Pursuant to congressional authorization, the U.S. Army Corps of Engineers (Corps) and the U.S. Bureau of Reclamation (Reclamation), the agencies with primary responsibility for federal water resources management, operate water projects for specified purposes. In the case of Corps dams and their related reservoirs, Congress generally has limited the use of such projects for municipal and industrial (M&I) water supply, but growing M&I demands have raised interest in-and concern about-changing current law and reservoir operations to give Corps facilities a greater role in M&I water storage. Reallocation of storage from a currently authorized purpose to M&I use would change the types of benefits produced by a facility and the stakeholders served, which has led to controversy over project operations at some federal projects. The Corps and Reclamation, therefore, may be authorized to operate federal water projects for M&I use under the project-specific authorization statutes. Alternatively, the generally applicable Water Supply Act of 1958 (WSA) authorizes the Corps and Reclamation to include water storage for municipal and industrial use as a project purpose for new and existing projects. The WSA requires congressional approval if adding water supply storage would seriously affect the original project purposes or involve a major operational change for the project. However, the WSA does not define the extent to which the change in water supply storage must affect existing purposes or what constitutes a major operational change. This ambiguity has become a particular issue when severe drought raises the competition for water supply, and is an especially contentious issue in eastern riparian states where all users are affected by any drought. Because of such water shortages in some riparian basins with Corps projects, the Corps' reallocation of water storage at its discretion has been of particular interest. This issue is at the center of ongoing litigation related to the Corps' activities in the Apalachicola-Chattahoochee-Flint River Basin (ACF). The scope of the Corps' authority under the WSA was the subject of a 2008 decision by the U.S. Court of Appeals for the D.C. Circuit (Southeastern Federal Power Customers v. Geren), as well as a 2011 decision by the U.S. Court of Appeals for the 11th Circuit (In re Tri-State Water Rights Litigation). The D.C. and 11th Circuits reached different results, and the U.S. Supreme Court declined a petition for its review of the issue in 2012. These cases each addressed a tri-state water dispute involving Lake Lanier, a Corps water project in the ACF basin, which includes parts of Alabama, Florida, and Georgia. Using the Corps' reallocations of water storage for M&I use at Lake Lanier as an example, this report analyzes the legal and policy issues associated with reallocation under the WSA. Specifically, it examines Corps authority under the WSA, including limitations on modifications that constitute major operational changes. The report details data and examples regarding the Corps' reallocations under the WSA. It also analyzes various legal challenges of water supply storage at Lake Lanier, including courts' identification of congressionally authorized purposes, and discusses results of the litigation and options for Congress. Although the WSA provides authority to Reclamation as well, the application of the WSA to Reclamation is beyond the scope of the report.

Four species of non-indigenous Asian carp are expanding their range in U.S. waterways, resulting in a variety of concerns and problems. Three species-bighead, silver, and black carp-are of particular note, based on the perceived degree of environmental concern. Current controversy relates to what measures might be necessary and sufficient to prevent movement of Asian carp from the Mississippi River drainage into the Great Lakes through the Chicago Area Waterway System. Several bills have been introduced in the 112th Congress to direct actions to avoid the possibility of carp becoming established in the Great Lakes. According to the Great Lakes Fishery Commission, Asian carp pose a significant threat to commercial and recreational fisheries of the Great Lakes. Asian carp populations could expand rapidly and change the composition of Great Lakes ecosystems. Native species could be harmed because Asian carp are likely to compete with them for food and modify their habitat. It has been widely reported that Great Lakes fisheries generate economic activity of approximately $7 billion annually. Although Asian carp introduction is likely to modify Great Lakes ecosystems and cause harm to fisheries, studies forecasting the extent of potential harm are not available. Therefore, it is not possible to provide estimates of potential changes in the regional economy or economic value (social welfare) by lake, species, or fishery. The locks and waterways of the Chicago Area Waterway System (CAWS) have been a focal point for those debating how to prevent Asian carp encroachment on the Great Lakes. The CAWS is the only navigable link between the Great Lakes and the Mississippi River, and many note the potential of these waterways to facilitate invasive species transfers from one basin to the other. The U.S. Army Corps of Engineers constructed and is currently operating electrical barriers to prevent fish passage through these waterways. In light of recent indications that Asian carp may be present upstream of the barriers, increased federal funding to prevent fish encroachment was announced by the Obama Administration. Part of this funding is being spent by the Corps of Engineers to explore options relating to the "hydrologic separation" of the Great Lakes and Mississippi River drainage basins. The potential closure of navigation structures in the CAWS is of particular interest to both the Chicago area shipping industry and Great Lakes fishery interests. Since December 2010, Michigan and other Great Lakes states have filed a number of requests for court ordered measures to stop the migration of invasive Asian carp toward Lake Michigan from the Mississippi River basin via the CAWS. The U.S. Supreme Court denied several motions for injunctions to force Illinois, the U.S. Army Corps of Engineers, and the Metropolitan Water Reclamation District of Greater Chicago to take necessary measures to prevent the carp from entering Lake Michigan. Michigan, Minnesota, Ohio, Pennsylvania, and Wisconsin sought a separate order in federal district court seeking similar relief, which was also denied. In the 112th Congress, language in P.L. 112-74 authorized the Corps of Engineers to take emergency measures to exclude Asian carp from the Great Lakes. In addition, H.R. 892 and S. 471 would direct federal agencies to take measures to control the spread of Asian carp. Notably, each of these bills, as well as H.R. 4406 and S. 2317, would require the Corps of Engineers to complete the Chicago portion of a study on hydrologic separation of the Great Lakes and Mississippi River Basin within 18 months of enactment. H.R. 2432 would require the Corps of Engineers to prepare an economic impact statement before carrying out any federal action relating to the Chicago Area Water System. H.R. 4146 and S. 2164 would authorize the Corps of Engineers to take actions to manage Asian carp traveling up the Mississippi River in Minnesota.