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

CRS Report for Congress
CALFED Bay-Delta Program:
Overview of Institutional and Water Use Issues
Updated February 2, 2005
Pervaze A. Sheikh
Natural Resources Policy Analyst
Resources, Science, and Industry Division
Betsy A. Cody
Specialist in Natural Resource Policy
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

CALFED Bay-Delta Program:
Overview of Institutional and Water Use Issues
The California Bay-Delta Program (CALFED) was initiated in 1995 to resolve
water resources conflicts in the Sacramento/San Joaquin Rivers Delta and San
Francisco Bay (Bay-Delta) in California. The program planning effort focused on
developing a plan to address three main problem areas in the Bay-Delta: ecosystem
health, water quality, and water supply reliability. CALFED was initially authorized
to receive federal funding from FY1998 to FY2000; and since that time only certain
projects supporting CALFED goals received appropriations. The program was finally
reauthorized October 25, 2004.
The Bay-Delta is formed by the confluence of the north-flowing San Joaquin
River, the south-flowing Sacramento River, and the San Francisco Bay, to which the
delta of the two rivers is linked. This 738,000-acre area contains a vast network of
marshes, wetlands, and open water that supplies water to two-thirds of California’s
population and nearly seven million acres of farmland through a series of pumps,
canals, and dams operated by the federal and state governments. The competing
demands for Bay-Delta water have stretched the resource’s capacity to provide
reliable amounts of water to users (e.g., farmers) and the ecosystem. The Bay-Delta
ecosystem is being altered by habitat conversion and water quality degradation,
including salt water intrusion. For example, several fish populations have declined,
and some species are on federal threatened and endangered species lists. Many
attribute the deterioration to unnaturally low levels of water in the Bay-Delta. Listing
of these species has affected the timing and use of water pumped from the Bay-Delta
and has created uncertainty in water supplies for water users in southern California.
Allocating water from the Bay-Delta has been the subject of conflicts and
disputes among stakeholders such as farmers, urban water contractors, and
environmentalists for years. CALFED was developed as a response to these conflicts
through a series of agreements and revisions that have involved federal and state
legislation, and stakeholder accords. A Record of Decision (ROD) for the current
CALFED Program was issued by a consortium of state and federal agencies in
August 2000; however, legislation to implement the CALFED Program as outlined
in the ROD had not been enacted until recently. CALFED, as described in the ROD,
has 12 program components that range from water quality and supply to ecosystem
restoration and governance. CALFED was planned to be implemented in three
phases, of which two are already completed. The third phase is the implementation
of the CALFED program as outlined in the ROD. Stage I (of three stages in phase
III) of CALFED is currently underway and is expected to take seven years to
complete and cost nearly $8.7 billion.
The reauthorization of CALFED funding has been controversial. Specific issues
such as authorization for water storage projects, balance among project and program
activities, and water supplies for the environment, as well as broader issues such as
governance and the degree to which the ROD is implemented, were resolved to
varying degrees with the passage of P.L. 108-361, which reauthorized the CALFED
Program. This report will be updated as events warrant.

In troduction ....................................................1
Background ......................................................3
Conflicts and Federal Government Involvement......................5
Implementation of the Federal Endangered Species Act............6
Implementation of the CVPIA................................6
Implementation of the Clean Water Act........................7
CALFED Bay-Delta Program........................................7
CALFED Legislative Issues..........................................9
Funding ................................................10
Water Storage............................................11
Environmental Water Account..............................12
Science .................................................13
Land Acquisition.........................................13
Conclusion ......................................................14
Appendix A. Chronology of Events Relevant to Restoration of the California
Bay-Delta ...................................................16
List of Figures
Figure 1. The California Bay-Delta Watershed (shaded)...................4

CALFED Bay-Delta Program: Overview of
Institutional and Water Use Issues
The 1,153-square mile estuary at the confluence of the San Francisco Bay and
the Sacramento and San Joaquin Rivers Delta — the Bay-Delta — is also the hub of
California’s extensive water supply system. As such, the Bay-Delta has endured
decades of competing water demands. During this time, the Bay-Delta ecosystem has
experienced environmental degradation, increasing regional water demands, and a
decrease in reliable water supplies for urban, agricultural, and natural areas. For
example, by the late 1980’s and early 1990'’s fish species declines and water quality
problems had become so severe that continued operation of the state and federal
water supply projects were coming into conflict with state and federal environmental
laws. To counter this trend and to avoid shutdown or severe operational changes to
pumps at the heart of the State Water Project (SWP) and the federal Central Valley
Project (CVP), the State of California and several federal agencies entered into a
partnership to resolve resource conflicts. This partnership resulted in an agreement
known as the Bay-Delta Accord, which ultimately led to the development of the
CALFED Bay-Delta Program (CALFED) and the Record of Decision (ROD) for the
CALFED Bay-Delta Final Programmatic Environmental Impact Statement and1
Report (EIS/EIR). The objectives of CALFED were to restore ecological health,
improve water quality, fortify infrastructure for managing water (e.g. improving
Delta levees), and increase water supply reliability in the Bay-Delta area.
The authorization of an annual federal appropriation of $143 million from
FY1998 to FY2000 for the CALFED program — to develop and implement specific
portions of an ecosystem protection plan and long-term restoration projects for the
Bay-Delta — expired September 30, 2000.2 Between 1998 and 2000, $220 million
in federal funds was appropriated for the CALFED program; however, absent an
explicit authorization from the authorizing committees, congressional appropriators
have been reluctant to directly fund the program since.
Three bills were introduced in the 108th Congress to authorize appropriations for
federal participation in the CALFED program; H.R. 2828 (introduced July 23, 2003,

1 CALFED Bay-Delta Program, Programmatic Record of Decision, Volume 1 - Record of
Decision and Attachments I through 4 (California: August 28, 2000), hereafter referred to
as the ROD.
2 The initial authorization for CALFED funding (P.L. 104-208, Division E) came on the
heels of a 1994 agreement among state and federal agencies, and urban, agricultural, and
environmental interests to protect the Bay-Delta while satisfying key needs of various
involved interests.

by Ken Calvert), H.R. 2641 (introduced June 26, 2003, by George Miller), and S.
1097 (introduced May 21, 2003, by Dianne Feinstein and Barbara Boxer).3 All three
bills would have authorized implementation of various CALFED program
components, action items, and activities identified in the ROD; however, none of the
bills would have authorized the implementation of the ROD in its entirety.4
The reauthorization of federal participation in the CALFED program was quite
controversial. The controversy stems, in part, from the complex nature of water
allocation from the Bay-Delta itself. For decades, two massive water supply projects
— the State Water Project (SWP) and the federal Central Valley Project (CVP) —
have moved water from northern California, through the Bay-Delta to water users in
southern California. Decisions on who gets how much water and when they receive
it are generally made annually and are based on a myriad of state and federal laws,
historic water rights, contracts, and negotiated agreements. Any proposed change to
this complex water allocation system is met with concern from water users who fear
they may lose water, receive reduced priority for water supplies, or receive water of
a degraded quality. On the other hand, many attribute the Bay-Delta’s deterioration
to unnaturally low water supplies resulting from the management of the state and
federal projects and have called for changes in project operations. In particular, the
decline of certain fish species (e.g., winter run chinook salmon) led to operational
changes affecting when and how much water can be pumped from the Bay-Delta to
supply water users south of the Delta. Additionally, environmental groups have
advocated increased water supplies for environmental purposes to stave off the
decline of fish and wildlife species, improve water quality for other uses, and restore
the health and vitality of the Bay-Delta ecosystem.
While the CALFED program is an attempt to balance competing interests and
develop a plan for managing Bay-Delta water resources to meet competing demands,
all parties have not been 100% satisfied in the final goals, programmatic actions, and
water management regimes called for the in the ROD. Specifically, some agricultural
stakeholders have expressed concerns over how much water they will receive and
have asked for assurances that they will receive a certain percentage of their
contracted supplies; however, other agricultural and urban contractors fear their water
supplies may be threatened by such assurances. Some of the same groups, and
others, are concerned that the methods of distributing water will disadvantage them,
that the program is not balanced (e.g. between ecosystem restoration and water
storage facilities), and that funding levels and authorization for surface water storage
facilities are inadequate. Further, some question the legitimacy of scientific findings
regarding environmental water needs and believe the level of water allocated for
recovering threatened and endangered species in the Bay-Delta may not be justified.

3 For a congressional distribution memo that provides a detailed comparison of all three bills
related to the CALFED Bay-Delta Program, please contact Pervaze Sheikh at 7-6070 or
Betsy Cody at 7-7229. Side-by-side comparisons of more recent versions of the bills are
also available.
4 CALFED program components as listed in the ROD include governance, ecosystem
restoration, watersheds, water supply reliability, storage, conveyance, Environmental Water
Account, water use efficiency, water quality, water transfers, levee stability, and science.

Others are concerned that legislative efforts to resolve some of these issues
could undermine the ability of the CALFED program to restore fisheries and other
resources associated with the Bay-Delta ecosystem. Some environmental groups
argue for greater flows of water to natural areas to support the recovery of
endangered and threatened plant and animal species. Some also advocate investing
in water conservation and new pricing strategies to lower demand for Bay-Delta
water, and using new technologies (e.g. desalination and water recycling) to stretch
existing water supplies. In general, environmental groups oppose development of
new surface storage projects preferring instead to manage existing supplies more
Where there was once general agreement, perhaps tenuous, among the
stakeholders who participated in development of the ROD, this agreement was based
on a delicate balance of many interests and nearly a decade of fairly intense
negotiations. Consequently, any attempt to authorize a program departing from the
ROD has met with resistance from parties who fear their interests may not be well
served. This report presents the historical progression of conflicts and agreements
that led to the creation of CALFED, and discusses governance, ecosystem restoration,
and water use issues related to the reauthorization of CALFED in the 108th Congress
(P.L. 108-361). For more information on CALFED oversight in the 109th Congress,
see CRS Report IB10019, Western Water Resource Issues, by Betsy Cody and
Pervaze Sheikh.
The Bay-Delta is a 1,153 square-mile area located where the Sacramento and
San Joaquin Rivers converge and flow into San Francisco Bay. These rivers along
with other tributaries form a mosaic of sloughs and waterways that surround 57 man-
made islands within the Bay-Delta (see Figure 1). The Bay-Delta is considered the
largest estuary on the West Coast and its combination of fresh and salt water
ecosystems provide habitat for a diverse array of plant and animal life. An estimated
750 species of plants and animals, including over 130 species of fish are found in the
Bay-Delta.5 The Bay-Delta also contains over 700,000 acres of farmland,6 and is
used by approximately 12 million recreationists per year who among other activities,
boat, fish, hike, and sightsee in the Bay-Delta.
The water regime of the Bay-Delta was significantly altered in the 1930s when
the federal government at the behest of California, began a massive project to divert
water from the Sacramento Valley and Delta to farmland in California’s vast Central
Valley. The state, some 20 years later, followed with its own State Water Project
(SWP) which in large part parallels the federal Central Valley Project (CVP),
diverting much of the natural inflow into the San Francisco Bay to agricultural,
industrial, and urban consumers mostly in the San Joaquin Valley and Southern

5 CALFED Bay-Delta Program, 2003 Annual Report, (Sacramento, CA:2003).
6 The main crops grown in the Bay-Delta are wheat, alfalfa, cotton, corn, and tomatoes.

California.7 The Bay-Delta now supplies water to 22 million people and millions of
acres of farmland in California.8 Two networks of pumps, dams, canals, and
reservoirs take an estimated 5.9 million acre-feet (maf) of water from the San Joaquin
and Sacramento Rivers and their tributaries, and distribute it to agricultural and urban
water users in the California Central Valley via the CVP, and to Southern California
via the SWP.9 The combined annual amount of water taken by the CVP and SWP
ranges between 20% and 70% of the total annual inflow in the Bay-Delta region.10
Figure 1. The California Bay-Delta Watershed (shaded)
Source: Adapted by CRS Map Resources.

7 K. Taylor, K. Jacobs, and S. Luoma, “CALFED: An Experiment in Science and Decision-
making,” Environment v.45 (2003), pp. 30-41.
8 CALFED Bay-Delta Program, 2003 Annual Report, (Sacramento, CA:2003).
9 ROD.
10 Ibid.

Construction and operation of the CVP and SWP projects over many decades
fundamentally altered the physical environment of the Central Valley as well as the
Bay-Delta. Hundreds of wetland areas were lost or altered, and by the late 1980s,
water quality and Endangered Species Act (ESA) issues threatened the operation of
the CVP and the SWP. Today, the Bay-Delta ecosystem is still generally considered
to be unhealthy and unable to provide reliable amounts of water for water users.
Some also believe that the Bay-Delta is unable to sustain viable habitats for all of its
plant and animal life.11 Water quality has deteriorated in the Bay-Delta partially due
to drainage of freshwater and influx of highly saline water. Further, pollutants
originating from agricultural runoff, cities, and ranches have lowered water quality
in the Bay-Delta. The Bay-Delta has also suffered from fragmentation and loss of
native habitat. Of the nearly 350,000 acres of original tidal marshland in the Bay-
Delta, only 8,000 acres remain. Several plant and animal species are on state and
federal endangered and threatened lists, including the steelhead trout and the winter-
run chinook salmon. Problems in the Bay-Delta related to water quality and fish and
wildlife have raised compliance issues with the Clean Water Act (CWA) (P.L. 92-
500, as amended), the Endangered Species Act (ESA; P.L. 93-205, as amended), as
well as comparable state laws. These issues are discussed in more detail below.
Conflicts and Federal Government Involvement
The limited supply of water in California has been the subject of conflicts
among competing interests for decades. The fundamental controversy over water
supplies more recently has centered on the distribution of water supplies to urban
areas and agriculture, and their effect on the environment. In 1986, California and
federal government entered into a Coordinated Operation Agreement (COA) to
coordinate operations between the CVP and SWP, and to allow equitable sharing of
surplus water.12 Afterwards, controversy peaked when California was experiencing
a six-year drought (1987 - 1992).13 Limited water supplies during the drought led to
water rationing in urban and agricultural areas, a reduction in crop productivity and
cultivation, and environmental deterioration in river and marshland habitats. The
distribution of water was further complicated by the implementation of the federal
CWA and ESA in the Bay-Delta. Concerns that annual operations of the CVP and
SWP may have been violating federal and state water quality and endangered species
statutes resulted in new efforts to provide baseline water supplies for environmental
purposes. In 1992, the Central Valley Project Improvement Act (Title 34 of P.L.
102-575; CVPIA) for the first time allocated specific water supplies for natural areas
and for fish and wildlife.14 The development of subsequent regulations affected

11 U.S. Senate Committee on Energy and Natural Resources, CALFED Bay-Delta
Authorization Act, 107th Cong., 2nd Sess. (S.Rept. 107-171), June 24, 2002, (US GPO,
Washington, DC: 2002).
12 The COA received congressional approval in 1986 (P.L. 99-546).
13 For background on the California drought, see CRS Report 91-208 ENR, The California
Drought: Effects on Agriculture and Related Resources.
14 Water was first allocated for fish and wildlife habitat in 1993 by the BOR; however, the
accounting method for calculating the amount of water transferred to fish and wildlife

water allocation, decision making, and infrastructure operation in the Bay-Delta and
surrounding areas, and created new controversies among farmers, urban users, and
environmentalists over water supply distribution.
Implementation of the Federal Endangered Species Act. Several fish
species in the Bay-Delta have been listed as either endangered or threatened under
the federal ESA. The ESA generally prohibits actions that involve “taking”
(including harming) a listed species except under certain specified circumstances. It
also directs federal agencies to avoid adverse modification of a listed species’critical
habitat. Further, the ESA requires the designation of critical habitat areas where a
species is currently found or which might provide additional habitat for species
recovery.15 Actions implemented under the ESA have resulted in changes to dam
operations, water flow, and pumping facilities in the Bay-Delta. For example,
exports of water out of the Bay-Delta were limited to protect salmon runs of the
winter-run chinook salmon (Onchorhyncus tshawtscha), which was listed as
endangered in 1989. As other fish species, such as the delta smelt (Hypomesus
transpacificus) and spring-run chinook salmon (Onchorhyncus tshawytscha), have
been listed as threatened, further restrictions on water exports and project
modifications have been implemented in the Bay-Delta. Controversy over water
allocated to the environment for recovering fish was exemplified when efforts to
protect the then federally listed threatened Sacramento splittail (Pogonichthys
macrolepidotus) resulted in a lawsuit against the U.S. Fish and Wildlife Service
(FWS) by state water contractors. A federal judge, in 2000, invalidated the decision
to list the species, citing the failure of the FWS to consider the opinions of state game
scientists, explain high stocking rates in 1998, and explain why the splittail was
threatened. In September 2003, the FWS withdrew the splittail from the threatened
species list after analyzing the population and determining that it would not become
threatened or endangered in the foreseeable future.
Implementation of the CVPIA. Water allocation for endangered species and
the environment in general was to be enhanced with the enactment of the CVPIA in
1992. The legislation was enacted largely in response to the decline of fish and
wildlife species in the Bay-Delta and the Sacramento and San Joaquin Rivers system.
The CVPIA changed the priorities for water supply for the CVP by ranking fish and
wildlife water needs on par with irrigation and domestic water uses. Refuges are
granted the same high priority given to agriculture; and water reductions to refuges
may not exceed 25% during drought years. CVPIA also reallocates CVP water back
to natural areas to benefit salmon, steelhead trout, and other fish and wildlife.16
Some argue that limited funds appropriated for the restoration fund, litigation over

14 (...continued)
habitat has remained controversial.
15 For greater detail on implementing ESA, see CRS Report RL31654, Endangered Species
Act: A Primer, by Pamela Baldwin, Eugene Buck, and M. Lynne Corn. For more
information on ESA legislation, see CRS Issue Brief IB10072, Endangered Species:
Difficult Choices, by Eugene H. Buck, M. Lynne Corn, and Pamela Baldwin.
16 The CVPIA authorizes the allocation of 800,000 acre-ft of water annually for fish and
wildlife purposes, provides for anadromous fish restoration, and creates a restoration fund
financed by water and power users.

providing 800,000 acre-feet of water for the environment each year, and controversy
over contract renewal provisions has led to the CVPIA not fully meeting
environmental expectations. At the same time, many farmers and others have called
the CVPIA a disaster, claiming that the priority for allocating water supplies to the
environment is too high.
Implementation of the Clean Water Act. Beginning in the late 1980's, the
implementation of the CWA by the U.S. Environmental Protection Agency (EPA)
generated controversy between the State Water Board and the federal government.
The CWA regulates both surface water and groundwater quality and is enforced by
the EPA. In 1987, the EPA notified the State of California that state surface water
quality standards were not in compliance with the CWA. The state responded with
new water standards that were again rejected by the EPA. In 1993, after a lawsuit
brought by environmentalists, the EPA issued a set of federal water quality guidelines
for implementation in California. These were later rejected by the state.
This ongoing struggle to address CWA requirements further threatened
continued operation of the CVP and SWP, particularly operations of Delta pumping
facilities. In order to forestall cutbacks in water project operations, state and federal
authorities jointly adopted mutually acceptable water quality standards and agreed
to regulate the CVP and SWP operations to meet these standards, as well as to
develop target flows for ESA listed species. This agreement, known as the Bay-Delta
Accord, included the following elements: provisions to regulate springtime flow and
export limits to benefit fish species; operational flexibility to comply with provisions
of the ESA that address water supply and species monitoring issues among others;
and measures to improve environmental conditions in the Bay-Delta Estuary (e.g.,
waste discharge control and habitat restoration). The Accord was in effect until 2000
and then was incorporated in part by the ROD.
CALFED Bay-Delta Program
Controversies surrounding implementation of the federal statutes outlined above
fueled the creation of the Bay-Delta Framework Agreement (a refinement of the
Accord), which was signed in 1995 by state and federal agencies with regulatory
responsibilities in the Bay-Delta. This agreement marked the beginning of the
CALFED process and defined three issues that were deemed important for federal-
state coordination and cooperation: the formulation of water quality standards;
coordination of federal and state project operations with regulatory requirements (i.e.,
coordination of CVP and SWP operations to maintain compliance with the ESA,
CVPIA, and state and federal water quality provisions); and development of a joint
federal-state process to develop long-term solutions to environmental, water supply,
and water quality problems in the Bay-Delta. The CALFED Program was created
from the Framework Agreement to address these issues. The initial authorization of
federal funding for the CALFED Program came in 1996 with the enactment of P.L.
104-208 (Division E, Title I). This legislation authorized nearly $430 million for
FY1998 to FY2000. Funds appropriated for CALFED under this authorization were
$85 million for FY1998, $75 million for FY1999, and $60 million for FY2000. The

funding authorization expired September 30, 2000; however, some activities that
support CALFED program goals continued to receive federal funding.17
The CALFED process brought state, federal, and other stakeholders together to
develop a programmatic response to restoration and water supply issues in the Bay-
Delta. First, definitions of the problems to be addressed in the Bay-Delta were listed,
and a set of alternative solutions was developed. Second, to comply with the
California Environmental Quality Act (CEQA) and National Environmental Policy
Act (NEPA), an environmental impact statement (EIS) and an environmental impact
report (EIR) were prepared to identify the impacts associated with the individual
solutions being considered. Then, from a set of four alternatives, a “Preferred
Program Alternative” was selected as the long-term plan for improving water quality,
stabilizing Bay-Delta levees, restoring the Bay-Delta ecosystem, and improving water
supply reliability. This plan was announced August 28, 2000, in the Record of
Decision for the CALFED Bay-Delta Final Programmatic Environmental Impact
Statement and Report (ROD). The key components of the plan outlined in the ROD
include specific activities in 12 program areas, among them, the development of an
Environmental Water Account and the authority for a CALFED Policy Group.18 The
CALFED Policy Group, as proposed in the ROD, would have consisted of
representatives from 23 federal and state agencies and would have been responsible
for overseeing the implementation of CALFED, assessing its progress (including
reports to federal and state legislatures), and reviewing and coordinating CALFED
and related programs.19 However, before federal legislation was enacted approving
the ROD as a framework for implementing the CALFED program, the California
legislature adopted its own governance structure for the CALFED program.
The State of California established the California Bay-Delta Authority
(CALFED Authority) in September 2002. This state agency is housed in the
California Resources Agency and is responsible for overseeing the implementation
of the CALFED program. Specifically, the CALFED Authority is expected to
oversee the state implementation of the CALFED Program according to the ROD,
develop policies and track timelines associated with CALFED projects, report
annually to state and federal legislatures, manage the science element of CALFED
and establish an independent science board, review and approve program plans and

17 For CALFED-related funding requests for FY2005, see CRS Report RL32307,
Appropriations for FY2005: Energy and Water Development, coordinated by Carl Behrens
and Marc Humphries.
18 Program components include governance, ecosystem restoration, watersheds, water supply
reliability, storage, conveyance, Environmental Water Account, water use efficiency, water
quality, water transfers, levees, and science.
19 The primary or “lead” federal agencies involved in the CALFED process include the BOR
and the FWS, both within the Department of the Interior; the EPA; the NOAA Fisheries
(Department of Commerce; formerly the National Marine Fisheries Service); the U.S. Army
Corps of Engineers (Department of Defense); and the Natural Resources Conservation
Service (Department of Agriculture). State agencies include the Resources Agency
(Department of Water Resources, Department of Fish and Game, Reclamation Board, and
Delta Protection Commission); the California Environmental Protection Agency (including
the State Water Resources Control Board); and the Department of Food and Agriculture.

budgets, and administer the CALFED Program (e.g., hiring staff and approving
policies).20 The agency is expected to consist of representatives from six California
State agencies, six federal agencies, and the Bay Delta Public Advisory Committee,
as well as five members of the public (each representing a program region21), two at-
large members appointed by the State Senate and Assembly, and four non-voting
members of the State Legislature. The state law establishing the CALFED Authority
explicitly states that nothing should extend the application of federal law to actions
by state agencies or extend state law to actions by federal agencies.22 Further, the
CALFED Authority will dismantle in 2006 unless federal legislation authorizing the
participation of appropriate federal agencies in the CALFED Authority is enacted.
P.L. 108-361 authorized the Secretary of the Interior and federal agency heads to
participate as non-voting members of the CALFED Authority. It has not yet been
determined if this provision will nullify the sunset clause for the CALFED Authority.
The state law requires that the Secretary of the California Resources Agency make
a determination and written notification that “federal legislation has been enacted
authorizing the participation of appropriate federal agencies in the Authority” for the
sunset clause to be removed.23 This notification has not yet been issued.
CALFED Legislative Issues
The debate over the reauthorization of CALFED in the 108th Congress largely
centered on specific issues such as the authorization for water storage projects, cost
allocation, balance among project and program activities, and water supplies for the
environment, as well as broader issues such as governance and the degree to whichth
the ROD is implemented. Oversight issues during the 109 Congress are expected
to include project financing, water storage project programs, and implementation of
the Operations Criteria and Plan and South Delta Improvements Plan.
Three bills were introduced in the 108th Congress to authorize appropriations for
federal participation in CALFED: H.R. 2641, H.R. 2828, and S. 1097. S. 1097 and
H.R. 2828 were approved by respective full committees in the House and Senate
(House Resources and Senate Energy and Natural Resources). H.R. 2828 passed the
House, as amended, July 9, 2004. The Senate subsequently took up the House bill,
amended it, and passed H.R. 2828 on September 15, 2004. After several weeks of
tense negotiations, the House passed the Senate version under suspension of the rules
and without amendment on October 6, 2004. The bill was signed into law October

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

20 The California Bay-Delta Authority Act, Chapter 812, Statutes of 2002 (SB 1653, Costa)
of California State Law.
21 The California Bay-Delta Program is divided into five regions including the Sacramento
and San Joaquin River Delta, San Francisco Bay, Sacramento Valley, San Joaquin Valley,
and Southern California.
22 The California Bay-Delta Authority Act, Chapter 812, Statutes of 2002 (California Water
Code §79400 et seq.).
23 Ibid.

P.L. 108-361 approves the ROD as a framework for addressing the CALFED
Bay-Delta Program and authorizes under existing and new authorizations, several
activities and projects related to the components of CALFED.
S. 1097, as introduced, would have authorized federal agencies to conduct
projects and activities included under 14 components similar to the 12 components
defined in the ROD. These activities range from the specific, such as the
construction of floodway improvements in the Lower Mokelumne River, to broad
categories such as water conservation projects to enhance water supply reliability,
water quality, and ecosystem benefits. S. 1097, as amended on May 20, 2004, would
have authorized $389 million in funding for these activities from FY2005 to FY2010.
As passed by the House in July, H.R. 2828 was similar to S. 1097 in that it
would have authorized federal agencies to conduct projects and activities included
under components defined in the ROD and provided an authorization of $389
million for those activities. H.R. 2828, however, differed from S. 1097 in some
ways. The July version of H.R. 2828 would have (1) approved the ROD as a general
framework; (2) included a provision potentially pre-authorizing the construction of
federal water projects; (3) contained additional requirements for land acquisition and
ecosystem restoration projects; and (4) authorized appropriations from FY2005 to
FY2008. 24
Thematically, the major areas of bill differences include the degree to which the
existing ROD would have been implemented, the entity in charge of managing
program activities, the process for project approval (e.g., feasibility study and project
authorization), cost allocation schemes, and requirements for land acquisition.
Congress is expected to face other CALFED issues in the next few years, including
funding levels, water storage, water supplies for the environment, land acquisition,
and science. A summary of each of these issues is presented below.
Funding. The implementation of CALFED is expected to cost an estimated
$10 billion dollars over 30 years; however, during the first seven years (referred to
as Stage 1), implementation costs are estimated to be $8.7 billion. The CALFED
program identified in the ROD envisions a three-way split in responsibility for
funding between the federal government, state government, and local users (e.g.,
through user fees). However, each program element in the plan may have its own
cost-sharing formula.
Federal appropriations for the CALFED Program are expected in the annual
Energy and Water Development Appropriations bills; however, other federal funding25
may be provided via appropriations for other federal programs. State funding is
expected to come from a combination of state bond measures, restoration fees paid

24 For a Congressional distribution memo that contains a side-by-side analysis of H.R. 2828
and S. 1097, please contact either Pervaze Sheikh at 7-6070 or Betsy Cody at 7-7229.
25 For example, federal appropriations are expected from federal agencies that provide funds
to state programs (e.g., a California State revolving fund for improving drinking water
quality that is receiving capitalization grants from the EPA), which would be provided under
different appropriations bills.

under the authority of the CVPIA, state and federal appropriations, and local user
fees (e.g., fees for water use). A draft finance plan was released on December 4,
2004. This plan specifies how funding for the CALFED Program is expected to be
distributed among the federal and state government, water users, and local grant
matching. A final version of this plan is expected in 2005.
In the past few years, Congress funded discrete projects within the CALFED
program, but, lacking an authorizing statute, provided no appropriations for the
overall program from FY2001 to FY2005. For example, in the joint explanatory
statement to P.L. 108-137 (Energy and Water Development Appropriations for
FY2004), conference managers stated that it would be difficult for Congress to
support the CALFED program without program authorization by Congress. To date,
federal funding has been appropriated to provide fish screens for existing water
diversions; implement pollution control measures; manage fish, riparian, and
estuarine habitat; and study water storage projects. The funding has been in addition
to funds already authorized for projects and programs under the CVPIA and other
previously authorized projects and programs. Although, no federal funds were
appropriated for the CALFED Program from FY2001-FY2005, appropriations were
provided for projects that support the goals of CALFED, such as the continued study
of four water supply projects. No federal funds were appropriated for FY2001 for
CALFED or any of its projects. For FY2002, FY2003, FY2004 and FY2005
Congress included $30 million, $23 million,$9.0 million, and $8.5 million,
respectively, in the Water and Related Resources account of the Bureau of
Reclamation (BOR) for projects supporting the goals of CALFED; however, again,
it did not fund the CALFED program per se. As enacted, P.L. 108-361 authorizes
$389 million for the CALFED program for FY2005 - FY2010.
Water Storage. Many argue that an increase in water supplies for California
is needed due to population growth in the state and lower supplies from the Colorado
River, among other things. One mechanism to increase the availability of additional
water supplies is to increase the capacity for surface water storage. Several
stakeholders, including some Members of Congress, have argued for an increase in
investments for building additional surface water storage capacity in California.
Others contend existing developed water supplies can be stretched through
conservation, water reuse and recycling, conjunctive use (storing water in
groundwater basins), water transfers, and changes in water management policy
(e.g.,water pricing). During a House Resources committee hearing on a CALFED
crosscut budget in May of 2003, several Members of Congress expressed concerns
that more money has been spent on environmental activities than on storage.
Program officials countered by explaining that the authorization for feasibility studies
for water storage expansion projects were delayed until early in 2003, when they
were authorized in the FY2003 Omnibus Appropriations (P.L. 108-7) and that over
time, funding for water storage will increase relative to future ecosystem spending.
Thus, they contend, the CALFED program is designed to be implemented in a
“balanced” manner over the life of the program. Some supporters of ecosystem
restoration spending note that the federal government has already invested $1.3
billion in the CVP and that this water supply investment is in part responsible for the
critical state of species and water quality in the Bay-Delta.

Both S. 1097 and H.R. 2828 included several provisions designed to provide
balance among program components. H.R. 2828 as originally passed the House,
further included a provision to possibly streamline project approval. The provision
would have allowed the Secretary of Interior to proceed with water storage
construction upon completion of a feasibility study, unless Congress passed a
disapproval resolution within 120 legislative days (§103(b)(5)(A)(i)(III)). This
provision was very controversial and was one of the major differences in the House
and Senate bills upon which there was strong disagreement. Ultimately, the
provision was dropped from the bill and replaced with a provision requiring a
rebalancing of program elements and re-submission of options for water storage if
Congress does not authorize construction of water storage facilities within a certain
time frame.
Environmental Water Account. To increase water supply reliability, while
not adversely affecting the Bay-Delta ecosystem, the ROD included an
Environmental Water Account (EWA), which was established by CALFED agencies
in 2000. The account is seen as a way to add flexibility to the regulatory system to
ensure that fish are protected from water project operations while allowing for greater
water supply reliability for agricultural and urban users. CALFED agencies are to
use the EWA to annually acquire, bank, and transfer approximately 380,000 acre-feet
of water and arrange for its conveyance. The account may use transfers, options, and
acquisitions to obtain water to compensate water users when pumps are shut down26
to mitigate “fish take.” In addition, water may be obtained through financing
conservation or recycling projects. Five CALFED agencies are partners in the EWA:
U.S. Fish and Wildlife Service (FWS), National Oceanic and Atmospheric
Association Fisheries (NOAA Fisheries), BOR, California Department of Fish and
Game, and California Department of Water Resources. These agencies authorize
exports from the account to provide additional water for species protection.
The use of the EWA and the amount of water that is needed or desirable in the
EWA has generated controversy. Prior CALFED bills would have directed that the
EWA provide assurances that actions taken to protect species listed as threatened or
endangered under the federal ESA avoid water delivery impacts and costs to project
water users. This language would have significantly narrow the scope and priorities
of the EWA, as compared with the ROD. For example, the ROD does not limit the
scope of the EWA to only species listed under the ESA, nor does the ROD contain
provisions that protect water users from costs associated with the function of the
EWA. While many stakeholders support the EWA, they are divided as to how it
should work. Some participants have expressed concern that the water level
prescribed for fisheries is too low, that baseline water needs are not adequately
defined, and that operating rules for the EWA are unclear. Others believe that too
much water is already allocated for the environment and want assurances that certain

26 An environmental consequence of water pumping in the Bay-Delta is the death of fish at
the pumping stations (i.e., “fish take”). Fish take limits (limit on how many fish may be
harmed under the ESA) have been set by fish regulatory agencies in the Bay-Delta, and
when these limits are approaching, an EWA panel consisting of representatives from five
agencies can ask for pumps to be shut down. Water supplies lost during this period can be
compensated from the EWA.

quantities of water for farming will be available. Both H.R. 2828 and S. 1097
included several provisions addressing the EWA, yet they differ in some respects.
For example, the definitions of the EWA under S. 1097 and H.R. 2828 were largely
tied to the ROD; however, S. 1097 noted that the EWA is to provide water in
addition to the regulatory baseline quantity of water to protect and restore Delta
fisheries, while H.R. 2828, as reported and enacted, defined the EWA as the
cooperative management program established under the ROD. As enacted, P.L. 108-
361, also authorizes the use of the existing Central Valley Project Restoration Fund
for EWA purposes (not to exceed $10 million).
Science. Ecosystem restoration is generally undertaken with uncertainties in
the restoration process (e.g., scientific uncertainty in the ability of some restoration
projects to succeed). Specifically, restoration efforts may require the application of
untested technologies, and may uncover unforeseen circumstances that may indicate
a change in the initial restoration strategy. Indeed, some argue that identifying and
eliminating all uncertainties involved with restoration is probably impossible. Some
stakeholders question the level of scientific uncertainty in some restoration activities
and regulations of CALFED. For example, some question the validity of provisions
that specify the level of water needed for the Bay-Delta ecosystem to restore
endangered fish species. They have called for an independent scientific review of the
validity of the quantitative allocations of water to habitats of endangered and
threatened fish species. Independent scientific review and the implementation of
adaptive management was addressed under various versions of H.R. 2828 and S.
1097; P.L. 108-361 contains provisions that call for the establishment of an
independent science board and other panels to provide oversight and peer review of
the program; creation of monitoring and research programs and performance27
measures; and development and implementation of adaptive management.
Land Acquisition. Federal and state land acquisition is expected to be
necessary to implement several components of the CALFED Program according to
the ROD. For example, the ROD estimates that nearly 260,000 acres of agricultural
land will need to be used for ecosystem restoration, water quality, water storage and
conveyance, and levee system integrity projects and activities. Because land
acquisition may cause conflicts among stakeholders and affect surrounding
landowners and local governments, as recognized by the ROD, land acquisition in
the Bay-Delta is controversial. Some argue that land acquisition is essential for
restoring ecosystems and should not be subjected to extended delays and restrictions;
others argue that guidelines and assurances must be established to minimize potential
economic impacts of land acquisition.
S. 1097 and H.R. 2828 would have authorized federal funds to acquire fee title
to land only where consistent with the ROD in implementing the CALFED Program
(§4(f) of S. 1097 and §104(e) of H.R. 2828). This provision would have applied to
all components under each bill. H.R. 2828, as passed by the House in July, included

27 Adaptive management within the context of CALFED could be described as incorporating
new information learned from experience and scientific studies into restoration and water
supply projects or policies that may make these projects and policies progress more
efficiently toward reaching their goals.

additional requirements for land to be acquired for ecosystem restoration. For
example, it would have directed that potential impacts of acquiring land be reported
and mitigated; preliminary management plans be created to report existing
conditions, expected ecological benefits, cost estimates, and implementation
schedules; and federal land acquisitions be identified. Some fear such language
would constrain ecosystem restoration activities, while others argue that such
language is needed to reduce pressure on acquiring private property and to ensure
success in ecological restoration. P.L. 108-361 incorporates much of the language
in H.R. 2828, including a provision that requires federal funds for the implementation
of CALFED be used to acquire fee title to land only where consistent with the ROD.
Other provisions require the Secretary of the Interior to identify parcels of land to be
acquired, and provide notice of land acquisitions, 150 days before the project is
approved, to appropriate authorizing committees of the House and Senate and
Senators and Representatives whose districts will be affected. P.L. 108-361 also
contains a set of reporting provisions from H.R. 2828 that are to describe the process
and timing of notifying public and local governments of land acquisitions; describe
the measures taken to reduce impacts of land acquisition on agricultural lands,
pursuant to the ROD; and include preliminary management plans for all lands
acquired, including the expected ecological benefits, cost estimates, and
implementation schedules.
A decade-long attempt to address water quality, water supply, and ESA issues
in the California Bay-Delta via the CALFED process ultimately resulted in
development of an estimated 30-year, $10 billion plan to manage water and related
resources throughout most of the state. A formal Record of Decision for the plan and
associated program activities was released in August 2000, shortly before
authorization of federal funding for the CALFED process expired. Several attempts
were made to reauthorize federal funding for the program during the 107th Congress;
however, no authorizing legislation was enacted. Failure to reauthorize federal
funding and participation in the CALFED program resulted in piecemeal
appropriations for specific projects and activities that support the goals of the
CALFED program for FY2001 - FY2005. Appropriators repeatedly indicated a
reluctance to provide more general program funding until the program was
The debate to reauthorize CALFED continued in the 108th Congress, ultimately
resulting in the passage of H.R. 2828, as amended in the Senate, and passed by the
House, October 6, 2004 (P.L. 108-361). Several issues were debated, including
streamlined water supply project approval, balance among program activities (e.g.
water supply and ecosystem restoration), the level of federal and state funding for the
program, and the quality of science used to support policy decisions.
An emphasis on increasing water supply through surface and ground water
storage projects associated with CALFED has become a priority for California due
to population growth, increasingly limited water supplies, and insecurity of water
supplies from the Colorado River. With diminished water supplies from the

Colorado River, added pressure for water could be placed on the Bay-Delta, which
in turn might affect the viability of the CALFED Program.28 Oversight issues before
the 109th Congress are likely to include program budgeting and financing, status of
storage projects, and overall program balance.

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

Appendix A. Chronology of Events Relevant to
Restoration of the California Bay-Delta
1978 — State Board adopts Water Rights Decision 1485 and a water quality control
plan for the Bay-Delta. Decision 1485 set forth conditions for the SWP and CVP
operations in the Delta that included water quality standards, export limitations, and
minimum flow rates.

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

(named after Judge Racanelli who wrote the opinion) determines 1978 plan
inadequate because it only assessed the effects of the CVP and SWP. Ruling
stipulates that the State Board should consider all beneficial uses, instream and
consumptive, when setting water quality standards.
1987 — EPA officials notify State Board that the 1978 water quality plan is
inadequate under federal Clean Water Act (CWA).

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

1991 — State Board adopts water quality control plan for the Bay-Delta and begins
work on a separate water rights decision. EPA disapproves the plan under the CWA.
1992 — State Board releases and later withdraws interim Delta standards, Decision
1630. Congress passes the Central Valley Project Improvement Act (CVPIA, Title
34 of P.L. 102-575), which included several fish and wildlife protection and
restoration goals, including dedicating 800,000 acre-feet of water to fish and wildlife
1993 — The EPA released draft federal water quality standards after being sued by
1994 — The Bay-Delta Accord is signed, marking an agreement between state and
federal officials on water quality standards, and creating the CALFED Bay-Delta
Program. In addition, state and federal officials announce a framework agreement
that will coordinate CVP and SWP operations to meet water quality standards and
protect endangered species; adopt state water quality standards; and develop a long-
term strategy to resolve Delta fish and wildlife, water supply reliability, levee
stability and water quality problems.
1995 — State Board adopts water quality plan with objectives similar to those in the
accord. EPA approves plan and withdraws federal standards.
1996 — Congress authorizes development of a CALFED plan (program) with $143
million in annual funding for FY1996 to FY2000 (P.L. 104-208, Division E).
CALFED Bay-Delta Program releases phase I report outlining core programs and
three potential solutions.
1998 — CALFED Bay-Delta Program releases phase II draft EIS/EIR with three

1999 — CALFED releases a draft programmatic EIS/EIR.

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

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

implementation of the preferred alternative.
2002 — The CALFED Bay-Delta Authority is established by the state to oversee the
implementation of the CALFED Program according to the principles outlined in the
2003 — The Sacramento splittail is delisted from the threatened species list by the
U.S. Fish and Wildlife Service.

2004 — The Water Supply, Reliability, and Environmental Improvement Act is
signed into law on October 25, 2004 (P.L. 108-361) reauthorizing the CALFED
Program and authorizing $389 million in federal funds for FY2005 - FY2010.