LOS ANGELES — The U.S. House passed a bill to accelerate local funding for water projects in 17 western states amid opposition from California Democrats, who say it would compromise the state's sovereign authority.
The most controversial aspect of the bill is that it would repeal California's authority to implement the San Joaquin River Restoration Settlement Act. The Congressional Budget Office estimates the measure would reduce federal costs by $162 million over the next several years.
HR 2898, the Western Water and American Food Security Act of 2015, was approved by the House of Representatives by a 245-176 vote on July 16.
"The House today passed a drought bill that included some useful short-term provisions as well as some provisions that would violate environmental law," U.S. Sen. Dianne Feinstein said in a prepared statement. "While I cannot support the bill as passed, I remain hopeful we can come to an agreement that can advance through both chambers."
Two California Assembly members, House Speaker Toni Atkins and Marc Levin, also came out in opposition, saying they hoped if it managed to pass the U.S. Senate that President Obama would veto the bill.
U.S. Rep. Devin Nunes, a San Joaquin, Calif. Republican and the bill's co-author, called the effort "legislation that will ease the devastating water crisis that is wreaking havoc on the Central Valley economy and pushing useful farmland out of production."
The bill proposes changes that compromise California's sovereign authority to balance competing water needs in the face of a fourth year of drought, according to Atkins, D-San Diego, and Levine, D-San Rafael.
Akins said HR 2898 takes California in the wrong direction by resorting "to the same water wars that have long plagued our state by creating winners and losers in the short term and bitter and irreconcilable conflicts in the long term. It flies in the face of the hard, positive work we've done for Californians."
The state legislature and the Gov. Jerry Brown "worked in a bipartisan way to pass an over-$7.5-billion water bond and expedited access to general funds and bond funds to help farmers, cities and the environment," Atkins said.
Levine said that the state, in a historic drought, needs "real solutions, not Congressional gamesmanship."
On July 16, the same day that the bill passed the House of Representatives, Moody's Investors Service released a largely positive report on the state of California's water credits despite severe drought conditions.
The drought isn't hurting the state's credit rating, because California is experiencing robust economic growth and revenue growth, said Michael Wertz, a Moody's analyst.
"There really aren't drought impacts for the state of California rating as a whole," Wertz said. "But, we should be mindful that despite how much we hear about the drought, agricultural revenues are only 2% of the state's gross domestic product."
As the state has experienced severe droughts in previous decades, water wholesalers have stored water in preparation, ameliorating some of the damage on water utilities and wholesalers, Wertz said. The utilities also have been adjusting rates to deal with increased conservation, he said.
"California's drought is now in its fourth year and virtually the entire state is in drought; exceptional drought covers almost 45% of the state," Moody's analysts wrote in the report. "The state has experienced 10 multiyear droughts since 1900. The current drought is among the most severe recorded resulting in significant depletion of the state's key reservoirs."
As result only three water creditsthat Moody's tracks have a negative outlook - and the state's major water suppliers and utilities continue to be highly-rated, he said.
The three with negative outlooks are: Kern County Water Agency Improvement District 4, Asuza WaterEnterprise and Modesto Water Enterprise. But even those three have retained Single-A ratings.
Nunes took swipes at Democrats, who have opposed what he said were four previous efforts by the U.S. House of Representatives to pass a major California water bill.
"Although the White House and many congressional Democrats resisted all our previous efforts and are already opposing the new bill, we are working to convince them that something has to be done," Nunes said. "As thirsty Central Valley farmers and families continue to watch their water get flushed into the ocean due to ever-expanding environmental regulations, it's long past time that the government stop prioritizing fish over families."
The legislation is expected to decrease budget deficits over the next 10 years, according to the Congressional Budget Office.
Non-federal contractors are expected to finance accelerated payments with bonds exempt from federal taxation, which the CBO estimates would lead to a decrease in revenues of $89 million over the 2016-2025 period if the legislation is enacted. At the same time, the bill would reduce direct federal spending by $883 million over the same time frame thus decreasing budget deficits over the 10-year period by $794 million.
The bill would direct the Bureau of Reclamation to convert water service contracts with water districts in 17 western states to repayment contracts if a contractor requests it. Water users that choose to convert their contracts would be required to accelerate repayment of their share of the capital costs of constructing the affected projects. Under the bill, existing repayment contractors would have the option to repay their share of capital costs on an accelerated schedule.
It would also allow the BOR, the U.S. Fish and Wildlife and the National Oceanic Atmospheric Administration to respond to drought conditions in western states by authorizing appropriations for projects to store water and by accelerating reviews of permit applications and environmental studies for new water projects.
Feinstein agreed with the Republicans on the need to increase the flexibility of the state's water delivery infrastructure.
"We need to facilitate water transfers and maximize water pumping without violating environmental laws like the Endangered Species Act," she said.
