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NEW CONTRACTS Removes existing limilalions on new contracts (above and beyond the many 

 compromise exceptions tliat are already part of the CVPIA) subject only to completion of "appropriate 

 environmental review" and a Secretarial determination that there is "sufficient water to meet existing 

 contractual and legal obligations of the Secretary relative to the Central Valley Project" 



Comments: If there's enough CVP water to meet new contractual commitments, why do existing 

 environmental commitments cause so many apparent problems for current CVP contractors? Why 

 shouldn't voluntary water transfers (as promoted by the CVPIA, but as frustrated by these amendments) 

 be the principal means for meeting new water-use demands? Why should any additional CVP water be 

 sold at a loss to federal taxpayers? Note also that the Secretary's "legal obligations" to public 

 environmental resources will be substantially more difficult to meet should these proposed amendments 

 become law. 



RENEWALS Requires, upon request, the renewal of "any existing long term repayment or water service 

 contracts" for successive periods of 25 years each, in perpetuity. Validates all pre-CVPIA renewals in 

 their entirety, irrespective of financial, environmental, or other impacts. Eliminates incentive provisions 

 for early contract renewals. 



Comments: Abrogates a fundamental compromise of the CVPIA. Provides no assurance that the terms 

 and conditions of all such perpetual renewals would not result (as has historically been the case) in huge 

 taxpayer losses and sustained environmental damage. Elimination of early-renewal incentives perpetuates 

 taxpayer subsidies and moves away, not towards, free-market principles. (According to data supplied by 

 Smith-Barney, Inc. on behalf of the CVP Authority, more than 1,215,200 acre-feet of CVP contract 

 deliveries will be made at rates which make no contribution to capital recovery through at least 2004.) 

 Eliminates, directly or indirectly, a significant source of Restoration Fund receipts. (Losses could involve 

 from $2-12 million per year in non-renewal surcharges after 1997 for the 1.33 MAP of CVP irrigation 

 contracts scheduled to expire between 2004 and 2008, and/or up to $7 million in tiered-rate receipts should 

 those same contracts be renewed prior thereto. Note: all estimates are based on October 1992 price 

 levels.) 



WATER TRANSFERS Imposes water district control and de-facto veto authority over all voluntary, 

 user-initiated transfers of CVP water except for transfers, exchanges, or banking arrangements "which 

 could have been conducted" prior to enactment of tlie CVPIA (emphasis added). Waives the collection 

 of $25/AF surcharges for water transferred off-Project when rights of first refusal are exercised. 



Comments: District veto authority over all voluntary, user-initiated transfers will discourage transfers of 

 CVP water in response to changing State-wide needs, and will abrogate a fundamental compromise of the 

 CVPIA. The exception for so-called "historic" transfers would apply without limitation as to financial, 

 environmental, third-party, or other effects, even if such transfers had never historically occurred. The 

 implied waiver of off-Project surcharges will result in a long-term loss of Restoration Fund income-e.g., 

 $10,000,000 in any year in which rights of first refusal are exercised against only 400,000 AF/year of 

 proposed off-Project transfers of CVP water. 



WATER PRICING Eliminates tiered water rates, under which 80 percent of a contractor's CVP water 

 is provided interest-free with only the last 10 percent provided at so-called "full cost" rates. 



Comments: Described by the CVPWA and others as "punitive," tliis provision of the CVPIA-another 

 fundamental compromise-actually locked-in historic interest subsidies for a full 80 percent of the 



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