitions for ``Colorado
River Basin'' and ``Colorado River System'' as defined and used in the
Colorado River Compact.
Response: We have adopted these suggestions from a State agency and
included these definitions in this rule.
Comment: Modify the definition of ``Consuming State'' to clarify
that this means the State where ICUA is or will be used.
Response: This suggestion from several entities, including State
agencies, was adopted to clarify the actual way the proposed water
transactions will work.
Comment: The narrative in the preamble for the proposed rule
incorrectly attributed the definition of ``consumptive use'' to the
Colorado River Compact of November 24, 1922.
Response: We agree with several State agencies, a water authority,
and a water district that the definition was incorrectly attributed to
the Compact. As the respondents explained, the term ``consumptive use''
is defined by Articles I(A) and I(C) of the Decree.
Comment: Modify the definition of ``Interstate Storage Agreement''
(now termed a ``Storage and Interstate Release Agreement'') to delete
reference to ``redemption of storage credits'' and make other changes
consistent with the incorporation of changes to other definitions.
Response: We agree with the suggestions from several entities,
including State agencies, that the definition should emphasize that the
Storage and Interstate Release Agreement provides terms for offstream
storage of Colorado River water by a storing entity, the subsequent
development of ICUA by the Storing State consistent with the laws of
the Storing State, a request by the storing entity to the Secretary to
release ICUA to the consuming entity, and the release of ICUA by the
Secretary to the consuming entity.
Comment: The definition for ``Interstate Storage Agreement'' (now
termed a ``Storage and Interstate Release Agreement'') in the proposed
rule states that the agreement may include other entities determined to
be appropriate to the performance and enforcement of the agreement
without indicating who those entities might be or who makes the
determination that their inclusion is appropriate.
Response: This rule has been revised to clarify that the decision
to include other entities will be determined by the consuming and
storing entities and the Secretary during the negotiation of a Storage
and Interstate Release Agreement.
Comment: Delete the term ``storage credit'' from the proposed rule
as it lacks clarity.
Response: We have adopted this change, suggested by several
entities, including State agencies, a water authority, and a water
district.
Comment: Modify the definition of ``Storing State'' to clarify that
water stored offstream under an Interstate Storage Agreement (now
termed a ``Storage and Interstate Release Agreement'') will be used in
the Storing State in place of water within the Storing State's
apportionment that the Storing State otherwise would have diverted from
the mainstream.
Response: We have modified the definition of Interstate Storage
Agreement and renamed it ``Storage and Interstate Release Agreement''
in this rule. The modified definition reflects that water stored
offstream under a Storage and Interstate Release Agreement will be used
in the Storing State.
Comment: Delete the definition of ``unused apportionment'' and in
its place, insert definitions for ``unused basic apportionment'' and
``unused surplus apportionment.'' The intent of the suggestion is to
clarify that, with the determination of a water supply condition by the
Secretary, a State is receiving either a normal, surplus, or shortage
apportionment. Also, revise the definition to clarify that to be
unused, the water otherwise would not have been diverted and that water
conserved or saved through an agreement between two entitlement holders
is eligible for storage.
Response: The Department did not adopt these changes that were
suggested by a water district. The AOP determines whether a State is
receiving a normal, surplus, or shortage apportionment, and that
decision is unaffected by this rule. Also, only water that is not used
by entitlement holders in the applicable State's priority system for
purposes other than storage for use in interstate transactions is
eligible for storage for use in interstate transactions under this
rule.
Comment: Delete the term ``unused entitlement'' from the proposed
rule.
Response: We have adopted this change, suggested by several
entities, including State agencies and a water district.
Comments Concerning Sec. 414.3--Storage and Interstate Release
Agreements and Redemption of Storage Credits
Comment: As discussed earlier under Purpose, there should be a
statement that the actions contemplated under this rule are within the
Secretary's authority
[[Page 58996]]
under the Law of the River and that it is not the intent of this rule
to change or expand the Secretary's authorities. This narrative should
also emphasize an intent to provide for more efficient use of unused
apportionment and surpluses within the ``Law of the River'' but specify
that water users in the Lower Division States must plan to live within
the apportionments made to them under the ``Law of the River.''
Response: We agree with this suggestion from a State Agency to
clarify that this rule is deemed to be within but does not expand the
Secretary's authority. The preamble to this rule includes a section to
provide further explanation of the purpose of this part. This rule is
not intended to change or expand the Secretary's authorities under the
``Law of the River.'' This rule is intended to facilitate more
efficient use of unused apportionment and surpluses within the ``Law of
the River'' in the Lower Division States.
We also believe that this rule, in conjunction with the
implementation of the California 4.4 Plan and the development of
surplus criteria, will provide a framework for the Lower Division
States to hold consumption within the apportionments available for use
within those States.
Comment: Conform this section of the rule with previous changes
that delete the reference to the term, ``redemption of storage
credits.''
Response: We have adopted this change, suggested by several
entities, including State agencies, a water authority, and a water
district. As discussed previously, this rule will provide for offstream
storage of Colorado River water in a Storing State, the subsequent
development of ICUA by the storing entity for release by the Secretary
to a consuming entity, and the recovery of the stored water for use in
the Storing State.
Comment: Delete the reference to Article II(B)(6) of the Decree in
the first sentence under Sec. 414.3(a) because the Decree does not cite
a legal authority for entering into Interstate Storage Agreements (now
termed ``Storage and Interstate Release Agreements'').
Response: We agree that ``Storage and Interstate Release
Agreements'' are not referenced in the Decree and have modified
Sec. 414.3(a) of the rule. However, Article II(B)(6) of the Decree
provides authority for the Secretary to (1) make an annual
determination under this rule of the availability of ICUA and (2)
release any such water in accordance with the terms of a Storage and
Interstate Release Agreement.
Comment: Delete the last sentence of Sec. 414.3(a), that reads,
``An Interstate Storage Agreement (now termed an ``Storage and
Interstate Release Agreement'') will allow a storing entity to store
unused entitlement and/or unused apportionment for the credit of an
authorized entity located in a Consuming State and will provide for the
subsequent redemption of the credit.''
Response: We agree with this comment from a State agency and have
modified this rule to incorporate this change.
Comment: A senior priority holder in California should not be
allowed to agree to make available unused apportionment for storage in
another State without first obtaining the agreement of California's
junior priority holders.
Response: Under this rule, only water that is unused by all
entitlement holders in the applicable State's priority system is
eligible for storage by an authorized entity for use in an interstate
transaction.
Comment: One respondent noted that its contract with the Secretary
allows it to request Reclamation to approve an exchange, lease, or
transfer of its water entitlement. The respondent further stated its
intent to pursue interstate marketing opportunities and position its
Colorado River water supply as an unused apportionment that may be
released annually for use in the other Lower Division States under the
Decree.
Response: The Department recognizes that the entitlement holder's
contract allows it to request approval of an exchange, lease, or
transfer and notes that any change in the place of use or type of use
of the entitlement is subject to the Secretary's approval. The
development of ICUA under a Storage and Interstate Release Agreement
may involve the exchange, lease, or transfer of Colorado River water
under an individual entitlement holder's contract. Any such exchange,
lease, or transfer would be subject to Secretarial approval unless the
entitlement holder's contract specifies otherwise. Moreover, to
participate under this rule as an authorized entity in a Storing State,
that entity must be expressly authorized under State law.
Comment: The rule should be modified to allow authorized entities
in California and Nevada to have equal access to store that portion of
Arizona's Colorado River apportionment that is not otherwise put to use
by entitlement holders within Arizona. Also, authorized entities in
California and Nevada should have equal access to the quantity of ICUA
that Arizona will make available to consuming entities when those
entities request it.
Response: We recognize these concerns expressed by a State agency
and a water district but do not believe it is appropriate to establish
an allocation method in this rule. Storage and Interstate Release
Agreements are voluntary interstate water transactions. The Secretary
will not require authorized entities of one State to enter into Storage
and Interstate Release Agreements with authorized entities in another
State. We encourage each storing entity to consider the needs of all
consuming entities under prospective Storage and Interstate Release
Agreements.
Comment: Modify Sec. 414.3(a) to allow a more general description
of the entities by which Colorado River water will be stored and the
storage facilities in which it will be stored.
Response: We did not accept this recommendation. It is necessary to
clearly identify the actual entity that will store Colorado River water
under the Storage and Interstate Release Agreement and the facility
where it will be stored so that a thorough review of the impacts of the
storage on environmental and trust resources can be performed.
Comment: Specify in Sec. 414.3(a) that the water to be stored will
be within the basic apportionment or the surplus apportionment of the
Storing State or unused basic apportionment or unused surplus
apportionment of the Consuming State. Any unused apportionment of the
Consuming State may only be made available by the Secretary to the
Storing State under Article II(B)(6).
Response: We agree with this suggestion from several State agencies
and a water district, and have modified this rule to incorporate this
change.
Comment: Specify in Sec. 414.3(a) the maximum quantity of ICUA that
will be available for release to the consuming entity under the
agreement.
Response: We agree with this suggestion from several State
agencies, a water authority, and a water district. We have modified
this rule to incorporate this change.
Comment: Specify in Sec. 414.3(a), by January 31, the maximum
quantity of ICUA that will be available for release and delivery to the
consuming entity under the Interstate Storage Agreement (now termed a
``Storage and Interstate Release Agreement'') in that current year.
Response: We did not accept this suggestion from a water district.
The rule leaves the determination of this detail to the Storage and
Interstate
[[Page 58997]]
Release Agreement that will be negotiated among the parties to that
agreement. Further, this subject involves accounting matters that are
set forth in Sec. 414.4.
Comment: Specify in Sec. 414.3(a) that the consuming entity may not
request ICUA in a quantity that exceeds the quantity of water then in
storage under an Interstate Storage Agreement (now termed a ``Storage
and Interstate Release Agreement'') in the Storing State. Several
respondents suggested deleting the statement from the proposed rule
that water then in storage under an Interstate Storage Agreement (now
termed a ``Storage and Interstate Release Agreement'') may not be
recovered within the same calendar year in which the water was stored
offstream. Another respondent suggested retaining this statement.
Response: We agree with the suggestion from several State agencies,
a water authority, and a water district that the Storage and Interstate
Release Agreement must specify that the consuming entity may not
request a quantity of ICUA in excess of the quantity of water then in
storage under a Storage and Interstate Release Agreement. The quantity
of water stored under a Storage and Interstate Release Agreement serves
as the basis for the quantity of ICUA that may be developed under the
Storage and Interstate Release Agreement. This rule allows Colorado
River entitlement holders in the Storing State the option to use the
water previously stored under a Storage and Interstate Release
Agreement, under a direct contract with the Secretary, or under a valid
subcontract with an entitlement holder authorized to enter into
subcontracts. However, the rule also allows other means consistent with
Storing State law to develop ICUA. We do not agree with the suggestion
from a water district to retain the requirement that water stored under
a Storage and Interstate Release Agreement may not be recovered within
the same year the water is stored offstream. The parties may agree to
permit the consuming entity to request and receive ICUA during the same
year water is stored under a Storage and Interstate Release Agreement.
However, the applicable law of the Storing State may not permit a
consuming entity to request the delivery of a quantity of ICUA that
exceeds the quantity of unused apportionment that was stored offstream
for that consuming entity under a Storage and Interstate Release
Agreement as of the end of the prior year.
Comment: Modify Sec. 414.3(a) to specify that, by a date certain to
be specified in the Interstate Storage Agreement (now termed a
``Storage and Interstate Release Agreement''), the consuming entity
will provide notice to the Lower Division States and to the Secretary
of its request for a specific quantity of ICUA in the following
calendar year.
Response: We agree with this suggestion from two State agencies and
a water authority and have modified this rule to incorporate this
intent. The revised provision is now renumbered Sec. 414.3(a)(7). The
rule will allow the parties and the Secretary to reach a mutually
acceptable date for the notice in the Storage and Interstate Release
Agreement.
Comment: Modify Sec. 414.3(a) to specify that the date when the
consuming entity will provide notice to the Lower Division States and
to the Secretary will be the later of (i) November 30 or (ii) within 45
days after the AOP has been transmitted to the Governors of the
Colorado River Basin States. This change will allow more flexibility in
case the AOP is not transmitted by the Secretary to the Governors
before November 30, as has occurred sometimes in the past.
Response: We did not incorporate this suggestion from a water
district into this rule. It is possible that the processes for the
Secretary to send the AOP to the Governors and the Colorado River
entitlement holders to complete their annual water orders may not be
completed until late in the year, beyond November 30. However, we agree
with several respondents that the date when the authorized entity is to
provide notice is better incorporated into the Storage and Interstate
Release Agreement.
Comment: Modify Sec. 414.3(a) to clarify that a storing entity,
after receiving a notice of a request for a specific quantity of ICUA,
will take actions to ensure that the Storing State's consumptive use of
Colorado River water will be decreased by a quantity sufficient to
develop the requested quantity of ICUA to be released for use in the
Consuming State.
Response: We agree with this suggestion from a State agency, a
water authority, and a water district and have modified this rule to
incorporate this change. The revised provision is now renumbered
Sec. 414.3(a)(8).
Comment: Modify Sec. 414.3(a) to provide that the Interstate
Storage Agreement (now termed a Storage and Interstate Release
Agreement will specify which types of actions may be taken in the
Storing State to develop ICUA.
Response: We agree with this suggestion from a State agency, a
water authority, and a water district and have modified this rule to
incorporate this change. The modified rule also requires the storing
entity to specify the means by which the development of the ICUA will
be enforceable by the storing entity. The revised provision is now
renumbered Sec. 414.3(a)(9).
Comment: The rule should be modified to specify that an Interstate
Storage Agreement (now termed a ``Storage and Interstate Release
Agreement'') will require the storing entity to certify that ICUA is
developed that otherwise would not exist and to specify the quantity,
the means, and the entity by which the unused apportionment will be
developed.
Response: We agree with this suggestion by a State agency, a water
authority, and a water district and have modified and renumbered this
provision Sec. 414.3(a)(10) to incorporate this change into this rule.
We do not agree with the comment from a State agency that it is
necessary to specify the procedure by which certification is provided
to the Secretary. However, the Secretary and the authorized entities
may specify the certification procedure in the Storage and Interstate
Release Agreement if they so choose.
Comment: The rule should provide guidance as to how the development
of ICUA will be verified.
Response: We agree with the suggestion from a State agency and a
water authority that this rule should require a Storage and Interstate
Release Agreement to specify a procedure for verification of the ICUA
appropriate to the manner in which it is developed. This rule has been
modified to incorporate this requirement into a new Sec. 414.3(a)(11).
In addition, a new Sec. 414.3(a)(6) was included in this rule to
require the Storage and Interstate Release Agreement to specify a
procedure for verification of the quantity of water stored in the
Storing State under a Storage and Interstate Release Agreement.
Further, Sec. 414.3(a)(10) specifies that the storing entity must
certify to the Secretary that ICUA has been or will be developed that
would not otherwise exist. The Secretary may use independent means to
verify the existence of ICUA.
Comment: The Secretary should review the water orders and release
the AOP before actions are taken to develop or release ICUA.
Response: We do not agree with this suggestion from a State agency.
The respondent raised a concern that this rule might allow a storing
entity to increase its water order to include the quantity of requested
ICUA. The authorized entity could then decrease its order, pump ground
water or release
[[Page 58998]]
surface water that it otherwise would have used anyway, claim credit
for developing ICUA, and receive payment for actions it would not have
taken. We do not believe it is necessary for the consuming entity to
postpone its request for ICUA until after the annual water orders and
the AOP are completed. We believe that information on water orders
should be shared openly and up front in the interest of better regional
cooperation. The open nature of these water schedules will help ensure
that an initial water order is legitimate and that it is not
intentionally increased in order that a Storing entity could get credit
for ICUA without taking the actions necessary to develop that ICUA.
Comment: Modify Sec. 414.3(a) to include a requirement for the
storing entity to provide evidence that the stored water has not
migrated out of the State, out of the United States, to a saline sink,
or returned to the mainstream.
Response: We do not agree with the comment from a water district
that this provision is necessary in this rule. We will require full
environmental compliance on all Storage and Interstate Release
Agreements and will consider the potential migration of ground water
storage when evaluating the effects of storage on the environment and
trust resources.
Comment: Modify Sec. 414.3(a) to clarify that the parties to the
Interstate Storage Agreement (now termed a ``Storage and Interstate
Release Agreement'') other than the United States will indemnify the
United States from actions taken by parties to the agreement other than
the United States, not for the broader actions of the United States.
Response: We agree that the United States is covered by the Federal
Tort Claims Act and other laws and have revised this paragraph, now
designated Sec. 414.3(a)(16), to incorporate this comment by a water
district and an irrigation district.
Comment: The Department should protect the water in Indian tribes'
ground water basins by not allowing the storage or recovery of water
from ground water basins that are hydraulically connected to the
tribes' ground water basins.
Response: The Department acknowledges its obligation to protect
tribal resources. Section 414.3(b) provides that the Secretary will
consider potential effects on trust resources and entitlement holders,
which include Indian tribes with rights to the use of Colorado River
water, in considering, participating in, and administering a Storage
and Interstate Release Agreement.
Comment: Modify the following elements of Sec. 414.3(b), now
renumbered Sec. 414.3(c), to require the Secretary to notify the public
of a request to approve an Interstate Storage Agreement (now termed a
``Storage and Interstate Release Agreement''), provide a more
definitive time for the Secretary to respond to the request, provide
for execution of necessary contracts to authorize the diversion and use
of Colorado River water, and provide an appeals process.
Response: We have modified the rule to provide in Sec. 414.3(a)
that the Secretary will be a party to a Storage and Interstate Release
Agreement. We modified Sec. 414.3(c) to specify that the Regional
Director for the Bureau of Reclamation's Lower Colorado Region
(Regional Director) shall have the authority to negotiate, execute, and
administer a Storage and Interstate Release Agreement on behalf of the
Secretary. The rule does not provide for an appeal of the Regional
Director's decision whether to execute a particular Storage and
Interstate Release Agreement. The necessity of contracts to authorize
the diversion of water under a Storage and Interstate Release
Agreement, except for storage of Article II(D) (of the Decree) water by
Federal or tribal entitlement holders, is addressed in Sec. 414.3(e) of
the rule. The rule allows for the storage of Colorado River water
either through a direct contract with the Secretary or through a valid
subcontract with an entitlement holder authorized by the Secretary to
enter into such subcontracts. The Storage and Interstate Release
Agreement to which the Secretary will be a party satisfies the Section
5 requirement for the release or diversion of ICUA to the consuming
entity in the Consuming State.
Comment: Amend Sec. 414.3 (c) to conform the wording to other
changes made that delete use of the term ``redemption of storage
credits.''
Response: We agree with the suggestions from several State
agencies, a water authority, and a water district, and have modified
this rule to more clearly describe the intent of the Storage and
Interstate Release Agreements. The revised wording specifies that,
after receiving a notice of a request for release of ICUA, the storing
entity will certify to the Secretary that sufficient water has been
stored for the Storing State to support the development of the
requested quantity of ICUA. The revised paragraph is designated
Sec. 414.3(a)(10).
Comment: Amend Sec. 414.3(d) to conform the wording to other
changes that delete use of the term redemption of storage credits.
Also, specify that ICUA is available only for use by the consuming
entity.
Response: We agree with the suggestions from several State
agencies, a water authority, and a water district and has modified this
rule to more clearly describe the intent of the Storage and Interstate
Release Agreements. The revised wording substitutes the term
``intentionally created unused apportionment'' (``ICUA'') for the less
definitive term ``redemption of storage credits.'' In addition, the
revised rule clarifies that ICUA will be released only for use by the
consuming entity.
Comment: The rule should provide for a contractual commitment by
the Secretary to release to a consuming entity ICUA that exists as a
consequence of implementation of the Interstate Storage Agreement.
Response: We modified the rule in Sec. 414.3(a) to provide that the
Secretary will be a party to Storage and Interstate Release Agreements.
Sections 414.3(a)(12) through 414.3(a)(15) provide, among other things,
that the Secretary will commit in the Storage and Interstate Release
Agreement to release ICUA but only if all necessary actions are taken
under the rule, if all laws and executive orders have been complied
with, and if the Secretary has first determined that ICUA has been
developed or will be developed by a storing entity.
Comment: A Federal agency has commented as to whether actual
storage of Colorado River water must take place in those instances
where both storage and recovery take place in the same year.
Response: The rule does allow for the release and delivery of ICUA
in the same year in which it is developed. Consistent with the laws of
the storing state, if recovery and development occur in the same year,
and section 414.3(f) (Anticipatory Release of ICUA) is invoked, the
Secretary will not require actual storage of water subsequent to the
release of ICUA.
Comments Concerning Sec. 414.4--Reporting Requirements and Accounting
Under Storage and Interstate Release Agreements
Comment: Amend Sec. 414.4 to provide more flexibility in the
reporting date and to clarify the intent that water stored under an
Interstate Storage Agreement (now termed a ``Storage and Interstate
Release Agreement'') will be recovered and used in the State in which
water will be stored and it will be ICUA water rather than credits that
the Secretary will release under an Interstate Storage Agreement (now
termed a ``Storage and Interstate Release Agreement''). The language
should reference the Interstate Storage
[[Page 58999]]
Agreements (now termed ``Storage and Interstate Release Agreements'')
that establish the basis for the accounting for the water to be
released by the Secretary for use in the Consuming State.
Response: We agree with this suggestion from several State
agencies, a water authority, and a water district, and have revised
this rule to more clearly describe the intent of the Storage and
Interstate Release Agreements. The reporting date was made more
flexible by allowing the date to be agreed upon by the parties to the
Storage and Interstate Release Agreement and specified in the Storage
and Interstate Release Agreement. To be consistent with other changes
made in this rule, this provision refers to the water stored under a
Storage and Interstate Release Agreement as water that is available to
the storing entity. The Secretary will account for water stored under a
Storage and Interstate Release Agreement and available to support the
development of ICUA. The Secretary will release ICUA for use by a
consuming entity when the provisions of this rule and the Storage and
Interstate Release Agreement have been satisfied.
Comment: It is not clear how the ``cut to the aquifer'' or losses
from storage or transportation are determined or if they are arbitrary
or based on actual data. It is not clear whether this detail is
specific to a State's regulation or the Interstate Storage Agreement
(now termed a ``Storage and Interstate Release Agreement'').
Response: A storing entity will determine how much stored water
must remain in an aquifer based on the Storing State's applicable law
and/or the policy of the authorized entity. In Arizona, that decision
is based on State law which requires that 5 percent of water placed in
offstream storage remain in the ground to replenish the aquifer. The
authorized entity will determine, consistent with applicable State law,
how much stored water can be recovered when that authorized entity
decreases its diversions and consumptive use of Colorado River water in
the future to develop ICUA that the Secretary will release for use by a
consuming entity.
Comments Concerning Sec. 414.5--Water Quality
Comment: Modify Sec. 414.5(a) to clarify that the interstate
agreements referred to are Interstate Storage Agreements (now termed
``Storage and Interstate Release Agreements''). Clarify which water is
being referred to and recognize the Secretary's responsibilities under
the Colorado River Basin Salinity Control Act.
Response: We agree with these suggestions from several State
agencies, a water authority, and a water district, and have modified
Sec. 414.5(a). This rule clarifies that the referenced agreements are
Storage and Interstate Release Agreements. In addition, the last
sentence of Sec. 414.5(a) was modified to qualify that the United
States has no obligation to construct or furnish water treatment
facilities to maintain or improve water quality except as otherwise
provided in relevant Federal law. Implementation of this rule will not
modify the Secretary's responsibilities under the Colorado River Basin
Salinity Control Act of June 24, 1974 (88 Stat. 266).
Comments Concerning Sec. 414.6--Environmental Compliance and Funding of
Federal Costs
Comment: Modify Sec. 414.6(b) to clarify that the interstate
agreements referred to are Interstate Storage Agreements (now termed
``Storage and Interstate Release Agreements'') and that the costs
incurred by the United States in evaluating, processing, and approving
an Interstate Storage Agreement (now termed a Storage and Interstate
Release Agreement'') will be funded by the parties to that agreement.
Response: We agree with these suggestions from several State
agencies, a water authority, and a water district, and have modified
Sec. 414.6(b) to require that the authorized entities that are parties
to a Storage and Interstate Release Agreement must fund the United
States costs of considering, participating in, and administering that
agreement.
Public Comments on DPEA and Responses
The following is a discussion of the comments received on the DPEA
and our responses. This section includes comments on the scope of the
DPEA, Secretarial discretion, adequacy of the environmental assessment,
potential effects on plants and wildlife, water available for instream
flows and habitat enhancement, concerns over deliveries to Mexico,
efficiency improvements, storage alternatives, consultations, sunset
clause, economic impacts of the rule, effects on ground water storage,
and general comments.
Scope of the DPEA
Comment: The description of proposed interstate transactions in the
draft programmatic environmental assessment is overly broad and the
draft environmental assessment is therefore unnecessarily broad in its
scope.
Response: We recognize, from comments on the proposed rule and
DPEA, that prospective transactions are not described the way
prospective authorized entities will intend them to work. Colorado
River water stored offstream under a Storage and Interstate Release
Agreement will be available for use in the Storing State. When a
consuming entity requests water stored under a Storage and Interstate
Release Agreement, it will receive ICUA, not storage credits. The
storing entity will take actions to reduce its State's consumptive use
of Colorado River water, thereby developing ICUA. When the Secretary is
satisfied that ICUA has been or will be developed, an equivalent
quantity of ICUA will be released by the Secretary for use by the
consuming entity. Based on a reformulation of the prospective
transactions that may take place under the rule, we believe that the
final programmatic environmental assessment (FPEA) is appropriate.
Secretarial Discretion
Comment: Several respondents commented that the rule should not be
finalized or surplus water stored offstream before the Department
clarifies exactly what discretion the Secretary has in providing water
for habitat enhancement and how the proposed rule would affect that
discretion.
Response: In the Lower Colorado River area (LCR), the Decree
apportions surplus among the Lower Division States as follows: 50
percent to California, 46 percent to Arizona, and 4 percent to Nevada.
Entities with surplus contracts are currently using surplus and may
store it offstream for intrastate use without the proposed Rule. We
recognize that the Secretary's management of the LCR to accommodate
endangered and sensitive species and their critical habitat is being
reviewed as part of the MSCP. FWS developed a Reasonable and Prudent
Alternative (RPA) in the Biological and Conference Opinion (BCO) for
the current and projected routine operations and maintenance of the
LCR. The RPA contains a number of provisions, one of which, 13(a),
addresses the type and extent of the Secretary's discretionary action
flexibility for all operations and maintenance activities on the
Colorado River. Reclamation has provided a summary of its discretion to
FWS. Reclamation complied with RPA provision 13(b) by providing a
report to FWS on December 30, 1998, that identifies opportunities to
increase the Secretary's discretion in Colorado River operations in
order to provide water for fish and wildlife purposes. We believe
[[Page 59000]]
that this rule can be implemented without compromising the MSCP
process.
Adequacy of the Environmental Assessment
Comment: The level of environmental compliance proposed by
Reclamation is inadequate and Reclamation should complete a
programmatic EIS on the proposed rule and the entire operation of the
Colorado River.
Response: Please refer to the previous discussion of adequacy of
the environmental assessment under the Environmental Concerns section
of the Public Comments on Proposed Rule and Responses on General
Issues.
Potential Effects on Plants and Wildlife
Comment: Compliance with the ESA for the proposed rule was not
accomplished through the biological opinions for Central Arizona
Project (CAP) or Lower Colorado River Operations and Maintenance
Activity and Reclamation cannot defer them until a later date.
Response: We do not agree with this view expressed by several
environmental groups. Reclamation has prepared a biological assessment
(BA) for the proposed rule and entered into informal consultation with
FWS. Please refer to the response to the following comment for more
details about those consultations. Reclamation has incorporated by
reference into its BA for the proposed rule the 1996 Biological
Assessment for Description and Assessment of Operations, Maintenance,
and Sensitive Species of the Lower Colorado River (LCRBA). The LCRBA
analyzed the potential effects to listed species and designated
critical habitat from current and projected routine LCR operations and
maintenance where Reclamation has discretionary involvement or control.
Reclamation also incorporated by reference FWS's 1997 BCO based on the
LCRBA. These documents provide the baseline for current and projected
routine LCR operations. More information on the BA prepared for this
rule is contained in the next few responses.
The BCO and prior consultations with FWS for physical facilities
and water delivery contracts with the Central Arizona Water
Conservation District and Southern Nevada Water Authority cover the
effects of both mainstream and offstream areas that would be involved
in the scope of proposed actions under the rule.
Comment: The offstream storage and retrieval of water under the
proposed rule is likely to have adverse direct, indirect, and
cumulative effects on wildlife and critical habitat, particularly for
threatened and endangered species.
Response: We do not agree with the view by several environmental
groups that proposed actions under the proposed rule will adversely
affect threatened and endangered species and critical habitat.
Reclamation has met with FWS and engaged in informal consultations
under the ESA. In the course of those consultations, Reclamation
prepared a BA that analyzed the potential effects of operations under
the proposed rule on listed species and designated habitat in the LCR
action area. This analysis was based upon the most likely storage and
retrieval scenarios of water from Lakes Mead or Havasu and associated
river reaches to obtain ICUA under the proposed rule. At the request of
FWS, several worst case scenarios were formulated by Reclamation for
purposes of comparison with Colorado River operations that are most
likely to occur under the proposed rule. These worst case scenarios
were given detailed analysis and discussed with FWS but were later
eliminated because they are not realistic and will not be allowed under
proposed Storage and Interstate Release Agreements.
The BA analyzed several scenarios, one of which was a proposed
action in which 1.2 maf would be stored in Arizona under a Storage and
Interstate Release Agreement to allow an authorized entity in Nevada to
meet its future water needs. Maximum conveyance capacity expected to be
made available on the CAP to store water for interstate water
transactions is 200 kaf/year. An authorized entity in Nevada will make
future diversions of water from Lake Mead, in addition to Nevada's
normal basic and surplus apportionments, to use ICUA released by the
Secretary. This additional diversion of ICUA will be limited, under
Arizona law, to a maximum of 100 kaf in any year. The BA analyzed the
effects of this and other scenarios for storage of Colorado River water
and future release of ICUA on listed species and their designated
habitat. Effects to each species were determined for the most likely
and low probability case scenarios. Habitat requirements for breeding,
nesting, and foraging of some species are not dependent on the LCR.
Fluctuations in water surface elevations associated with most likely
and low probability storage and retrieval scenarios on reservoirs and
riverine reaches on the LCR are very small and are not likely to
adversely affect bonytail chub, razorback sucker, Yuma clapper rail, or
southwestern willow flycatcher. Based upon the available information
regarding the critical habitats for the razorback sucker and bonytail
chub, storage and release of ICUA under this rule will not adversely
modify critical habitat for these fish species. Other listed and
sensitive species will not be affected by implementation of the rule.
Reclamation did not consult with FWS on species in Mexico because the
United States has no authority or discretion regarding Mexico's use of
its treaty water or flood control releases.
Reclamation has notified the National Marine Fisheries Service that
a section 7 consultation for Mexican species under its administration
is not required.
Water Available for Instream Flows and Habitat Enhancement
Comment: Concern was expressed that Colorado River stream flows
downstream from Lake Mead would first increase when water is put into
storage in Arizona and then decrease in the future as more water is
diverted from Lake Mead when Nevada recovers stored water.
Response: No significant changes are expected in stream flows
downstream from Lake Mead as a result of implementation of a Storage
and Interstate Release Agreement between Arizona and Nevada under the
rule. The Biological Assessment for this rule evaluated the effects of
storage of 100 and 200 kaf/year of Colorado River water in Arizona and
subsequent diversion in a later year of up to 100 kaf by Nevada from
Lake Mead. Very small changes in water surface elevations would occur
in the riverine and reservoir areas below Lake Mead. The largest
increase or decrease in average monthly water surface elevation when
storing or using water was 0.12 feet. These changes fall within the
range of increases and decreases in water surface elevations below Lake
Mead and Hoover Dam under current river operations.
Concerns over Deliveries to Mexico
Comment: The DPEA states that a minor reduction will occur in the
quantity of surplus water available for delivery to Mexico over the
long term without explaining what a minor reduction is or what studies
have been done to quantify this.
Response: Please refer to the previous discussion of adequacy of
the environmental assessment under the Environmental Concerns section
of the Public Comments on Proposed Rule and Responses on General
Issues.
Comment: Offstream storage of surplus water will decrease the
likelihood that water from flood control releases will reach the Gulf
of
[[Page 59001]]
California, thereby reducing the quantity of water that otherwise would
be available for environmental restoration in the delta.
Response: Flood control releases are projected to average 788 kaf/
year during the period 1999-2015. Offstream storage could decrease
flood control releases reaching Mexico by an average of 23 kaf/year
during this time. The probability of occurrence of flood control
releases could decrease by 0.83 percent. These decreases fall within
the range of flood control projections previously consulted on in the
1996 Biological Assessment of Operations, Maintenance, and Sensitive
Species of the Lower Colorado River.
Please refer to the previous discussion of adequacy of the
environmental assessment under the Environmental Concerns section of
the Public Comments on Proposed Rule and Responses to General Issues.
Efficiency Improvements
Comment: Efficiency improvements in river management and the
storage of Colorado River water in underground aquifers mean less water
is available for environmental purposes, such as the riparian and
aquatic ecosystems of the river, including the river and delta region
in Mexico.
Response: Please refer to the previous discussion of efficiency
improvements under Public Comments on Proposed Rule and Responses on
General Issues.
Storage Alternatives
Comment: It is not clear what storage options are available under
the rule, or how the rule would apply if there are changes in Arizona's
laws or if California or Nevada enact conflicting laws.
Response: We have modified this rule in response to comments from
several State agencies, a water district, and a water authority. This
rule now provides in Sec. 414.3(a)(2) and Sec. 414.6(a)(3),
respectively, for the storage of basic or surplus apportionment of the
Storing State, not otherwise put to use by entitlement holders within
the Storing State, or storage of the unused basic or surplus
apportionment of the Consuming State. If unused apportionment from the
Consuming State is to be stored under a Storage and Interstate Release
Agreement, the rule provides that the Secretary will make that water
available to the storing entity in accordance with the terms of a
Storage and Interstate Release Agreement and will not make that water
available to other entitlement holders. The rule has been drafted to
apply uniformly to all three Lower Division States and the Department
will not speculate about potential changes in Arizona's laws or whether
California or Nevada may enact conflicting laws.
Comment: Banking in Lake Mead is illegal and it should not be
listed as an alternative to the rule.
Response: We do not agree with the comment from a State agency that
banking in Lake Mead is illegal. Moreover, under NEPA, Reclamation is
charged with the responsibility to analyze reasonable alternatives, and
the Department believes that it has appropriately complied with NEPA in
this regard.
Comment: The DPEA misstates Arizona law with regard to the ability
to create ICUA during a shortage year.
Response: We agree with the comment from a State agency that the
statement in the DPEA that ``Interstate recovery of storage credits in
Arizona for California and Nevada will not be allowed in a shortage
year'' is not accurate. The FPEA has been revised to clarify that AWBA
has discretion to decide whether it is in Arizona's best interests to
enter into a Storage and Interstate Release Agreement that would
require decreased diversions of mainstream water by Arizona during
years when the Secretary has declared a shortage on the Colorado River.
Consultations
Comment: The requirement for consultation under the Fish and
Wildlife Coordination Act is broader than described and consultation is
required with the State wildlife agencies on an equal footing with FWS.
Response: We do not agree with this comment from a State agency
that Reclamation is required to consult with State wildlife agencies.
Reclamation's responsibility under the Fish and Wildlife Coordination
Act is to coordinate with FWS who in turn is expected to interface and
represent fish and wildlife concerns based on, among other things,
coordination with State game and fish agencies. In addition, the Fish
and Wildlife Coordination Act requirements will be met through both ESA
and NEPA consultations. The Fish and Wildlife Coordination Act requires
Reclamation to consider fish and wildlife resource needs in operation
and management of water projects.
Sunset Clause
Comment: The need for a permanent rule was questioned and it was
suggested that the rule should have a termination date, such as the end
of the time that storage is anticipated. It was suggested that a sunset
date will allow the Department an opportunity to do a programmatic
reevaluation of how the rule is being used.
Response: We do not agree with the suggestion from a Federal agency
that there should be a sunset date. Under this rule, a consuming entity
will be able to enter into Storage and Interstate Release Agreements
and pay for storage of water that the Storing State will use in the
future when the consuming entity calls for ICUA. However, there is no
way to accurately predict the future and unanticipated changes in the
rate of population growth or the occurrence of droughts or surplus
conditions will affect how much water can be stored or when ICUA will
be needed. The parties to a Storage and Interstate Release Agreement
would not agree to subject any water already in storage to new terms
and conditions under new rules. A consuming entity that invests
significant sums of money into funding water storage in a Storing State
is not likely to agree to subject itself to limited term storage or
revised terms and conditions for the right to receive ICUA under an
already signed Storage and Interstate Release Agreement. The storage
and retrieval period between Arizona and Nevada is projected to run
from years 1999 to 2030 and may run longer if both California and
Nevada enter into Storage and Interstate Release Agreements with
Arizona. Under Arizona law no more than a total of 100 kaf of water
stored in Arizona may be retrieved by California and Nevada in any
given year. If Nevada is limited to retrieving a maximum of 50 kaf of
ICUA from Arizona because California is also retrieving ICUA, the water
stored under a Storage and Interstate Release Agreement could be
retrieved at this rate beyond the year 2030.
Economic Impacts of the Rule
Comment: Some respondents commented that the proposed rule may
impact the southern California water rates if less water that is
apportioned to but unused by Arizona and Nevada is made available to
California.
Response: Please refer to the previous discussion of potential
economic impacts of the rule on southern California water rates that is
included in the discussion of economic impacts of this rule under
Public Comments on Proposed Rule and Responses on General Issues.
Comment: The DPEA provides little information regarding potential
environmental justice concerns regarding minority and low-income
communities, such as Indian tribes, communities along the Mexican
border, and communities near the Gulf of California.
[[Page 59002]]
Response: We have reevaluated the section of the DPEA on
environmental justice and has included additional analysis. Based on
this additional analysis, we do not find that this rule will have an
effect on minority or low-income communities. As discussed in previous
responses, this rule is not intended as a mechanism to compensate
tribes.
Because Mexico is a sovereign nation, we have no control over how
Colorado River water is used once it reaches the international border.
Thus while we have determined that there may be minimal effects of this
rule on flood control deliveries to the international border, we cannot
determine the potential effects that any potential reduction in the
deliveries of flood control water may have within the Republic of
Mexico.
Effects on Ground Water Storage
Comment: Some respondents, including Indian tribes, commented that
the rule would result in a net loss in ground water over time to
``indirect storage'' and that this is a significant indirect effect of
the rule but the DPEA shows no analysis of this effect.
Response: We do not agree that actions under this rule will result
in a loss of ground water to indirect storage. The method by which
Colorado River water is stored by indirect storage allows water to
remain in the ground in lieu of being pumped. When Arizona is the
Storing State, the development of ICUA is limited to only 95 percent of
the water previously stored under a Storage and Interstate Release
Agreement. Therefore, the ground water will gain by 5 percent of the
water that would have been pumped anyway if it were left in the ground
through in lieu storage actions. Further, although Arizona law
currently does not allow the development of ICUA by any means other
than pumping water that was stored under a Storage and Interstate
Release Agreement, this rule allows additional flexibility. If Arizona
changes its laws or policy in the future to allow other means of
developing ICUA, it is possible that the alternative means could help
preserve Arizona's ground water. Finally, as stated previously, this
rule allows Colorado River entitlement holders in the Storing State the
option to use the water previously stored under a Storage and
Interstate Release Agreement or other means consistent with Storing
State law to develop ICUA.
Comment: Reclamation should clarify how the rule fits within the
regulatory framework for ground water protection in each State, as well
as the federal role in ground water protection. The preamble to the
proposed rule contains a statement that, ``Water quality will be
monitored by the Environmental Protection Agency . . .'' It is not
clear to what extent Reclamation expects the Environmental Protection
Agency (EPA) to be involved in offstream storage authorized under the
rule.
Response: We do not anticipate a need for EPA to evaluate data
collected through any offstream storage of Colorado River water. The
purpose of the statement was to declare that the Department, and more
specifically Reclamation, does not have the responsibility to regulate
ground water quality.
General Comments
Comment: There were a number of editorial comments on the DPEA that
suggested clarification or additional explanation on various points.
Response: We have reviewed and considered the comments and has
adopted many of the suggestions into the text of the FPEA. In addition,
the previously mentioned informal consultations between Reclamation and
FWS resulted in Reclamation's incorporation of numerous suggestions
made by FWS into the BA and FPEA.
Public Comments on Definition of Authorized Entity and Several
Other Technical Matters and Responses
As a result of receiving differing comments on the definition of
authorized entity and several other technical matters, the Department
reopened the comment period on September 21, 1998 (63 FR 50183) for a
30-day period ending October 21, 1998. We asked interested parties to
provide comments on three specific questions:
Question 1: Should the definition of ``authorized entity'' be
revised to clarify that an authorized entity, including a water bank,
must hold an entitlement to Colorado River water in order to ensure
consistency with the Law of the River, including specifically Section 5
of the BCPA as interpreted by the Decree?
Question 2: Should an approved Interstate Storage Agreement (now
termed a Storage and Interstate Release Agreement) and a contract under
Section 5 of the BCPA be combined into one document, thus making the
parties entitlement holders upon execution of the agreement?
Question 3: If not combined, should the Interstate Storage
Agreement (now termed a Storage and Interstate Release Agreement) and
any separate Section 5 contract (or amendments to an existing contract)
be processed and approved simultaneously to eliminate duplication of
any administrative and compliance procedures?
The Department received 10 letters from 11 respondents during the
reopened comment period. The respondents included three State agencies,
three water districts, one water authority, one water users
association, and three environmental organizations. We reviewed and
analyzed all pertinent comments and revised the rule based on these
comments. Four respondents, including one water users association and
three environmental organizations, did not address the issues on which
comments were solicited during the reopened comment period. One water
users association resubmitted its comments from the original comment
period. Three environmental organizations reiterated the same
environmental concerns addressed in their respective responses in the
original comment period. Two respondents jointly submitted a report
that addresses potential effects of water flows from the United States
on the riparian and marine ecosystems of the Colorado River delta in
Mexico.
The remaining seven respondents provided comments on issues
pertinent to the reopened comment period, although one State agency and
one water district also resubmitted their respective comments from the
original comment period.
The following is a discussion of the comments received on the
issues pertinent to the reopened comment period and our responses.
Comments on Question 1
Comment: One State agency and two water districts cite the BCPA and
the Decree to support their view that an authorized entity must have a
contract with the Secretary. Two State agencies, one water district,
and one water authority commented that an authorized entity need not be
an entitlement holder to store water and make it available to a
Consuming State under an Interstate Storage Agreement (now termed a
``Storage and Interstate Release Agreement''). The latter group
recognizes that the BCPA and the Decree require all diversions of
Colorado River water from the mainstream to be based on an entitlement.
However, these respondents believe there is no statutory requirement
for the authorized entity to have a direct contract with the Secretary
in order to fulfill its responsibilities to store its own State's
unused apportionment. Under their reasoning, the authorized entity can
arrange for storage and ensure the availability of unused apportionment
in the future
[[Page 59003]]
through existing contractual arrangements with other parties that have
entitlements through contracts with the Secretary.
Response: With the exception of Federal and tribal rights
identified in Article II(D) of the Decree, all diversions of water from
the Colorado River for use within the Lower Division States require a
contract with the Secretary. This is specified in Section 5 of the BCPA
and confirmed by the Decree in Arizona v. California. Under this rule
diversions of Colorado River water will occur in two circumstances. The
first is when water is taken from the river and stored off-stream by
the storing entity and the second is when ICUA has been developed and
that water is released by the Secretary for use by the consuming
entity.
For authorized entities that do not hold a Federal or tribal
entitlement recognized in Article II(D) of the Decree, the rule allows
for the storage of Colorado River water either through a direct
contract with the Secretary or through a valid subcontract with an
entitlement holder. For the release or diversion of ICUA to the
consuming entity, the Storage and Interstate Release Agreement, to
which the Secretary will be a party, satisfies the Section 5
requirement.
Comments on Question 2
Comment: One State agency and one water district believe that
sufficient statutory and contractual authorities exist to allow the
authorized entity to take water for banking purposes that otherwise
would be unused in that State. These parties believe the authorized
entity does not need to hold its own entitlement because sufficient
legal authority already exists under applicable laws and contracts. The
State agency states that not all end users of Colorado River water are
required to have entitlements or contracts with the Secretary. The
State agency further contends that the Colorado River Basin Project Act
[43 U.S.C. 1524(b)] makes a direct contract between the Secretary and
end-users of Colorado River water in Arizona discretionary.
Response: The Department recognizes in new Sec. 414.3(e) that
storage of Article II(D) water by Federal or tribal entitlement holders
or existing contracts may allow for the delivery of water under this
rule. These include direct contracts between authorized entities and
the Secretary. These also include subcontracts between authorized
entities and an entitlement holder that has been authorized by the
Secretary to enter into subcontracts for the delivery of Colorado River
water. Authorized entities that are Federal or tribal entitlement
holders identified in Article II(D) of the Decree are not subject to
the Section 5 contract requirement in the Decree. Section 414.3(e) also
provides that the Storage and Interstate Release Agreement, to which
the Secretary is a party, can be a water delivery contract. We agree
that when existing contracts or valid subcontracts provide for delivery
of Colorado River water under this rule, there is no need to combine
these contracts with the Storage and Interstate Release Agreement.
Comment: Another State agency and one water authority, in a joint
response, believe an additional contract, beyond the contract necessary
to fulfill the requirements of Section 5 of the BCPA, is necessary with
the Secretary for the release of water based on the development of ICUA
by a storing entity. However, those parties do not see a need for new
and additional Section 5 contracts beyond those that now exist.
Response: The Department modified the rule in Sec. 414.3(a) to
provide that the Secretary will be a party to Storage and Interstate
Release Agreements. Sections 414.3(a)(12) through 414.3(a)(15) provide,
among other things, that the Secretary will commit in the Storage and
Interstate Release Agreement to release ICUA but only if all necessary
actions are taken under the rule, if all laws and executive orders have
been complied with, and if the Secretary has first determined that ICUA
has been developed or will be developed by a storing entity.
Comment: One State agency and two water districts commented that
whether or not the Interstate Storage Agreement (now termed a ``Storage
and Interstate Release Agreement'') and Section 5 contract are combined
is discretionary and that this should be determined by the particular
situation.
Response: We have modified Sec. 414.3(a) to provide that the
Secretary will be a party to the Storage and Interstate Release
Agreement. The Storage and Interstate Release Agreement can serve as a
water delivery contract within the meaning of Section 5 of the BCPA. We
recognize in Sec. 414.3(e) that, in certain circumstances, existing
contracts or subcontracts can satisfy the requirements of Section 5 for
the delivery of water under a Storage and Interstate Release Agreement.
In such circumstances, the rule does not anticipate the need for the
execution of any further Section 5 contracts in order to implement a
Storage and Interstate Release Agreement. Storage of water by
authorized entities that hold Article II(D) of the Decree entitlements
will not be subject to a Section 5 contract requirement.
Comment: One water district suggested that while there is no legal
requirement for the Interstate Storage Agreement (now termed a
``Storage and Interstate Release Agreement'') and Section 5 contract to
be combined, it was suggested that such an action would have the effect
of making the Secretary a party to the Interstate Storage Agreement
(now termed a ``Storage and Interstate Release Agreement''). It was
asserted that making the Secretary party to the Interstate Storage
Agreement (now termed a ``Storage and Interstate Release Agreement'')
may give the authorized entities a greater sense of security that
future obligations will be performed.
Response: The Department recognizes in new Sec. 414.3(e) that
existing contracts may allow for the delivery of water under this rule.
These include direct contracts between authorized entities and the
Secretary. These also include subcontracts between authorized entities
and an entitlement holder that has been authorized by the Secretary to
enter into subcontracts for the delivery of Colorado River water.
Section 414.3(e) also provides that the Storage and Interstate Release
Agreement, to which the Secretary is a party, can serve as a water
delivery contract. We agree that when existing contracts or valid
subcontracts provide for delivery of Colorado River water under this
rule, there is no need to combine these contracts with the Storage and
Interstate Release Agreement.
Comment: Another water district stated that if one of the parties
to the Interstate Storage Agreement (now termed a ``Storage and
Interstate Release Agreement'') already holds an entitlement for
delivery of Colorado River water under a BCPA Section 5 contract, a new
or amended water delivery contract may not be necessary.
Response: The Department recognizes in the new Sec. 414.3(e) that
in certain circumstances existing contracts may satisfy the Section 5
requirement of the BCPA so that additional Section 5 authority would be
unnecessary to perform activities under a Storage and Interstate
Release Agreement. Section 5 authority is also unnecessary for the
storage of Article II(D) of the Decree water by Federal or tribal
entitlement holders. In circumstances where additional Section 5
authority is unnecessary, the Storage and Interstate Release Agreement
would only cover the specific details of a transaction between the
Secretary and the other parties to the Storage and Interstate Release
Agreement.
[[Page 59004]]
Comments on Question 3
Comment: One State agency and one water district stated that
sufficient statutory and contractual authorities already exist under
applicable laws and contracts to allow the authorized entity to take
water for banking purposes. Therefore there would be no need for a new
or amended contract. Another State agency and one water authority
believe that an additional contract is necessary with the Secretary to
ensure the Secretary's commitment to release water based on the
development of ICUA by a storing entity. That contract could be
executed concurrently with an Interstate Storage Agreement. However, as
noted under comments on Question 2, those parties do not see a need for
new and additional Section 5 contracts beyond those that now exist. One
State agency responded that if there are two separate agreements, they
should be processed, reviewed, and approved simultaneously. The two
water districts commented that any necessary Section 5 contract,
whether or not combined with an Interstate Storage Agreement, should be
processed and approved simultaneously with the Interstate Storage
Agreement.
Response: Question 3 asked whether Storage and Interstate Release
Agreements and Section 5 contracts, if not combined, should be
processed simultaneously. We have modified the rule in Sec. 414.3(a) to
provide that the Secretary will be a party to a Storage and Interstate
Release Agreement. The Department also recognizes in Sec. 414.3(e)
that, in certain circumstances, existing contracts or subcontracts
satisfy the requirements of Section 5 for the delivery of water under a
Storage and Interstate Release Agreement. The rule does not anticipate
the need for the execution of any further Section 5 contracts in order
to implement a Storage and Interstate Release Agreement. Question 3 is
moot in light of these modifications to the rule. Comments by the
parties in response to Question 3 primarily address issues raised by
Questions 1 and 2 and are responded to above.
V. Procedural Matters
<bullet> Environmental Compliance
<bullet> Paperwork Reduction Act
<bullet> Regulatory Flexibility Act
<bullet> Small Business Regulatory Enforcement Fairness Act (SBREFA)
<bullet> Unfunded Mandates Reform Act of 1995
<bullet> Executive Order 12612, Federalism Assessment
<bullet> Executive Order 12630, Takings Implications Analysis
<bullet> Executive Order 12866, Regulatory Planning and Review
<bullet> Executive Order 12988, Civil Justice Reform
Environmental Compliance
We prepared a DPEA and placed it on file in the Reclamation
Administrative Record. We received comments on the DPEA (discussed
above in III. Responses to Comments), and carefully considered those
comments in preparing the final programmatic environmental assessment
(FPEA). We have accepted many of these comments and incorporated them
into the FPEA, which is on file in the Reclamation Administrative
Record. Based on the FPEA, we have determined that a Finding of No
Significant Impact is warranted.
We have also, under the ESA, consulted with FWS on potential
impacts of this rule on listed species and designated habitat. Based on
the analysis contained in the BA that we prepared for the rule, we have
determined that operations under this rule are not likely to adversely
affect listed species or designated habitat in the action area. FWS has
concurred with this finding. We have also determined that we have no
Section 7 obligations for species within Mexico due to our inability to
control the use of water once it reaches Mexico.
Compliance with NEPA, the ESA, and other relevant statutes, laws,
and executive orders will be completed for future Federal actions taken
under this rule to ensure that any action authorized or carried out by
the Secretary does not jeopardize the continued existence of any
threatened or endangered species, does not adversely modify or destroy
critical habitat, and is analyzed by an appropriate environmental
document. Consultation and coordination between Reclamation, FWS, other
agencies, and interested parties will be completed on a case-by-case
basis.
Paperwork Reduction Act
This rule is geographically limited to the States of Arizona,
California, and Nevada. The collection of information contained in the
rule covers storing entities that would store Colorado River water off
the mainstream of the Colorado River. The information we would collect
would be compiled by these storing entities in the course of their
normal business, and the annual reports to the Secretary will not
impose any significant time or cost burden. We will submit the
information collection requirements in this rule to the Office of
Management and Budget for approval as required by the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. We will not require collection of
this information until the Office of Management and Budget has given
its approval.
Regulatory Flexibility Act
The Department of the Interior certifies that this document will
not have a significant economic effect on a substantial number of small
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
This rule will not impose any direct cost on small entities. Financial
costs associated with the development and release of intentionally
created unused apportionment will be borne by the parties who
voluntarily enter into offstream storage and release agreements. A
benefit-cost analysis was completed and concludes that this rule does
not impose significant or unique impact upon small governments
(including Indian communities), small entities such as water purveyors,
water districts, or associations, or individual entitlement holders.
From a financial perspective, since the rule may provide an opportunity
for authorized entities in the Lower Division States to secure
additional supplies of Colorado River water, Colorado River water users
may experience a cost savings. The rule will not affect any Colorado
River entitlement holder's right to use its full water entitlement.
Further, in times of shortage on the Colorado River, numerous small
water users with senior water rights, which are determined by an
earlier priority date, will retain their seniority and will be served
before less senior users regardless of size.
Small Business Regulatory Enforcement Fairness Act (SBREFA)
This rule is not a major rule under 5 U.S.C. 804(2), the SBREFA.
This rule:
(1) Does not have an annual effect on the economy of $100 million
or more. The Department prepared a benefit-cost analysis, which
estimated that this rule would cause net economic benefits on a State
and regional level using different water supply models and discount
rates. Under a conservative water supply scenario characterized by 19
years of normal conditions on the Colorado River and one surplus year,
discounted net economic benefits at the regional level ranged from
$12.8 to $61.2 million at 5.75 per cent and $9.5 to $47.7 million at
8.27 per cent. Under a water supply scenario characterized by 10 years
of surplus conditions on the Colorado River, the net economic benefits
range from $550,255 to $4.8 million at 5.75 per cent and $350,789 to
$3.1 million at 8.27 per cent. Under the scenario characterized by 10
surplus
[[Page 59005]]
years, demand for banked water is relatively low because water users in
the Lower Division States can meet most of their water needs with
diversions from the mainstream within the basic and surplus
apportionments for use within those States.
(2) Will not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions.
This rule facilitates the creation of an additional alternative for
water agencies to secure water supplies. However, entering into Storage
and Interstate Release Agreements for the offstream storage of Colorado
River water and the release of ICUA provided for in this rule is
voluntary. Should the costs of the procedures to facilitate these
transactions, provided for in the rule, be greater than the cost of
other alternative water supplies, the States would probably select the
cheaper alternatives.
This rule may create an opportunity for the total cost of
alternative water supplies to decrease, thereby reducing the cost
burden on all water users in southern California.
Water users in southern Nevada are just now approaching use of the
entire 300 kaf basic annual apportionment of Colorado River for use in
Nevada. Like California, Nevada will also need alternative water
supplies to satisfy the increasing demands of economic development and
population growth. The cost of securing alternative supplies will be
greater than the cost of obtaining Colorado River water under the
State's basic or surplus apportionment. This rule may provide an
opportunity for Colorado River water users in Nevada to experience a
cost savings in securing additional supplies of Colorado River water.
(3) Does not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises.
This rule is facilitating voluntary water transactions that may
confer benefits on a national basis in many economic sectors.
(i) Voluntary water transactions can promote economic efficiency
gains. These gains accrue to the parties in a given transaction and to
the wider regional and national economy. The gains result due to
greater flexibility in how and where water is used.
(ii) Voluntary water transactions offer a cost effective way to
increase water supplies without constructing new mainstream facilities
such as dams.
(iii) Voluntary water transactions may stimulate investment and
development in conservation technology that is currently economically
infeasible given the returns to water in its present use.
Unfunded Mandates Reform Act of 1995
This rule does not impose an unfunded mandate on State, local, or
tribal governments or the private sector of more than $100 million per
year. The range of benefits and costs associated with the rule are
constrained because the amount of water that can be released under an
offstream storage agreement in any one year is constrained by State law
and immediate demand. This rule does not have a significant or unique
effect on State, local, or tribal governments or the private sector.
The rule provides a framework under which authorized entities could
voluntarily store Colorado River water offstream for future interstate
use. The publication of this rule does not authorize specific
activities, and will not impose costs on any State, local, or tribal
government, or the private sector. A statement (benefit-cost analysis)
containing the information required by the Unfunded Mandates Reform Act
(2 U.S.C. 1531 et seq.) has been prepared and is summarized below in
the section relating to Executive Order 12866.
We received comments on the benefit-cost analysis that were
editorial in nature or asked for clarification or revision of
information in the analysis. We accepted approximately 85 percent of
the comments and revised the text or footnotes as necessary to include
those changes where requested.
The benefit-cost analysis concluded that this rule does not impose
significant or unique impact upon small governments (including Indian
communities), small entities such as water districts, or individual
entitlement holders. The rule will not affect the priority of water use
on the Colorado River. Therefore benefits received by water users,
regardless of size, associated with the right to divert Colorado River
water will remain. Costs of storage and release of unused apportionment
water will be borne by authorized entities in the Storing State and the
Consuming State who voluntarily enter into storage and release
agreements. All Colorado River water users may experience a decrease in
water costs since the rule will enable authorized entities in the Lower
Division States to secure additional water supplies. The adoption of 43
CFR part 414 will not result in any unfunded mandate to State, local,
or tribal governments in the aggregate, or to the private sector, of
$100 million or more in any one year.
Executive Order 12612, Federalism Assessment
In accordance with Executive Order 12612, this rule does not have
sufficient federalism implications to warrant the preparation of a
Federalism Assessment. A Federalism Assessment is not required. This
rule does not alter the relationship between the Federal Government and
the States under the Decree nor does it alter the distribution of power
and responsibilities among the various levels of government.
Executive Order 12630, Takings Implications Analysis
In accordance with Executive Order 12630, this rule does not have
significant takings implications. A takings implication assessment is
not required. This rule does not represent a government action capable
of interfering with constitutionally protected property rights. This
rule does not impose additional fiscal burdens on the public and would
not result in physical invasion or occupancy of private property or
substantially affect its value or use. This rule would not result in
any Federal action that would place a restriction on a use of private
property and does not affect a Colorado River water entitlement
holder's right to use its full water entitlement. Under this rule, an
authorized entity may store unused Colorado River water available from
an entitlement holder's water rights only if the water right holder
does not use or store that water on its own behalf. When the Storing
State must reduce its diversions to develop ICUA, an entity that
reduces its consumptive use of Colorado River water to develop that
unused apportionment will do so voluntarily under an appropriate
agreement. Therefore, the Department of the Interior has determined
that this rule would not cause a taking of private property or require
further discussion of takings implications under this Executive Order.
Executive Order 12866, Regulatory Planning and Review
This rule is a significant regulatory action under section 3(f)(4)
of Executive Order 12866 because it raises novel legal or policy
issues. Executive Order 12866 requires an assessment of potential costs
and benefits under section 6(a)(3). The Department's benefit-cost
analysis determines that this rule does not impose significant or
unique impacts upon small governments (including Indian communities),
small entities such as water purveyors or associations, or even
individual water entitlement holders.
[[Page 59006]]
California and Nevada are looking for alternative water supplies to
satisfy the increasing demands of economic development and population
growth. This rule may provide an opportunity for Colorado River water
users in Nevada to experience a marginal cost savings in securing
alternative supplies. Offstream storage of Colorado River water and
making available ICUA are voluntary actions. Should the costs of the
procedures in this rule to facilitate these transactions be greater
than the costs of other alternative water supplies, California and
Nevada would probably select the lower cost alternatives.
The benefit-cost analysis estimated net economic benefits of this
rule on a State and regional level using different water supply models
and discount rates. The different water supply models represent
potential water supply conditions on the Colorado River that affect
interstate demand for water from an Arizona water bank and the
magnitude of economic benefits obtained from that water. The discount
rates used in the analysis were 5.75 per cent (the average rate on
municipal bonds in 1996, which is a rate faced by major water purveyors
in California and Nevada) and 8.27 per cent (the prime rate in 1996,
which more accurately represents the cost of money).
Under a conservative water supply scenario characterized by 19
years of normal conditions on the Colorado River and one surplus year,
discounted net economic benefits at the regional level ranged from
$12.8 to $61.2 million at 5.75 per cent and $9.5 to $47.7 million at
8.27 per cent. Under a water supply scenario characterized by 10 years
of surplus conditions on the Colorado River, the net economic benefits
range from $550,255 to $4.8 million at 5.75 per cent and $350,789 to
$3.1 million at 8.27 per cent. Under the scenario characterized by 10
surplus years, demand for banked water is relatively low because water
users in the Lower Division States can meet most of their water needs
with diversions from the mainstream within the basic and surplus
apportionments for use within those States.
We have placed the full analysis on file in the Reclamation
Administrative Record at Bureau of Reclamation, Administrative Record,
Lower Colorado Regional Office, P.O. Box 61470, Boulder City, NV 89006-
1470, Attention: BC00-4451.
Executive Order 12988, Civil Justice Reform
In accordance with Executive Order 12988, the Office of the
Solicitor has determined that this rule does not unduly burden the
judicial system and meets the requirements of sections 3(a) and 3(b)(2)
of the Order.
List of Subjects in 43 CFR Part 414
Environmental compliance, Public lands, Water bank program, Water
resources, Water storage, Water supply, and Water quality.
Dated: October 26, 1999.
Patricia J. Beneke,
Assistant Secretary--Water and Science.
For the reasons stated in the preamble, the Bureau of Reclamation
adds a new part 414 to title 43 of the Code of Federal Regulations as
follows:
PART 414--OFFSTREAM STORAGE OF COLORADO RIVER WATER AND DEVELOPMENT
AND RELEASE OF INTENTIONALLY CREATED UNUSED APPORTIONMENT IN THE
LOWER DIVISION STATES
Sec.
Subpart A--Purposes and Definitions
414.1 Purpose.
414.2 Definitions of terms used in this part.
Subpart B--Storage and Interstate Release Agreements
414.3 Storage and Interstate Release Agreements.
414.4 Reporting Requirements and accounting under storage and
interstate release agreements.
Subpart C--Water Quality and Environmental compliance
414.5 Water Quality.
414.6 Environmental Compliance and funding of Federal costs.
Authority: 5 U.S.C. 553; 43 U.S.C. 391, 485 and 617; 373 U.S.
546; 376 U.S. 340.
Subpart A--Purposes and Definitions
Sec. 414.1 Purpose.
(a) What this part does. This part establishes a procedural
framework for the Secretary of the Interior (Secretary) to follow in
considering, participating in, and administering Storage and Interstate
Release Agreements in the Lower Division States (Arizona, California,
and Nevada) that would:
(1) Permit State-authorized entities to store Colorado River water
offstream;
(2) Permit State-authorized entities to develop intentionally
created unused apportionment (ICUA);
(3) Permit State-authorized entities to make ICUA available to the
Secretary for release for use in another Lower Division State. This
release may only take place in accordance with the Secretary's
obligations under Federal law and may occur in either the year of
storage or in years subsequent to storage; and
(4) Allow only voluntary interstate water transactions. These water
transactions can help to satisfy regional water demands by increasing
the efficiency, flexibility, and certainty in Colorado River management
in accordance with the Secretary's authority under Article II (B) (6)
of the Decree entered March 9, 1964 (376 U.S. 340) in the case of
Arizona v. California, (373 U.S. 546) (1963), as supplemented and
amended.
(b) What this part does not do. This part does not:
(1) Affect any Colorado River water entitlement holder's right to
use its full water entitlement;
(2) Address or preclude independent actions by the Secretary
regarding Tribal storage and water transfer activities;
(3) Change or expand existing authorities under the body of law
known as the ``Law of the River';
(4) Change the apportionments made for use within individual
States;
(5) Address intrastate storage or intrastate distribution of water;
(6) Preclude a Storing State from storing some of its unused
apportionment in another Lower Division State if consistent with
applicable State law; or
(7) Authorize any specific activities; the rule provides a
framework only.
Sec. 414.2 Definitions of terms used in this part.
Authorized entity means:
(1) An entity in a Storing State which is expressly authorized
pursuant to the laws of that State to enter into Storage and Interstate
Release Agreements and develop ICUA (``storing entity''); or
(2) An entity in a Consuming State which has authority under the
laws of that State to enter into Storage and Interstate Release
Agreements and acquire the right to use ICUA (``consuming entity'').
Basic apportionment means the Colorado River water apportioned for
use within each Lower Division State when sufficient water is available
for release, as determined by the Secretary of the Interior, to satisfy
7.5 million acre-feet (maf) of annual consumptive use in the Lower
Division States. The United States Supreme Court, in Arizona v.
California, confirmed that the annual basic apportionment for the Lower
Division States is 2.8 maf of consumptive use in the State of Arizona,
4.4 maf of consumptive use in the State of California, and 0.3 maf of
consumptive use in the State of Nevada.
BCPA means the Boulder Canyon Project Act, authorized by the Act of
Congress of December 21, 1928 (45 Stat. 1057).
[[Page 59007]]
Colorado River Basin means all of the drainage area of the Colorado
River System and all other territory within the United States to which
the waters of the Colorado River System shall be beneficially applied.
Colorado River System means that portion of the Colorado River and
its tributaries within the United States.
Colorado River water means water in or withdrawn from the
mainstream.
Consuming entity means an authorized entity in a Consuming State.
Consuming State means a Lower Division State where ICUA will be
used.
Consumptive use means diversions from the Colorado River less any
return flow to the river that is available for consumptive use in the
United States or in satisfaction of the Mexican treaty obligation.
(1) Consumptive use from the mainstream within the Lower Division
States includes water drawn from the mainstream by underground pumping.
(2) The Mexican treaty obligation is set forth in the February 3,
1944, Water Treaty between Mexico and the United States, including
supplements and associated Minutes of the International Boundary and
Water Commission.
Decree means the decree entered March 9, 1964, by the Supreme Court
in Arizona v. California, 373 U.S. 546 (1963), as supplemented or
amended.
Entitlement means an authorization to beneficially use Colorado
River water pursuant to:
(1) The Decree;
(2) A water delivery contract with the United States through the
Secretary; or
(3) A reservation of water from the Secretary.
Intentionally created unused apportionment or ICUA means unused
apportionment that is developed:
(1) Consistent with the laws of the Storing State;
(2) Solely as a result of, and would not exist except for,
implementing a Storage and Interstate Release Agreement.
Lower Division States means the States of Arizona, California, and
Nevada.
Mainstream means the main channel of the Colorado River downstream
from Lee Ferry within the United States, including the reservoirs
behind dams on the main channel, and Senator Wash Reservoir off the
main channel.
Offstream storage means storage in a surface reservoir off of the
mainstream or in a ground water aquifer. Offstream storage includes
indirect recharge when Colorado River water is exchanged for ground
water that otherwise would have been pumped and consumed.
Secretary means the Secretary of the Interior or an authorized
representative.
Storage and Interstate Release Agreement means an agreement,
consistent with this part, between the Secretary and authorized
entities in two or more Lower Division States that addresses the
details of:
(1) Offstream storage of Colorado River water by a storing entity
for future use within the Storing State;
(2) Subsequent development of ICUA by the storing entity,
consistent with the laws of the Storing State;
(3) A request by the storing entity to the Secretary to release
ICUA to the consuming entity;
(4) Release of ICUA by the Secretary to the consuming entity; and
(5) The inclusion of other entities that are determined by the
Secretary and the storing entity and the consuming entity to be
appropriate to the performance and enforcement of the agreement.
Storing entity means an authorized entity in a Storing State.
Storing State means a Lower Division State in which water is stored
off the mainstream in accordance with a Storage and Interstate Release
Agreement for future use in that State.
Surplus apportionment means the Colorado River water apportioned
for use within each Lower Division State when sufficient water is
available for release, as determined by the Secretary, to satisfy in
excess of 7.5 maf of annual consumptive use in the Lower Division
States.
Unused apportionment means Colorado River water within a Lower
Division State's basic or surplus apportionment, or both, which is not
otherwise put to beneficial consumptive use during that year within
that State.
Upper Division States means the States of Colorado, New Mexico,
Utah, and Wyoming.
Water delivery contract means a contract between the Secretary and
an entity for the delivery of Colorado River water in accordance with
section 5 of the BCPA.
Subpart B--Storage and Interstate Release Agreements
Sec. 414.3 Storage and Interstate Release Agreements.
(a) Basic requirements for Storage and Interstate Release
Agreements. Two or more authorized entities may enter into Storage and
Interstate Release Agreements with the Secretary in accordance with
paragraph (c) of this section. Each agreement must meet all of the
requirements of this section.
(1) The agreement must specify the quantity of Colorado River water
to be stored, the Lower Division State in which it is to be stored, the
entity(ies) that will store the water, and the facility(ies) in which
it will be stored.
(2) The agreement must specify whether the water to be stored will
be within the unused basic apportionment or unused surplus
apportionment of the Storing State. For water from the Storing State's
apportionment to qualify as unused apportionment available for storage
under this part, the water must first be offered to all entitlement
holders within the Storing State for purposes other than interstate
transactions under proposed Storage and Interstate Release Agreements.
(3) The agreement must specify whether the water to be stored will
be within the unused basic apportionment or unused surplus
apportionment of the Consuming State. If the water to be stored will be
unused apportionment of the Consuming State, the agreement must
acknowledge that any unused apportionment of the Consuming State may be
made available from the Consuming State by the Secretary to the Storing
State only in accordance with Article II(B)(6) of the Decree. If unused
apportionment from the Consuming State is to be stored under a Storage
and Interstate Release Agreement, the Secretary will make the unused
apportionment of the Consuming State available to the storing entity in
accordance with the terms of a Storage and Interstate Release Agreement
and will not make that water available to other entitlement holders.
(4) The agreement must specify the maximum quantity of ICUA that
will be developed and made available for release to the consuming
entity.
(5) The agreement must specify that ICUA may not be requested by
the consuming entity in a quantity that exceeds the quantity of water
that had been stored under a Storage and Interstate Release Agreement
in the Storing State.
(6) The agreement must specify a procedure to verify and account
for the quantity of water stored in the Storing State under a Storage
and Interstate Release Agreement.
(7) The agreement must specify that, by a date certain, the
consuming entity will:
(i) Notify the storing entity to develop a specific quantity of
ICUA in the following calendar year;
(ii) Ask the Secretary to release that ICUA; and
(iii) Provide a copy of the notice or request to each Lower
Division State.
(8) The agreement must specify that when the storing entity
receives a request to develop a specific quantity of ICUA:
[[Page 59008]]
(i) It will ensure that the Storing State's consumptive use of
Colorado River water will be decreased by a quantity sufficient to
develop the requested quantity of ICUA; and
(ii) Any actions that the storing entity takes will be consistent
with its State's laws.
(9) The agreement must include a description of:
(i) The actions the authorized entity will take to develop ICUA;
(ii) Potential actions to decrease the authorized entity's
consumptive use of Colorado River water;
(iii) The means by which the development of the ICUA will be
enforceable by the storing entity; and
(iv) The notice given to entitlement holders, including Indian
tribes, of opportunities to participate in development of this ICUA.
(10) The agreement must specify that the storing entity will
certify to the Secretary that ICUA has been or will be developed that
otherwise would not have existed. The certification must:
(i) Identify the quantity, the means, and the entity by which ICUA
has been or will be developed; and
(ii) Ask the Secretary to make the ICUA available to the consuming
entity under Article II(B)(6) of the Decree and the Storage and
Interstate Release Agreement.
(11) The agreement must specify a procedure for verifying
development of the ICUA appropriate to the manner in which it is
developed.
(12) The agreement must specify that the Secretary will release
ICUA developed by the storing entity:
(i) In accordance with a request of the consuming entity;
(ii) In accordance with the terms of the Storage and Interstate
Release Agreement;
(iii) Only for use by the consuming entity and not for use by other
entitlement holders; and
(iv) In accordance with the terms of the Storage and Interstate
Release Agreement, the BCPA, Article II(B)(6) of the Decree and all
other applicable laws and executive orders.
(13) The agreement must specify that ICUA shall be released to the
consuming entity only in the year and to the extent that ICUA is
developed by the storing entity by reducing Colorado River water use
within the Storing State.
(14) The agreement must specify that the Secretary will release
ICUA only after the Secretary has determined that all necessary actions
have been taken under this part.
(15) The agreement must specify that before releasing ICUA the
Secretary must first determine that the storing entity:
(i) Stored water in accordance with the Storage and Interstate
Release Agreement in quantities sufficient to support the development
of the ICUA requested by the consuming entity; and
(ii) Certified to the satisfaction of the Secretary that the
quantity of ICUA requested by the consuming entity has been developed
in that year or will be developed in that year under Sec. 414.3(f).
(16) The agreement must specify that the non-Federal parties to the
Storage and Interstate Release Agreement will indemnify the United
States, its employees, agents, subcontractors, successors, or assigns
from loss or claim for damages and from liability to persons or
property, direct or indirect, and loss or claim of any nature
whatsoever arising by reason of the actions taken by the non-federal
parties to the Storage and Interstate Release Agreement under this
part.
(17) The agreement must specify the extent to which facilities
constructed or financed by the United States will be used to store,
convey, or distribute water associated with a Storage and Interstate
Release Agreement.
(18) The agreement must include any other provisions that the
parties deem appropriate.
(b) How to address financial considerations. The Secretary will not
execute an agreement that has adverse impacts on the financial
interests of the United States. Financial details between and among the
non-Federal parties need not be included in the Storage and Interstate
Release Agreement but instead can be the subject of separate
agreements. The Secretary need not be a party to the separate
agreements.
(c) How the Secretary will execute storage and interstate release
agreements. The Regional Director for the Bureau of Reclamation's Lower
Colorado Region (Regional Director) may execute and administer a
Storage and Interstate Release Agreement on behalf of the Secretary.
The Secretary will notify the public of his/her intent to participate
in negotiations to develop a Storage and Interstate Release Agreement
and provide a means for public input. In considering whether to execute
a Storage and Interstate Release Agreement, the Secretary may request,
and the non-Federal parties must provide, any additional supporting
data necessary to clearly set forth both the details of the proposed
transaction and the eligibility of the parties to participate as State-
authorized entities in the proposed transaction. The Secretary will
also consider: applicable law and executive orders; applicable
contracts; potential effects on trust resources; potential effects on
entitlement holders, including Indian tribes; potential impacts on the
Upper Division States; potential effects on third parties; potential
environmental impacts and potential effects on threatened and
endangered species; comments from interested parties, particularly
parties who may be affected by the proposed action; comments from the
State agencies responsible for consulting with the Secretary on matters
related to the Colorado River; and other relevant factors, including
the direct or indirect consequences of the proposed Storage and
Interstate Release Agreement on the financial interests of the United
States. Based on the consideration of the factors in this section, the
Secretary may execute or decide not to execute a Storage and Interstate
Release Agreement.
(d) Assigning interests to an authorized entity. Non-Federal
parties to a Storage and Interstate Release Agreement may assign their
interests in the Agreement to authorized entities. The assignment can
be in whole or in part. The assignment can only be made if all parties
to the agreement approve.
(e) Requirement for contracts under the Boulder Canyon Project Act.
Release or diversion of Colorado River water for storage under this
part must be supported by a water delivery contract with the Secretary
in accordance with Section 5 of the BCPA. The only exception to this
requirement is storage of Article II(D) (of the Decree) water by
Federal or tribal entitlement holders. The release or diversion of
Colorado River water that has been developed or will be developed as
ICUA under this part also must be supported by a Section 5 water
delivery contract.
(1) An authorized entity may satisfy the requirement of this
section through a direct contract with the Secretary. An authorized
entity also may satisfy the Section 5 requirement of the BCPA, for
purposes of this part, through a valid subcontract with an entitlement
holder that is authorized by the Secretary to subcontract for the
delivery of all or a portion of its entitlement.
(2) For storing entities that do not otherwise hold a contract or
valid subcontract for the delivery of the water to be stored, the
Storage and Interstate Release Agreement will serve as the vehicle for
satisfying the Section 5 requirement for the release or diversion of
that water.
(3) For consuming entities that do not otherwise hold a contract or
valid subcontract for the delivery of the water to be released by the
Secretary as ICUA, the Storage and Interstate Release Agreement will
serve as the vehicle for
[[Page 59009]]
satisfying the Section 5 requirement for the release or diversion of
that water.
(f) Anticipatory release of ICUA. The Secretary may release ICUA to
a consuming entity before the actual development of ICUA by the storing
entity if the storing entity certifies to the Secretary that ICUA will
be developed during that same year that otherwise would not have
existed.
(1) These anticipatory releases will only be made in the same year
that the ICUA is developed.
(2) Before an anticipatory release, the Secretary must be satisfied
that the storing entity will develop the necessary ICUA in the same
year that the ICUA is to be released.
(g) Treaty obligations. Prior to executing any specific Storage and
Interstate Release Agreements, the United States will consult with
Mexico through the International Boundary and Water Commission under
the boundary water treaties and other applicable international
agreements in force between the two countries.
Sec. 414.4 Reporting requirements and accounting under Storage and
Interstate Release Agreements.
(a) Annual report to the Secretary. Each storing entity will submit
an annual report to the Secretary containing the material required by
this section. The report will be due on a date to be agreed upon by the
parties to the Storage and Interstate Release Agreement. The report
must include:
(1) The quantity of water diverted and stored during the prior year
under all Storage and Interstate Release Agreements; and
(2) The total quantity of stored water available to support the
development of ICUA under each Storage and Interstate Release Agreement
to which the storing entity is a party as of December 31 of the prior
calendar year.
(b) How the Secretary accounts for diverted and stored water. The
Secretary will account for water diverted and stored under Storage and
Interstate Release Agreements in the records maintained under Article V
of the Decree.
(1) The Secretary will account for the water that is diverted and
stored by a storing entity as a consumptive use in the Storing State
for the year in which it is stored.
(2) The Secretary will account for the diversion and consumptive
use of ICUA by a consuming entity as a consumptive use in the Consuming
State of unused apportionment under Article II(B)(6) of the Decree in
the year the water is released in the same manner as any other unused
apportionment taken by that State.
(3) The Secretary will maintain individual balances of the
quantities of water stored under a Storage and Interstate Release
Agreement and available to support the development of ICUA. The
appropriate balances will be reduced when ICUA is developed by the
storing entity and released by the Secretary for use by a consuming
entity.
Subpart C--Water Quality and Environmental Compliance
Sec. 414.5 Water quality.
(a) Water Quality is not guaranteed. The Secretary does not warrant
the quality of water released or delivered under Storage and Interstate
Release Agreements, and the United States will not be liable for
damages of any kind resulting from water quality problems. The United
States is not under any obligation to construct or furnish water
treatment facilities to maintain or improve water quality except as may
otherwise be provided in relevant Federal law.
(b) Required water quality standards. All entities, in diverting,
using, and returning Colorado River water, must:
(1) Comply with all applicable water pollution laws and regulations
of the United States, the Storing State, and the Consuming State; and
(2) Obtain all applicable permits or licenses from the appropriate
Federal, State, or local authorities regarding water quality and water
pollution matters.
Sec. 414.6 Environmental compliance and funding of Federal costs.
(a) Ensuring environmental compliance. The Secretary will complete
environmental compliance documentation, compliance with the National
Environmental Policy Act of 1969, as amended, and the Endangered
Species Act of 1973, as amended; and will integrate the requirements of
other statutes, laws, and executive orders as required for Federal
actions to be taken under this part.
(b) Responsibility for environmental compliance work. Authorized
entities seeking to enter into a Storage and Interstate Release
Agreement under this part may prepare the appropriate documentation and
compliance document for a proposed Federal action, such as execution of
a proposed Storage and Interstate Release Agreement. The compliance
documents must meet the standards set forth in Reclamation's national
environmental policy guidance before they can be adopted.
(c) Responsibility for funding of Federal costs. All costs incurred
by the United States in evaluating, processing, and/or executing a
Storage and Interstate Release Agreement under this part must be funded
in advance by the authorized entities that are party to that agreement.
[FR Doc. 99-28417 Filed 10-29-99; 8:45 am]
BILLING CODE 4310-94-P