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.. OOiR3~ . i j Federal Register/Vol. 64, No, 21O/Monday, November 1. 1999/Rules and Regulations 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 ll(D) of the Decree. all diversions of Water from the Colorado River for llse within the Lower Division Slates reqllire 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 entiries [hat do not hold a Federal or tribal entitlement recognized in Article I1(D) of the Decree, the rule allows For Ihe storage of Colorado River water either through a direct contract with the Secretary or through a valid subcontract with an entitlement holder. For the rdease or diversiol1 of ICUA to the consuming entity, the Storage and Interstate Release Agreement. to which the Secretary will be a pany, satisfies the Section 5 requirement. Comments on Question 2 Commenr: 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 entHy docs not m~ed to hold its own entitlement becau'5R. suffk.iem legal authority already exists under applicable laws and contracts. The State agency states that not all end users of Colorado River W'3\er are required to have entitlements or contracts with the Secretary. The State agency further contends that the Colorado River Basin Project Act \43 USe. ] 524(bll make.. direct contract between the Secretary and end-users of Colorado River water in Arizona discretionary. Hcsponse: The Department recognizc.s in new ~414.3(e) that storage of Article II(D) water by Federal or tribal entitlement holders or existing contracts may "now for the del ivery of water under this rule. These include direct contracts be(ween authorized entities and the Secretary. These also include subcontracts ~twecn authorized entities and an entitlemem holder that has been authorized by the Secretary to enter into subcontracts for [he delivery of Colorado River water. Authorized entities that are Federal or tribal entitlement holders identified in Article JJ(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 contrac\ 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 ~ 414.3(a) to provide tflat the Sec.retary 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 lnterstate Release Agreement to release ICUA but only if all necessary actions are taken under the rule, if all laws and executive orders have been compiled with, and if the Secretary has first determined that ICUA has been developed or will be developed by a slOring 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 Agreemenf') and Section 5 contract are combined is discretionary and that this should be determined by the particular situation. Response: We have modified ~ 414.3(a) to provide thar the Secretary will be a party to the Storage and Interstate Release Agreement. The Srof<lge and Interstate Release Agreement can serve as a water delivery contract within the meaning of Section 5 oft!l.e BCPA.. Werecogl1iz€- in ~ 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 Int€'.rstate Release Agreement. In such circumstances, the rule does not anticipate (he 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 ll(D) of the Dec.ree emillements witl not be subject to a SectlOn 5 contract requirement. CommeI1f: 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 c.ontractlo 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 9 414.3(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 rhat the Storage and Interstate Release Agreement, to which the Secretary is a part)', can serve as a water delivery contract. We agree thtH when existing contracts or valid subcontracrs provide for delivery of Colorado River watcr under tllis rule, there is no need to combil1e these contracts with the Storage and lnterstilte Release Agreement. Comment: Another watcr district stated that if one of (he parties to the Interstate Storage Agreement (now termed a "Storage and lnterstate Release Agreement") already holds an enlitlemenr for delivery of Colorado River water under a BCPA Section 5 contrac.t, a new or amended v.'ater delivery contract may not be necessary. Response: The Department recognizes in the new 9414.3(e) that in certain circumstances existing contracts may sa\isfy the Section 5 requirement of the SePA so that addithmal Section 5 authority would be \.mnecess,~ry to perform activities under a Storage anrl interstate Release Agreement. Section 5 authority is also unnecessary for the storage of Article ll(D) of the Decree water by rederalor trib3\ entil}ement holders. In circumstances where additional Section 5 authority is unnecessary. the Storage and Interstate R~~ease Agreement would only cover the specific details of a transaction between the Secretary and the other parties to the Storage and Interstate ~e~ease Agreement.