House Report 107-360 - WESTERN WATER SECURITY ENHANCEMENT ACT

[House Report 107-360]
[From the U.S. Government Publishing Office]

107th Congress Rept. 107-360
HOUSE OF REPRESENTATIVES
2d Session Part 1

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WESTERN WATER SECURITY ENHANCEMENT ACT

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February 14, 2002.--Ordered to be printed

_______

Mr. Hansen, from the Committee on Resources, submitted the following

R E P O R T

together with

DISSENTING AND ADDITIONAL VIEWS

[To accompany H.R. 3208]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill
(H.R. 3208) to authorize funding through the Secretary of the
Interior for the implementation of a comprehensive program in
California to achieve increased water yield and environmental
benefits, as well as improved water system reliability, water
quality, water use efficiency, watershed management, water
transfers, and levee protection, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Western Water Security Enhancement
Act''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Purposes.
Sec. 4. Definitions.

TITLE I--WESTERN WATER SECURITY PROGRAM

Sec. 101. Interim program activities and governance structure.
Sec. 102. Long-term governance and monitoring.
Sec. 103. California water supply security.
Sec. 104. Implementation of the CALFED program.
Sec. 105. Competitive grant program.
Sec. 106. Authorization and appropriation process.
Sec. 107. Annual reports.
Sec. 108. Treatment of funds.
Sec. 109. Land acquisition; management plan required for existing
lands.
Sec. 110. Environmental justice.

TITLE II--SMALL RECLAMATION PROJECTS

Sec. 201. Short title; references.
Sec. 202. Amendments to the Small Reclamation Projects Act of 1956.
Sec. 203. Additional appropriations.
Sec. 204. Guidelines.
Sec. 205. Effective date.
Sec. 206. Limitation.

TITLE III--MISCELLANEOUS

Sec. 301. Secretarial actions to reduce California's use of Colorado
River water.
Sec. 302. Willard Bay Reservoir enlargement study.
Sec. 303. Amendments to the Federal Water Project Recreation Act.
Sec. 304. Limitations on recovery of reimbursable expenses for valve
rehabilitation project at the Arrowrock Dam, Boise Project, Idaho.
Sec. 305. Contract assurances for payment of prevailing wages for
laborers and mechanics.

SEC. 3. PURPOSES.

The purposes of this Act are the following:
(1) To authorize funding, through the Secretary of the
Interior, for the implementation of a comprehensive program to
achieve increased water yield and water supply, improved water
quality and enhanced environmental benefits as well as improved
water system reliability, water use efficiency, watershed
management, water transfers, and levee protection for
California.
(2) To implement the 4 primary objectives of the CALFED
program for California in accordance with the solution
principles set forth in the CALFED program.
(3) To ensure that the Secretary of the Interior and the
Federal agencies, in cooperation with the State, implement
actions necessary to improve drinking water quality pursuant to
the record of decision, including through financial and
technical support of local enhancement of water treatment
infrastructure and technology.
(4) To enhance water security in the Western United States by
authorizing a competitive grants program and reauthorizing and
amending the Small Reclamation Projects Act of 1956.

SEC. 4. DEFINITIONS.

As used in this Act:
(1) Bay-delta solution area.--The term ``Bay-Delta solution
area'' means the Bay-Delta watershed and the San Francisco Bay/
Sacramento-San Joaquin Delta Estuary, California, and the areas
in which diverted/exported water is used.
(2) Bay-delta watershed.--The term ``Bay-Delta watershed''
means the Sacramento River-San Joaquin River Delta, and the
rivers and watersheds that are tributary to that Delta.
(3) CALFED program.--The term ``CALFED program'' means the
cooperative, interagency effort of the State agencies and
Federal agencies with management or regulatory responsibilities
for the Bay-Delta solution area as set forth in the record of
decision, including complementary actions (as that term is
defined in the record of decision).
(4) Congressional authorizing committees.--The term
``congressional authorizing committees'' means the Committee on
Energy and Natural Resources of the Senate and the Committee on
Resources of the House of Representatives.
(5) Delta.--The term ``Delta'' means the Sacramento River-San
Joaquin River Delta in California as defined in California
Water Code section 12220.
(6) Ecosystem restoration program.--The term ``Ecosystem
Restoration Program'' means the program described in section
2.2.2 of the record of decision.
(7) Environmental water account.--The term ``Environmental
Water Account'' means the water account established by the
Program agencies pursuant to the record of decision to provide
water for the protection and recovery of species of fish listed
under section 4(c) of the Endangered Species Act of 1973 (16
U.S.C. 1533(c)).
(8) Federal agencies.--The term ``Federal agencies'' means
the Federal agencies that are signatories to Attachment 3 of
the record of decision.
(9) Program agencies.--The term ``Program agencies'' means
both the Federal agencies and the State agencies.
(10) Reclamation lands.--The term ``Reclamation lands''--
(A) means real property administered by the
Secretary, acting through the Commissioner of
Reclamation; and
(B) includes all acquired and withdrawn lands and
water areas under the administrative jurisdiction of
the Bureau of Reclamation.
(11) Record of decision.--The term ``record of decision''
means the record of decision issued August 28, 2000, pursuant
to the National Environmental Policy Act of 1969 for the CALFED
Bay-Delta Program Final Programmatic Environmental Impact
Statement.
(12) Restoration fund.--The term ``restoration fund'' means
the Central Valley Project Restoration Fund established by
section 3407 of the Central Valley Project Improvement Act (106
Stat. 4726).
(13) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(14) State agencies.--The term ``State agencies'' means the
California State agencies that are signatories to Attachment 3
of the record of decision.
(15) Water security board.--The term ``Water Security Board''
means such board established pursuant to section 102.
(16) Water supply.--The term ``water supply'' means a
quantity of water that is developed or derived from--
(A) increased water yield;
(B) recycling existing sources;
(C) surface or groundwater storage;
(D) conservation; or
(E) other actions or water management tools that
improve the availability and reliability of water
supplies for beneficial uses in all water year types,
including critically dry years.
(17) Water yield.--The term ``water yield'' means a new
quantity of water in storage that is reliably available in
critically dry years for beneficial uses.

TITLE I--WESTERN WATER SECURITY PROGRAM

SEC. 101. INTERIM PROGRAM ACTIVITIES AND GOVERNANCE STRUCTURE.

(a) In General.--The Federal agencies, in consultation with State
agencies, shall continue to operate under the interim governance
structure as described in Attachment 3 of the record of decision, and
in accordance with section 103 of this Act, until the date on which the
Water Security Board is established under section 102.
(b) Allocation of Funding During Interim.--The Secretary shall ensure
that during the period preceding establishment of the Water Security
Board under section 102, Federal funding is allocated such that--
(1) there is balanced progress toward increased water yield
and water supply, improved water quality, and enhanced
environmental benefits; and
(2) adequate progress is made in improving water system
reliability, water quality, water use efficiency, watershed
management, water transfers, and levee protection, in
accordance with the record of decision.
(c) Water Supply and Water Yield Studies.--
(1) In general.--The Secretary, acting through the Bureau of
Reclamation, shall conduct a study of available water supplies
and water yields and existing demand and future needs--
(A) within the units of the Central Valley Project;
(B) within the area served by Central Valley Project
agricultural water service contractors and municipal
and industrial water service contractors; and
(C) within the Bay-Delta solution area.
(2) Report.--The Secretary shall submit a report to the
congressional authorizing committees by not later than October
1, 2002, describing the findings of the study. The report shall
describe--
(A) water yield and water supply improvements, if
any, for Central Valley Project agricultural water
service contractors and municipal and industrial water
service contractors, that would result from projects
described in the record of decision; and
(B) all feasible water management actions or projects
that would improve water yield or water supply and
that, if taken or constructed, would balance available
water supplies and existing demand for those
contractors and other water users of the Bay-Delta
watershed with due recognition of water right
priorities.
(3) Feasible defined.--For purposes of paragraph (2), the
term ``feasible'' means capable of being accomplished in a
reasonable period of time, taking into account economic,
environmental, social, and technological factors and benefits.
(d) Water Quality Studies.--
(1) Study.--The Secretary, in cooperation with the State,
shall conduct a study to identify and recommend drinking water
quality improvement projects and programs to carry out under
the CALFED program.
(2) Report.--The Secretary shall submit a report to the
congressional authorizing committees by not later than October
1, 2002, describing the findings of the study.
(e) Summary of Expenditures to Date.--The Director of the Office of
Management and Budget shall submit to the Congress, by not later than
March 1, 2002, a report describing all Federal and State expenditures
made before such date under the CALFED program and other Federal and
State programs that may be complementary to the CALFED program.

SEC. 102. LONG-TERM GOVERNANCE AND MONITORING.

(a) Establishment of the Water Security Board.--
(1) In general.--The Secretary shall cooperate with the State
of California to develop a proposal to--
(A) establish an administrative entity, to be known
as the ``Water Security Board'', for managing CALFED
program operations and implementation of section 105
with respect to California; and
(B) otherwise provide for the long-term
implementation of the CALFED program.
(2) Development and submittal of proposal.--For purposes of
paragraph (1)--
(A) the Federal agencies shall participate with the
State agencies and stakeholders to develop a proposal
in accordance with this section to be authorized by the
Congress and the California Legislature before becoming
effective; and
(B) the Secretary shall submit the proposal to the
Congress and the California Legislature by October 1,
2002.
(3) Public participation.--The Federal agencies shall include
broad public, tribal, and local government involvement in the
proposal. Meetings of multiple State agencies and Federal
agencies for development of the proposal shall be open to the
public.
(b) Program Elements.--The proposal submitted by the Secretary under
this section shall provide the following:
(1) Establishment of an administrative entity to be
authorized under Federal and California State law which shall
be known as the Water Security Board.
(2) The Water Security Board--
(A) shall direct and oversee the implementation of
the CALFED program and implementation of section 105
with respect to California; and
(B) may adopt and modify program elements as
necessary to achieve the purposes of the CALFED
program.
(3) The Water Security Board shall ensure that all relevant
Federal programs authorized under this Act and other
preexisting authorities, including the restoration fund and
other programs authorized by the Central Valley Project
Improvement Act (106 Stat. 4706 et seq.), coordinate and
integrate goalsetting, funding, and implementation with CALFED
programs to ensure the most biologically effective and cost-
effective expenditure of Federal funds and resources for CALFED
program-related activities.
(4) The Water Security Board shall manage and allocate CALFED
program funds to maintain balanced progress among all CALFED
program elements.
(5) The Water Security Board shall be comprised of
representatives from each of the following groups:
(A) The Federal agencies.
(B) The State agencies.
(C) Local governments and other interested persons.
(6) Each member of the Water Security Board who is a
representative of a Federal agency or State agency shall be an
official with a level of authority that is at least as great as
the lowest level of authority of the Federal and State
officials, respectively, that signed the record of decision.
(7) Mechanisms for funding, by the Program agencies, of
activities under the proposal, including for the Ecosystem
Restoration Program.
(c) Promotion of Partnerships.--The proposal submitted by the
Secretary under this section shall provide the following:
(1) The Water Security Board shall seek out and promote
partnerships with local interests and programs that seek to
integrate various management options so as to maximize the
final resource benefits.
(2) The Water Security Board shall cooperate and undertake
joint activities with other persons, including local public
agencies, Indian tribes, private water users, and landowners
pursuant to the record of decision. Such activities shall
include, but not be limited to, planning, design, technical
assistance, construction projects, and the development of an
independent peer review science program.
(d) Monitoring.--The proposal submitted by the Secretary under this
section shall provide that the Water Security Board shall coordinate
with the Program agencies to--
(1) ensure that ecological monitoring data collected for
ecosystem restoration projects are integrated, streamlined,
compatible, and designed to measure overall trends in ecosystem
health in the Bay-Delta watershed;
(2) provide integrated monitoring plans and protocols to be
used for gauging cost-effective performance of projects; and
(3) ensure that the findings of such monitoring are used to
modify and adopt elements of the CALFED program.
(e) Objective Review and Analysis.--The proposal submitted by the
Secretary under this section shall provide that the Water Security
Board shall ensure that--
(1) all aspects of the CALFED program components, including
the competitive grants program under section 105 with respect
to California, use credible and objective scientific review and
economic analysis;
(2) recommendations of the Water Security Board are based on
the best available scientific information; and
(3) a science review board and independent peer review
process for implementation of the proposal is established,
including independent review of biological opinions.
(f) Land Partnerships and Acquisitions.--The proposal submitted by
the Secretary under this section shall provide that--
(1) before obligating or expending Federal funds to acquire
land for the Ecosystem Restoration Program, the Water Security
Board shall first determine that existing Federal land, State
land, or other land acquired for ecosystem restoration with
amounts provided by the United States or the State of
California is not available for that purpose;
(2) in determining whether to acquire land for the Ecosystem
Restoration Program, the Water Security Board, through the
Secretary, shall--
(A) consider the cumulative impacts on the local
government and communities of transferring the property
into government ownership; and
(B) fully mitigate such impacts;
(3) the Water Security Board may not acquire land for any
project if such acquisition, or any change in management of the
land after such acquisition, will have any significant
unmitigated effect on surrounding landowners;
(4) the Water Security Board, through the Secretary, shall
fully mitigate the adverse impacts of any conversion of
agriculture land due to the implementation of the CALFED
program; and
(5) the Water Security Board shall partner with landowners
and local agencies to develop cooperating landowner commitments
that will meet coequal objectives of achieving local economic
and social goals and implementing the Ecosystem Restoration
Program goals.
(g) Compliance With State Law.--The proposal submitted by the
Secretary under this section shall provide that the Federal agencies
and the Water Security Board shall operate in compliance with
California water law. Nothing in this Act shall be construed to
invalidate or preempt State law.
(h) Continued Consultation and Negotiation Regarding Cost Sharing.--
The Federal agencies shall continue coordinated consultations and
negotiations with the State of California pursuant to the cost sharing
agreement required by section 78684.10 of California Senate Bill 900,
Chapter 135, Statutes of 1996, signed by the Governor of California on
July 11, 1996, and may enter into an agreement with the State for that
purpose.
(i) Satisfaction of Solution Principles and Primary Objectives.--The
Secretary shall ensure that the proposal submitted under this section
and other actions taken to implement the record of decision satisfy the
solution principles and primary objectives of the CALFED program.
(j) Limitation on Appropriations To Implement CALFED Program.--No
amounts may be appropriated for any fiscal year after fiscal year 2004
to implement the CALFED program, including under any other provision of
this title, and no amounts may be appropriated from the restoration
fund after such fiscal year, if there has not been enacted by the
Congress a law authorizing implementation of the proposal submitted by
the Secretary under this section.

SEC. 103. CALIFORNIA WATER SUPPLY SECURITY.

(a) Water System Improvements.--
(1) In general.--The Federal agencies, acting through the
CALFED program, shall develop a balanced and timely program to
achieve for agricultural and urban uses throughout the Bay-
Delta solution area--
(A) increased water supply and water yield, improved
water quality, and environmental benefits; and
(B) improved water system reliability, water use
efficiency, watershed management, water transfers, and
levee protection.
(2) Development of options.--In developing water yield and
water supply options the Federal agencies, in cooperation with
the State agencies, shall--
(A) consider all potential water yield and water
supply storage alternatives (including those identified
in the study under section 101(c)(1)); and
(B) utilize a cost/benefit analysis in conjunction
with environmental criteria to ensure that proposals
are selected that address environmental issues and are
economically viable.
(3) Selection of projects.--In selecting projects and
programs for increasing water yield and water supply, improving
water quality, and enhancing environmental benefits, projects
and programs with multiple benefits shall be emphasized.
(4) Water deliveries to south-of-delta agricultural water
service contractors.--(A) The Secretary shall use the
discretion of the Secretary to the maximum extent practicable
to accomplish the goal, during a normal water year, of making
available to south-of-Delta Central Valley Project agricultural
water service contractors at least 70 percent of the currently
identified contract maximum for such contractors.
(B) The restoration of supply for south-of-Delta Central
Valley Project agricultural water service contractors pursuant
to this paragraph shall be accomplished--
(i) by providing water from existing facilities
historically used to provide Central Valley Project
water to these contractors,
(ii) in a manner consistent with California water
laws,
(iii) without reducing deliveries to, increasing the
costs of, or otherwise adversely affecting other water
suppliers and water users that rely on water diverted
from watercourses tributary to the Delta, and in the
Delta,
(iv) without degrading the quality of water for
municipal, industrial, and agricultural uses, and
(v) in a manner that is consistent with the Bureau of
Reclamation's municipal and industrial water shortage
policy.
(C) Nothing in this paragraph grants, diminishes, or
otherwise affects any water right or right under any contract,
including a settlement or exchange contract, in effect as of
the date of enactment of this Act.
(5) Banks pumping plant.--In accordance with the record of
decision, the Federal agencies shall cooperate with the State
of California to do the following:
(A) Increase pumping limits at the Banks Pumping
Plant in accordance with the schedule established in
the record of decision, or earlier if feasible.
(B) Manage the Environmental Water Account and the
Ecosystem Restoration Program to maximize the water
supply benefits to be provided by the increased pumping
capability.
(C) Implement the other actions in section 2.2.6. of
the record of decision.
(b) Environmental Water Management.--
(1) Management of environmental water account.--The Federal
agencies, in cooperation with the State agencies, shall manage
the Environmental Water Account and the Ecosystem Restoration
Program under the record of decision as part of a comprehensive
plan to provide assurances that actions taken to protect
species listed under section 4(c) of the Endangered Species Act
of 1973 (16 U.S.C. 1533(c)), pursuant to biological opinions
and incidental take permits under that Act, will be carried out
in a manner that--
(A) avoids redirected impacts and water supply and
water quality impacts to the Central Valley Project and
the State Water Project and to water right holders in
the Bay-Delta solution area; and
(B) avoids adverse effects on the water right holders
in the Bay-Delta solution area, by not imposing any
direct costs or indirect costs on the water users in
the Bay-Delta solution area.
(2) Environmental water account priorities and operation.--
(A) The Secretary shall give first priority, in the allocation
and use of Environmental Water Account and the Ecosystem
Restoration Program assets actually obtained or developed, to
meeting the water supply assurances set forth in paragraph (1).
(B) If, by December 31 of any year, the Environmental Water
Account Tier 2 assets (as that term is used in section 2.2.7 of
the record of decision) water purchase targets, or their
functional equivalents, have not been met, the Federal agencies
shall continue their efforts to meet such water purchase
targets and shall make use of the available Environmental Water
Account assets to avoid jeopardizing the continued existence of
any species listed under section 4(c) of the Endangered Species
Act of 1973 (16 U.S.C. 1533(c)) in a manner consistent with
minimizing water supply and water quality impacts.
(C) If the efforts to meet such water purchase targets are
unsuccessful, the maximum responsibility of water service
contractors of the State Water Project and the Central Valley
Project to provide water for Environmental Water Account Tier 2
asset purposes shall be the difference between the
Environmental Water Account purchase targets established in
section 2.2.7 of the record of decision and the amount of water
actually acquired. This section shall not impose any
obligations or responsibilities on other water users within the
Bay-Delta watershed.

SEC. 104. IMPLEMENTATION OF THE CALFED PROGRAM.

(a) In General.--The Secretary and the Federal agencies shall,
subject to approvals and the availability of appropriations under this
Act, and consistent with the goals included pursuant to paragraph (3)
of section 107(a) in annual reports under that section, carry out all
actions necessary to implement the CALFED program.
(b) Balanced Regulatory Implementation.--The Secretary and the
Federal agencies, in carrying out their regulatory responsibilities
under any Federal law, shall not--
(1) treat one CALFED program element as an alternative to
another CALFED program element; or
(2) consider, as an alternative to one element of the CALFED
program, implementation of any other element of the CALFED
program beyond the levels described in the record of decision.
(c) Regulatory Coordination.--The Secretary, working with the
Governor of the State of California, shall, on or before January 1,
2003, develop a regulatory coordination and streamlining process for
the issuance of permits and approvals required under State and Federal
law for projects under the CALFED program, to ensure that all Federal
agencies' and State agencies' respective regulatory programs will be
coordinated in a manner that reduces or eliminates duplicative
processes or decisionmaking, thereby reducing costs and time that would
otherwise be required.
(d) Program Agencies Discretion.--This Act shall not affect the
discretion of any of the Program agencies or the authority granted to
any of the Program agencies by any other Federal or State law.
(e) Authorization of Appropriations.--
(1) In general.--In addition to the other amounts authorized
by this Act, there are authorized to be appropriated for
activities that implement the CALFED program--
(A) for each of fiscal years 2002 through 2004,
$200,000,000; and
(B) for each of fiscal years 2005 through 2032 such
sums as may be necessary for balanced completion of
Stage 1 of the CALFED program and balanced
implementation of subsequent stages of the CALFED
program.
(2) Continuing availability.--Funds appropriated pursuant to
this subsection may remain available until expended.

SEC. 105. COMPETITIVE GRANT PROGRAM.

(a) General Authority.--The implementing entity shall undertake a
competitive grant program to--
(1) investigate and identify opportunities for the design and
construction of demonstration and permanent facilities, or the
implementation of other programs, to--
(A) increase water yield and water supply;
(B) maintain existing water supply;
(C) improve water quality; or
(D) improve water use efficiency and water
conservation, reclamation, desalination of brackish and
sea water, and recycling of wastewater and impaired
ground and surface waters;
(2) carry out design and construction of facilities and
implement other programs identified pursuant to paragraph (1);
(3) conduct research, including desalination and other new
and innovative techniques and techniques for water treatment,
regarding sea water and the reclamation of wastewater and
impaired ground and surface waters; and
(4) encourage watershed management actions to increase water
quality, water yield, water supply, and groundwater recharge
and storage.
(b) Limitations on Grants.--
(1) Location of project.--Grants under the program may be
made only for projects carried out in a State that contains
Reclamation lands.
(2) Per state limit.--(A) Except as provided in subparagraph
(B), of the amount available in a fiscal year for grants under
the program, not more than 50 percent may be used for projects
in a single State.
(B) The Secretary may increase the percentage that applies
under subparagraph (A) if the Secretary finds that, due to the
lack of grant applications for projects that the Secretary
finds meet the evaluation criteria under this section, such
increase is necessary to ensure the use of amounts available
for such fiscal year for such grants.
(c) Evaluation Criteria.--In determining what projects described in
subsection (a) are eligible for funding under this section, the
implementing entity, to the maximum extent possible, shall consider the
following criteria:
(1) Whether a project--
(A) increases water yield and water supply;
(B) reduces or stabilizes demand on existing Federal
and State water supply facilities; or
(C) increases the availability of locally and
regionally developed water supplies.
(2) Whether a project improves water quality in a manner that
results in continuous, measurable, and significant water
quality benefits, except that any project the primary purpose
of which is the project sponsor's compliance with the Federal
Water Pollution Control Act shall not be considered as
improving water quality for purposes of this paragraph.
(3) Whether a project--
(A) serves a small, rural, or economically
disadvantaged community or Indian tribes;
(B) shows economic benefits; and
(C) is cost-effective.
(4) Whether a project restores or enhances habitats,
including those affected by or affecting project operation, or
provides water for, or otherwise protects, Federal or State
listed threatened or endangered species, or facilitates
consensus-based environmental restoration programs.
(5) Whether a project helps meet existing legal requirements,
contractual water supply obligations, Indian trust
responsibilities, water rights settlements, water quality
control plans and department of health requirements, Federal
and State environmental laws, the Federal Water Pollution
Control Act, or other obligations.
(6) Whether a project promotes and applies a regional or
watershed perspective to water resource management or cross-
boundary issues, implements an integrated resources management
approach, increases water management flexibility, or forms a
partnership with other entities.
(7) Whether a project improves health and safety of the
general public.
(8) Whether a project provides benefits outside the region in
which the project occurs.
(9) Whether a project provides benefits to the agricultural
community, including any adverse impacts on agricultural
production and agricultural lands.
(d) Construction Grants.--No grant may be made under this section for
the construction of any project until after--
(1) an appraisal investigation and a feasibility study have
been completed;
(2) the implementing entity has determined that the non-
Federal project sponsor is financially capable of funding the
non-Federal share of the project's costs; and
(3) the implementing entity has approved a cost-sharing
agreement with the non-Federal project sponsor that commits the
non-Federal project sponsor to funding its share of the
project's construction costs on an annual basis, and ongoing
operations and maintenance.
(e) Cost Sharing.--
(1) In general.--Except as provided in paragraph (2), and
notwithstanding any other provision of this Act, a grant under
this section shall not exceed the lesser of $50,000,000 (June
2000 prices) or 35 percent of the total cost of the project.
(2) Reduced non-federal share.--The implementing entity may
reduce the non-Federal share of the cost of a project carried
out with a grant under this section, including (subject to the
availability of amounts for such grants, and less than $50
million) by increasing the amount of the Federal share of such
costs to an amount that is greater than the amount specified in
paragraph (1), if the implementing entity, through the
Secretary, determines that--
(A) the project is for the benefit of a small, rural,
or socially disadvantaged community or an Indian tribe;
and
(B) application of paragraph (1) would result in
economic hardship for such community or Indian tribe.
(f) Annual Report.--The implementing entity shall provide the
Congress an annual report detailing the benefits gained by projects
funded under this section, and expenditures for each such project. The
report shall include information on each project the implementing
entity has approved for funding, including an assessment of how the
project met each of the evaluation criteria under this section.
(g) Implementing Entity Defined.--In this section the term
``implementing entity''--
(1) except as provided in paragraph (2), means the Secretary;
and
(2) for purposes of grants under this section for projects in
California, means the Water Security Board.
(h) Authorization of Appropriations.--For grants under this section,
there are authorized to be appropriated--
(1) $50,000,000 for fiscal year 2002; and
(2) $500,000,000 for each fiscal year thereafter.

SEC. 106. AUTHORIZATION AND APPROPRIATION PROCESS.

(a) Activities Other Than Construction and Acquisition.--There are
authorized to be appropriated to the Secretary such sums as are
necessary to pay the Federal share of CALFED program costs and expenses
for--
(1) prefeasibility and feasibility studies, environmental
reviews, permit acquisitions, and related preconstruction and
preland acquisition activities;
(2) administration of all CALFED program areas, including
governance, monitoring, and implementation of a comprehensive
science program; and
(3) acquiring the Tier 2 and Tier 3 assets (as those terms
are defined in the record of decision) for the Environmental
Water Account.
(b) Construction and Acquisition Activities.--The process for
authorizing appropriations to pay the Federal share of the costs of
implementing elements of the CALFED program, as set forth in the record
of decision, through the construction of projects and the acquisition
of lands, easements, and rights-of-way shall be as follows:
(1) Every odd-numbered year beginning in 2003 at the same
time the Secretary submits the report described in section
107(a), the Water Security Board, acting through the Secretary,
shall submit to the congressional authorizing committees a
report setting forth the list of projects and other actions
that are proposed for construction or acquisition in order to
implement the CALFED program over the next 2 fiscal years. The
list shall specify which projects and actions require
authorization by the Congress through the process set forth in
this subsection. The Water Security Board and the Secretary
shall certify that implementation of the CALFED program in the
manner set forth in the report will result in balanced
implementation in all CALFED program areas.
(2) No amounts may be appropriated for any fiscal year after
fiscal year 2003 for any project or other action that has not
been previously authorized and that requires construction or
acquisition of lands, easements, and rights-of-way, unless the
project has been specifically authorized by law.
(3) It is the intent of Congress that the authorizations and
appropriations for implementation of the CALFED program shall
promote and carry out the fundamental principle that the CALFED
program components, consisting of ecosystem restoration,
watershed improvements, water supply improvements, storage
including water yield, conveyance, water use efficiency, water
quality improvement, and levee stability, must progress
together in a balanced manner.
(4) If the Congress, through the authorization and
appropriation process set forth in this section, amends, or
fails to authorize or fund, the projects and other actions
included in a report submitted pursuant to paragraph (1), the
Secretary shall, in consultation with the Water Security Board,
redetermine whether implementation of the projects and other
actions, as authorized or funded, respectively, by the Congress
will maintain balanced implementation in all CALFED program
areas. If the Secretary finds that implementation of such
projects, as so authorized or funded by the Congress, will not
maintain balanced implementation in all program areas, the
Secretary shall report to the Congress the finding and
recommend those steps needed to restore balance to the
implementation process.
(c) Contents of Reports.--
(1) In general.--For each project recommended under paragraph
(1), the reports under this subsection shall include--
(A) a project description;
(B) feasibility and operational studies;
(C) required environmental documentation;
(D) a finding of consistency with the record of
decision;
(E) a cost-benefit analysis;
(F) identification of project benefits and
beneficiaries;
(G) identification of adverse impacts, if any, to
agricultural, municipal, industrial, or other water
users;
(H) a cost and benefit allocation plan;
(I) financing and repayment plan; and
(J) in the case of a project proposed to be funded
with a grant under section 105, a certification that an
agreement in accordance with section 105(d)(3) has been
signed and the Water Security Board has determined that
the non-Federal project sponsor is financially capable
of funding the project's non-Federal share of the
project's costs, and ongoing operations and
maintenance.
(2) Recommendations regarding specific projects.--The Water
Security Board, through the Secretary, shall include in reports
under this subsection recommendations with respect to
construction of the surface storage, groundwater storage, and
complementary actions, that would improve water system
reliability, water quality, water supply, or water yield, or
any combination thereof, consistent with the dates specified in
the record of decision or such other date as may be specified
by the Water Security Board.

SEC. 107. ANNUAL REPORTS.

(a) Annual Water Report by Water Security Board.--Not later than
February 1 of each year, the Water Security Board, through the
Secretary, shall submit to the Congress an annual report that includes
the following:
(1) Federal funding.--An accounting of all Federal funds
received (or to be received) by the Water Security Board,
including--
(A) a description of all projects and activities
carried out with such funds;
(B) amounts received by the State that have not yet
been expended by the State; and
(C) cost allocation and any applicable repayment
capacity findings for new projects.
(2) Assessment of achievements.--A description and assessment
of expenditures and achievements of the CALFED program and the
competitive grant program under section 105 in the current
fiscal year, including accomplishments in achieving--
(A) increased water supply and water yield;
(B) improved water quality, including--
(i) measures taken to improve salinity;
(ii) an assessment of progress made in
implementing drinking water sources protection
projects and programs described in the record
of decision; and
(iii) identification of regionally and
locally sponsored projects and programs to
improve water treatment infrastructure and
technology;
(C) enhanced environmental benefits, including
ecosystem restoration;
(D) improved water system reliability, water use
efficiency, watershed management, water transfers, and
levee protection; and
(E) benefits in all geographic regions covered within
the Bay-Delta solution area.
(3) Performance measures.--A clear statement of goals to
achieve, under the CALFED program--
(A) increased water supply and water yield;
(B) improved water quality;
(C) enhanced environmental benefits; and
(D) improved water system reliability, water use
efficiency, watershed management, water transfers, and
levee protection.
(b) Annual Budget Crosscut Report.--Not later than February 1 of each
year, the Director of the Office of Management and Budget shall submit
to the Congress an interagency budget crosscut report that describes in
detail--
(1) all proposed and planned Federal expenditures in the next
fiscal year on ecosystem restoration and other purposes in the
Bay-Delta solution area; and
(2) all proposed and planned State of California and Federal
expenditures in the next fiscal year to achieve the objectives
identified within the record of decision.

SEC. 108. TREATMENT OF FUNDS.

Funds authorized to be appropriated by this title to those Federal
agencies that are currently or subsequently become participants in the
CALFED program shall be in addition to the baseline funding levels
established for currently authorized projects and programs under the
Central Valley Project Improvement Act (title XXXIV of Public Law 102-
575) and other currently authorized Federal programs for the purposes
of Bay-Delta ecosystem protection and restoration and water system and
water quality improvement.

SEC. 109. LAND ACQUISITION; MANAGEMENT PLAN REQUIRED FOR EXISTING LAND.

Federal funds, including Federal grant funds, may not, for purposes
of implementing the record of decision, be used to acquire any
additional lands for CALFED ecosystem restoration unless the State
agencies and Federal agencies, through the Secretary and by not later
than January 1, 2003, develop a management plan for all lands acquired
for CALFED program ecosystem restoration before the date of enactment
of this Act.

SEC. 110. ENVIRONMENTAL JUSTICE.

It is the intent of the Congress that--
(1) implementation of the CALFED program by the Federal
agencies and State agencies should fulfill the commitment to
addressing environmental justice challenges referred to in the
CALFED Bay-Delta Program Environmental Justice Workplan, dated
December 13, 2000;
(2) the Federal agencies and State agencies should continue
to collaborate to develop a comprehensive environmental justice
workplan for the CALFED program, including through continuation
of the functions of the CALFED-Bay Delta Environmental Justice
Workgroup; and
(3) the Water Security Board should collaborate with such
workgroup to ensure fulfillment of the commitment referred to
in paragraph (1).

TITLE II--SMALL RECLAMATION PROJECTS

SEC. 201. SHORT TITLE; REFERENCES.

(a) Short Title.--This title may be cited as the ``Small Reclamation
Water Resources Project Act of 2001''.
(b) References.--Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the Small
Reclamation Projects Act of 1956 (43 U.S.C. 422 et seq.).

SEC. 202. AMENDMENTS TO THE SMALL RECLAMATION PROJECTS ACT OF 1956.

(a) Purpose.--The first section (43 U.S.C. 422a) is amended--
(1) by striking ``under the'' and inserting ``under this Act
and other''; and
(2) by adding at the end the following: ``Such projects may
include, but shall not be limited to, irrigation projects.
Irrigation shall not be a required purpose for projects
receiving assistance under this Act. In providing assistance,
the Secretary shall give priority to recommended proposals that
are related to a project that is otherwise authorized under the
Federal reclamation laws and that will benefit from assistance
under this Act.''.
(b) Definitions.--Section 2 (43 U.S.C. 422b) is amended--
(1) in paragraph (c), by striking ``a State'' and inserting
``an Indian Tribe, a State'';
(2) by striking paragraph (d) and inserting the following:
``(d) The term `project' means any of the following:
``(1) A multipurpose water resource development carried out
by a non-Federal organization involving significant
conservation of water, energy, and the environment.
``(2) The rehabilitation, betterment, or retrofit of any
existing Federal or non-Federal water infrastructure for
purposes of complying with law and regulations.
``(3) An activity described in paragraph (1) or (2) that--
``(A) is carried out by a non-Federal organization
under the Federal reclamation laws in one or more of
the 17 western reclamation States, Hawaii, Alaska, the
Commonwealth of Puerto Rico, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, the
Virgin Islands, and the Trust Territory of the Pacific
Islands; and
``(B) in the case of an activity proposed for any
project that is authorized under the reclamation laws
immediately before the enactment of the Small
Reclamation Water Resources Project Act of 2001, is
determined by the Secretary to be consistent with the
purposes of that project before that date of
enactment.''; and
(3) by striking paragraph (f) and inserting the following:
``(f) The term `water quality improvements' means operational
measures and physical features associated with--
``(1) the reclamation and reuse of irrigation drainage or
municipal and industrial return flows, including wastewater
flows; or
``(2) the reclamation, or control, of brackish, toxic, or
impaired waters for beneficial reuse or protection of other
related water, land, or environmental resources.''.
(c) Modification of Loan and Grant Programs.--The Small Reclamation
Projects Act of 1956 is amended--
(1) by striking sections 3 through 8 (43 U.S.C. 422c-422h);
and
(2) by inserting after section 2 (43 U.S.C. 422b) the
following:

``TITLE I--STATE AND LOCAL PARTICIPATION IN RECLAMATION PROJECTS

``SEC. 101. LOAN, GRANT, AND LOAN GUARANTEE PROGRAM.

``There is hereby established a program within the Bureau of
Reclamation, under which the Secretary may make loans, grants, and loan
guarantees to any organization to carry out a project.

``SEC. 102. PROPOSAL CONTENTS AND REQUIREMENTS.

``(a) In General.--Any organization seeking assistance under this
title shall submit a proposal to the Secretary in such form and manner
as the Secretary may prescribe. Any proposal for a project submitted
under this title shall set forth a plan and estimated cost in detail
comparable to those included in preauthorization reports required for a
project under the Federal reclamation laws.
``(b) Lands and Waters.--Each proposal submitted under this title
shall include a statement of financial capability and legal authority,
and a resolution from the governing board of the organization showing
that the organization seeking assistance--
``(1) holds or can acquire all lands and interests in land
(except public and other lands and interest in land owned by
the United States that are within the administrative
jurisdiction of the Secretary and subject to disposition by the
Secretary) to complete the project;
``(2) holds or can acquire all rights, pursuant to applicable
State law, to the use of water necessary for the successful
construction, operation, and maintenance of the project;
``(3) is willing to finance, and capable of financing, the
non-Federal portion of the costs of the project, including all
costs of acquiring lands, interests in land, and rights to the
use of water, except as provided in section 105(b)(2); and
``(4) has the legal authority and responsibility under State
law to carry out the project.

``SEC. 103. FEDERAL SHARE AND PROJECT SPONSOR SHARE OF COSTS.

``(a) In General.--The Secretary shall require each organization
receiving assistance under this title to contribute toward the cost of
the project (other than by loan or grant of Federal funds) not less
than 25 percent of the costs of the project. The Secretary shall credit
toward the non-Federal cost share that amount--
``(1) the costs paid by the organization for investigations,
surveys, engineering, administration, and other services
necessary for the preparation of proposals and plans for the
proposed project that are required by the Secretary;
``(2) the value of lands, rights-of-way, and water rights
acquisition required for the proposed project that are provided
by the organization;
``(3) amounts spent by the organization for construction or
acquisition of facilities for the proposed project prior to
project approval; and
``(4) the fee required by section 403.
``(b) Prevention of Loss and Damage to Fish and Wildlife.--The costs
of measures to prevent loss of, and damage to, existing fish and
wildlife resources as the result of a project for which assistance is
provided under this title shall be considered project costs and, for
purposes of reimbursement, shall be allocated as may be appropriate
among project functions.
``(c) Maximum Allowable Federal Share.--The maximum allowable Federal
share per project shall be $50,000,000 (January 2001 dollars).
``(d) Increase in Amount.--To compensate for increases in
construction costs due to price escalation, and subject to subsection
(c), the Secretary may increase the amount of a loan or grant, or both,
under this title for a project at any time prior to the completion of
construction of the project, using the Bureau of Reclamation's
composite construction cost trends index.

``SEC. 104. APPROVAL OR DISAPPROVAL OF PROJECTS.

``(a) In General.--The Secretary shall determine whether a proposal
under this title is financially feasible and constitutes a reasonable
risk, and either approve or disapprove the proposal, by not later than
the later of--
``(1) one year after the date the proposal is submitted to
the Secretary; or
``(2) the date of the completion of the appropriate
documentation under the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.).
``(b) Transmittal to Congress.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall promptly transmit any approved proposals to the Congress
with a brief statement of the project purposes and funding
requirements.
``(2) Completion of documentation.--The documentation
required under the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.) for a proposed project must be
completed before the Secretary transmits the proposal to the
Congress.

``SEC. 105. CONTRACT TERMS AND CONDITIONS.

``(a) In General.--Upon approval of any project proposal submitted
under this title by an organization, the Secretary shall negotiate with
the organization a contract establishing the terms under which
assistance shall be provided under this title.
``(b) Contract Terms.--The contract shall include the following:
``(1) The maximum amount of any grant, which shall not exceed
50 percent of the maximum allowable Federal share of the costs
of the project under section 103.
``(2) The time and method of making any grant or loan
available to the organization.
``(3) Such terms and conditions as the Secretary considers
necessary or proper to provide assurance of, and security for,
prompt repayment of any loan and to ensure achievement of the
purposes for which the loan was made.
``(4) A plan for repayment by the organization of any loan
within 25 years, except that the organization shall have the
right to prepay the loan or any component thereof without
penalty.
``(5) For any loan, payment of interest at a rate established
by the Secretary of the Treasury at the beginning of the fiscal
year in which the contract is executed, that shall be based on
the average market yield on outstanding marketable obligations
of the United States with periods of maturity comparable to the
applicable repayment period of the loan.
``(c) Loans Projects by Indian Tribes.--
``(1) In general.--For any project undertaken by an Indian
tribe with assistance under this title, the Secretary shall--
``(A) determine, based on the findings in the
proposal under section 102, the reimbursable and
nonreimbursable costs for the project constructed under
this Act;
``(B) apportion those costs in accordance with the
benefits received; and
``(C) allocate the reimbursable costs to the project
beneficiaries.
``(2) Leavitt act.--The Act of July 1, 1932 (chapter 369; 25
U.S.C. 386a), popularly known as the `Leavitt Act', shall not
apply to loans made under this Act.

``TITLE II--PARTNERSHIP PROGRAM

``SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.

``(a) Program.--There is hereby established within the Bureau of
Reclamation a small grant and loan program to be known as the Small
Reclamation Water Resources Management Partnership Program, to be
carried out under this title. The purpose of this program shall be to
implement projects that can be performed--
``(1) by the recipient organization's workforce or
contractors,
``(2) with streamlined documentation, and
``(3) in a period of 18 months or less.
``(b) Grants.--Grants under this title shall not exceed $5,000,000
for any one project under such program. The Secretary shall require the
recipient organization to provide matching funds in an amount equal to
50 percent of the amount of the grant.
``(c) Loans.--Loans under this title shall not exceed $5,000,000 per
project, and shall be subject to cost sharing in the same manner as
provided in title I. The contract for each loan under this title shall
require payment of interest at a rate established by the Secretary of
the Treasury in the same manner as provided in section 105(b)(5) for
loans under title II.

``SEC. 202. REPAYMENT OF LOANS.

``Each loan made under this title shall be repaid within the 5-year
period beginning on the date the Secretary certifies that work to be
carried out with the loan is completed.

``SEC. 203. ELIGIBLE ACTIVITIES.

``(a) In General.--The following types of activities shall be
eligible for grants or loans under this title:
``(1) Water conservation.
``(2) Water quality improvement projects.
``(3) Water management for urban landscapes.
``(4) Drought assistance.
``(5) Fish and wildlife improvements.
``(6) Public safety improvements.
``(7) Water supply, including water production, conveyance,
conservation, and management.
``(b) Additional Activities.--The Secretary may add to the list of
eligible activities under subsection (a) as the Secretary considers
appropriate, except that any such addition shall not take effect until
60 days after the Secretary publishes a notice of the proposed addition
in the Federal Register, and has notified the Committee on Resources of
the House of Representatives and the Committee on Energy and Natural
Resources of the Senate in writing of the proposed addition and the
reasons therefore.

``SEC. 204. APPLICATION PROCESS.

``(a) Notice of Intent.--Each organization seeking a grant or loan
under this title shall submit a notice of intent to the Secretary by
April 1 of each year outlining the proposed project and the public
benefits thereof. Within two months, the Secretary shall provide a
written response to the organization, expressing either the Bureau of
Reclamation's interest or disinterest in participating in the project.
``(b) Application.--30 days after receipt of a response under
subsection (a) expressing the Bureau of Reclamation's interest in
participating in a project, the organization may submit to the
Secretary an appropriate loan or grant application, giving details of
the project and the anticipated public benefits.
``(c) Contents.--The application for any project proposal under this
title shall include each of the following:
``(1) A resolution by the board of directors of the
organization stating--
``(A) the total estimated project cost;
``(B) the amount of the grant or loan requested;
``(C) the amount of the non-Federal contribution for
any grant;
``(D) the organization's ability to finance and
construct the project; and
``(E) the project objectives.
``(2) A summary of the proposal.
``(3) A brief description of the anticipated effects of the
project on the environment.
``(4) Evidence that the organization has all lands and water
rights needed for the project, or can obtain them and has legal
authority and responsibility under, State law to carry out the
proposed project.
``(5) A project plan, including a general map showing the
location of proposed physical features, conceptual engineering
drawings of major and typical structures, and general standards
for design.
``(6) A construction schedule, with dates and a schedule of
funding requirements under this title, in sufficient detail to
provide an analysis of the proposed construction program.
``(7) A description of the proposed Federal funding for the
project and of the non-Federal funding for the project.
``(d) Costs.--The cost of any investigations and preparation of any
environmental documentation for a project carried out with assistance
under this title shall be borne by the project applicant, and shall be
credited against the non-Federal cost share.
``(e) Annual Listing.--The Secretary shall include in the annual
budget justification for the Bureau of Reclamation, a listing of the
activities and total funding required for work committed to under this
title.

``SEC. 205. TERMS AND CONDITIONS OF PROJECT WORK.

``The Secretary shall examine each project proposal submitted under
this title to determine if the project can reasonably be expected to
accomplish its purpose, and approve or disapprove such proposal by
September 1 of the year in which the application for assistance under
this title is submitted. If the Secretary approves the proposal, and
subject to the availability of appropriations, the Secretary shall
provide funding within 60 days after such approval for work scheduled
for the next fiscal year.

``SEC. 206. LIMITATION ON PROJECT PROPOSALS.

``Only one proposal may be submitted under this title by an applicant
in any 5-year period.

``TITLE III--LOAN GUARANTEES

``SEC. 301. ESTABLISHMENT OF LOAN GUARANTEE PROGRAM.

``There is hereby established within the Bureau of Reclamation a
demonstration program to guarantee loans for projects receiving, or
eligible to receive, loans or grants under title I or II of this Act.

``SEC. 302. PROGRAM REQUIREMENTS.

``(a) In General.--The Secretary may provide support under the
demonstration program to organizations through the provision of loan
guarantees for the purposes for which assistance is authorized under
titles I and II, under such terms and conditions as are specified in
this section. Any proposal for a project submitted under this title
shall set forth a plan and estimated costs, in detail, comparable to
those required to be included in preauthorization reports required for
a project under the Federal reclamation laws.
``(b) Selection of Recipients.--The Secretary shall adopt and use
competitive procedures in the selection of organizations to receive
loan guarantees under this section. In selecting any organization to
receive a loan guarantee under this section, the Secretary shall
consider, at a minimum, the following:
``(1) The extent to which the loan guarantee would support
new water supplies or more efficient use of existing supplies.
``(2) The repayment period of the guaranteed loan.
``(3) The extent to which the loan guarantee would provide
for a project of wide public purpose.
``(4) Whether the loan guarantee would help the organization
comply with a Federal or State environmental statute or
regulation.
``(5) The extent to which the loan guarantee would enable the
organization to meet the needs of other local water purveyors.
``(6) The extent to which the guaranteed loan would support a
program that would supplement, rather than duplicate, other
available water resource programs.
``(7) The fiscal impact of the loan guarantee program as a
whole on other Bureau of Reclamation programs.
``(c) Apportionment.--The total amount made available to the
Secretary for a fiscal year to cover the costs of loan guarantees under
this section shall be divided between projects receiving or eligible to
receive loans under titles I and II, with title I projects receiving 75
percent and title II projects receiving 25 percent.
``(d) Maximum.--The maximum amount of a loan guaranteed under this
section may not exceed 75 percent of the total cost of the project
carried out with the loan.
``(e) Limitation on Use of Loan.--No loan guaranteed under this title
shall be used to cover the organization's local cost share for any
project assisted under this Act.
``(f) Reporting.--Reporting and documentation requirements under
titles I and II shall similarly apply to loan guarantees under this
title.
``(g) State Law.--For purposes of this Act, when any bonds are issued
by an organization to help finance a project for which the organization
is also receiving a loan guarantee under this section, such bonds shall
not be treated as affecting the tax-exempt status of such bonds under
applicable State law.
``(h) Full Faith and Credit.--Any loan guarantee issued pursuant to
this section shall constitute an obligation, in accordance with the
terms of such guarantee, of the United States Government, and the full
faith and credit of the United States is hereby pledged to the full
performance of the obligations.
``(i) Report.--At the end of the third fiscal year after the
enactment of this subsection, the Secretary shall submit a report to
the Congress on the beneficial use and suggested improvements for use
of loan guarantees under this title as a mechanism for project
construction.

``SEC. 303. SUNSET.

``No loan guarantee may be issued under this title in any fiscal year
after the expiration of 10 full fiscal years after initial funding of
projects under the amendments made by the Small Reclamation Water
Resources Project Act of 2001.

``TITLE IV--GENERAL PROVISIONS

``SEC. 401. PROPOSAL FEE.

``The Secretary shall assess and collect a fee to defray the cost of
examining each proposal for a loan, grant, or loan guarantee under this
Act. The amount of the fee shall be equal to $5,000 or \1/10\ of 1
percent of the Federal share of the costs of the proposed project,
whichever is greater. The Secretary shall require that 50 percent of
the fee shall accompany the application and the remainder shall be due
only upon approval of the project by the Secretary.

``SEC. 402. MISCELLANEOUS PROVISIONS.

``(a) Title.--Title to all project works and facilities constructed
with assistance under this Act shall remain in the name of the
organization.
``(b) Combined Loans, Grants, and Loan Guarantees.--A project sponsor
shall be eligible for a loan, grant, loan guarantee, or combination
thereof for a project proposal under this Act. An applicant may submit
one proposal to be carried out with assistance under more than one
title under this Act. No organization shall be eligible for an
additional loan, grant, loan guarantee, or any combination thereof for
the same project that has previously received approval for a loan,
grant, or loan guarantee under this Act within the prior five fiscal
years.
``(c) Planning, Construction, Operation, and Maintenance.--The United
States shall not be required to provide planning, construction,
operation, and maintenance of any project receiving a loan, grant or
loan guarantee under this Act.
``(d) State Water Law.--Any project assisted under this Act shall be
carried out in accordance with applicable State water law.''.
(d) Conforming Amendments.--
(1) Sections 9 through 13 of the Small Reclamation Projects
Act of 1956 (43 U.S.C. 422i-422k-1) are redesignated as
sections 403 through 407, respectively.
(2) Section 404 of such Act, as redesignated by paragraph (1)
of this subsection, is amended as follows:
(A) By striking ``section 3'' and inserting ``title
I''.
(B) By striking ``effective October 1, 1986,'' and
inserting ``for any fiscal year''.
(C) By striking ``for loans and grants pursuant to
this Act'' and inserting ``for loans and grants
pursuant to title I''.
(D) By striking ``five years after the date of
enactment of this Act'' and inserting ``ten years after
the date of enactment of the Small Reclamation Water
Resources Project Act of 2001''.
(E) By striking ``section 4(c)'' and inserting
``title I''.

SEC. 203. ADDITIONAL APPROPRIATIONS.

Section 404 of the Small Reclamation Projects Act of 1956 (43 U.S.C.
422j), as redesignated by section 202(d)(1) of this Act, is further
amended--
(1) by striking ``such sums'' and all that follows through
``That the Secretary'' and inserting ``to carry out this Act
$1,300,000,000 for fiscal years after fiscal year 2001, of
which $900,000,000 may be appropriated to carry out title I and
to complete ongoing projects under Public Law 84-984,
$300,000,000 may be appropriated to carry out title II, and
$100,000,000 may be appropriated to carry out title III. Of
funds authorized under this Act, not more than 20 percent shall
be used for projects to be carried out by Indian tribes or in
economically disadvantaged communities. The Secretary''; and
(2) by striking ``any single State'' and all that follows
through ``the Secretary is authorized to waive'' and inserting
``in any single State. Funds obligated or expended for projects
by Indian tribes shall not be considered for purposes of the
preceding sentence. The Secretary may waive''.

SEC. 204. GUIDELINES.

Within 180 days after the date of enactment of this Act, the
Secretary of the Interior shall complete and publish such
administrative guidelines as may be necessary to carry out the
amendments made by this title.

SEC. 205. EFFECTIVE DATE.

The amendments made by this title shall take effect on the date of
enactment of this Act. Nothing in this title or in any amendment made
by this title shall affect any loan or grant that has been approved
before the date of enactment of this Act.

SEC. 206. LIMITATION.

Activities funded under this title shall not be considered a
supplemental or additional benefit under the Act of June 17, 1902 (82
Stat. 388), and all Acts amendatory thereof or supplementary thereto.

TITLE III--MISCELLANEOUS

SEC. 301. SECRETARIAL ACTIONS TO REDUCE CALIFORNIA'S USE OF COLORADO
RIVER WATER.

(a) Review.--The Secretary shall review programs that are
administered by the Department of the Interior in furtherance of the
goal of reducing California's use of Colorado River water to its basic
annual apportionment, in a manner consistent with amounts and deadlines
established in the Interim Surplus Guidelines.
(b) Utilization of Existing Programs and Authorities.--The Secretary
shall utilize existing programs and authorities in furtherance of the
goal of reducing California's current use of Colorado River water.
(c) Identification of Status of Ongoing Efforts.--In preparing the
operating plans described in section 602(b) of the Colorado River Basin
Project Act of 1968, beginning with the operating plan for 2003, the
Secretary shall specifically identify and describe the status of
ongoing efforts to reduce California's current use of Colorado River
water.
(d) Funding To Address Impacts of QSA on Salton Sea.--There is
authorized to be appropriated to the Secretary $60,000,000 for
activities to address environmental impacts on the Salton Sea
associated with implementation of the Quantification Settlement
Agreement.
(e) Basis for Determinations of Domestic Colorado River Surplus
Conditions.--For the purpose of assuring that California expeditiously
takes all required actions to reduce its use of Colorado River water to
its allocation of 4,400,000 acre-feet, in accordance with the strategy
set forth in the Colorado River Interim Surplus Guidelines published in
the Federal Register on January 25, 2001, the Secretary shall, on and
after January 1, 2016, base determinations of domestic Colorado River
surplus conditions under Article II(B)(2) of the Supreme Court Decree
in Arizona v. California, 376 U.S. 340 (1964) exclusively on the 70R
spill avoidance strategy, as set forth in section IV of the Interim
Surplus Guidelines.

SEC. 302. WILLARD BAY RESERVOIR ENLARGEMENT STUDY.

(a) Authorization of Feasibility Study.--Pursuant to the reclamation
laws, the Secretary, through the Bureau of Reclamation, may conduct a
feasibility study on raising the height of Arthur V. Watkins Dam and
thereby enlarging the Willard Bay Reservoir for the development of
additional storage to meet water supply needs within the Weber Basin
Project area. The feasibility study shall include such environmental
evaluation as required under the National Environmental Policy Act of
1969 and a cost allocation as required under the Reclamation Projects
Act of 1939.
(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary shall submit a report on the results of the
study to the Congress for review and approval.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $2,000,000.

SEC. 303. AMENDMENTS TO THE FEDERAL WATER PROJECT RECREATION ACT.

(a) Congressional Policy.--The first section of the Federal Water
Project Recreation Act (16 U.S.C. 460l-12) is amended by striking
``public bodies'' and inserting ``entities''.
(b) Allocation of Costs.--Section 2 of the Federal Water Project
Recreation Act (16 U.S.C. 460l-13) is amended--
(1) in subsection (a) by striking ``, before authorization of
a project,'';
(2) in subsection (a), by striking ``public bodies'' and
inserting ``entities'' and by striking ``Projects authorized
during the calendar year'' and all that follows to the end of
the subsection;
(3) in subsection (b) by striking ``non-Federal interests''
each place it appears and inserting ``non-Federal entities'';
(4) in subsection (b)(2)--
(A) by striking ``: Provided, That the source of
repayment may be limited to'' and inserting ``. The
source of repayment may include''; and
(B) by inserting ``and retained'' after
``collected''; and
(5) in subsection (b)(2) by adding at the end the following:
``Fees and charges may be collected, retained and used by the
non-Federal entities for operation, maintenance, and
replacement of recreation facilities on project lands and
waters being managed by the non-Federal entities. As
established by the Secretary, any excess revenues will be
credited to the Reclamation Fund to remain available, without
further Act of appropriation, to support recreation development
and management of Bureau of Reclamation land and water
areas.''.
(c) Recreation and Fish and Wildlife Enhancement.--Section 3 of the
Federal Water Project Recreation Act (16 U.S.C. 460l-14) is amended--
(1) by striking subsection (a), redesignating subsection (b)
as subsection (a), and inserting after subsection (a) (as so
redesignated) the following:
``(b) In the absence of a non-Federal managing partner, the Secretary
of the Interior, acting through the Commissioner of Reclamation, is
authorized, as a part of any water resource development project under
the Secretary's control heretofore or hereafter authorized or
reauthorized, investigate, plan, construct, replace, manage, operate
and maintain or otherwise provide for public use and enjoyment of
project lands, facilities, and water areas in a manner coordinated with
the other project purposes; the costs of which are nonreimbursable.'';
(2) in subsection (a) (as so redesignated) by inserting ``or
enhance'' after ``project construction to preserve'', by
striking ``enhancement potential'' and inserting ``resources'',
and by striking ``public bodies'' each place it appears and
striking ``public body'' and inserting in lieu thereof
``entities'' and ``entity'', respectively;
(3) in subsection (c)(1)(B) by striking ``public body'' each
place it appears and inserting ``entity''; and
(4) by adding at the end of subsection (c) the following:
``(3) In the absence of a non-Federal managing partner, the Secretary
of the Interior, acting through the Commissioner of Reclamation, may
modify or expand existing facilities, the costs of which are
nonreimbursable.''.
(d) Lease of Facilities.--Section 4 of the Federal Water Project
Recreation Act (16 U.S.C. 460l-15) is repealed.
(e) Post Authorization Development.--Section 5 of the Federal Water
Project Recreation Act (16 U.S.C. 460l-16) is amended by striking
``public bodies'' and inserting ``entities''.
(f) Miscellaneous Reports.--Section 6 of the Federal Water Project
Recreation Act (16 U.S.C. 460l-17) is amended--
(1) in subsection (e) by striking ``and 5'' and inserting
``and between 3 and 4'';
(2) in subsection (g) by striking ``3(b)'' and inserting
``3(a)''; and
(3) in subsection (h) by striking ``public bodies'' and
inserting ``entities''; and by striking ``3(b)'' and inserting
``3(a)''.
(g) Miscellaneous Reports.--Section 6 of the Federal Water Project
Recreation Act (16 U.S.C. 460l-17) is amended by adding at the end the
following:
``(i) Amounts collected under section 2805 of Public Law 102-575 for
admission to or recreation use of project land and waters shall be
deposited in a special account in the Reclamation Fund and remain
available to the Commissioner of Reclamation without further
appropriation until expended. Such funds may be used for the
development, reconstruction, replacement, management, and operation of
recreation resources on project lands and waters with not less than 60
percent being used at the site from which the fees were collected.''.
(h) Management for Recreation, Fish and Wildlife, and Other
Resources.--Section 7 of the Federal Water Project Recreation Act (16
U.S.C. 460l-18) is amended--
(1) by amending subsection (a) to read as follows:
``(a) The Secretary of the Interior, acting through the Commissioner
of Reclamation, is authorized, in conjunction with any water resource
development project heretofore or hereafter constructed or which is
otherwise under the Secretary's control, to--
``(1) investigate, plan, design, construct, replace, manage,
operate, and maintain or otherwise provide for recreation and
fish and wildlife enhancement facilities and services, the
costs of which may be nonreimbursable;
``(2) provide for public use and enjoyment of project lands,
facilities, and water areas in a manner coordinated with the
other project purposes; and
``(3) to acquire or otherwise make available such adjacent
lands or interests therein as are necessary for public
recreation or fish and wildlife use.'';
(2) in subsection (b), by inserting ``, acting through the
Commissioner of Reclamation,'' and inserting ``and management''
after ``administration''; and by striking ``lease''; and by
adding at the end ``All such agreements or contracts for
administration or management shall identify the terms and
conditions of administration, management, and use, approvals
required from Bureau of Reclamation, and assure public access
to project lands managed for recreation.'';
(3) by adding:
``(7) The Secretary of the Interior, acting through the
Commissioner of Reclamation, is also authorized to enter into
agreements with other non-Federal entities for recreation and
concession management at Bureau of Reclamation projects. All
such agreements or contracts for management shall identify the
terms and conditions of management and use, approvals required
from the Bureau of Reclamation, and assure public access to
project lands managed for recreation.''; and
(4) by adding at the end the following:
``(d) The Secretary of the Interior, acting through the Commissioner
of Reclamation, is authorized to approve the administration,
management, and use of Bureau of Reclamation lands, waters, and the
resources thereon by means of easements, leases, licenses, contracts,
permits, and other forms of conveyance instruments.
``(e) The Secretary of the Interior, acting through the Commissioner
of Reclamation, is authorized to produce and/or sell to the public:
information about Bureau of Reclamation programs including
publications, photographs, computer discs, maps, brochures, posters,
videos, and other memorabilia related to the Bureau of Reclamation, and
the natural, historic, and cultural resources of the area; and, other
appropriate and suitable merchandise to enhance the public's use of the
area. Income from such sales shall be credited to the Reclamation Fund
to remain available, without further Act of appropriation, to pay costs
associated with the production and sale of items, and any remaining
revenue shall be available, without further Act of appropriation, to
support recreation development and management of Bureau of Reclamation
land and water areas.''.
(i) Definitions.--Section 10 of the Federal Water Project Recreation
Act (16 U.S.C. 4601-21) is amended by adding at the end the following:
``(f) The term `non-Federal entity' means non-Federal public bodies,
nonprofit organizations, Indian tribes, or entities within the private
sector.''.
(j) Authorization of Appropriations.--The Federal Water Project
Recreation Act (16 U.S.C. 460l-12 et seq.) is amended by redesignating
section 12 as section 13, and by inserting after section 11 the
following:

``SEC. 12. FUND AUTHORIZATIONS.

``There is hereby authorized to be appropriated from time to time
such funds as may be required for the Secretary of the Interior, acting
through the Commissioner of Reclamation to accomplish the purposes of
this Act and remain available until expended.''.

SEC. 304. LIMITATIONS ON RECOVERY OF REIMBURSABLE EXPENSES FOR VALVE
REHABILITATION PROJECT AT THE ARROWROCK DAM, BOISE
PROJECT, IDAHO.

The Secretary of the Interior, in accepting payments for the
reimbursable expenses incurred for the replacement, repair, and
extraordinary maintenance with regard to the Valve Rehabilitation
Project at the Arrowrock Dam on the Arrowrock Division of the Boise
Project, Idaho--
(1) shall recover no more than $6,900,000 of such expenses
according to the application of the current formula for
charging users for reimbursable operation and maintenance
expenses at Bureau of Reclamation facilities on the Boise
Project; and
(2) shall recover this portion of such expenses over a period
of not less than 15 years.

SEC. 305. CONTRACT ASSURANCES FOR PAYMENT OF PREVAILING WAGES FOR
LABORERS AND MECHANICS.

Any contract under which laborers or mechanics may be employed, for a
project or activity funded in whole or in part under title I or II (or
under an amendment made by such title), shall contain reasonable
assurances that each contractor or subcontractor involved shall pay
laborers and mechanics employed by such contractor or subcontractor
wages equivalent to those applicable under the Act of March 3, 1931 (40
U.S.C. 276a et seq., commonly known as the Davis-Bacon Act).

Purpose of the Bill

The purpose of H.R. 3208 is to authorize funding through
the Secretary of the Interior for the implementation of a
comprehensive program in California to achieve increased water
yield and environmental benefits, as well as improved water
system reliability, water quality, water use efficiency,
watershed management, water transfers, and levee protection.

Background and Need for Legislation

california: a growing population and a thirst for water

In the last two decades, the population of California has
grown by more than 30% while additional water in surface
storage has increased by only 2%. The need for additional water
has generally been met over the last decade by increased
conservation practices and water recycling. In some cases
increased water demand has been met through agriculture to
urban water transfers. Testimony before the House Resources
Committee in Washington D.C. and throughout the State of
California has indicated that the demand for water may outpace
these innovative approaches to meet the future water needs and
that Congress should further consider the role of additional
surface and groundwater storage throughout the State.
California water consumption is based on a complicated mix
of competing users, transportation constraints, and limited
supplies. Two-thirds of the water demand comes from the
southern third of the State, while two-thirds of the
precipitation and water storage are in the northern third of
the State. Water is moved from the San Francisco Bay/
Sacramento-San Joaquin River Delta (Bay-Delta) area through the
State Water Project (SWP) and the federal Central Valley
Project (CVP). California averages 23 inches of precipitation
per year and there are nearly 85 million-acre feet of water (on
average) available for all uses (this includes water from the
Colorado and Klamath Rivers).
California has the fifth largest economy in the world and
produces one-eighth of the Nation's gross domestic product. As
the recent energy crisis has demonstrated, lack of planning and
infrastructure investment results in the deterioration of both
system capacity and flexibility while reducing the ability to
respond to emergencies. In testimony before the Resources
Committee, Sunne McPeak, President and Chief Executive Officer,
Bay Area Council, stated, ``Water policy decisions and the
manner in which they are implemented will affect every resident
and every business in California, which in turn has major
implications for the national economy.''

california bay-delta and the calfed program

For nearly two decades, Californians, Congress and the
Department of the Interior have grappled with decreasing water
supply reliability in the face of drought and infrastructure
limitations, and increasing environmental water demands as
these hydrologic and mechanical factors have impacted fishery
and wildlife habitat and production in the California Bay-
Delta.
Enactment of the Central Valley Project Improvement Act,
implementation of the Clean Water Act by the U.S. Environmental
Protection Agency relative to water quality in the Bay-Delta,
and U.S. Fish and Wildlife Service and National Marine
Fisheries Service (NMFS) regulatory actions under the federal
Endangered Species Act further have impacted California's water
supply allocation and infrastructure operation decision-making
and capability.
In response to decreasing water supply reliability,
concerns over human and environmental water quality, and the
overarching need to resolve increasing conflicts among water
needs, Californians worked together to focus the actions and
objectives of State and federal regulatory, environmental and
water resources agencies towards a comprehensive and
cooperative program. This collaborative process resulted in the
Bay-Delta Accord, signed by State and federal regulatory
agencies, in December 1994, with the cooperation of diverse
interest groups. This accord integrated water quality standards
and created a State-federal coordination group to better
integrate the State Water Project (SWP) and Central Valley
Project (CVP), and led to the establishment of the CALFED Bay-
Delta Program in May 1995. The Program's primary focus was to
develop a long-term comprehensive plan to restore ecological
health and improve water management in the Bay-Delta system
while honoring the water rights and private property rights of
residents.
The development of a long-term solution was divided into
three phases:
Phase I: Phase I (completed in September 1996) identified
problems in the Bay-Delta system; developed a mission
statement, guiding principles, Program objectives and actions
needed to meet Program objectives. Three alternatives to
restore the Bay-Delta were discussed (ranging from $4-12
billion). Additionally, this Phase began implementation of
environmental restoration projects authorized under the
California Bay-Delta Environmental Enhancement Act (Public Law
104-333) and authorized $430 million for projects common in all
Program alternatives. To date, more than $200 million has been
appropriated under this authorization.
Phase II: A major milestone was accomplished when CALFED
released the Record of Decision (ROD) under the National
Environmental Policy Act on August 28, 2000. The ROD provides
the framework to address these issues through a sustained,
long-term effort by the CALFED agencies and stakeholder groups.
The ROD set out actions to be included in Stage 1 of the CALFED
Program, which is to cover the first seven years of a 30-year
program, and builds the foundation for long-term actions.
However, the Congressional authorization for this Program has
expired and the House of Representatives Committee on
Appropriations has committed not to appropriate additional
funding for the Program until it is reauthorized.
Phase III: Phase III is currently underway and covers
Program implementation. Implementation is divided into three
stages. Stage I will take seven years. It includes site-
specific environmental review, project development, and pre-
construction activities. The Committee expects that all Program
objectives (i.e. new water yield and supply, levee work,
habitat improvements and water quality work) will be met
continuously. Stages II and III remain undefined.
Expedient implementation of core CALFED Program elements is
necessary to California's water supply security, economic
stability, and long-term resolutions of the decades old ``water
wars''. With the authorization for the Program expired, it is
important that Congress act quickly to assure a safe and secure
water system in the near and long-term.

california, colorado river basin states, and other reclamation states

In addition to the need to improve the water security in
the California Bay-Delta, there is a further need to address
other important water security issues throughout all western
reclamation States. The reclamation States consist of all or
part of North and South Dakota, Nebraska, Kansas, Oklahoma,
Texas, New Mexico, Colorado, Wyoming, Montana, Idaho, Utah,
Nevada, Arizona, California, Washington, and Oregon. These are
States in which the Bureau of Reclamation has historically been
authorized to act. A common theme was presented at several
hearings this past year that water security is critically
important throughout the West. For the past 15 years, the West
has been experiencing the most dramatic demographic changes for
any region or period in the country's history. Should present
trends continue, by 2025 population in the Bureau of
Reclamation States may increase by approximately 26.5%, or
almost 33.5 million people (U.S. Census Bureau).

California and the Colorado River Basin States

The Colorado River Basin States include Wyoming, Colorado,
Utah, New Mexico, Arizona, Nevada and California. They are
separated into two basins, the upper (Wyoming, Colorado, Utah
and New Mexico) and the lower (Arizona, Nevada and California),
each basin is entitled to 7.5 million acre feet on an annual
basis, under the Colorado River Compact of 1928.
Testimony presented before the Committee this past year has
culminated in the need for Congress to assure that the legal
water entitlement of each State is adhered to. An issue raised
at several hearings has been to determine whether California
can live within its legal apportionment of 4.4 million acre
feet of lower Colorado River Basin water, although it has been
drafting several hundred thousand additional acre feet of water
for many years.
As a result of provisions in a later decree (the 1964
decree in Arizona v. California), California has been allowed
to legally use more than its annual 4.4 million acre feet basic
apportionment of Colorado River water. In past years,
California relied upon apportioned but unused Colorado River
water from the States of Arizona and Nevada, and in more recent
years surplus reservoir system water since Arizona and Nevada
are now using close to their full apportionments.
For many years the other Basin States have had the
legitimate concern that dependence on this surplus by
California, as the State continues to grow rapidly, creates a
reliance which, legal apportionment or not, will be difficult
or impossible to undo once the other Basin States can
beneficially use the full amount of their individual State
apportionments.
In recent years this concern has escalated even further as
development in Arizona, Nevada, and the upper Basin States has
increased and greater demands for Colorado River water are
being created. This is accompanied, from the perspective of the
other Basin States, by the increasing sense that, even though
California water users know the limits of their legal
apportionment, State or water user actions in California to
limit water consumption or develop new supplies are not being
taken in time to avoid a serious legal and political collision.
The Colorado River in the lower Basin is managed largely by
the Secretary of the Interior. Recognizing the potential for
such a collision in the near future, the previous
Administration, under pressure from the other Colorado River
Basin States, crafted a plan to address this issue. The
Secretary threatened to cease declaring ``annual surpluses'' on
the Colorado River unless California agreed to a specific plan
to reduce its annual take of Colorado River water to its legal
apportionment.
As a result of this pressure the Colorado River Basin
States have entered into an agreement with the Secretary of the
Interior to assure that California reduce its demand by about
15% from approximately 5.2 million acre feet to 4.4 million
acre feet over the next 15 years.This agreement is called the
Interim Surplus Agreement. An initial reduction in water use by
California is required under the agreement by December 31, 2002.
Although the population is projected to grow by 30% during
this same time in California, it is expedient that California
adhere to the Agreement. H.R. 3208 provides further incentives
and assistance to California and the other Basin States to meet
this commitment, while providing the water security necessary
for a healthy environment and population at large.

Reclamation States

Population growth throughout the West has, in many cases,
exceeded the rest of the country. This has increased the
competition for a finite water resource amongst a variety of
interests, including agriculture, municipal and industrial,
recreational, and environmental. No appreciable water supply,
including surface and groundwater has been added to the complex
water system in the West in the last 30 years. Demand for water
is outstripping available supplies throughout the West.
Over the past year, the Committee has received more than
100 letters regarding the increasing need for further funding
for water recycling/reuse and groundwater storage projects
throughout the Reclamation States. The Committee is aware of
projects that would require an excess of $12 billion in federal
appropriations. The Committee is also aware that water
recycling projects authorized under the Title XVI, of Public
Law 102-575, are severely underfunded. It is the intent of the
Committee that the competitive grant program, which includes
water recycling/reuse and groundwater storage will help
ameliorate problems associated with the current lack of water
security throughout all Reclamation States.

conclusion

In summary, H.R. 3208 addresses all these western water
problems by: (1) authorizing funding for the implementation of
a comprehensive program to achieve increased water yield and
water supply, improved water quality and enhanced environmental
benefits, as well as improved water system reliability, water
use efficiency, watershed management, water transfers, and
levee protection for California; (2) implementing the four
primary objectives of the CALFED Program for California in
accordance with the solution principles set forth in that
Program; (3) ensuring that the Secretary of the Interior and
the federal agencies, in cooperation with the State of
California, implement actions necessary to improve drinking
water quality pursuant to the ROD, including through financial
and technical support of local enhancement of water treatment
infrastructure and technology; and (4) enhancing water security
in the Western United States by authorizing a competitive grant
program and reauthorizing and amending the Small Reclamation
Projects Act of 1956.

Section-by-Section Analysis

Section 1. Short title

The legislation may be cited as the Western Water Security
Enhancement Act.

Section 2. Table of contents

This section provides a table of contents for the bill.

Section 3. Purposes

This section describes the purposes of the bill, including
the protection and further development of water infrastructure
throughout the Western United States, particularly in
California. This will ensure the implementation of ecosystem
protection programs, development of water supply projects
critically needed to achieve increased water yield and supply,
environmental benefits and improved water quality, water system
reliability, water use efficiency, watershed management, water
transfers and levee protection throughout the Reclamation
States, particularly in California.

Section 4. Definitions

This section defines several terms used throughout the
bill.

TITLE I--WESTERN WATER SECURITY PROGRAM

Section 101. Interim Program activities and governance structure

This section directs the federal agencies to coordinate
with the State agencies, and continue to operate under the
interim governance structure as described in the ROD until a
new board, known as the Water Security Board (WSB) is
established, and the governance is transferred to that entity.
The authorization of $200 million to carry out this Program for
fiscal years 2002-2004 is meant to be broad, allowing all
CALFED-related activities that are discussed in the ROD to
continue in the interim.
The Committee believes that water storage and basic
infrastructure needs were not adequately addressed in the
initial years of the CALFED Program. It is the intent of the
Committee that future federal funding shall be allocated such
that there is balance in increasing water yield and supply,
while improving water quality and enhancing environmental
benefits. As the CALFED solution principles indicate, solutions
shall focus on solving problems in all areas of CALFED, and no
Program elements will be left behind.
It is the intent of the Committee that beneficiaries will
pay for appropriately allocated costs of construction of water
projects that pass the screening process envisioned in the ROD.
Project costs will be based on an appropriate allocation of
benefits received. It is envisioned that repayment terms for
all federal investments include the principle of
``beneficiaries pay''.
Studies shall be undertaken by the Secretary of Interior,
resulting in a report submitted by October 1, 2002, to
determine the existing level of water demand and the available
water supplies to meet that demand within the area served by
the Central Valley Project. The report shall describe all
projects or actions that could feasibly be pursued to balance
water demand and water supply. Furthermore, the Secretary shall
study and recommend projects identified in the ROD to improve
drinking water quality.
This section requires that a report be submitted to
Congress identifying all expenditures underCALFED, and other
programs that may be complimentary to the CALFED Program. The intent of
this report is to assure that federal appropriations are coordinated
and to limit duplicative efforts.
The Committee recommends the Secretary, prior to
implementing new water storage or conveyance mechanisms or
changes to Central Valley Project operations in furtherance of
CALFED Program implementation, fully evaluate the electric
power demand and supply impacts, as well as the Central Valley
Project cost allocation impacts, of those activities.

Section 102. Long-term governance and monitoring

In testimony before the Committee, several witnesses
expressed concern that local stakeholder input has been
minimally taken under consideration by the CALFED agencies. The
intent of the Committee is that the long-term governance
structure under this section shall be developed with
participation of federal, State, tribal and representatives of
the public, including local stakeholders. It is the intent of
the Committee that there will be no federal funding for CALFED,
the competitive grants program and no appropriation of Central
Valley Project Improvement Act restoration funds until a long-
term governance and program have been authorized by Congress.
The Committee wants to be very clear that the future
governance of the CALFED Program needs to be a multiparty
structure originating in California with broad public, tribal,
and local government involvement. Board members representing
State and federal officials shall be atleast the level of
authority that signed the ROD. This will assure that decision making at
State and federal levels rest with accountable persons.
The board will be required to ensure federal funds and
resources are expended in the most cost-efficient manner. The
Committee expects that meetings to develop Program goals and
operational criteria, when possible, shall be open to the
public. Furthermore, it is the intent of the Committee that
decisions made by the WSB shall be based on credible and
objective scientific review and economic analysis. Specifically
the Committee expects that the WSB will utilize the best
available, independent peer-reviewed information, so that a
disastrous outcome such as that occurred in the Klamath Basin
in 2001 does not occur. Additionally, the WSB shall ensure that
the level of progress achieved for various CALFED Program
objectives are accurately measured and continually evaluated
for ongoing Program improvement.
The Committee expects that the WSB will seek out
opportunities to partner with local interests, and undertake
joint activities with local public agencies, tribes, private
water users, and landowners. These partnerships shall provide a
means for private landowners to cooperate effectively with
CALFED to promote Program goals while also furthering the
interests of landowners. These partnerships shall be voluntary
and involve participation to assure mutual gain between local
stakeholders and the CALFED Program objectives.
Prior to spending or obligating any federal funds to
purchase additional private land for the CALFED ecosystem
restoration program, the Committee expects that the WSB must
first determine that no federally-owned lands, State-owned
lands or other lands acquired for ecosystem restoration with
federal or State of California funds are already available to
meet the desired objectives. Additionally, the Committee
expects the WSB to consider the impacts of any potential land
purchases on local government and communities, such as the
economic impact on communities taking land out of agricultural
production, and to take appropriate action to mitigate those
impacts. Prior to acquiring additional land for environmental
purposes, a management plan for lands already acquired, shall
be prepared. It is the intent of Congress that properties
purchased, or acquired, for ecosystem restoration shall be
managed in a manner to not impact surrounding land owners in a
negative manner.
It is the intent of the Committee that the WSB shall
include recommendations with respect to the construction of
complementary actions that, among other benefits, improve,
regional water supplies, water system reliability and water
quality, as mentioned in the ROD. Examples of complementary
actions may include projects that improve water conveyance and
increased water supply mechanisms throughout the Bay-Delta
solution area.
The Committee intends that CALFED Program implementation
relative to Sacramento-San Joaquin River Delta water quality,
water supply reliability, and levee system integrity, shall be
consistent with the CALFED Program ROD objectives and solution
principles. The Program objectives and solutions include, as
referenced in the ROD: (1) providing good water quality for all
beneficial uses; (2) reducing the mismatch of water supply and
current and projected beneficial uses; (3) reducing the risk to
land use and associated economic activities, water supply,
infrastructure and the ecosystem from catastrophic breaching of
Delta levees; and (4) having no significant redirected impacts.
It is the intent of the Committee that federal and State
agencies, including the WSB, shall operate in compliance with
California water law. The Committee recognizes the changing
nature of State Water Board and federal court decisions and
assumes that the Secretary's implementation of the CALFED ROD
will comply with these changes.

Section 103. California water supply security

After conducting numerous hearings and reviewing
subsequently-submitted correspondence, the Committee became
concerned that projects were being evaluated for storage and
yield without considering all potential storage alternatives
and utilizing a cost/benefit analysis in conjunction with
environmental criteria to assure projects are environmentally
and economically viable. The Committee believes that the
statutory language emphasizes that the Secretary's existing
discretion provides the ability to operate the Central Valley
Project to reach the objectives described in the ROD pertaining
to south-of-Delta Central Valley Project agricultural water
service contractors. The Committee emphasizes that any exercise
of this discretion should be based on the CALFED principle of
no redirected impacts, including not adversely impacting water
users in the Delta, and north and south of the Delta.
Furthermore, the Committee believes that the Secretary should
participate with the State of California in efforts to increase
the Banks-Pumping Plant utility, without redirecting impacts to
other water users, including water users in the Delta, and
north and south of the Delta, in accordance with the time frame
in the ROD, and consistent with State law.
Both Governor Gray Davis (D-CA) and former Secretary of the
Interior Bruce Babbitt acknowledge that the federal and State
regulatory process has gone awry within the State of
California. Additionally, witnesses at several hearings before
the Resources Committee have expressed concern that the water
system has been managed increasingly for the enhancement of the
environment, while potentially jeopardizing water quality and
human consumption needs. This system was primarily created to
meet the needs of a world-class agriculture and municipal and
industrial system. The Committee believes current operation of
the system is not producing balance amongst competing demands.
The WSB shall manage the Environmental Water Account (EWA)
so that environmental goals can be met, but will be carried out
in such a way that there will be no annual net loss of water to
water users. EWA assets are to be used first and foremost for
federally and State listed species under the relevant
Endangered Species Acts and not for other priorities. The EWA
shall be authorized to ensure that public benefits are matched
by public expenditures to achieve these important goals. It is
the intent of the Committee that the EWA be funded jointly by
the State and federal governments and authorized to acquire,
bank, transfer, sell and borrow water and arrange for its
conveyance.
The Environmental Water Account (EWA), as described in the
ROD, is established to provide water beyond the Regulatory
Baseline for the protection and recovery of fish. The
EWAOperating Principles Agreement indicates that the management
agencies ``will manage the EWA assets and will exercise their
biological judgement to determine what SWP/CVP operational changes are
beneficial to the Bay-Delta ecosystem and/or the long-term survival of
fish species, including those listed under the State and Federal
Endangered Species Act.''
Unfortunately, this mandate is too broad. The EWA should be
a tool used to protect listed species. The Committee believes
that the mandate the EWA is now operating under allows too much
flexibility in utilizing the EWA assets. This flexibility
allows the EWA Management Group to use EWA water for a large
variety of purposes, thus not leaving enough water available
for the protection of listed species. If additional water is
needed for listed species, the State and federal endangered
species acts shall apply.
It is the intent of the Committee that all agencies dealing
with the protection of endangered fish species shall
demonstrate, using best available science, the need for, and
the benefit of utilizing the EWA assets.

Section 104. Implementation of the CALFED Program

This section directs the development of a streamlining
process for the issuance of permits and approvals required
under State and federal law and regulatory programs to minimize
the burden of submission requirements. This shall not affect
the integrity of the review process.
This section authorizes $200 million for the CALFED Program
for the years 2002-2004. After 2004, such sums as may be
necessary are authorized through 2032 for completion of all
stages of the CALFED Program. Appropriations not expended shall
remain available to the Program.

Section 105. Competitive Grant Program

The competitive grant program will identify opportunities
throughout the Reclamation States for the design and
construction of demonstration and permanent facilities to
increase water yields and improve water quality. This program
is to include, but not be limited to, reclamation and reuse
projects, conjunctive use projects, groundwater storage and
water use efficiency projects. Evaluation criteria are provided
for ranking these projects to determine which should receive
grants, which can be up to $50 million or 35% of the total cost
of the project. This section authorizes $500 million, of which
no one State can receive more than 50% of the annual
appropriation.

Section 106. Authorization and appropriation process

In recognition that the CALFED Program has operated as a
preauthorization/block grant program, the Committee believes
that there needs to be an adjustment to return the federal
funding mechanism to Congress. This will allow appropriate
Congressional oversight of planned expenditures prior to a
federal appropriation of funds. The Committee believes that
expenditures to date have not been balanced and have possibly
threatened the integrity of the CALFED process of balanced
implementation of all Program components. Without this section,
the Committee believes that inappropriate amounts of federal
dollars will continue to be spent without Congressional
authorization.

Section 107. Annual reports

This section focuses on the need for the CALFED Program to
improve coordination with the State and federal agencies. It
will provide meaningful annual budget crosscuts; adopt
performance measures that provide a real basis for adaptive
management rather than continual policy drifting with no goals
or financial accountability; and the use objective science
rather than the current agency speculation driven by regulatory
objectives. This section only applies to the CALFED Program and
competitive grant monies that California may be eligible to
receive.

Section 108. Treatment of funds

Funds authorized under this Program shall be in addition to
funds authorized under other programs. However, it is the
intent of this Committee that all funds shall be coordinated
and streamlined to ensure the efficient use of limited
resources.

Section 109. Land acquisition; management plan required for existing
land

The Committee believes that previous land acquisitions have
not been managed in a manner consistent with the protection of
surrounding land uses. The Committee does not want additional
land purchases for the CALFED ecosystem restoration program
until management plans for existing lands have been developed.
This shall include lands purchased by non-federal entities
using federal grants.

Section 110. Environmental justice

This section requires the federal and State agencies to
address issues within the Environmental Justice Workplan.

TITLE II--SMALL RECLAMATION PROJECTS

This title reauthorizes the Small Reclamation Projects Act
(SRPA) of 1956, to allow for loans and loan guarantees to be
made for a variety of water projects throughout the western
United States. The title continues the existing SRPA program,
but no longer requires irrigation as a project component.
Projects under this program are limited to $50 million in
federal assistance.

TITLE III--MISCELLANEOUS

Section 301. Secretarial actions to reduce California's use of Colorado
river water

This section requires the Secretary of the Interior shall
review programs to further the goal of reducing California's
use of Colorado River water to its basic annual
apportionment.There is also authorized to be appropriated $60 million
for activities to address environmental impacts on the Salton Sea
associated with plans to reduce California's consumption of water under
the Quantification Settlement Agreement.

Section 302. Willard Bay Reservoir enlargement study

This section authorizes the Bureau of Reclamation to
conduct a feasibility study on raising the height of Arthur V.
Watkins Dam to enlarge Willard Bay Reservoir to meet water
supply needs within the Weber Basin Project area in Utah.

Section 303. Amendments to the Federal Water Project Recreation Act

This section provides the Bureau of Reclamation recreation
management authorities to effectively develop and manage
recreation at Reclamation water projects. The current statute
authorizes Reclamation to partner with federal and non-federal
government agencies for recreation development and management.
This bill extends that authority to include non-federal
entities, which are defined as non-federal public bodies, non-
profit organizations, Indian tribes, or entities within the
private sector.

Section 304. Limitations on recovery of reimbursable expenses for valve
rehabilitation project at the Arrowrock Dam, Boise Project,
Idaho

This section defines the terms under which the Secretary of
the Interior may accept payment for the reimbursable portion of
the valve rehabilitation project at Arrowrock Dam in Idaho. The
repayment shall be limited to $6.9 million and shall be
collected over a period of not less than 15 years.

Section 305. Contract assurances for payment of prevailing wages for
laborers and mechanics

This section provides that any contract for a project or
activity funded under Title I or Title II of this Act shall
contain reasonable assurances that the contractors involved
shall pay laborers and mechanics wages equivalent to those
applicable under the Davis-Bacon Act (40 U.S.C. 276a et seq.).

Committee Action

Congressman Ken Calvert (R-CA), introduced H.R. 3208 on
November 1, 2001. The bill was referred primarily to the
Committee on Resources and in addition to the Committee on
Transportation and Infrastructure. On November 7, 2001, the
Committee on Resources met to consider the bill. Mr. Calvert
offered an en bloc amendment of technical changes to the bill.
The amendment was adopted by unanimous consent. Congressman Cal
Dooley (D-CA) offered an amendment to Section 103(a)(4) of the
bill to direct the Secretary of the Interior to use her
discretion, to the maximum extent practicable, to provide at
least 70 percent of the current contract maximum water delivery
to water users south of the Bay-Delta area. The restoration of
supply must comply with existing State and federal
environmental and water law. In addition, the Secretary cannot
reduce deliveries, increase costs or otherwise adversely affect
other water users that rely on water diverted from watercourses
tributary to the Delta or in the Delta. Furthermore, water
quality for municipal, industrial and agricultural uses cannot
be degraded. Congressman George Miller (D-CA) offered a
substitute amendment to the Dooley amendment to strike Section
103(a)(4) of the bill. The Miller amendment to the Dooley
amendment failed on a roll call vote of 14 to 20, as follows:

The Dooley amendment was then adopted by voice vote.
Congressman Richard Pombo (R-CA) offered an en bloc amendment
regarding: (1) the accountability of federal agencies in the
management and purchasing of land for the CALFED Program; (2)
ensuring that other water users (non exporters) are not imposed
with obligations for shortfalls in the operation of the
Environmental Water Account; (3) CALFED implementation must
mitigate for any adverse impacts on agricultural lands; and (4)
protection of the water rights of people within the Bay-Delta
Solution area. The amendment was agreed to by voice vote. Mr.
Pombo then offered and withdrew an amendment regarding the
Banks Pumping Plant and the Environmental Water Account and the
ecosystem restoration program. Congresswoman Grace Napolitano
(D-CA) offered an amendment to strike Section 111 of the bill,
which placed a limit on the State of California's share of
appropriations for Title XVI projects at 25%. The Napolitano
amendment was agreed to by a roll call vote of 18 to 16, as
follows:

Congresswoman Hilda Solis (D-CA) offered an amendment to
replace the Water Security Board with the Secretary of the
Interior. The Solis amendment failed by a roll call vote of 16
to 18, as follows:

Ms. Solis then offered an amendment to strike Section
106(b)(b)(2)(B), which would waive Congressional review of all
construction, acquisition of lands, easements, and rights-of-
way for projects that received appropriations before 2003. The
amendment was agreed to by voice vote. Congressman Nick Rahall
(D-WV) offered an amendment to strike Title I of the bill and
replace it with language modeled on S. 1768 (CALFED legislation
introduced by the two California Senators) minus the expedited
procedures. The Rahall amendment also included language
relating to the payment of wages equivalent to those required
under the Davis-Bacon Act for laborers and mechanics employed
for a project or activity funded under Title I or Title II of
the bill. The Rahall amendment failed on a roll call vote of 17
to 20, as follows:

Mr. Miller offered an amendment relating to the payment of
wages equivalent to those required under the Davis-Bacon Act
for laborers and mechanics employed for a project or activity
funded under Title I or Title II of the bill. The Miller
amendment was adopted by a roll call vote of 23 to 18, as
follows:

Congressman James V. Hansen (R-UT) offered an amendment to
enforce the State of California's allocation of 4.4 million
acre-feet of water from the Colorado River as established in
the Interim Surplus Guidelines. The Hansen amendment was agreed
to by voice vote.
The bill, as amended, was then ordered favorably reported
to the House of Representatives by a roll call vote of 24 to
18, as follows:

An earlier version of the bill, H.R. 1985, was introduced
by Mr. Calvert on May 24, 2001. That bill was also referred to
the Committee on Resources and additionally to the Committee on
Transportation and Infrastructure. Within the Committee on
Resources, the bill was referred to the Subcommittee on Water
and Power. The Subcommittee held a hearing on H.R. 1985 on July
26, 2001. On September 13, 2001, the Subcommittee forwarded an
amended version of the bill to the Full Resources Committee for
consideration. In addition, the Subcommittee held a series of
oversight hearings on the CALFED Program in Washington, D.C.
and the western United States.

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 Resources' oversight findings and recommendations
are reflected in the body of this report.

Constitutional Authority Statement

Article I, section 8 of the Constitution of the United
States grants Congress the authority to enact this bill.

Compliance With House Rule XIII

1. Cost of Legislation.--Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that Rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act.--As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, credit
authority, or an increase or decrease in revenues or tax
expenditures. According to the Congressional Budget Office,
enactment of H.R. 3208 would affect direct spending by allowing
the spending of certain recreational user fees. This increase
in direct spending would be less than $500,000 per year.
3. 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 authorize funding through the
Secretary of the Interior for the implementation of a
comprehensive program in California to achieve increased water
yield and environmental benefits, as well as improved water
system reliability, water quality, water use efficiency,
watershed management, water transfers, and levee protection.
4. Congressional Budget Office Cost Estimate.--Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:

U.S. Congress,
Congressional Budget Office,
Washington, DC, February 8, 2002.
Hon. James V. Hansen,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3208, the Western
Water Security Enhancement Act.
If you wish further details on this estimate, we will be
pleased to provide them.The CBO staff contact is Julie
Middleton.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.

H.R. 3208--Western Water Security Enhancement Act

Summary: H.R. 3208 would authorize the appropriation of
funds to implement a number of water resource programs,
including the CALFED program, the Bureau of Reclamation's small
reclamation projects program, and a new competitive grant
program that would be administered by the Bureau of
Reclamation. Assuming appropriation of the necessary sums, CBO
estimates that implementing H.R. 3208 would cost $1.9 billion
over the 2002-2007 period.
A consortium of 18 federal and state agencies in California
participate in the CALFED program, which is designed to
increase water yield and environmental benefits, as well as
improve water quality, water system reliability, water use
efficiency, watershed management, water transfers, and levee
protection in the San Francisco Bay and the Sacramento-San
Joaquin Delta (known as the Bay-Delta watershed). Section 104
would authorize the appropriation of $600 million over fiscal
years 2002-2004 for implementation of stage I of the CALFED
program. The bill also would establish a Water Security Board
consisting of representatives from federal and state agencies
to direct and oversee the program. CBO estimates that
implementing this provision would cost $555 million over the
2002-2007 period.
In addition, H.R. 3208 would increase the amount authorized
to be appropriated for direct loans and loan guarantees under
the Small Reclamation Projects Act of 1956 and would expand the
pool of projects eligible to participate in this program. CBO
estimates that implementing these provisions would cost $215
million over the 2002-2007 period, subject to the appropriation
of the necessary amounts.
Under this bill, the Secretary of the Interior would be
authorized to establish a new competitive grant program to
increase water supply and improve water quality in the Bay-
Delta watershed, and in the western states where the Bureau of
Reclamation operates, by constructing water management
facilities, conducting research, and encouraging
watershedmanagement. CBO estimates that implementing this program would
cost about $1 billion over the 2002-2007 period, assuming appropriation
of the necessary amounts.
Finally, the bill would authorize the appropriation of $60
million to conduct an environmental mitigation project at the
Salton Sea in California, and $2 million for a feasibility
study to enlarge Willard Bay Reservoir in Utah.
H.R. 3208 would affect direct spending; therefore, pay-as-
you-go procedures would apply. By allowing spending of certain
recreation user fees, CBO estimates that the bill would
increase direct spending by less than $500,000 per year.
H.R. 3208 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Enactment of this legislation would benefit public agencies
eligible to receive grants and other federal funds authorized
by this bill. Any costs that those agencies might incur would
result from conditions imposed on the receipt of federal funds,
or would stem from voluntary contractual relationships with the
federal government for the receipt of water supplies.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3208 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION \1\
Spending under current law:
Estimated authorization level \2\............... 7 7 7 7 8 8
Estimated outlays............................... 59 64 7 7 8 8
Proposed changes:
Estimated authorization level................... 324 750 760 565 565 560
Estimated outlays............................... 29 235 419 453 413 352
Spending under H.R. 3208:
Estimated authorization level................... 331 757 767 572 573 568
Estimated outlays............................... 88 299 426 440 421 360
----------------------------------------------------------------------------------------------------------------
\1\ H.R. 3208 also would affect direct spending by less than $500,000 per year.
\2\ The 2002 level is the amount appropriated for that year for Small Reclamation Projects Act loans. Estimated
outlays include spending of funds provided for CALFED and Small Reclamation Projects Act loans in previous
appropriations acts.

Basis for estimate
For instance, CBO assumes H.R. 3208 would be enacted early
in fiscal year 2002 and that the necessary amounts would be
appropriated each year. H.R. 3208 would authorize the
appropriation of funds for three water programs, including the
CALFED program, the small reclamation projects program, and a
new competitive grant program. H.R. 3208 also would authorize
some miscellaneous projects and would authorize the Bureau of
Reclamation to spend certain recreation user fees.
Spending subject to appropriation
CALFED implementation.--Section 104 would authorize the
appropriation of $600 million over the 2002-2004 period for
implementation of the CALFED program. Although the program's
authorization expired in 2000 and is has not received an
appropriation of federal funds since then, it continues to
spend funds appropriated in previous years. Based on
information from the Bureau and local water agencies, and on
historical spending of similar programs, CBO estimates that
outlays to implement this provision would be about $555 million
over the 2002-2007 period, assuming appropriation of the
authorized sums.
Under this bill, federal government agencies would be
authorized to work cooperatively with California state agencies
to carry out stage I of the CALFED implementation plan, called
the Programmatic Record of Decision (signed by the Bureau of
Reclamation and other federal and state agencies on May 28,
2000), to restore the ecological integrity of the Bay-Delta
watershed and to ensure adequate supplies of water for the
region. Stage I of the plan covers the first seven years of an
anticipated 30-year implementation effort. The Bureau of
Reclamation estimates that implementing stage I of the plan
would cost $8.7 billion. The plan anticipates that the federal
share of this part of the program would be approximately $2.7
billion. This amount would likely be a small fraction of the
total federal cost called for by a 30-year implementation plan
for the CALFED program. Under section 102, however, no funds to
implement CALFED would be authorized to be appropriated after
2004 without a subsequent authorization act.
Small reclamation loan program.--Section 203 would increase
the authorized funding level for direct loans and loan
guarantees under the Small Reclamation Projects Act (SRPA) of
1956 from $600 million to $1.3 billion. In addition, the bill
would expand the program by eliminating the requirement that
all funded projects have an irrigation component, and would
allow projects in Alaska and the U.S. territories to be
eligible for funding. Approximately $350 million remains
available for appropriation under the existing SRPA
authorization.
Although demand for loans under this program has not been
strong, CBO expects that the amendments that would be made by
H.R. 3208 would provide an alternative means of funding local
projects that have not been constructed because the Bureau of
Reclamation has insufficient funds. In addition, CBO estimates
that demand for these loans would increase because the pool of
eligible projects would grow. Based on information from the
Bureau of Reclamation and local water agencies, CBO estimates
that implementing this modified loan program would cost $215
million over the 2002-2007 period. For this estimate, we assume
that the Bureau of Reclamation would continue to operate this
loan program under the same terms now in effect. Loans that
have been issued are estimated to involve a subsidy of between
25 percent and 30 percent. At that level, we estimate the
expanded loan program would support an average of $130 million
of project loans per year over the next five years.
Competitive grant program.--Section 105 would authorize the
appropriation of $2.6 billion over the 2002-2007 period for
grants to increase water yield and water supply, and to improve
water quality, water conservation and water use efficiency in
the western states where the Bureau of Reclamation operates.
After 2007, the bill would authorize the appropriation of $500
million per year for this program. According to the Bureau of
Reclamation, demand for existing grants exceeds the level of
funding that has been appropriated. Many water projects have
been authorized to be constructed, but sufficient funds to
implement them have not been provided. Based on information
from the Bureau of Reclamation and local water agencies, and on
historical spending of similar programs such as the
Environmental Protection Agency's State and Tribal Assistance
Grants. CBO estimates that implementing the competitive grant
program would cost about $1 billion over the 2002-2007 period.
Miscellaneous authorizations.--Section 301 would authorize
the appropriation of $60 million for activities to mitigate
environmental impacts on the Salton Sea in California. Section
302 would authorize the appropriation of $2 million to prepare
a feasibility study on enlarging Willard Bay Reservoir in Utah
by raising its dam. CBO estimates that implementing these
provisions would cost $62 million over the 2002-2007 period.
Direct spending
Section 303 would allow the Bureau of Reclamation to spend
recreation user fees for authorized purposes without further
appropriation. The agency collects approximately $300,000 from
recreation fees each year. Currently, the spending of those
fees is subject to appropriation. Based on the experience of
other agencies that are authorized to spend such fees, we
expect that the amount of fees that the Bureau collects would
increase slightly. CBO estimates that the net increase in
spending due to this provision would be less than $500,000 per
year.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The net
changes in outlays that are subject to pay-as-you-go procedures
would be less than $500,000 each year. For the purposes of
enforcing pay-as-you-go procedures, only the effects through
2006 are counted.
Intergovernmental and private-sector impact: H.R. 3208
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would authorize grants and loans to
support projects carried out by state and local governments
(including public water agencies) and Indian tribes. While the
new grant funds would benefit those governments, conditions
attached to the funds, including matching requirements, would
entail some additional costs. For example, one provision would
require that wages paid to laborers and mechanics working on
projects funded by this bill conform to certain federal
standards. This requirement could increase the cost of those
projects. Any such costs would be voluntary, however.
Other provisions in this bill would affect the allocation
of water supplies among certain western states and among water
users in California who contract with the federal government
for the delivery of those supplies. One such provision would
require the state of California to reduce its annual use of
water from the Colorado River to 4.4 million acre-feet by the
year 2016. While federal law already sets California's
allocation from the Colorado River to that level under some
supply conditions, the Bureau currently has the authority to
increase that allocation when supplies are sufficient, and has
done so for several years. The language in this bill would
reduce that flexibility and effectively require the Bureau to
enforce the 4.4 million acre-feet limit under most conditions.
Estimate prepared by: Federal costs: Julie Middleton;
Impact on State, local, and tribal governments: Marge Miller;
Impact on the Private Sector: Cecil McPherson.
Estimate approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.

Compliance With Public Law 104-4

This bill contains no unfunded mandates.

Preemption of State, Local or Tribal Law

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

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

SMALL RECLAMATION PROJECTS ACT OF 1956

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That the
purpose of this Act is to encourage State and local
participation in the development of projects [under the] under
this Act and other Federal reclamation laws, with emphasis on
rehabilitation and betterment of existing projects for purposes
of significant conservation of water, energy and the
environment and for purpose of water quality control, and to
provide for Federal assistance in the development of similar
projects in the seventeen western reclamation States by non-
Federal organizations. Such projects may include, but shall not
be limited to, irrigation projects. Irrigation shall not be a
required purpose for projects receiving assistance under this
Act. In providing assistance, the Secretary shall give priority
to recommended proposals that are related to a project that is
otherwise authorized under the Federal reclamation laws and
that will benefit from assistance under this Act.
Sec. 2. As used in this Act--
(a) * * *

* * * * * * *

(c) The term ``organization'' shall mean [a State] an Indian
Tribe, a State or a department, agency, or political
subdivision thereof or a conservancy district, irrigation
district, water users' association, an agency created by
interstate compact, or similar organization which has capacity
to contract with the United States under the Federal
reclamation laws.
[(d) The term ``project'' shall mean (i) any complete
irrigation project, or (ii) any multiple-purpose water resource
project that is authorized or is eligible for authorization
under the Federal reclamation laws, or (iii) any distinct unit
of a project described in clause (i) and (ii) or (iv) any
project for the drainage of irrigated lands, without regard to
whether such lands are irrigated with water supplies developed
pursuant to the Federal reclamation laws, or (v) any project
for the rehabilitation and betterment of a project or distinct
unit described in clauses (i), (ii), (iii), and (iv): Provided,
That the estimated total cost of the project described in
clause (i), (ii), (iii), (iv), or (v) does not exceed the
maximum allowable estimated total project cost as determined by
subsection (f) hereof: Provided further, That a project
described in clause (i), (ii), or (iii) may consist of existing
facilities as distinct from newly constructed facilities, and
funds made available pursuant to this Act may be utilized to
acquire such facilities subject to a determination by the
Secretary that such facilities meet standards of design and
construction which he shall promulgate and that the cost of
such existing facilities represent less than fifty per centum
of the cost of the project. Nothing contained in this Act shall
preclude the making of more than one loan or grant, or combined
loan and grant, to an organization so long as no two such loans
or grants, or combinations thereof, are for the same project,
as herein defined.]
(d) The term ``project'' means any of the following:
(1) A multipurpose water resource development carried
out by a non-Federal organization involving significant
conservation of water, energy, and the environment.
(2) The rehabilitation, betterment, or retrofit of
any existing Federal or non-Federal water
infrastructure for purposes of complying with law and
regulations.
(3) An activity described in paragraph (1) or (2)
that--
(A) is carried out by a non-Federal
organization under the Federal reclamation laws
in one or more of the 17 western reclamation
States, Hawaii, Alaska, the Commonwealth of
Puerto Rico, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands,
the Virgin Islands, and the Trust Territory of
the Pacific Islands; and
(B) in the case of an activity proposed for
any project that is authorized under the
reclamation laws immediately before the
enactment of the Small Reclamation Water
Resources Project Act of 2001, is determined by
the Secretary to be consistent with the
purposes of that project before that date of
enactment.

* * * * * * *

[(f) The maximum allowable estimated total project cost of a
proposal submitted during any given calendar year shall be
determined by the Secretary using the Bureau of Reclamation
composite construction cost index for January of that year with
$15,000,000 as the January 1971 base.]
(f) The term ``water quality improvements'' means operational
measures and physical features associated with--
(1) the reclamation and reuse of irrigation drainage
or municipal and industrial return flows, including
wastewater flows; or
(2) the reclamation, or control, of brackish, toxic,
or impaired waters for beneficial reuse or protection
of other related water, land, or environmental
resources.
[Sec. 3. Any organization desiring to avail itself of the
benefits provided in this Act shall submit a proposal therefor
to the Secretary in such form and manner as he shall prescribe.
Each such proposal shall be accompanied by a payment of $5,000
to defray, in part, the cost of examining the proposal.
[Sec. 4. (a) Any proposal with respect to the construction of
a project which has not theretofore been authorized for
construction under the Federal reclamation laws shall set
forth, among other things, a plan and estimated cost in detail
comparable to those included in preauthorization reports
required for a Federal reclamation project; shall have been
submitted for review by the States of the drainage basin in
which the project is located in like manneras provided in
subsection (c), section 1 of the Act of December 22, 1944 (58 Stat.
887), except that the review may be limited to the State or States in
which the project is located if the proposal is one solely for
rehabilitation and betterment of an existing project; and shall include
a proposed allocation of capital costs to functions such that costs for
facilities used for a single purpose shall be allocated to that purpose
and costs for facilities used for more than one purpose shall be so
allocated among the purposes served that each purpose will share
equitably in the costs of such joint facilities. The costs of means and
measures to prevent loss of and damage to fish and wildlife resources
shall be considered as project costs and allocated as may be
appropriate among project functions.
[(b)(1) Every such proposal shall include a showing that the
organization already holds or can acquire all lands and
interests in land (except public and other lands and interests
in land owned by the United States which are within the
administrative jurisdiction of the Secretary and subject to
disposition by him) and rights, pursuant to applicable State
law, to the use of water necessary for the successful
construction, operation, and maintenance of the project and
that it is ready, able, and willing to finance otherwise than
by loan and grant of Federal funds such portion of the cost of
the project (which portion shall include all costs of acquiring
lands, interests in land, and rights to the use of water),
except as provided in subsection 5(b)(2) hereof, as the
Secretary shall have advised is proper in the circumstances.
[(2) The Secretary shall require each organization to
contribute toward the cost of the project (other than by loan
and/or grant of Federal funds) an amount equal to 25 percent or
more of the allowable estimated cost of the project: Provided,
That the Secretary, at his discretion, may reduce the amount of
such contribution to the extent that he determines that the
organization is unable to secure financing from other sources
under reasonable terms and conditions, and shall include
letters from lenders or other written evidence in support of
any funding of an applicant's inability to secure such
financing in any project proposal transmitted to the Congress:
Provided further, That under no circumstances shall the
Secretary reduce the amount of such contribution to less than
10 percent of the allowable estimated total project costs. In
determining the amount of the contribution as required by this
paragraph, the Secretary shall credit toward that amount the
cost of investigations, surveys, engineering, and other
services necessary to the preparation of proposals and plans
for the project as required by the Secretary, and the costs of
lands and rights-of-way required for the project, and the
$5,000 fee described in section 3 of this Act. In determining
the allowable estimated cost of the project, the Secretary
shall not include the amount of grants accorded to the
organization under section 5(b).
[(c) At such time as a project is found by the Secretary and
the Governor of the State in which it is located (or an
appropriate State agency designated by him) to be financially
feasible, is determined by the Secretary to constitute a
reasonable risk under the provisions of this Act, and is
approved by the Secretary, such findings and approval shall be
transmitted to the Congress. Each project proposal transmitted
by the Secretary to the Congress shall include a certification
by the Secretary that an adequate soil survey and land
classification has been made, or that the successful
irrigability of those lands and their susceptibility to
sustained production of agricultural crops by means of
irrigation has been demonstrated in practice. Such proposal
shall also include an investigation of soil characteristics
which might result in toxic or hazardous irrigation return
flows. The Secretary, at the time of submitting the project
proposal to Congress or at the time of his determination that
the requested project constitutes a reasonable risk under the
provisions of this Act, may reserve from use or disposition
inimical to the project any lands and interests in land owned
by the United States which are within his administrative
jurisdiction and subject to disposition by him and which are
required for use by the project. Any such reservation shall
expire at the end of two years unless the contract provided for
in section 5 of this Act shall have been executed.
[(d) At the time of his submitting the project proposal to
the Congress, or at any subsequent time prior to completion of
construction of the project, including projects heretofore
approved, the Secretary may increase the amount of the
requested loan and/or grant to an amount within the maximum
allowed by subsection (a) of section 5 of the Act as herein
amended, to compensate for increases in construction costs due
to price escalation.
[(e) No appropriation shall be made for financial
participation in any such project prior to sixty calendar days
(which sixty days, however, shall not include days on which
either the House of Representatives or the Senate is not in
session because of an adjournment of more than three calendar
days to a day certain) from the date on which the Secretary's
findings and approval are submitted to the Congress and then
only if, within said sixty days, neither the Committee on
Natural Resources of the House of Representatives nor the
Committee on Energy and Natural Resources of the Senate
disapproves the project proposal by committee resolution. The
provisions of this subsection (e) shall not be applicable to
proposals made under section 6 of this Act.
[(f) The Secretary shall give due consideration to financial
feasibility, emergency, or urgent need for the project. All
project works and facilities constructed under this Act shall
remain under the jurisdiction and control of the local
contracting organization subject to the terms of the repayment
contract.
[Sec. 5. Upon approval of any project proposal by the
Secretary under the provisions of section 4 of this Act, he may
negotiate a contract which shall set out, among other things--
[(a) the maximum amount of any loan to be made to the
organization and the time and method of making the same
available to the organization. Said loan shall not exceed the
lesser of (1) two-thirds of the maximum allowable estimated
total project cost as determined by subsection (f) of section
2, or (2) the estimated total cost of the project minus the
contribution of the local organization as provided in section
4(b) and the amount of the grant approved;
[(b) the maximum amount of any grant to be accorded the
organization. Said grant shall not exceed the sum of the
following: (1) the costs of investigations, surveys, and
engineering and other services necessary to the preparation of
proposals and plans for theproject allocable to fish and
wildlife enhancement or public recreation; (2) one-half the costs of
acquiring lands or interests therein to serve exclusively the purposes
of fish and wildlife enhancement or public recreation, plus the costs
of acquiring joint use lands and interests therein properly allocable
to fish and wildlife enhancement and public recreation; (3) one-half
the costs of basic public outdoor recreation facilities or facilities
serving fish and wildlife enhancement purposes exclusively; (4) one-
half the costs of construction of joint use facilities properly
allocable to fish and wildlife enhancement or public recreation; (5)
that portion of the estimated cost of constructing the project which,
if it were constructed as a Federal reclamation project, would be
properly allocable to functions, other than recreation and fish and
wildlife enhancement and flood control, which are nonreimbursable under
general provisions of law applicable to such projects; and (6) that
portion of the estimated cost of constructing the project which is
allocable to flood control and which would be nonreimbursable under
general provisions of law applicable to projects constructed by the
Secretary of the Army.
[(c) a plan of repayment by the organization of (1) the sums
lent to it in not more than forty years from the date when the
principal benefits of the project first become available; (2)
interest, as determined by the Secretary of the Treasury, as of
the beginning of the fiscal year in which the contract is
executed, on the basis of the average market yields on
outstanding marketable obligations of the United States with
remaining periods of maturity comparable to the applicable
reimbursement period of the project, adjusted to the nearest
one-eighth of 1 percent on the unamortized balance of any
portion of the loan--
[(A) which is attributable to furnishing irrigation
benefits in each particular year to land held in
private ownership by a qualified recipient or by a
limited recipient, as such terms are defined in section
202 of the Reclamation Reform Act of 1982, in excess of
three hundred and twenty irrigable acres; or,
[(B) which is allocated to domestic, industrial, or
municipal water supply, commercial power, fish and
wildlife enhancement, or public recreation except that
portion of such allocation attributable to furnishing
benefits to a facility operated by an agency of the
United States, which portion shall bear no interest.
[(d) provision for operation of the project, if a
grant predicated upon its performance of
nonreimbursable functions is made, in accordance with
regulations with respect thereto prescribed by the head
of the Federal department or agency primarily concerned
with those functions and, in the event of noncompliance
with such regulations, for operation by the United
States or for repayment to the United States of the
amount of any such grant;
[(e) such provisions as the Secretary shall deem
necessary or proper to provide assurance of and
security for prompt repayment of the loan and interest
as aforesaid. The liability of the United States under
any contract entered into pursuant to this Act shall be
contingent upon the availability of appropriations to
carry out the same, and every such contract shall so
recite; and
[(f) provisions conforming to the preference
requirements contained in the proviso to section 9(c)
of the Act of August 4, 1939 (53 Stat. 1193), if the
project produces electric power for sale.
[Sec. 6. Any proposal with respect to the construction of a
project which has theretofore been authorized for construction
under the Federal reclamation laws shall be made in like manner
as a proposal under section 4 of this Act, but the Secretary
may waive such requirements of subsections (a) and (b) of that
section as he finds to be duplicative of, or rendered
unnecessary or impossible by, action already taken by the
United States. Upon approval of any such proposal by the
Secretary he may negotiate and execute a contract which
conforms, as nearly as may be, to the provisions of section 5
of this Act.
[Sec. 7. Upon request of an organization which has made or
intends to make a proposal under this Act, the head of any
Federal department or agency may make available to the
organization any existing engineering, economic, or hydrologic
information and printed material that it may have and that will
be useful in connection with the planning, design,
construction, or operation and maintenance of the project
concerned. The reasonable cost of any plans, specifications,
and other unpublished material furnished by the Secretary
pursuant to this section and the cost of making and
administering any loan under this Act shall, to the extent that
they would not be nonreimbursable in the case of a project
constructed under the Federal reclamation laws, be treated as a
loan and covered in the provisions of the contract entered into
under section 5 of this Act unless they are otherwise paid for
by the organization.
[Sec. 8. The planning and construction of projects undertaken
pursuant to this Act shall be subject to all procedural
requirements and other provisions of the Fish and Wildlife
Coordination Act (48 Stat. 401), as amended (16 U.S.C. 661 et
seq.). The Secretary shall transfer to the Fish and Wildlife
Service or to the National Marine Fisheries Service, out of
appropriations or other funds made available under this Act,
such funds as may be necessary to conduct the investigations
required to carry out the purposes of this section.]

TITLE I--STATE AND LOCAL PARTICIPATION IN RECLAMATION PROJECTS

SEC. 101. LOAN, GRANT, AND LOAN GUARANTEE PROGRAM.

There is hereby established a program within the Bureau of
Reclamation, under which the Secretary may make loans, grants,
and loan guarantees to any organization to carry out a project.

SEC. 102. PROPOSAL CONTENTS AND REQUIREMENTS.

(a) In General.--Any organization seeking assistance under
this title shall submit a proposal to the Secretary in such
form and manner as the Secretary may prescribe. Any proposal
for a project submitted under this title shall set forth a plan
and estimated cost in detail comparable to those included in
preauthorization reports required for a project under the
Federal reclamation laws.
(b) Lands and Waters.--Each proposal submitted under this
title shall include a statement of financial capability and
legal authority, and a resolution from the governing board of
the organization showing that the organization seeking
assistance--
(1) holds or can acquire all lands and interests in
land (except public and other lands and interest in
land owned by the United States that are within the
administrative jurisdiction of the Secretary and
subject to disposition by the Secretary) to complete
the project;
(2) holds or can acquire all rights, pursuant to
applicable State law, to the use of water necessary for
the successful construction, operation, and maintenance
of the project;
(3) is willing to finance, and capable of financing,
the non-Federal portion of the costs of the project,
including all costs of acquiring lands, interests in
land, and rights to the use of water, except as
provided in section 105(b)(2); and
(4) has the legal authority and responsibility under
State law to carry out the project.

SEC. 103. FEDERAL SHARE AND PROJECT SPONSOR SHARE OF COSTS.

(a) In General.--The Secretary shall require each
organization receiving assistance under this title to
contribute toward the cost of the project (other than by loan
or grant of Federal funds) not less than 25 percent of the
costs of the project. The Secretary shall credit toward the
non-Federal cost share that amount--
(1) the costs paid by the organization for
investigations, surveys, engineering, administration,
and other services necessary for the preparation of
proposals and plans for the proposed project that are
required by the Secretary;
(2) the value of lands, rights-of-way, and water
rights acquisition required for the proposed project
that are provided by the organization;
(3) amounts spent by the organization for
construction or acquisition of facilities for the
proposed project prior to project approval; and
(4) the fee required by section 403.
(b) Prevention of Loss and Damage to Fish and Wildlife.--The
costs of measures to prevent loss of, and damage to, existing
fish and wildlife resources as the result of a project for
which assistance is provided under this title shall be
considered project costs and, for purposes of reimbursement,
shall be allocated as may be appropriate among project
functions.
(c) Maximum Allowable Federal Share.--The maximum allowable
Federal share per project shall be $50,000,000 (January 2001
dollars).
(d) Increase in Amount.--To compensate for increases in
construction costs due to price escalation, and subject to
subsection (c), the Secretary may increase the amount of a loan
or grant, or both, under this title for a project at any time
prior to the completion of construction of the project, using
the Bureau of Reclamation's composite construction cost trends
index.

SEC. 104. APPROVAL OR DISAPPROVAL OF PROJECTS.

(a) In General.--The Secretary shall determine whether a
proposal under this title is financially feasible and
constitutes a reasonable risk, and either approve or disapprove
the proposal, by not later than the later of--
(1) one year after the date the proposal is submitted
to the Secretary; or
(2) the date of the completion of the appropriate
documentation under the National Environmental Policy
Act of 1969 (42 U.S.C. 4321 et seq.).
(b) Transmittal to Congress.--
(1) In general.--Subject to paragraph (2), the
Secretary shall promptly transmit any approved
proposals to the Congress with a brief statement of the
project purposes and funding requirements.
(2) Completion of documentation.--The documentation
required under the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.) for a proposed project
must be completed before the Secretary transmits the
proposal to the Congress.

SEC. 105. CONTRACT TERMS AND CONDITIONS.

(a) In General.--Upon approval of any project proposal
submitted under this title by an organization, the Secretary
shall negotiate with the organization a contract establishing
the terms under which assistance shall be provided under this
title.
(b) Contract Terms.--The contract shall include the
following:
(1) The maximum amount of any grant, which shall not
exceed 50 percent of the maximum allowable Federal
share of the costs of the project under section 103.
(2) The time and method of making any grant or loan
available to the organization.
(3) Such terms and conditions as the Secretary
considers necessary or proper to provide assurance of,
and security for, prompt repayment of any loan and to
ensure achievement of the purposes for which the loan
was made.
(4) A plan for repayment by the organization of any
loan within 25 years, except that the organization
shall have the right to prepay the loan or any
component thereof without penalty.
(5) For any loan, payment of interest at a rate
established by the Secretary of the Treasury at the
beginning of the fiscal year in which the contract is
executed, that shall be based on the average market
yield on outstanding marketable obligations of the
United States with periods of maturity comparable to
the applicable repayment period of the loan.
(c) Loans Projects by Indian Tribes.--
(1) In general.--For any project undertaken by an
Indian tribe with assistance under this title, the
Secretary shall--
(A) determine, based on the findings in the
proposal under section 102, the reimbursable
and nonreimbursable costs for the project
constructed under this Act;
(B) apportion those costs in accordance with
the benefits received; and
(C) allocate the reimbursable costs to the
project beneficiaries.
(2) Leavitt act.--The Act of July 1, 1932 (chapter
369; 25 U.S.C. 386a), popularly known as the ``Leavitt
Act'', shall not apply to loans made under this Act.

TITLE II--PARTNERSHIP PROGRAM

SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.

(a) Program.--There is hereby established within the Bureau
of Reclamation a small grant and loan program to be known as
the Small Reclamation Water Resources Management Partnership
Program, to be carried out under this title. The purpose of
this program shall be to implement projects that can be
performed--
(1) by the recipient organization's workforce or
contractors,
(2) with streamlined documentation, and
(3) in a period of 18 months or less.
(b) Grants.--Grants under this title shall not exceed
$5,000,000 for any one project under such program. The
Secretary shall require the recipient organization to provide
matching funds in an amount equal to 50 percent of the amount
of the grant.
(c) Loans.--Loans under this title shall not exceed
$5,000,000 per project, and shall be subject to cost sharing in
the same manner as provided in title I. The contract for each
loan under this title shall require payment of interest at a
rate established by the Secretary of the Treasury in the same
manner as provided in section 105(b)(5) for loans under title
II.

SEC. 202. REPAYMENT OF LOANS.

Each loan made under this title shall be repaid within the 5-
year period beginning on the date the Secretary certifies that
work to be carried out with the loan is completed.

SEC. 203. ELIGIBLE ACTIVITIES.

(a) In General.--The following types of activities shall be
eligible for grants or loans under this title:
(1) Water conservation.
(2) Water quality improvement projects.
(3) Water management for urban landscapes.
(4) Drought assistance.
(5) Fish and wildlife improvements.
(6) Public safety improvements.
(7) Water supply, including water production,
conveyance, conservation, and management.
(b) Additional Activities.--The Secretary may add to the list
of eligible activities under subsection (a) as the Secretary
considers appropriate, except that any such addition shall not
take effect until 60 days after the Secretary publishes a
notice of the proposed addition in the Federal Register, and
has notified the Committee on Resources of the House of
Representatives and the Committee on Energy and Natural
Resources of the Senate in writing of the proposed addition and
the reasons therefore.

SEC. 204. APPLICATION PROCESS.

(a) Notice of Intent.--Each organization seeking a grant or
loan under this title shall submit a notice of intent to the
Secretary by April 1 of each year outlining the proposed
project and the public benefits thereof. Within two months, the
Secretary shall provide a written response to the organization,
expressing either the Bureau of Reclamation's interest or
disinterest in participating in the project.
(b) Application.--30 days after receipt of a response under
subsection (a) expressing the Bureau of Reclamation's interest
in participating in a project, the organization may submit to
the Secretary an appropriate loan or grant application, giving
details of the project and the anticipated public benefits.
(c) Contents.--The application for any project proposal under
this title shall include each of the following:
(1) A resolution by the board of directors of the
organization stating--
(A) the total estimated project cost;
(B) the amount of the grant or loan
requested;
(C) the amount of the non-Federal
contribution for any grant;
(D) the organization's ability to finance and
construct the project; and
(E) the project objectives.
(2) A summary of the proposal.
(3) A brief description of the anticipated effects of
the project on the environment.
(4) Evidence that the organization has all lands and
water rights needed for the project, or can obtain them
and has legal authority and responsibility under, State
law to carry out the proposed project.
(5) A project plan, including a general map showing
the location of proposed physical features, conceptual
engineering drawings of major and typical structures,
and general standards for design.
(6) A construction schedule, with dates and a
schedule of funding requirements under this title, in
sufficient detail to provide an analysis of the
proposed construction program.
(7) A description of the proposed Federal funding for
the project and of the non-Federal funding for the
project.
(d) Costs.--The cost of any investigations and preparation of
any environmental documentation for a project carried out with
assistance under this title shall be borne by the project
applicant, and shall be credited against the non-Federal cost
share.
(e) Annual Listing.--The Secretary shall include in the
annual budget justification for the Bureau of Reclamation, a
listing of the activities and total funding required for work
committed to under this title.

SEC. 205. TERMS AND CONDITIONS OF PROJECT WORK.

The Secretary shall examine each project proposal submitted
under this title to determine if the project can reasonably be
expected to accomplish its purpose, and approve or disapprove
such proposal by September 1 of the year in which the
application for assistance under this title is submitted. If
the Secretary approves the proposal, and subject to the
availability of appropriations, the Secretary shall provide
funding within 60 days after such approval for work scheduled
for the next fiscal year.

SEC. 206. LIMITATION ON PROJECT PROPOSALS.

Only one proposal may be submitted under this title by an
applicant in any 5-year period.

TITLE III--LOAN GUARANTEES

SEC. 301. ESTABLISHMENT OF LOAN GUARANTEE PROGRAM.

There is hereby established within the Bureau of Reclamation
a demonstration program to guarantee loans for projects
receiving, or eligible to receive, loans or grants under title
I or II of this Act.

SEC. 302. PROGRAM REQUIREMENTS.

(a) In General.--The Secretary may provide support under the
demonstration program to organizations through the provision of
loan guarantees for the purposes for which assistance is
authorized under titles I and II, under such terms and
conditions as are specified in this section. Any proposal for a
project submitted under this title shall set forth a plan and
estimated costs, in detail, comparable to those required to be
included in preauthorization reports required for a project
under the Federal reclamation laws.
(b) Selection of Recipients.--The Secretary shall adopt and
use competitive procedures in the selection of organizations to
receive loan guarantees under this section. In selecting any
organization to receive a loan guarantee under this section,
the Secretary shall consider, at a minimum, the following:
(1) The extent to which the loan guarantee would
support new water supplies or more efficient use of
existing supplies.
(2) The repayment period of the guaranteed loan.
(3) The extent to which the loan guarantee would
provide for a project of wide public purpose.
(4) Whether the loan guarantee would help the
organization comply with a Federal or State
environmental statute or regulation.
(5) The extent to which the loan guarantee would
enable the organization to meet the needs of other
local water purveyors.
(6) The extent to which the guaranteed loan would
support a program that would supplement, rather than
duplicate, other available water resource programs.
(7) The fiscal impact of the loan guarantee program
as a whole on other Bureau of Reclamation programs.
(c) Apportionment.--The total amount made available to the
Secretary for a fiscal year to cover the costs of loan
guarantees under this section shall be divided between projects
receiving or eligible to receive loans under titles I and II,
with title I projects receiving 75 percent and title II
projects receiving 25 percent.
(d) Maximum.--The maximum amount of a loan guaranteed under
this section may not exceed 75 percent of the total cost of the
project carried out with the loan.
(e) Limitation on Use of Loan.--No loan guaranteed under this
title shall be used to cover the organization's local cost
share for any project assisted under this Act.
(f) Reporting.--Reporting and documentation requirements
under titles I and II shall similarly apply to loan guarantees
under this title.
(g) State Law.--For purposes of this Act, when any bonds are
issued by an organization to help finance a project for which
the organization is also receiving a loan guarantee under this
section, such bonds shall not be treated as affecting the tax-
exempt status of such bonds under applicable State law.
(h) Full Faith and Credit.--Any loan guarantee issued
pursuant to this section shall constitute an obligation, in
accordance with the terms of such guarantee, of the United
States Government, and the full faith and credit of the United
States is hereby pledged to the full performance of the
obligations.
(i) Report.--At the end of the third fiscal year after the
enactment of this subsection, the Secretary shall submit a
report to the Congress on the beneficial use and suggested
improvements for use of loan guarantees under this title as a
mechanism for project construction.

SEC. 303. SUNSET.

No loan guarantee may be issued under this title in any
fiscal year after the expiration of 10 full fiscal years after
initial funding of projects under the amendments made by the
Small Reclamation Water Resources Project Act of 2001.

TITLE IV--GENERAL PROVISIONS

SEC. 401. PROPOSAL FEE.

The Secretary shall assess and collect a fee to defray the
cost of examining each proposal for a loan, grant, or loan
guarantee under this Act. The amount of the fee shall be equal
to $5,000 or \1/10\ of 1 percent of the Federal share of the
costs of the proposed project, whichever is greater. The
Secretary shall require that 50 percent of the fee shall
accompany the application and the remainder shall be due only
upon approval of the project by the Secretary.

SEC. 402. MISCELLANEOUS PROVISIONS.

(a) Title.--Title to all project works and facilities
constructed with assistance under this Act shall remain in the
name of the organization.
(b) Combined Loans, Grants, and Loan Guarantees.--A project
sponsor shall be eligible for a loan, grant, loan guarantee, or
combination thereof for a project proposal under this Act. An
applicant may submit one proposal to be carried out with
assistance under more than one title under this Act. No
organization shall be eligible for an additional loan, grant,
loan guarantee, or any combination thereof for the same project
that has previously received approval for a loan, grant, or
loan guarantee under this Act within the prior five fiscal
years.
(c) Planning, Construction, Operation, and Maintenance.--The
United States shall not be required to provide planning,
construction, operation, and maintenance of any project
receiving a loan, grant or loan guarantee under this Act.
(d) State Water Law.--Any project assisted under this Act
shall be carried out in accordance with applicable State water
law.
Sec. [9.] 403. The Secretary is authorized to perform any and
all acts and to make such rules and regulations as may be
necessary or proper in carrying out the provisions of this Act.
Sec. [10.] 404. There are hereby authorized to be
appropriated, [such sums as may be necessary, but not to exceed
$600,000,000 to carry out the provisions of this Act and,
effective October 1, 1986, not to exceed an additional
$600,000,000: Provided, That the Secretary] to carry out this
Act $1,300,000,000 for fiscal years after fiscal year 2001, of
which $900,000,000 may be appropriated to carry out title I and
to complete ongoing projects under Public Law 84-984,
$300,000,000 may be appropriated to carry out title II, and
$100,000,000 may be appropriated to carry out title III. Of
funds authorized under this Act, not more than 20 percent shall
be used for projects to be carried out by Indian tribes or in
economically disadvantaged communities. The Secretary shall
advise the Congress promptly on the receipt of each proposal
referred to in [section 3] title I, and no contract shall
become effective until appropriated funds are available to
initiate the specific proposal covered by each contract. All
such appropriations shall remain available until expended and
shall, insofar as they are used to finance loans made under
this Act, be reimbursable in the manner hereinabove provided.
Not more than 20 percent of the total amount of additional
funds authorized to be appropriated [effective October 1, 1986,
for loans and grants pursuant to this Act] for any fiscal year
for loans and grants pursuant to title I shall be for projects
in [any single State: Provided, That beginning five years after
the date of enactment of this Act, the Secretary is authorized
to waive] in any single State. Funds obligated or expended for
projects by Indian tribes shall not be considered for purposes
of the preceding sentence. The Secretary may waive the 20
percent limitation for loans and grants which meet the purposes
set forth in section 1 of this Act: Provided further, That the
decision of the Secretary to waive the limitation shall be
submitted to the Congress together with the project proposal
pursuant to [section 4(c)] title I of this Act and shall become
effective only if the Congress has not, within 60 legislative
days, passed a joint resolution of disapproval for such a
waiver.
Sec. [11.] 405. This Act shall be a supplement to the Federal
reclamation laws and may be cited as the Small Reclamation
Projects Act of 1956.
Sec. [12.] 406. If any provision of this Act or the
application of such provision to any person, organization, or
circumstance shall be held invalid, the remainder of the Act
and the application of such provision to persons,
organizations, or circumstances other than those as to which it
is held invalid shall not be affected thereby.
Sec. [13.] 407. A loan contract negotiated and executed
pursuant to this Act may be amended or supplemented for the
purpose of deferring repayment installments in accordance with
the provisions of section 17(b) of the Reclamation Project Act
of 1939, as amended (73 Stat. 584, 43 U.S.C. 485b-1).
----------

FEDERAL WATER PROJECT RECREATION ACT

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That it is
the policy of the Congress and the intent of this Act that (a)
in investigating and planning any Federal navigation, flood
control, reclamation, hydroelectric, or multiple-purpose water
resource project, full consideration shall be given to the
opportunities, if any, which the project affords for outdoor
recreation and for fish and wildlife enhancement and that,
wherever any such project can reasonably serve either or both
of these purposes consistently with the provisions of this Act,
it shall be constructed, operated, and maintained accordingly;
(b) planning with respect to the development of the recreation
potential of any such project shall be based on the
coordination of the recreational use of the project area with
the use of existing and planned Federal, State, or local public
recreation developments; and (c) project construction agencies
shall encourage non-Federal [public bodies] entities to
administer project land and water areas for recreation and fish
and wildlife enhancement purposes and operate, maintain, and
replace facilities provided for those purposes unless such
areas or facilities are included or proposed for inclusion
within a national recreation area, or are appropriate for
administration by a Federal agency as a part of the national
forest system, as a part of the public lands classified for
retention in Federal ownership, or in connection with an
authorized Federal program for the conservation and development
of fish and wildlife.
Sec. 2. (a) If[, before authorization of a project,] non-
Federal [public bodies] entities indicate their intent in
writing to agree to administer project land and water areas for
recreation or fish and wildlife enhancement or for both of
these purposes pursuant to the plan for the development of the
project approved by the head of the agency having
administrative jurisdiction over it and to bear not less than
one-half the separable costs of the project allocated to
recreation, and to bear one-quarter of such costs allocated to
fish and wildlife enhancement, and not less than one-half the
costs of operation, maintenance, and replacement incurred
therefor--
(1) * * *

* * * * * * *

[Projects authorized during the calendar year 1965 may include
recreation and fish and wildlife enhancement on the foregoing
basis without the required indication of intent. Execution of
an agreement as aforesaid shall be a prerequisite to
commencement of construction of any project to which this
subsection is applicable.]
(b) The non-Federal share of the separable costs of the
project allocated to recreation and fish and wildlife
enhancement shall be borne by [non-Federal interests] non-
Federal entities, under either or both of the following methods
as may be determined appropriate by the head of the Federal
agency having jurisdiction over the project: (1) payment, or
provision of lands, interests therein, or facilities for the
project; or (2) repayment, with interest at a rate comparable
to that for other interest-bearing functions of Federal water
resource projects, within fifty years of first use of
projectrecreation or fish and wildlife enhancement facilities[:
Provided, That the source of repayment may be limited to]. The source
of repayment may include entrance and user fees or charges collected
and retained at the project by [non-Federal interests] non-Federal
entities if the fee schedule and the portion of fees dedicated to
repayment are established on a basis calculated to achieve repayment as
aforesaid and are made subject to review and renegotiation at intervals
of not more than five years. Fees and charges may be collected,
retained and used by the non-Federal entities for operation,
maintenance, and replacement of recreation facilities on project lands
and waters being managed by the non-Federal entities. As established by
the Secretary, any excess revenues will be credited to the Reclamation
Fund to remain available, without further Act of appropriation, to
support recreation development and management of Bureau of Reclamation
land and water areas.
Sec. 3. [(a) No facilities or project modifications which
will furnish recreation or fish and wildlife enhancement
benefits shall be provided in the absence of the indication of
intent with respect thereto specified in subsection 2(a) of
this Act unless (1) such facilities or modifications serve
other project purposes and are justified thereby without regard
to such incidental recreation or fish and wildlife enhancement
benefits as they may have or (2) they are minimum facilities
which are required for the public health and safety and are
located at access points provided by roads existing at the time
of project construction or constructed for the administration
and management of the project. Calculation of the recreation
and fish and wildlife enhancement benefits in any such case
shall be based on the number of visitor-days anticipated in the
absence of recreation and fish and wildlife enhancement
facilities or modifications except as hereinbefore provided and
on the value per visitor-day of the project without such
facilities or modifications. Project costs allocated to
recreation and fish and wildlife enhancement on this basis
shall be nonreimbursable.]
[(b)] (a) Notwithstanding the absence of an indication of
intent as specified in subsection 2(a), lands may be provided
in connection with project construction to preserve or enhance
the recreation and fish and wildlife [enhancement potential]
resources of the project:
(1) If non-Federal [public bodies] entities execute
an agreement after initial operation of the project
(which agreement shall provide that the non-Federal
[public bodies] entities will administer project land
and water areas for recreation or fish and wildlife
enhancement or both pursuant to the plan for the
development of the project approved by the head of the
agency having administrative jurisdiction over it and
will bear not less than one-half the costs of lands,
facilities, and project modifications provided for
recreation, and will bear one-quarter of such costs for
fish and wildlife enhancement, and not less than one-
half the costs of planning studies, and the costs of
operation, maintenance, and replacement attributable
thereto) the remainder of the costs of lands,
facilities, and project modifications provided pursuant
to this paragraph shall be nonreimbursable. Such
agreement and subsequent development, however, shall
not be the basis for any reallocation of joint costs of
the project to recreation or fish and wildlife
enhancement.
(2) If, within ten years after initial operation of
the project, there is not an executed agreement as
specified in paragraph (1) of this subsection, the head
of the agency having jurisdiction over the project may
utilize the lands for any lawful purpose within the
jurisdiction of his agency, or may offer the land for
sale to its immediate prior owner or his immediate
heirs at its appraised fair market value as approved by
the head of the agency at the time of offer or, if a
firm agreement by said owner or his immediate heirs is
not executed within ninety days of the date of the
offer, may transfer custody of the lands to another
Federal agency for use for any lawful purpose within
the jurisdiction of that agency, or may lease the lands
to a non-Federal [public body] entity, or may transfer
the lands to the Administrator of General Services for
disposition in accordance with the surplus property
laws of the United States. In no case shall the lands
be used or made available for use for any purpose in
conflict with the purposes for which the project was
constructed, and in every case except that of an offer
to purchase made, as hereinbefore provided, by the
prior owner or his heirs preference shall be given to
uses which will preserve and promote the recreation and
fish and wildlife [enhancement potential] resources of
the project or, in the absence thereof, will not
detract from the potential.
(b) In the absence of a non-Federal managing partner, the
Secretary of the Interior, acting through the Commissioner of
Reclamation, is authorized, as a part of any water resource
development project under the Secretary's control heretofore or
hereafter authorized or reauthorized, investigate, plan,
construct, replace, manage, operate and maintain or otherwise
provide for public use and enjoyment of project lands,
facilities, and water areas in a manner coordinated with the
other project purposes; the costs of which are nonreimbursable.
(c)(1) Any recreation facility constructed under this Act may
be expanded or modified if--
(A) * * *
(B) a non-Federal [public body] entity executes an
agreement which provides that such [public body]
entity--
(i) * * *

* * * * * * *

(3) In the absence of a non-Federal managing partner, the
Secretary of the Interior, acting through the Commissioner of
Reclamation, may modify or expand existing facilities, the
costs of which are nonreimbursable.
[Sec. 4. At projects, the construction of which has commenced
or been completed as of the effective date of this Act, where
non-Federal public bodies agree to administer project land and
water areas for recreation and fish and wildlife enhancement
purposes and to bear the not less than one-half the costs of
operation, maintenance, and replacement of existing facilities
serving those purposes, such facilities and appropriate project
lands may be leased to non-Federal public bodies.]
Sec. 5. Nothing herein shall be construed as preventing or
discouraging postauthorization development of any project for
recreation or fish and wildlife enhancement or both by non-
Federal [public bodies] entities pursuant to agreement with the
head of the Federal agency having jurisdiction over this
project. Such development shall not be the basis for any
allocation or reallocation of project costs to recreation or
fish and wildlife enhancement.
Sec. 6. (a) * * *

* * * * * * *

(e) Sections 2, 3, 4, [and 5] and between 3 and 4 of this Act
shall not apply to nonreservoir local flood control projects,
beach erosion control projects, small boat harbor projects,
hurricane protection projects, or to project areas or
facilities authorized by law for inclusion within a national
recreation area or appropriate for administration by a Federal
agency as a part of the national forest system, as a part of
the public lands classified for retention in Federal ownership,
or in connection with an authorized Federal program for the
conservation and development of fish and wildlife.

* * * * * * *

(g) Subsection 6(a)(2) of the Land and Water Conservation
Fund Act of 1965 (78 Stat. 897) shall not apply to costs
allocated to recreation and fish and wildlife enhancement which
are borne by the United States as a nonreimbursable project
cost pursuant to subsection 2(a) or subsection [3(b)] 3(a)(1)
of this Act.
(h) All payments and repayment by non-Federal [public bodies]
entities under the provisions of this Act shall be deposited in
the Treasury as miscellaneous receipts, and revenue from the
conveyance by deed, lease, or otherwise, of lands under
subsection [3(b)] 3(a)(2) of this Act shall be deposited in the
Land and Water Conservation Fund.
(i) Amounts collected under section 2805 of Public Law 102-
575 for admission to or recreation use of project land and
waters shall be deposited in a special account in the
Reclamation Fund and remain available to the Commissioner of
Reclamation without further appropriation until expended. Such
funds may be used for the development, reconstruction,
replacement, management, and operation of recreation resources
on project lands and waters with not less than 60 percent being
used at the site from which the fees were collected.
Sec. 7. [(a) The Secretary is authorized, in conjunction with
any reservoir heretofore constructed by him pursuant to the
Federal reclamation laws or any reservoir which is otherwise
under his control, except reservoirs within national wildlife
refuges, to investigate, plan, construct, operate and maintain,
or otherwise provide for public outdoor recreation and fish and
wildlife enhancement facilities, to acquire or otherwise make
available such adjacent lands or interests therein as are
necessary for public outdoor recreation or fish and wildlife
use, and to provide for public use and enjoyment of project
lands, facilities, and water areas in a manner coordinated with
the other project purposes. Lands, facilities and project
modifications for the purposes of this subsection may be
provided only after an agreement in accordance with subsection
(b) or (c) of section 3 of this Act has been executed.]
(a) The Secretary of the Interior, acting through the
Commissioner of Reclamation, is authorized, in conjunction with
any water resource development project heretofore or hereafter
constructed or which is otherwise under the Secretary's
control, to--
(1) investigate, plan, design, construct, replace,
manage, operate, and maintain or otherwise provide for
recreation and fish and wildlife enhancement facilities
and services, the costs of which may be
nonreimbursable;
(2) provide for public use and enjoyment of project
lands, facilities, and water areas in a manner
coordinated with the other project purposes; and
(3) to acquire or otherwise make available such
adjacent lands or interests therein as are necessary
for public recreation or fish and wildlife use.
(b) The Secretary of the Interior is authorized to enter into
agreements with Federal agencies or State or local public
bodies for the administration and management of project land
and water areas and the operation, maintenance, and replacement
of facilities and to transfer project lands or facilities to
Federal agencies or State or local public bodies by [lease]
agreement or exchange upon such terms and conditions as will
best promote the development and operation of such lands or
facilities in the public interest for recreation and fish and
wildlife enhancement purposes. All such agreements or contracts
for administration or management shall identify the terms and
conditions of administration, management, and use, approvals
required from Bureau of Reclamation, and assure public access
to project lands managed for recreation.

* * * * * * *

(d) The Secretary of the Interior, acting through the
Commissioner of Reclamation, is authorized to approve the
administration, management, and use of Bureau of Reclamation
lands, waters, and the resources thereon by means of easements,
leases, licenses, contracts, permits, and other forms of
conveyance instruments.
(e) The Secretary of the Interior, acting through the
Commissioner of Reclamation, is authorized to produce and/or
sell to the public: information about Bureau of Reclamation
programs including publications, photographs, computer discs,
maps, brochures, posters, videos, and other memorabilia related
to the Bureau of Reclamation, and the natural, historic, and
cultural resources of the area; and, other appropriate and
suitable merchandise to enhance the public's use of the area.
Income from such sales shall be credited to the Reclamation
Fund to remain available, without further Act of appropriation,
to pay costs associated with the production and sale of items,
and any remaining revenue shall be available, without further
Act of appropriation, to support recreation development and
management of Bureau of Reclamation land and water areas.

* * * * * * *

Sec. 10. As used in this Act:
(a) * * *

* * * * * * *

(f) The term ``non-Federal entity'' means non-Federal public
bodies, nonprofit organizations, Indian tribes, or entities
within the private sector.

* * * * * * *

SEC. 12. FUND AUTHORIZATIONS.

There is hereby authorized to be appropriated from time to
time such funds as may be required for the Secretary of the
Interior, acting through the Commissioner of Reclamation to
accomplish the purposes of this Act and remain available until
expended.
Sec. [12.] 13. This Act may be cited as the ``Federal Water
Project Recreation Act''.

DISSENTING VIEWS

We fully support the Committee's desire to provide a
legislative framework for the continuation of the CALFED Bay-
Delta Program in California. However, we believe the provisions
of Title I of H.R. 3208 as reported will not fairly implement
the CALFED Bay-Delta Program, and will instead cause years of
delay and litigation which, in turn, will discourage Congress
from funding the program. Without federal funding, state
funding will surely dry up, and CALFED will wither.
While our concerns primarily are with Title I of H.R. 3208
as reported, there are several other provisions of the bill
that, while well-intentioned, are seriously flawed and should
be rejected.

introduction and context

Title I of H.R. 3208, The Western Water Security
Enhancement Act, is primarily intended to reauthorize the
CALFED Bay-Delta Program, a collaborative effort involving
eighteen State and Federal agencies and representatives of
California's urban, agricultural, and environmental
communities. The goals of the program generally are to improve
fish and wildlife habitat, water supply reliability, and water
quality in the San Francisco Bay-San Joaquin River Delta, the
principal hub of California's water distribution system.
Congressional authorization for this program, originally
granted by the 1996 California Bay-Delta Environmental
Enhancement Act, has now lapsed.
The 1996 Act authorized a total of $430 million over three
years (FY 1998 to FY 2000) for ecosystem restoration activities
in the Bay-Delta region. From FY 1998 to FY 2000 a total of
$190 million was provided in appropriations administered by the
Bureau of Reclamation and other participating Federal agencies,
based on plans developed by CALFED. Other funds in support of
CALFED activities and projects have been made available by the
California legislature and State bond issues.
The lead CALFED agencies released the Final Programmatic
Environmental Impact Statement/Environmental Impact Report and
Preferred Alternative on July 21, 2000. A Record of Decision
(ROD) was signed by Interior Secretary Bruce Babbitt on August
28, 2000. The ROD formally approved a long-term plan for
restoring the Bay-Delta ecosystem and improving water
management.
No Federal funds were provided for the CALFED program in FY
2001, largely because the appropriations committees deferred to
the authorizing committees to review the program and develop
appropriate legislation. Because the Congress has not enacted
authorizing legislation, Federal spending for the Bay-Delta
program in recent years has been limited to activities that can
be undertaken within existing statutory authorities.

title i. western water security program

Title I of H.R. 3208 includes several highly controversial
provisions that go well beyond the agreements reached in the
formal Record of Decision (ROD) for the CALFED Bay-Delta
Program. For that reason, the legislation has drawn substantial
criticism from many CALFED participants and from leading
newspapers throughout California.
Almost everyone agrees that the stakeholder-driven,
collaborative CALFED program should continue. There really is
no other rational way to address the complex issues involved in
managing the state and federal water programs in California. To
achieve that goal, we must reauthorize the program and provide
adequate funding to achieve the goals identified in the ROD.
All parties would prefer to see some aspect of the ROD
changed. But the ROD was developed through thousands of hours
and hundreds of meetings throughout the state. Efforts to alter
its balanced program, or to steer it in ways that clearly and
unfairly favor certain participants in the CALFED process at
the expense of others, will discredit CALFED and jeopardize the
future of this legislation.
Unfortunately, Title I of H.R. 3208 is neither balanced nor
fair. It veers wildly from the course envisioned in years of
negotiations and the CALFED ROD. A number of significant
commitments made in the ROD are conspicuously missing from this
legislation, and some fundamental CALFED and Reclamation
policies would be reversed if H.R. 3208 is enacted.
Sec. 4. Definitions
The definition of ``Water Supply'' does not specifically
include desalination of seawater or brackish water.
Desalination technologies have improved dramatically in recent
years, and the costs associated with desalination continue to
decrease. The hearing record for this legislation includes
testimony that stresses the importance of desalination as a
means of increasing water supplies in California.
Sec. 102. Water Security Board
This section requires the Secretary to develop a proposal
for a CALFED ``Water Security Board.'' The bill includes a
number of specific directives to the Secretary regarding duties
and responsibilities of the Board.
We believe this section improperly will require the Water
Security Board to disregard the federal-state negotiated,
CALFED Record of Decision (ROD). In addition, the makeup of
thisWater Security Board is tenuous, with the bill only
enumerating Federal agencies, state agencies, local governments and
``other interested persons.'' Under this section, this nebulous entity
holds the purse strings of an unlimited authorization for funds to
implement a CALFED program that might ultimately be quite different
from that set forth in the ROD.
Sec. 102(b)(3) requires development of a proposal that
would improperly allow the Water Security Board, which is not a
Federal agency, to overturn decisions made by the Secretary of
the Interior and other Federal agencies regarding the
implementation of Federal laws, including the Central Valley
Project Improvement Act, the Clean Water Act, and the
Endangered Species Act. If this language is enacted, we will be
legislating institutional chaos. The practical effects of this
provision are difficult to imagine, but there is little doubt
that delays in implementation of Federal laws, and litigation
over the authorities of the Water Security Board, will result.
Sec. 102(e)(3) provides that the proposal for the Water
Security Board shall ensure that an ``independent peer review
process . . . including independent review of biological
opinions,'' is established. There is no provision in the
Endangered Species Act for peer reviews of biological opinions,
and legislating this requirement in H.R. 3208 is inappropriate.
Agency procedures already include extensive and formal review
requirements for biological opinions. If the sponsors of H.R.
3208 desire ``peer reviews,'' the Committee and the Congress
should have that debate in the context of legislation to amend
the Endangered Species Act.
Sec. 102(j) improperly holds hostage funding for
implementation of the CVP Restoration fund if Congress has not
enacted legislation authorizing implementation of the proposal
to create the Water Security Board. This language is
demonstrative of the pervasive bias in H.R. 3208 against
ecosystem restoration projects. We note there is no similar
language in the bill to prohibit funding for dams, canals, or
pumping plants if the Water Security Board is not created by a
date certain.

Sec. 103. California water supply security

Sec. 103(a)(2)(A) requires the Federal agencies to consider
``all potential water yield and water storage alternatives.''
This provision is guaranteed to re-ignite the classic conflicts
over water storage projects in California. Storage projects of
all types were evaluated during the preparation of the CALFED
ROD. It is neither necessary nor desirable to revisit storage
alternatives that have already been rejected during the CALFED
process.
Sec. 103(a)(4) includes so-called ``assurances'' language
for certain irrigation water deliveries. Notwithstanding the
amendment offered at Full Committee by Mr. Dooley and agreed to
by voice vote, this so-called ``assurances language'' is in
effect a statutory guarantee that approximately 1,000 Federal
water contractors on the west side of California's San Joaquin
Valley (primarily in the Westlands Water District) will receive
at least 70% of their current contractual water supplies \1\ in
a normal year. If H.R. 3208 as reported is enacted, what is now
a contractual right to receive irrigation water from the
Central Valley Project (CVP) will likely be interpreted as a
statutory right. We expect this could be viewed as a legal
entitlement which the Westlands Water District and others could
use in existing and likely future litigation to challenge other
uses of water and water claims of other water users in
California, including Indian Tribes, fishing interests, and the
environment. Several water districts \2\ in California have
objected to this language, fearing their rights to water
supplies are at risk.
---------------------------------------------------------------------------
\1\ Westlands' water service contract provides for a maximum
delivery of 1.15 million acre-feet per year. Deliveries of CVP water to
Westlands since 1990 have ranged from 25% to 100% of the contract
supply. When less than the full contract supply is available to
Westlands, the district uses local groundwater and also purchases
short-term surface water supplies to make up the shortfall (Source:
Westlands Water District).
\2\ Including two of the largest water districts in California, the
Friant Water Users Authority (letter to the Hon. Ken Calvert dated
November 6, 2001) and the Metropolitan Water District of Southern
California (letter to the Hon. Ken Calvert dated December 11, 2001).
---------------------------------------------------------------------------
The ``assurances language'' is a radical departure from
Federal Reclamation law. Full implementation of this language
would effectively turn the current CVP water allocation
structure on its head, giving the strongest claims to project
water to those who are most junior on the project. In effect,
the beneficiaries of the assurances language would be elevated
in water delivery priority above all others. Aggressive
implementation to accomplish the ``goal'' of assured water
deliveries in Sec. 103(a)(4) as amended would also likely take
precedence over water deliveries for environmental purposes,
including the Endangered Species Act and the Clean Water Act.
The United States is now under no legal obligation to
replace water or to pay damages for water that is not
deliverable to a CVP water service contractor. If the
assurances language in H.R. 3208 as reported is enacted, it may
be necessary to change the operation of the project to meet the
revised water delivery requirements. Will the United States be
liable for payment of damage claims by water districts (or
Indian Tribes, or commercial fishing interests, for example)
adversely affected by water deliveries pursuant to the
assurances language?
The water delivery guarantees contemplated by this section
of the bill are unprecedented. Water users throughout the West
are paying close attention to how this issue is resolved in
Congress, because Congressionally-mandated water deliveries in
California could seriously threaten the long-established
traditional system of allocating water via state water rights
permits.
Sec. 103(b) imposes a requirement that a ``comprehensive
plan'' (undefined) be prepared to insulate water users from the
``impacts'' and ``adverse effects'' of complying with the
Endangered Species Act. This provision illustrates well the
bias in H.R. 3208 against environmental protection and
enforcement of the Endangered Species Act. Despite the claims
by the bill's sponsors that H.R. 3208 is ``balanced,'' there is
no analogous provision in the bill that requires natural
resource values to be fully protected from overzealous dam
builders.

Sec. 105. Competitive Grant Program

Federal taxpayer dollars will be used to fund a new western
grant program for water resource development. This new water
project grant program will cost the federal taxpayer $50
million for FY2002 and $500 million for every year thereafter
in perpetuity, adding up to billions of dollars of taxpayer
money.
The ambitious program established in Sec. 105 was inserted
into the bill with a complete lack of justification. There is
nothing in the Committee hearing record that suggests either a
need or a justification for this type of program. There has
been no analysis of need, no inquiries to the Governors, no
vetting of this proposal at any level. Yet the Congress in this
section of H.R. 3208 is expected to stamp its approval on a
proposal to provide essentially unlimited and unsupervised
funding of new water projects throughout the West.
Sec. 105(d)(3) describes cost-sharing requirements, but the
language regarding ``ongoing operations and maintenance'' is
unclear. Under Reclamation law, project beneficiaries are
responsible for 100 percent of operation and maintenance. No
cost-sharing is allowed for these costs.

Sec. 106. Authorization and appropriation process

Sec. 106(b)(2) sets funding eligibility requirements for
projects, allowing appropriations only for projects that have
been specifically authorized by Congress. While well-
intentioned, we believe this section as currently drafted will
significantly bog down the implementation of the CALFED program
by requiring legislation for even the smallest projects. The
sponsors of H.R. 3208 should consider the approach taken in S.
1768, which simply authorizes implementation of the CALFED
program and sets forth authorization and reporting requirements
for construction and acquisition activities where the Federal
share exceeds $10 million.
Sec. 106(c)(1) enumerates report requirements for proposed
projects, but only superficial attention is given to project
economics and financial concerns. Completely ignored in this
section (and in the entire bill) are key promises made to
federal taxpayers and CALFED ``stakeholders'' in years of
CALFED negotiations, including the concept of ``beneficiaries
pay.'' The ROD requires people and groups benefiting from
projects to pay their fair share of those projects. H.R. 3208
ignores this important taxpayer protection, requiring only that
project reports include ``identification of project benefits
and beneficiaries'' and a ``cost and benefit allocation plan.''
These ineffectual reporting requirements will guarantee that
taxpayers will end up paying most of the bills for these
projects, whether cost-beneficial or not.
Sec. 106(c)(1) also references funding responsibilities for
``ongoing operations and maintenance,'' with language identical
to that found in Sec. 105(d)(3). Again, the language is
unclear. Under Reclamation law, project beneficiaries are
responsible for 100 percent of operation and maintenance. No
cost-sharing is allowed for these costs.

title ii. small reclamation projects

This title is a reinvention of the Small Reclamation
Projects Act of 1956, a program that has had more than its
share of problems and critics in recent years. Little or no
funding has been provided for loans under this program in
recent years. Title II of H.R. 3208 proposes an authorization
of $1.3 billion for this program.
This Title includes many commendable improvements and
reforms to the original 1956 program. For example, projects no
longer must include an irrigation component in order to be
eligible under the program. The program described in Title II
specifically also would be available to non-Federal
organizations in the Commonwealth of Puerto Rico, Guam,
American Samoa, the Commonwealth of the Northern Mariana
Islands, the Virgin Islands, and the Trust Territory of the
Pacific Islands. In addition, the program has been expanded to
allow projects for water conservation, water quality, and fish
and wildlife improvements.

title iii. miscellaneous

Sec. 301. Secretarial actions to reduce California's use of Colorado
River water

This section, in the form of an amendment by Chairman
Hansen, was adopted at the Full Committee markup of H.R. 3208.
Sec. 301(e) would prohibit the Secretary of the Interior
from delivering to California any more than 4.4 million acre
feet of water in any year after 2016, except when the Colorado
River is in a flood avoidance circumstance. If enacted, this
provision effectively requires California to move even faster
and more comprehensively towards full implementation of the
``4.4 plan'' than would otherwise be expected.
While well-intentioned, we cannot support the inclusion of
the Sec. 301(e) requirement. The seven Colorado River Basin
states have demonstrated their ability to work through complex
water management issues on their own. Congress should not
interfere in this process at this time.

Nick Rahall.
George Miller.
Hilda L. Solis.
Peter A. DeFazio.
Grace F. Napolitano.
Adam Smith.
Frank Pallone, Jr.
Jay Inslee.
Rush Holt.
Edward J. Markey.
Donna M. Christensen.
Jim McGovern.
Betty McCullom.
Dale E. Kildee.

ADDITIONAL VIEWS

While we oppose H.R. 3208 in the form that it is reported,
we do applaud the adoption by the Committee of language
requiring that prevailing wages be paid by contractors or
subcontractors on any project or activity funded by title I or
II. The Miller-Rahall amendment--which clarifies that wages
paid to laborers or mechanics on such federally funded projects
must be equivalent to wages applicable under the Davis-Bacon
Act of 1931--was approved by a vote of 23 to 18 and is
incorporated in Section 305.
For over seven decades, the Davis-Bacon Act has mandated
that prevailing wages be paid when the federal government funds
construction projects. Over many years, the Davis-Bacon law has
applied to traditional Bureau of Reclamation construction
projects including dams. The purpose of the Miller-Rahall
amendment is to eliminate any potential confusion or debate as
to whether Davis-Bacon wages are mandated for projects or
activities authorized by titles I and II of this legislation.
We are perplexed as to why any Member of the Committee
would have opposed this amendment. The Davis-Bacon law has long
been a vital cog in the economic progress of this nation.
Assuring that workers are paid a fair wage under a law enacted
under the Administration of President Hoover is not a radical
concept and, at a time of economic downturn, even more critical
to reinforce and implement. It is, after all, the hard-working
constituents of Committee Members and local economies,
particularly in the rural west, who stand to benefit most from
the payment of Davis-Bacon wages under this legislation.
Moreover, as we noted at the markup, the opposition of many
Majority Members to the Davis-Bacon amendment stands in stark
contrast to the position they took in support of wage-labor
protections in the bill to authorize oil and gas leasing in the
Arctic National Wildlife Refuge (H.R. 2436, incorporated into
H.R. 4 as passed by the House). There was not a peep of
opposition from the Majority, either in Committee markup or on
the House floor, to the expansive project labor guarantees for
Arctic Refuge leasing in that energy legislation.
We strongly believe that the rights of American workers to
be paid prevailing wages on federal projects should be
protected. This is a fundamental right that should not be
subject to the whims of the Majority or applied only when it is
politically convenient. Accordingly, we urge our colleagues to
resist any attempts to remove the Davis-Bacon language in
Section 305 when H.R. 3208 is considered by the House.

George Miller.
Nick Rahall.