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115th Congress    }                                  {   Rept. 115-257
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                  {         Part 1

======================================================================



 
                  WATER RIGHTS PROTECTION ACT OF 2017

                                _______
                                

 July 25, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

     Mr. Bishop of Utah, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 2939]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 2939) to prohibit the conditioning of any 
permit, lease, or other use agreement on the transfer of any 
water right to the United States by the Secretaries of the 
Interior and Agriculture, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 2939 is to prohibit the conditioning of 
any permit, lease, or other use agreement on the transfer of 
any water right to the United States by the Secretaries of the 
Interior and Agriculture.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 2939 upholds longstanding federal deference to State 
water laws by prohibiting agencies within the Departments of 
the Interior and Agriculture from conditioning or withholding 
the issuance of any permit, lease or other land use arrangement 
on the transfer of privately held water rights to the United 
States.
    Each State has its own system of water laws that govern 
public and private water rights within its borders. Eastern 
States normally use riparian systems of law, under which rights 
to use water are tied to land adjacent to waterways, while 
western States' water laws are more complex. Most western 
States have adopted the prior appropriation doctrine, or 
``first in time, first in right.'' Under prior appropriation, 
water rights are obtained by diverting water for some 
beneficial use, which can include domestic and municipal 
purposes, irrigation, stock-watering, manufacturing, mining, 
hydropower, aquaculture, recreation and fish and wildlife.
    During the expansion and development of the western 
territories in the beginning of the 20th century, the federal 
government generally left the western States to develop their 
own systems of water laws with relatively little conflict or 
involvement, outside of large-scale water projects. By the 
1920s, however, the United States began to pursue the 
establishment of water rights with greater frequency. Despite 
the federal government's general deference to State laws on 
matters affecting water rights, the United States could not be 
bound by a water rights determination in State court because 
the federal government was immune from State court decisions.
    In 1952 the McCarran Amendment (43 U.S.C. 666) waived the 
federal government's immunity from State court decisions and 
barred the United States from objecting to the application of 
State laws to such proceedings. This landmark law continued the 
tradition of federal deference to State water laws and put in 
place a framework under which the federal government was 
treated like a private entity for purposes of seeking water 
rights within western States, exclusive of eminent domain 
authorities provided by the Fifth Amendment to the U.S. 
Constitution.
    Despite the protections afforded to States under the 
McCarran Amendment, there have been recent instances where 
federal agencies have been accused of undermining State water 
laws. In 2014, the United States Forest Service (USFS) proposed 
a directive that was met with criticism on the grounds that it 
superseded State water laws and would eliminate multiple uses 
on and off federal lands. In proposing its draft ``Directive on 
Groundwater Resource Management,'' USFS stated in a 2014 press 
release that it needed to ``improve the Forest Service's 
ability to manage and analyze potential uses of National Forest 
System (NFS) land that could affect groundwater resources.''\1\ 
The proposal governed activities on 193 million acres of 
forests and grasslands in 42 States. Although the Forest 
Service Manual indicated that the proposed Groundwater 
Directive would not impact a State's ability to manage water, 
it specifically called for managing ``surface and groundwater 
resources that were hydraulically interconnected, and 
considered them interconnected in all planning and evaluation 
activities.''\2\
---------------------------------------------------------------------------
    \1\United States Department of Agriculture: U.S. Forest Service 
Proposes New Management Practices for Stewardship of Water Resources, 
May 5, 2014 (press release).
    \2\Forest Service Groundwater Resource Management Chapter 
2560.03.03; p. 8.
---------------------------------------------------------------------------
    In addition, the proposal indicated that USFS would 
``evaluate all applications to States for water rights on NFS 
lands and applications for water rights on adjacent lands that 
could adversely affect NFS groundwater resources.''\3\ At a 
June 24, 2014, Water and Power Subcommittee hearing on the 
Groundwater Directive, Mr. Patrick Tyrrell, State Engineer for 
Wyoming, testified that, ``[t]he assumptions, definitions, and 
new permitting considerations contemplated under the Proposed 
Directive materially interfere with Wyoming's authority over 
surface and groundwater, and will negatively impact the State's 
water users.''\4\ Subsequently, the Western Governors 
Association sent a letter to USFS expressing concerns.
---------------------------------------------------------------------------
    \3\Id. at 9-10.
    \4\Testimony of Mr. Pat Tyrrell before the House Water and Power 
Subcommittee, June 24, 2014, p. 1.
---------------------------------------------------------------------------
    In February 2015, then-Forest Service Chief Tom Tidwell 
indicated to the Senate Energy and Natural Resources Committee 
that the Groundwater Directive was being temporarily shelved: 
``Where we are today is we've stopped . . . We're going to go 
back, and we're going to sit down with--primarily with the 
states, the state water engineers--to really sit down with them 
and get their ideas about how we can do this, and ideally how 
we can do it together.''\5\ Although the Groundwater Directive 
was withdrawn, some water users have expressed concerns that 
similar proposals could be resurrected in some form in the 
future.
---------------------------------------------------------------------------
    \5\E&E; News: Agency puts breaks on controversial groundwater 
directive, February 26, 2015.
---------------------------------------------------------------------------
    This attempt at securing privately held water rights is not 
an isolated incident. In 2011, USFS issued a national interim 
directive (No. 2709.11-2011-3) for ski area special use permits 
in all 122 public land ski areas in the United States. The 
directive included a clause requiring applicant ski areas to 
relinquish privately held water rights to the United States as 
a permit condition. It also required that water rights arising 
on USFS lands off-site be relinquished to the United States in 
the event that the permit expired or is terminated. The purpose 
for the new clause, as stated by then-Forest Service Chief Tom 
Tidwell during a November 15, 2011, Natural Resources Committee 
hearing, was to ensure that water remains at the ski areas so 
that ski recreation could continue at those sites. On June 20, 
2014, USFS proposed an amended ski areas clause that reportedly 
addressed some ski area concerns (79 FR 35513). In 2015, USFS 
released a final directive that requires ski areas to prove 
that there is enough water to sustain skiing for the future 
rather than transferring water rights to the federal government 
as a condition of operating on public lands (80 FR 81508). At a 
May 2017, Water, Power and Oceans Subcommittee hearing, Mr. 
Christopher Treese, External Affairs Manager for the Colorado 
River Water Conservation District, testified that, ``[t]he `ski 
area rule' has been revised and reissued to the general 
satisfaction of the ski industry. However, many Western water 
users remain wary of federal attempts to overstep its authority 
with regard to water rights.''\6\
---------------------------------------------------------------------------
    \6\Testimony of Mr. Christopher Treese before the House Water, 
Power and Oceans Subcommittee, May 18, 2017, p.1.
---------------------------------------------------------------------------
    Similar policies have been adopted by USFS and other 
federal land management agencies involving grazing operations 
through the use of grazing permits. In the spring of 2012, 
ranchers with livestock grazing rights on USFS lands in Utah's 
Tooele County were told by USFS agents to sign a ``change of 
use'' application that would allow the agency to then determine 
what and where the use of the livestock water would be. At an 
October 2013, Water and Power Subcommittee hearing, Mr. Randy 
Parker, Chief Executive Officer for the Utah Farm Bureau 
Federation, testified that, ``[t]his Forest Service action 
called for the relinquishment of the water right in exchange 
for the approving the conditional use of the grazing 
allotment.''\7\ The matter was eventually resolved and 
characterized as a misunderstanding by regional USFS staff. Mr. 
Parker further testified at a May 2017, Water, Power and Oceans 
Subcommittee hearing that, ``[r]anchers, like any American 
business, need certainty to make decisions. The federal land 
management philosophy of the U.S. Forest Service and the Bureau 
of Land Management and their on-the-ground decision-making 
dictates an uncertain future for public lands ranching.''\8\
---------------------------------------------------------------------------
    \7\Testimony of Mr. Randy Parker before the House Water and Power 
Subcommittee, October 10, 2013, p. 11.
    \8\Testimony of Mr. Randy Parker before the House Water, Power and 
Oceans Subcommittee, May 18, 2017, p. 4.
---------------------------------------------------------------------------
    H.R. 2939 provides a permanent solution to protect State 
water law and private property rights from future federal 
takings. Additionally, the bill places strict limits on future 
federal policies that have the potential to impact State water 
rights.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    This section states the short title of the bill as the 
``Water Rights Protection Act of 2017''.

Section 2. Definitions

    This section defines key terms used throughout the Act.

Section 3. Treatment of water rights

    This section prohibits the Secretary of the Interior and 
the Secretary of Agriculture (Secretaries) from: conditioning 
the issuance, renewal, amendment, or extension of any permit, 
approval, license, lease, allotment, easement, right-of-way, or 
other land use or occupancy agreement on the transfer of any 
water right directly to the United States; requiring any water 
user to apply for or acquire a water right in the name of the 
United States under State law as a condition for any permit or 
other land use or occupancy agreement; and conditioning or 
withholding the issuance of any permit, approval or other 
agreement conditioned on with changes to water diversions or 
groundwater withdrawals that are contrary to State water law.

Section 4. Policy development

    This section requires the Secretaries to: recognize 
existing State authority for permitting and adjudicating water 
use; coordinate with States; and not assert any connection 
between surface and groundwater that is inconsistent with State 
water laws for any future rule, policy, directive, management 
plan, or similar federal action relating to the issuance of any 
permit, lease, license, easement or any other land use 
agreement.

Section 5. Effect

    This section affirms that nothing in the Act shall 
adversely impact: any existing legal authority under the 
jurisdiction of the Secretaries; existing or future Bureau of 
Reclamation contracts; the Endangered Species Act of 1973; 
federally reserved water rights; the Federal Power Act; Indian 
water rights; and federally held state water rights.

                            COMMITTEE ACTION

    H.R. 2939 was introduced on June 20, 2017, by Congressman 
Scott R. Tipton (R-CO). The bill was referred to the Committee 
on Natural Resources and in addition to the Committee on 
Agriculture. On May 18, 2017, the Subcommittee on Water, Power 
and Oceans held a hearing on a discussion draft of this bill. 
On June 22, 2017, the Natural Resources Committee met to 
consider the bill. Congresswoman Norma J. Torres (D-CA) offered 
an amendment designated 01; it was not adopted by a roll call 
vote of 15 ayes to 22 nays, as follows:


    No other amendments were offered, and the bill was ordered 
favorably reported to the House of Representatives by a 
bipartisan roll call vote of 24 ayes to 14 nays on June 27, 
2017, as follows:


            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation and the Congressional Budget Act of 
1974. With respect to the requirements of clause 3(c)(2) and 
(3) of rule XIII of the Rules of the House of Representatives 
and sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the enclosed cost estimate for 
the bill from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 14, 2017.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2939, the Water 
Rights Protection Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jeff LaFave.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 2939--Water Rights Protection Act of 2017

    H.R. 2939 would prevent federal agencies from requiring 
certain entities to relinquish their water rights to the United 
States in order to use public lands. The bill also would 
require the affected agencies to consult with states when 
developing policy related to land use agreements.
    Because CBO expects that implementing the bill would not 
affect the number of users of public lands or the amount of 
receipts received by federal agencies for the use of those 
lands, we estimate that implementing the bill would have no 
effect on the federal budget.
    Enacting H.R. 2939 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 2939 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    H.R. 2939 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandate Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Jeff LaFave. The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to prohibit the conditioning of any 
permit, lease, or other use agreement on the transfer of any 
water right to the United States by the Secretaries of the 
Interior and Agriculture.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                       COMPLIANCE WITH H. RES. 5

    Directed Rule Making. This bill does not contain any 
directed rule makings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.



                            DISSENTING VIEWS

    H.R. 2939 is nearly identical to the highly controversial 
H.R. 3189 from the 113th Congress, which passed the House on 
March 13, 2014 over the opposition of the Obama 
administration\1\ and nearly every Democratic House Member.\2\ 
If enacted, the legislation will undermine longstanding 
authorities of federal agencies to protect our nation's natural 
resources and the water rights of Indian tribes. Given these 
harmful impacts, we oppose H.R. 2939 as written.
---------------------------------------------------------------------------
    \1\Statement of Administration Policy on H.R. 3189, Executive 
Office of the President, March 12, 2014. https://
obamawhitehouse.archives.gov/sites/default/filestombilegislative/sap/
113/saphr3189r_20140312.pdf.
    \2\Recorded vote on H.R. 3189, Office of the Clerk of the U.S. 
House of Representatives. http://clerk.house.govievs/2014/ro11132.xml.
---------------------------------------------------------------------------
    The previous version of the Water Rights Protection Act was 
introduced to address a narrow water rights dispute between the 
U.S. Forest Service and the National Ski Areas Association. In 
2011, the Forest Service issued an Interim Directive relating 
to ski area operators on Forest Service-managed land. The 
Interim Directive sought to require ski areas operating on 
public land to transfer their water rights to the federal 
government. The Forest Service was concerned that the value of 
these water rights could lead ski resort companies to sell the 
water, leaving the Forest Service to manage the land with no 
water available to any future resort owner or other user.
    The Interim directive was opposed by the ski areas, and in 
2013 the Forest Service announced a revision to their water 
rights position, saying that they could meet their land 
management objectives without requiring the transfer of water 
rights. The Forest Service's Final Directive simply required 
ski areas to provide assurances that sufficient water rights 
would remain with the ski area permit for snowmaking and other 
essential operations, even if the ski resort is sold. The new 
directive has been favorably received by the ski industry, 
including the National Ski Areas Association.
    Even though the dispute this bill sought to address is now 
moot, the legislation has been reintroduced during the 115th 
Congress. Like the previous version of this bill, H.R. 2939 is 
written so broadly it would apply to all actions that require a 
permit on federal lands. If enacted, H.R. 2939 would strip 
longstanding legal authorities of federal agencies to place 
conditions on the use of public lands and waters if such 
conditions are inconsistent in any way with a water right 
recognized by a state. Such a change in the law will, in many 
cases, eliminate federal protections for public lands and 
protections for other public resources such as fish and 
wildlife.
    If enacted, H.R. 2939 will also threaten the federal 
government's ability to assert and protect federal reserved 
water rights for Indian tribes. Because the federal government 
holds the water rights of Indian tribes in trust, H.R. 2939's 
restrictions on the federal government's authority to enforce 
and protect its federal water rights, as a practical matter, 
will also limit the ability of tribes to assert and protect 
their water rights as well.
    During the Committee markup of H.R. 2939, to highlight one 
of the many flaws in the bill, the Ranking Member of the 
Subcommittee on Indian, Insular and Alaska Native Affairs, Rep. 
Norma Torres, offered an amendment to protect the water rights 
of several Indian tribes. Committee Republicans rejected the 
amendment.
    The Committee has received numerous letters in opposition 
to the current and previous version of the Water Rights 
Protection Act, including from nearly 70 conservation groups 
such as: Trout Unlimited, American Rivers, the National Audubon 
Society, the National Parks Conservation Association, American 
Whitewater, the Sierra Club, and the Chesapeake Bay Foundation.
    In testimony before Congress, legal analysts and the Obama 
administration also raised concerns that the prohibitions 
contained in the bill are overly broad and internally 
inconsistent, which would only introduce confusion into the 
current system of water rights and lead to more litigation.\3\ 
Attorneys representing Indian tribes have also warned the 
Committee that the bill poses a significant threat to Indian 
water rights and threatens Indian water rights settlements.
---------------------------------------------------------------------------
    \3\Statement of Adam Schempp, Environmental Law Institute, before 
the Senate Committee on Energy and Natural Resources, ``S. 982, The 
Water Rights Protection Act of 2015,'' June 18, 2015. https://
www.energy.senate.gov/publidindex.cfm/files/serve?File_id=F7EF0048-
BF49-49DA-ACBF-73B137441A60 Statement of Dionne Thompson, U.S. Bureau 
of Reclamation, Before the Senate Committee on Energy and Natural 
Resources, ``S. 982, The Water Rights Protection Act of 2015,'' June 
18, 2015. https://www.energy.senate.gov/publiaindex.cfm/
filesherve?File_id=6ACO2E59-6350-48FC-8106-7EB6CC67530A.
---------------------------------------------------------------------------
    In sum, H.R. 2939 is an unpopular, ill-conceived bill that 
would undermine the ability of federal agencies to properly 
manage public resources and protect Indian water rights. For 
these reasons, we oppose H.R. 2939 as reported.

                                   Raul M. Grijalva,
                                           Ranking Member,
                                           House Natural Resources 
                                               Committee.
                                   Jared Huffman,
                                           Ranking Member,
                                           Subcommittee on Water, Power 
                                               and Oceans.
                                   Grace F. Napolitano,
                                           Member of Congress.
                                   Colleen Hanabusa,
                                           Ranking Member,
                                           Subcommittee on Federal 
                                               Lands.
                                   Nanette Diaz Barragan,
                                           Member of Congress.
                                   Darren Soto,
                                           Member of Congress.
                                   A. Donald McEachin,
                                           Ranking Member,
                                           Subcommittee on Oversight 
                                               and Investigations.

                                  [all]