R.O. Draft 03/11-2003

Contract No. 14-06-200-[890A]{.mark}

Standard Irrigation Form

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

CONTRACT BETWEEN THE UNITED STATES AND

[RECLAMATION DISTRICT NO. 1004]{.mark},

DIVERTER OF WATER FROM SACRAMENTO RIVER SOURCES,

SETTLING WATER RIGHTS DISPUTES AND

PROVIDING FOR PROJECT WATER

# Table of Contents

[Article No.]{.underline} [Title]{.underline} [Page No]{.underline}.

> Preamble 1
>
> Explanatory Recitals 2-3

1 Definitions 3-6

2 Term of Contract 7

3 Water to be Furnished to Contractor 7-10

4 Return Flow 10-11

5 Constraints on the Availability of Water 11-12

6 Integrated Water Management and Partnerships 12-13

7 Use of Water Furnished to Contractor 13

8 Rate and Method of Payment for Water 14-18

9 Agreement on Water Quantities 19-21

10 Measurement of Water 21-23

11 Rules and Regulations 23

12 General Obligation -- Benefits Conditioned

> Upon Payment 23-24

13 Charges For Delinquent Payments 24

14 Quality of Water 24-25

15 Water and Air Pollution Control 25

16 Equal Opportunity 25-26

17 Compliance With Civil Rights Laws

> And Regulations 26-27

# Table of Contents -- continued

[Article No.]{.underline} [Title]{.underline} [Page No.]{.underline}

18 Mingling of Contractor's Project and

> Non-Project Water 27-28

19 Books, Records, and Reports 28

20 Change Of Place Of Use Or Organization 28-29

21 Consolidation Of Contracting Entities 29

22 Notices 29

23 Assignment Limited -- Successors and

Assigns Obligated 29-30

24 Officials Not to Benefit 30

25 Contingent Upon Appropriation or

Allotment of Funds 30

26 Confirmation of Contract 30

27 Unavoidable Groundwater Percolation 30

28 Privacy Act Compliance 31

29 Water Conservation 31-33

30 Opinions And Determinations 33

31 Contractor to Pay Certain Miscellaneous Costs 34

32 Waiver of Default 34

Signatures 35

Exhibit A Schedule of Monthly Diversions of Water

Exhibit B Map of Contractor's Ownership

Exhibit C Unit Duties

Exhibit D Rates and Charges

R.O. Draft 03/11-2003

Contract No. 14-06-200-[890A]{.mark}

Standard Irrigation Form

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

CONTRACT BETWEEN THE UNITED STATES AND

[RECLAMATION DISTRICT NO. 1004]{.mark},

DIVERTER OF WATER FROM SACRAMENTO RIVER SOURCES

SETTLING WATER RIGHTS DISPUTES AND

PROVIDING FOR PROJECT WATER

THIS CONTRACT, hereinafter referred to as "Settlement Contract," is
entered into by THE UNITED STATES OF AMERICA, hereinafter referred to as
the United States, made this \_\_\_\_\_ day of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, 2004, pursuant to the
applicable authority granted to it generally in the Act of June 17, 1902
(32 Stat. 388), and acts amendatory or supplementary thereto, including,
but not limited to, the Acts of August 26, 1937 (50 Stat. 844), as
amended and supplemented, August 4, 1939 (53 Stat. 1187), as amended and
supplemented, including, but not limited to, Sections 9 and 14 thereto,
July 2, 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68), October 12,
1982 (96 Stat. 1262), October 27, 1986 (100 Stat. 3050), as amended, and
Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all
collectively hereinafter referred to as Federal Reclamation law, and
[RECLAMATION DISTRICT NO. 1004]{.mark}, hereinafter referred to as the
Contractor, a public agency of the State of California, duly organized,
existing, and acting pursuant to the laws thereof, with its principal
place of business in California; **\[*may change depending on
contracting entity*\]**

WITNESSETH, that:

# EXPLANATORY RECITALS

\[1^st\]^ WHEREAS, the United States has constructed and is operating
the Central Valley Project, California, for multiple purposes pursuant
to its statutory authority; and

\[2^nd\]^ WHEREAS, the Contractor has rights to divert, is diverting,
and will continue to divert for reasonable beneficial use, water from
the natural flow of the Sacramento River and tributaries thereto, that
would have been flowing therein if the Central Valley Project were not
in existence; and **\[*Contractor Specific -- "Other" Rights"*\]**

\[3^rd\]^ WHEREAS, the construction and operation of the integrated and
coordinated Central Valley Project has changed and will further change
the regimen of the Sacramento, American, San Joaquin, and Trinity Rivers
and the Sacramento-San Joaquin Delta from unregulated flow to regulated
flow; and

\[4^th\]^ WHEREAS, the United States has rights to divert, is diverting,
and will continue to divert waters from said Rivers and said Delta in
connection with the operation of said Central Valley Project, and

\[5^th\]^ WHEREAS, the Contractor and the United States had a dispute
over the respective rights of the parties to divert and use water from
the regulated flow of the Sacramento River which threatened to result in
litigation, and as a means to settle that dispute entered into Contract
No. [14-06-200-890A, as revised,]{.mark} hereinafter referred to as the
Existing Contract, which established terms for the delivery to the
Contractor of Central Valley Project Water, and the quantities of Base
Supply the United States and the Contractor agreed may be diverted by
the Contractor from the Sacramento River pursuant to such contract; and

\[6^th\]^ WHEREAS, the United States and the Contractor disagree with
respect to the authority of the United States to change the quantities
of Base Supply and/or Project Water specified as available for diversion
in this Settlement Contract from the quantities specified in the
Existing Contract, and other issues related thereto. That dispute was
the subject of litigation in a lawsuit entitled *Glenn-Colusa Irrigation
District, et al. v. United States, et al*. \[Civ. No. S-01-1816 GEB/JFM
(E.D. Cal.)\]; that litigation was dismissed, without prejudice,
pursuant to a stipulation of dismissal filed by the parties thereto on
August 29, 2002. Notwithstanding that dismissal, the Contractor and the
United States enter into this Settlement Contract to renew the Existing
Contract, pursuant to the terms of the Existing Contract, Federal
Reclamation law, and the laws of the State of California; and

\[7^th\]^ WHEREAS, to assure the Contractor of the enjoyment and use of
the regulated flow of the said Rivers and the Delta, and to provide for
the economical operation of the Central Valley Project by, and the
reimbursement to, the United States for expenditures made for said
Project.

NOW, THEREFORE, in consideration of the performance of the herein
contained provisions, conditions, and covenants, it is agreed as
follows:

# DEFINITIONS

1\. When used herein, unless otherwise expressed or incompatible with
the intent hereof, the term:

\(a\) "Base Supply" shall mean the quantity of Surface Water established
in Articles 3 and 5 which may be diverted by the Contractor from the
Sacramento River each month during the period April through October of
each Year without payment to the United States for such quantities
diverted;

\(b\) "Basin-Wide Water Management Plan" shall mean the mutually
agreeable Sacramento River Basinwide Water Management Plan, dated
\_\_\_\_\_\_\_, developed by Glenn-Colusa Irrigation District, Maxwell
Irrigation District, Natomas Central Mutual Water Company, Pelger Mutual
Water Company, Princeton-Codora-Glenn Irrigation District, Provident
Irrigation District, Reclamation District 108, Sutter Mutual Water
Company, Anderson-Cottonwood Irrigation District, M&T, Inc., Meridian
Farms Water Company, Reclamation District 1004 and the U.S. Bureau of
Reclamation.

\(c\) "Charges" shall mean the payments for Project Water that the
Contractor is required to pay to the United States in addition to the
"Rates" specified in this Settlement Contract. The Contracting Officer
will, on an annual basis, determine the extent of these Charges. The
type and amount of each Charge shall be specified in Exhibit D;

\(d\) "Contract Total" shall mean the sum of the Base Supply and Project
Water available for diversion by the Contractor for the period April 1
through October 31;

\(e\) "Critical Year" shall mean any Year in which either of the
following eventualities exists:

\(1\) The forecasted full natural inflow to Shasta Lake for the current
Water Year, as such forecast is made by the United States on or before
February 15 and reviewed as frequently thereafter as conditions and
information warrant, is equal to or less than 3.2 million acre-feet; or

\(2\) The total accumulated actual deficiencies below 4 million
acre-feet in the immediately prior Water Year or series of successive
prior Water Years each of which had inflows of less than 4 million
acre-feet, together with the forecasted deficiency for the current Water
Year, exceed 800,000 acre-feet.

For the purpose of determining a Critical Year, the computation of
inflow to Shasta Lake shall be performed in a manner that considers the
extent of upstream development above Shasta Lake during the year in
question, and shall be used as the full natural flow to Shasta Lake. In
the event that major construction has occurred or occurs above Shasta
Lake after September 1, 1963 and which has materially altered or alters
the regimen of the stream systems contributing to Shasta Lake, the
computed inflow to Shasta Lake used to define a Critical Year will be
adjusted to eliminate the effect of such material alterations. After
consultation with the State of California, the National Weather Service,
and other recognized forecasting agencies, the Contracting Officer will
select the forecast to be used and will make the details of it available
to the Contractor. The same forecasts used by the United States for the
operation of the Project shall be used to make the forecasts hereunder;

\(f\) "CVPIA" shall mean the Central Valley Project Improvement Act,
Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706);

\(g\) "Eligible Lands" shall mean all lands to which Project Water may
be delivered in accordance with Section 204 of the Reclamation Reform
Act of October 12, 1982 (96 Stat. 1263), as amended, hereinafter
referred to as RRA;

\(h\) "Excess Lands" shall mean all lands in excess of the limitations
contained in Section 204 of the RRA, other than those lands exempt from
acreage limitation under Federal Reclamation law;

\(i\) "Full Cost Rate" shall mean that water rate described in Sections
205(a)(3) or 202(3) of the RRA, whichever is applicable;

\(j\) "Ineligible Lands" shall mean all lands to which Project Water may
not be delivered in accordance with Section 204 of the RRA;

\(k\) "Landholder" shall mean a party that directly or indirectly owns
or leases nonexempt land, as provided in 43 CFR 426.2;

\(l\) "Project" shall mean the Central Valley Project owned by the
United States and managed by the Department of the Interior, Bureau of
Reclamation;

\(m\) "Project Water" shall mean all Surface Water diverted or scheduled
to be diverted each month during the period April through October of
each Year by the Contractor from the Sacramento River which is in excess
of the Base Supply. The United States recognizes the right of the
Contractor to make arrangements for acquisition of water from projects
of others than the United States for delivery through the Sacramento
River and tributaries subject to written agreement between Contractor
and the United States as to identification of such water which water
when so identified shall not be deemed Project Water under this
Settlement Contract;

\(n\) "Rates" shall mean the payments for Project Water determined
annually by the Contracting Officer in accordance with the then current
applicable water ratesetting policies for the Project, as described in
subdivision (a) of Article 8 of this Settlement Contract;

\(o\) "Secretary" or "Contracting Officer" shall mean the Secretary of
the Interior, a duly appointed successor, or an authorized
representative acting pursuant to any authority of the Secretary and
through any agency of the Department of the Interior;

\(p\) "Surface Water" shall mean only those waters that are considered
as surface water under California law;

\(q\) "Water Year" shall mean the period commencing with October 1 of
one year and extending through September 30 of the next; and

> \(r\) "Year" shall mean a calendar year.

# TERM OF SETTLEMENT CONTRACT

2\. (a) This Settlement Contract shall become effective April 1, 2004,
and shall remain in effect until and including March 31, 2044:
[Provided]{.underline}, that under terms and conditions mutually
agreeable to the parties hereto, renewals may be made for successive
periods not to exceed 40 years each. The terms and conditions of each
renewal shall be agreed upon not later than one year prior to the
expiration of the then existing Settlement Contract.

\(b\) With respect to Project Water and the portions of this Settlement
Contract pertaining thereto, upon written request by the Contractor of
the Secretary made not later than one year prior to the expiration of
this Settlement Contract, whenever, account being taken of the amount
then credited to the costs of construction of water supply works, the
remaining amount of construction costs of water supply work which is
properly assignable for ultimate return by the Contractor as established
by the Secretary of the Interior pursuant to (3) of Section 1 of Public
Law 643 (70 Stat. 483), probably can be repaid to the United States
within the term of a contract under subsection 9(d) of the 1939
Reclamation Project Act (53 Stat. 1187), the relevant portions of this
Settlement Contract may be converted to a contract under said subsection
9(d) upon terms and conditions mutually agreeable to the United States
and the Contractor. The Secretary shall make a determination 10 years
after the date of execution of this Settlement Contract, and every five
years thereafter, of whether a conversion to a contract under said
subsection 9(d) can be accomplished pursuant to Public Law 643.
Notwithstanding any provision of this Settlement Contract, the
Contractor reserves and shall have all rights and benefits under Public
Law 643.

# WATER TO BE FURNISHED TO CONTRACTOR

3\. (a) Subject to the conditions, limitations, and provisions
hereinafter expressed, the Contractor is hereby entitled and authorized
to divert from the Sacramento River at the locations shown in Exhibit A,
for beneficial use within the area delineated on Exhibit B, (both
Exhibits are attached hereto and made a part hereof), the Contract Total
designated in Exhibit A, or any revision thereof, in accordance with the
monthly operating schedule required by Article 3(c) of this Settlement
Contract. The quantity of any water diverted under this Settlement
Contract from the Sacramento River, during the period April through
October, for use on any lands delineated on Exhibit B, by the owner of
such lands or otherwise shall constitute a part of the Contract Total as
shown on Exhibit A and shall be subject to all the provisions of this
Settlement Contract relating to such Contract Total as if such diversion
were made by the Contractor: [[Provided]{.underline},
[however]{.underline}, that the Contractor reserves the right to, and
may at its option, divert water from Butte Creek to the extent permitted
under California law for beneficial use within the area delineated on
Exhibit B. The lawfulness of the Contractor's [points of]{.underline}
diversion for said area from Butte Creek will not be challenged by, or
on behalf of, the Bureau of Reclamation except in the case of a general
adjudication as provided in subdivision[s]{.underline} (b) [and
(c)]{.underline} of Article 9.]{.mark}

**\[*NOTE: contractor-specific language dealing with individual water
rights may be needed*.\]**

\(b\) The Contractor may have acquired rights to divert water from the
Sacramento River during the period April through October, that were
obtained after the date of execution of the Existing Contract, or the
Contractor may acquire such rights in the future. All diversions made
from the Sacramento River, pursuant to such rights, during the period
April through October, shall not be considered a part of the quantity of
Base Supply and Project Water specified in Exhibit A;
[Provided]{.underline}, that the quantities diverted pursuant to the
above rights shall be identified on the schedule submitted pursuant to
Article 3(c) below, and shall not be substituted for any Base Supply or
Project Water; [Provided]{.underline}, [furthe]{.underline}r, that any
such identified quantities of other acquired rights may be diverted by
the Contractor before incurring any fee pursuant to Article 3(c)(1),
below.

\(c\) Before April 1 and before the first day of each month thereafter
when a revision is needed, the Contractor shall submit a written
schedule to the Contracting Officer indicating the Contract Total to be
diverted by the Contractor during each month under this Settlement
Contract. The United States shall furnish water to the Contractor in
accordance with the monthly operating schedule or any revisions thereof.
However, the United States recognizes the need of the Contractor to
change from time to time its monthly diversions of water from the
quantities shown in Exhibit A; the Contractor may make such changes,
provided:

\(1\) that for the quantity of Base Supply diverted in excess of the
monthly quantity shown in Exhibit A, and as may be reduced in accordance
with Article 5(a), during June, July, August, September, or October of
any Water Year, the Contractor shall be charged a rescheduling fee equal
to 50% of the sum of the storage operations and maintenance rate and the
storage capital rate components of the Project ratesetting policy.

\(2\) that in no event shall the total quantity scheduled for diversion
by the Contractor from the Sacramento River:

\(i\) During the period April through October exceed the aggregate of
the Contract Total for that period shown in Exhibit A or any revision
thereof;

\(ii\) During the period July through September exceed the aggregate of
the Contract Total for that period shown in Exhibit A or any revision
thereof.

\(d\) In the event conditions warrant, the Contracting Officer reserves
the right to require the Contractor to submit, at least 72 hours prior
to the beginning of each weekly period, its estimate of daily diversion
requirements for each such period from the Sacramento River:
[Provided]{.underline}, [however]{.underline}, that changes during any
such period may be made upon the giving of 72 hours' notice thereof to
the Contracting Officer.

\(e\) No sale, transfer, exchange, or other disposal of any of the
Contract Total designated in Exhibit A or the right to the use thereof
for use on land other than that shown on Exhibit B shall be made by the
Contractor without first obtaining the written consent of the
Contracting Officer. Such consent will not be unreasonably withheld and
a decision will be rendered in a timely manner. For short-term actions
that will occur within one year or less, the decision will be rendered
within 30 days after receipt of a complete written proposal. For
long-term actions that will occur in a period longer than one year, the
decision will be rendered within 90 days after receipt of a complete
written proposal. For a proposal to be deemed complete by the
Contracting Officer, it must comply with all provisions required by
State and Federal law, including information sufficient to enable the
Contracting Officer to comply with the National Environmental Policy
Act, the Endangered Species Act, and applicable rules or regulations
then in effect; [Provided]{.underline} that, such consent does not
authorize the use of Federal facilities to facilitate or effectuate the
sale, transfer, exchange or other disposal of Base Supply. Such use of
Federal facilities will be the subject of a separate agreement to be
entered into between the Contractor and Reclamation.

\(f\) For the purpose of determining whether section 3405(a)(1)(M) of
the CVPIA applies to the Contractor as a transferor or transferee of
Project Water, the Contracting Officer acknowledges that the Contractor
is within a county, watershed or other area of origin, as those terms
are utilized under California law.

\(g\) Nothing herein contained shall prevent the Contractor from
diverting water during the months of November through March for
beneficial use on the land shown on Exhibit B or elsewhere to the extent
authorized under the laws of the State of California.

\(h\) The United States assumes no responsibility for and neither it nor
its officers, agents, or employees shall have any liability for or on
account of:

> \(1\) The quality of water to be diverted by the Contractor;

\(2\) The control, carriage, handling, use, disposal, or distribution of
water diverted by the Contractor outside the facilities constructed and
then being operated and maintained by or on behalf of the United States;

\(3\) Claims of damage of any nature whatsoever, including but not
limited to, property loss or damage, personal injury, or death arising
out of or connected with the control, carriage, handling, use, disposal,
or distribution of said water outside of the hereinabove referred to
facilities; and

\(4\) Any damage whether direct or indirect arising out of or in any
manner caused by a shortage of water whether such shortage be on account
of errors in operation, drought, or unavoidable causes.

# RETURN FLOW

4\. Nothing herein shall be construed as an abandonment or a
relinquishment by the United States of any right it may have to the use
of waste, seepage, and return flow water derived from water diverted by
the Contractor hereunder and which escapes or is discharged beyond the
boundaries of the lands shown on Exhibit B; [Provided]{.underline}, that
this shall not be construed as claiming for the United States any right
to such water which is recovered by the Contractor pursuant to
California law from within the boundaries of the lands shown on Exhibit
B, and which is being used pursuant to this Settlement Contract for
surface irrigation or underground storage for the benefit of the lands
shown on Exhibit B by the Contractor. **\[*Colusa Basin Drain language
may be required*\]**

# CONSTRAINTS ON THE AVAILABILITY OF WATER

5\. (a) In a Critical Year, the Contractor's Base Supply and Project
Water agreed to be diverted during the period April through October of
the Year in which the principal portion of the Critical Year occurs and,
each monthly quantity of said period shall be reduced by twenty-five
percent.

\(b\) The amount of any overpayment by the Contractor shall, at its
option, be refunded or credited upon amounts to become due to the United
States from the Contractor under the provisions hereof in the ensuing
Year. To the extent of such deficiency such adjustment of overpayment
shall constitute the sole remedy of the Contractor.

[INTEGRATED WATER MANAGEMENT AND PARTNERSHIPS]{.underline}

6\. The Contractor and United States desire to work together to maximize
the reasonable beneficial use of water for their mutual benefit. As a
consequence, the United States and the Contractor will work in
partnership and with others within the Sacramento Valley, including
other Contractors, to facilitate the better integration within the
Sacramento Valley of all water supplies including, but not limited to,
the better management and integration of surface water and groundwater,
the development and better utilization of surface water storage, the
effective utilization of waste, seepage and return flow water, and other
operational and management options that may be identified in the future.
**\[*Language cross-referencing other related agreement will be added as
appropriate to the individual Settlement Contracts*.\]**

[USE OF WATER FURNISHED TO CONTRACTOR]{.underline}

7\. (a) Project Water furnished to the Contractor pursuant to this
Settlement Contract shall not be delivered or furnished by the
Contractor for any purposes other than agricultural purposes without the
written consent of the Contracting Officer. For purposes of this
Settlement Contract, "agricultural purposes" includes, but is not
restricted to, the watering of livestock, incidental domestic use
including related landscape irrigation, or underground water
replenishment.

\(b\) The Contractor shall comply with requirements applicable to the
Contractor in biological opinion(s) prepared as a result of a
consultation regarding the execution of this Settlement Contract
undertaken pursuant to Section 7 of the Endangered Species Act of 1973,
as amended, that are within the Contractor's legal authority to
implement. The Contractor shall comply with the limitations or
requirements imposed by environmental documentation applicable to the
Contractor and within its legal authority to implement. The Existing
Contract, which evidences in excess of 40 years of diversions, for
agricultural uses, of the quantities of water provided for in Article 3,
and the underlying water rights of the Contractor will be considered in
developing an appropriate base-line for the Biological Assessment
prepared pursuant to the Endangered Species Act, and in any other needed
environmental review. Nothing herein shall be construed to prevent the
Contractor from challenging or seeking judicial relief in a court of
competent jurisdiction with respect to any biological opinion or other
environmental documentation referred to in this Article.

[RATE AND METHOD OF PAYMENT FOR WATER]{.underline}

8\. (a) The Contractor shall make payments to the United States as
provided in this Article for all Project Water shown in Exhibit A as
follows:

\(1\) seventy-five percent of the amount shown as Project Water shall be
paid for by the Contractor in each Year; and in addition

\(2\) the Contractor shall pay for Project Water actually diverted in
excess of seventy-five percent of the amount shown as Project Water.

Such payments shall be at Rates and Charges established in accordance
with: (i) the Secretary's then-current ratesetting policies for the
Project; and (ii) applicable Reclamation law and associated rules and
regulations, or policies: [Provided]{.underline}, that if the Contractor
desires to use Project Water for other than agricultural use the Rates
and Charges set forth above will be adjusted by the Contracting Officer
to the applicable Rates and Charges for such use. The Rates and Charges
applicable to the Contractor upon execution of this Settlement Contract
are set forth in Exhibit D, as may be revised annually. The Secretary's
ratesetting policies for the Project shall be amended, modified, or
superseded only through a public notice and comment procedure. The
Contracting Officer shall adjust the amount of Project Water for which
payment is required to the extent of any reduction in diversions of
Project Water made in accordance with the water conservation provisions
of Article 29(e).

\(b\) The Contracting Officer shall notify the Contractor of the Rates
and Charges as follows:

\(1\) Prior to July 1 of each Year, the Contracting Officer shall
provide the Contractor an estimate of the Charges for Project Water that
will be applied to the period October 1, of the current Year, through
September 30, of the following Year, and the basis for such estimate.
The Contractor shall be allowed not less than two months to review and
comment on such estimates. On or before September 15 of each Year, the
Contracting Officer shall notify the Contractor in writing of the
Charges to be in effect during the period October 1 of the current Year,
through September 30, of the following Year, and such notification shall
revise Exhibit D.

\(2\) Prior to October 1 of each Year, the Contracting Officer shall
make available to the Contractor an estimate of the Rates for Project
Water for the following Year and the computations and cost allocations
upon which those Rates are based. The Contractor shall be allowed not
less than two months to review and comment on such computations and cost
allocations. By December 31 of each Year, the Contracting Officer shall
provide the Contractor with the final Rates to be in effect for the
upcoming Year, and such notification shall revise Exhibit D.

\(c\) The Contractor shall pay the United States for Project Water in
the following manner:

\(1\) With respect to Rates, prior to May 1 of each Year, the Contractor
shall pay the United States one-half the total amount payable pursuant
to subdivision (a) of this Article and the remainder shall be paid prior
to July 1 or such later date or dates as may be specified by the United
States in a written notice to the Contractor: [Provided]{.underline},
[however]{.underline}, that if at any time during the Year the amount of
Project Water diverted by the Contractor shall equal the amount for
which payment has been made, the Contractor shall pay for the remaining
amount of such water as shown in Exhibit A in advance of any further
diversion of Project Water.

\(2\) With respect to Charges, the Contractor shall also make a payment
to the United States, in addition to the Rate(s) in subdivision (c)(1)
of this Article, at the Charges then in effect, before the end of the
month following the month of delivery or transfer. The payments shall be
consistent with the quantities of Project Water delivered or
transferred. Adjustment for overpayment or underpayment of Charges shall
be made through the adjustment of payments due to the United States for
Charges for the next month. Any amount to be paid for past due payment
of Charges shall be computed pursuant to Article 13 of this Settlement
Contract.

\(d\) Payments to be made by the Contractor to the United States under
this Settlement Contract may be paid from any revenues available to the
Contractor.

\(1\) All revenues received by the United States from the Contractor
relating to the delivery of Project Water or the delivery of non-Project
water through Project facilities shall be allocated and applied in
accordance with Federal Reclamation law and the associated rules or
regulations, and the then current Project ratesetting policies for
Irrigation Water.

\(e\) The Contracting Officer shall keep its accounts pertaining to the
administration of the financial terms and conditions of its long-term
water service and Settlement Contracts, in accordance with applicable
Federal standards, so as to reflect the application of Project costs and
revenues. The Contracting Officer shall, each Year upon request of the
Contractor, provide to the Contractor a detailed accounting of all
Project and Contractor expense allocations, the disposition of all
Project and Contractor revenues, and a summary of all water delivery
information. The Contracting Officer and the Contractor shall enter into
good faith negotiations to resolve any discrepancies or disputes
relating to accountings, reports, or information.

\(f\) The parties acknowledge and agree that the efficient
administration of this Settlement Contract is their mutual goal.
Recognizing that experience has demonstrated that mechanisms, policies,
and procedures used for establishing Rates and Charges and/or for making
and allocating payments, other than those set forth in this Article may
be in the mutual best interest of the parties, it is expressly agreed
that the parties may enter into agreements to modify the mechanisms,
policies, and procedures for any of those purposes while this Settlement
Contract is in effect without amendment of this Settlement Contract.

\(g\) For the term of this Settlement Contract, Rates under the
respective ratesetting policies for the Project will be established to
recover only reimbursable operation and maintenance (including any
deficits) and capital costs of the Project, as those terms are used in
the then current Project ratesetting policies, and interest, where
appropriate, except in instances where a minimum Rate is applicable in
accordance with the relevant Project ratesetting policy. Proposed
changes of significance in practices which implement the ratesetting
policies for the Project will not be implemented until the Contracting
Officer has provided the Contractor an opportunity to discuss the
nature, need, and impact of the proposed change. [The Contractor retains
all rights to challenge the validity of Rates and Charges imposed
pursuant to this Settlement Contract, including but not limited to
operation and maintenance expenses and operation and maintenance
deficits, in an appropriate administrative or judicial
proceeding]{.mark}.

\(h\) Except as provided in subsection 3405(a)(1)(B) of the CVPIA, the
Rates for Project Water transferred, exchanged, or otherwise disposed
of, by the Contractor shall be the Contractor's Rates adjusted upward or
downward to reflect the changed costs of delivery (if any) of the
transferred, exchanged, or otherwise disposed of Project Water to the
transferee's point of delivery in accordance with the then-current
ratesetting policies for the Project. Except as provided in subsection
3407(d)(2)(A) of the CVPIA, the Charges for Project Water transferred,
exchanged, or otherwise disposed of, by the Contractor shall be the
Contractor's Charges specified in Exhibit D. If the Contractor is
receiving lower Rates and Charges because of inability to pay and is
transferring, exchanging, or otherwise disposing of Project Water to
another entity whose Rates and Charges are not adjusted due to inability
to pay, the Rates and Charges for transferred, exchanged, or otherwise
disposed of Project Water shall be the Contractor's Rates and Charges
unadjusted for ability to pay.

\(i\) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the
Contracting Officer is authorized to adjust determinations of ability to
pay every five years.

\(j\) Each payment to be made pursuant to subdivisions (a) and (b) of
this Article shall be made at the office of the Bureau of Reclamation,
Mid-Pacific Region, File No. 11546, P.O. Box 6000, San Francisco,
California, 94160-1546, or at such other place as the United States may
designate in a written notice to the said Contractor. Payments shall be
made by cash transaction, wire, or any other mechanism as may be agreed
to in writing by the Contractor and the Contracting Officer. In the
event there should be a default in the payment of the amount due, the
delinquent payment provisions of Article 13 shall apply. The Contractor
shall not be relieved of the whole or any part of its said obligation
by, on account of, or notwithstanding, as the case may be:

\(1\) Its failure, refusal, or neglect to divert seventy-five percent of
the quantity of Project Water shown on Exhibit A;

\(2\) The default in payment to it by any water user of assessments,
tolls, or other charges levied by or owing to said Contractor;

\(3\) Any judicial determination that any assessment, toll, or other
charge referred to in subsection 8(c)(2) of this Settlement Contract is
irregular, void, or ineffectual; or

\(4\) Any injunctive process enjoining or restraining the Contractor
from making or collecting any such assessment, toll, or other charge
referred to in subsection 8(c)(2) of this Settlement Contract.

# AGREEMENT ON WATER QUANTITIES

9\. (a) During the term of this Settlement Contract and any renewals
thereof:

\(1\) It shall constitute full agreement as between the United States
and the Contractor as to the quantities of water and the allocation
thereof between Base Supply and Project Water which may be diverted by
the Contractor from the Sacramento River for beneficial use on the land
shown on Exhibit B which said diversion, use, and allocation shall not
be disturbed so long as the Contractor shall fulfill all of its
obligations hereunder;

\(2\) Neither party shall claim any right against the other in conflict
with the provisions of Article 9(a)(1) hereof.

\(b\) Nothing herein contained is intended to or does limit rights of
the Contractor against others than the United States or of the United
States against any person other than the Contractor:
[Provided]{.underline}, [however]{.underline}, that in the event the
Contractor, the United States, or any other person shall become a party
to a general adjudication of rights to the use of water of the
Sacramento River system, this Settlement Contract shall not jeopardize
the rights or position of either party hereto or of any other person and
the rights of all such persons in respect to the use of such water shall
be determined in such proceedings the same as if this Settlement
Contract had not been entered into, and if final judgment in any such
general adjudication shall determine that the rights of the parties
hereto are different from the rights as assumed herein, the parties
shall negotiate an amendment to give effect to such judgment. In the
event the parties are unable to agree on an appropriate amendment they
shall, within 60 days of determining that there is an impasse, employ
the services of a neutral mediator, experienced in resolving water
rights disputes, to assist in resolving the impasse. The cost of the
mediation will be shared equally. A failure to reach agreement on an
amendment within 60 days of the end of mediation will cause the
immediate termination of this Settlement Contract.

\(c\) In the event that the California State Water Resources Control
Board or a court of competent jurisdiction issues a final decision or
order modifying the terms and conditions of the water rights of either
party to this Settlement Contract in order to impose Bay-Delta water
quality obligations, the Contractor and the United States shall promptly
meet to determine whether or not to modify any of the terms of this
Settlement Contract to comply with the final decision or order,
including, but not limited to, the applicability of the rescheduling
charge in Article 3(c)(1) of this Settlement Contract. If within 60 days
of the date of the issuance of the final decision or order the parties
are not able to reach agreement regarding either the need to modify this
Settlement Contract or the manner in which this Settlement Contract is
to be modified, the parties shall promptly retain a neutral mediator,
experienced in resolving water right disputes, to assist the parties in
resolving their dispute. The cost of the mediator shall be shared
equally. In the event that either of the parties to this Settlement
Contract determines that the parties will not be able to develop
mutually-agreeable modification(s) to this Settlement Contract even with
the assistance of a mediator, either of the parties to this Settlement
Contract may attempt to resolve the impasse by seeking appropriate
judicial relief including, but not limited to, filing a general
adjudication of the rights to the use of water in the Sacramento River
system. The foregoing provisions of this sub-article shall only apply to
the incremental obligations contained within a final decision or order
of the State Water Resources Control Board that reflects a modification
to the obligations imposed in State Water Resources Control Board
Revised Water Rights Decision 1641 dated March 15, 2000, and its
associated 1995 Water Quality Control Plan which, taken together, will
be considered the baseline for the application of the provisions of this
sub-article.

\(d\) In the event this Settlement Contract terminates, the rights of
the parties to thereafter divert and use water shall exist as if this
Settlement Contract had not been entered into; and the fact that as a
compromise settlement of a controversy as to the respective rights of
the parties to divert and use water and the yield of such rights during
the term hereof, this Settlement Contract places a limit on the Contract
Total to be diverted annually by the Contractor during the Settlement
Contract term and segregates it into Base Supply and Project Water shall
not jeopardize the rights or position of either party with respect to
its water rights or the yield thereof at all times after the Settlement
Contract terminates. It is further agreed that the Contractor at all
times will first use water to the use of which it is entitled by virtue
of its own water rights, and neither the provisions of this Settlement
Contract, action taken thereunder, nor payments made thereunder to the
United States by the Contractor shall be construed as an admission that
any part of the water used by the Contractor during the term of this
Settlement Contract was in fact water to which it would not have been
entitled under water rights owned by it nor shall receipt of payments
thereunder by the United States from the Contractor be construed as an
admission that any part of the water used by the Contractor during the
term of this Settlement Contract was in fact water to which it would
have been entitled under water rights owned by it.

#### MEASUREMENT OF WATER

10\. (a) All water diverted by the Contractor from the Sacramento River
will be diverted at the existing point or points of diversion shown on
Exhibit A or at such other points as may be mutually agreed upon in
writing by the Contracting Officer and the Contractor.

\(b\) All water diverted from the Sacramento River pursuant to this
Settlement Contract will be measured or caused to be measured by the
United States at each point of diversion with existing equipment or
equipment to be installed, operated, and maintained by the United
States, and/or others, under contract with and at the option of the
United States. The equipment and methods used to make such measurement
shall be in accordance with sound engineering practices. Upon request of
the Contractor, the accuracy of such measurements will be investigated
by the Contracting Officer and any errors appearing therein will be
corrected.

\(c\) The right of ingress to and egress from all points of diversion is
hereby granted to all authorized employees of the United States. The
Contractor also hereby grants to the United States the right to install,
operate, maintain and replace such equipment on diversion or carriage
facilities at each point of diversion as the Contracting Officer deems
necessary.

\(d\) The Contractor shall not modify, alter, remove, or replace
diversion facilities or do any other act which would alter the
effectiveness or accuracy of the measuring equipment installed by the
United States or its representatives unless and until the Contracting
Officer has been notified with due diligence and has been given an
opportunity to modify such measuring equipment in such manner as may be
necessary or appropriate. In the event of an emergency the Contractor
shall notify the United States within a reasonable time thereafter as to
the existence of the emergency and the nature and extent of such
modification, alteration, removal, or replacement of diversion
facilities.

\(e\) The Contractor shall pay the United States for the costs to
repair, relocate, or replace measurement equipment when the Contractor
modifies, alters, removes, or replaces diversion or carriage facilities.

\(f\) Contractor and Contracting Officer shall develop a mutually
agreeable surface water delivery water measurement program which shall
be implemented by the Contractor, and such measurement program shall be
consistent with the conservation and efficiency criteria for evaluating
water conservation plans as provided in Article 29(a)**.**

\(g\) All new surface water delivery systems installed within the lands
delineated on Exhibit B after the effective date of this Settlement
Contract shall also comply with the measurement provisions described in
this Article.

## RULES AND REGULATIONS

11\. The parties agree that the delivery of Project Water for irrigation
use or use of Federal facilities pursuant to this Settlement Contract is
subject to Federal Reclamation law, including but not limited to, the
Reclamation Reform Act of 1982 (43 U.S.C. 390aa et seq.), as amended and
supplemented, and the rules and regulations promulgated by the Secretary
of the Interior under Federal Reclamation law.

[GENERAL OBLIGATION\--BENEFITS CONDITIONED UPON PAYMENT]{.underline}

12\. (a) The obligation of the Contractor to pay the United States as
provided in this Settlement Contract is a general obligation of the
Contractor notwithstanding the manner in which the obligation may be
distributed among the Contractor\'s water users and notwithstanding the
default of individual water users in their obligations to the
Contractor.

\(b\) The payment of Charges becoming due hereunder is a condition
precedent to receiving benefits under this Settlement Contract. The
United States shall not make water available to the Contractor through
Project facilities during any period in which the Contractor may be in
arrears in the advance payment of water Rates due the United States. The
Contractor shall not furnish water made available pursuant to this
Settlement Contract for lands or parties which are in arrears in the
advance payment of water rates levied or established by the Contractor.

\(c\) With respect to subdivision (b) of this Article, the Contractor
shall have no obligation to require advance payment for water Rates
which it levies.

# CHARGES FOR DELINQUENT PAYMENTS

13\. (a) The Contractor shall be subject to interest, administrative and
penalty charges on delinquent installments or payments. When a payment
is not received by the due date, the Contractor shall pay an interest
charge for each day the payment is delinquent beyond the due date. When
a payment becomes 60 days delinquent, the Contractor shall pay an
administrative charge to cover additional costs of billing and
processing the delinquent payment. When a payment is delinquent 90 days
or more, the Contractor shall pay an additional penalty charge of six
percent per year for each day the payment is delinquent beyond the due
date. Further, the Contractor shall pay any fees incurred for debt
collection services associated with a delinquent payment.

\(b\) The interest charge rate shall be the greater of the rate
prescribed quarterly in the Federal Register by the Department of the
Treasury for application to overdue payments, or the interest rate of
one-half of one percent per month prescribed by Section 6 of the
Reclamation Project Act of 1939 (Public Law 76-260). The interest charge
rate shall be determined as of the due date and remain fixed for the
duration of the delinquent period.

\(c\) When a partial payment on a delinquent account is received, the
amount received shall be applied, first to the penalty, second to the
administrative charges, third to the accrued interest, and finally to
the overdue payment.

# QUALITY OF WATER

14\. The operation and maintenance of Project facilities shall be
performed in such manner as is practicable to maintain the quality of
raw water made available through such facilities at the highest level
reasonably attainable as determined by the Contracting Officer. The
United States does not warrant the quality of water and is under no
obligation to construct or furnish water treatment facilities to
maintain or better the quality of water.

# WATER AND AIR POLLUTION CONTROL

15\. The Contractor, in carrying out this Settlement Contract, shall
comply with all applicable water and air pollution laws and regulations
of the United States and the State of California, and shall obtain all
required permits or licenses from the appropriate Federal, State, or
local authorities.

# EQUAL OPPORTUNITY

16\. During the performance of this Settlement Contract, the Contractor
agrees as follows:

\(a\) The Contractor will not discriminate against any employee or
applicant for employment because of race, color, religion, sex, or
national origin. The Contractor will take affirmative action to ensure
that applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex, or
national origin. Such action shall include, but not be limited to, the
following: Employment, upgrading, demotion, or transfer; recruitment or
recruitment advertising; layoff or termination, rates of payment or
other forms of compensation; and selection for training, including
apprenticeship. The Contractor agrees to post in conspicuous places,
available to employees and applicants for employment, notices to be
provided by the Contracting Officer setting forth the provisions of this
nondiscrimination clause.

\(b\) The Contractor will, in all solicitations or advertisements for
employees placed by or on behalf of the Contractor, state that all
qualified applicants will receive consideration for employment without
discrimination because of race, color, religion, sex, or national
origin.

\(c\) The Contractor will send to each labor union or representative of
workers with which it has a collective bargaining agreement or other
contract or understanding, a notice, to be provided by the Contracting
Officer, advising the said labor union or workers\' representative of
the Contractor\'s commitments under Section 202 of Executive Order No.
11246 of September 24, 1965, as amended, and shall post copies of the
notice in conspicuous places available to employees and applicants for
employment.

\(d\) The Contractor will comply with all provisions of Executive Order
No. 11246 of September 24, 1965, as amended, and of the rules,
regulations, and relevant orders of the Secretary of Labor.

\(e\) The Contractor will furnish all information and reports required
by said amended Executive Order and by the rules, regulations, and
orders of the Secretary of Labor, or pursuant thereto, and will permit
access to its books, records, and accounts by the Contracting Officer
and the Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.

\(f\) In the event of the Contractor\'s noncompliance with the
nondiscrimination clauses of this Settlement Contract or with any of the
said rules, regulations, or orders, this Settlement Contract may be
canceled, terminated, or suspended, in whole or in part, and the
Contractor may be declared ineligible for further Government contracts
in accordance with procedures authorized in said amended Executive
Order, and such other sanctions may be imposed and remedies invoked as
provided in said Executive Order, or by rule, regulation, or order of
the Secretary of Labor, or as otherwise provided by law.

\(g\) The Contractor will include the provisions of paragraphs (a)
through (g) in every subcontract or purchase order unless exempted by
the rules, regulations, or orders of the Secretary of Labor issued
pursuant to Section 204 of said amended Executive Order, so that such
provisions will be binding upon each subcontractor or vendor. The
Contractor will take such action with respect to any subcontract or
purchase order as may be directed by the Secretary of Labor as a means
of enforcing such provisions, including sanctions for noncompliance:
[Provided,]{.underline} [however]{.underline}, that in the event the
Contractor becomes involved in, or is threatened with, litigation with a
subcontractor or vendor as a result of such direction, the Contractor
may request the United States to enter into such litigation to protect
the interests of the United States.

# 

# COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

***(For Districts Only)***

17\. (a) The Contractor shall comply with Title VI of the Civil Rights
Act of 1964 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of
1975 (P.L. 93-112, as amended), the Age Discrimination Act of 1975 (42
U.S.C. 6101, et seq.) and any other applicable civil rights laws, as
well as with their respective implementing regulations and guidelines
imposed by the U.S. Department of the Interior and/or Bureau of
Reclamation.

\(b\) These statutes require that no person in the United States shall,
on the grounds of race, color, national origin, handicap, or age, be
excluded from participation in, be denied the benefits of, or be
otherwise subjected to discrimination under any program or activity
receiving financial assistance from the Bureau of Reclamation. By
executing this Settlement Contract, the Contractor agrees to immediately
take any measures necessary to implement this obligation, including
permitting officials of the United States to inspect premises, programs,
and documents.

\(c\) The Contractor makes this agreement in consideration of and for
the purpose of obtaining any and all Federal grants, loans, contracts,
property discounts, or other Federal financial assistance extended after
the date hereof to the Contractor by the Bureau of Reclamation,
including installment payments after such date on account of
arrangements for Federal financial assistance which were approved before
such date. The Contractor recognizes and agrees that such Federal
assistance will be extended in reliance on the representations and
agreements made in this Article, and that the United States reserves the
right to seek judicial enforcement thereof.

# MINGLING OF CONTRACTOR'S PROJECT AND NON-PROJECT WATER

18\. (a) Project Water must of necessity be transported by the
Contractor to its water users by means of the same works and channels
used for the transport of its non-Project Water including Base Supply.
Notwithstanding such mingling of water, the provisions of Article 11
hereof shall be applicable only to Project Water, and such mingling of
water shall not in any manner subject to the provisions of Article 11
hereof the Contractor's non-Project water including Base Supply.

\(b\) If required in accordance with subdivision (c) of this Article,
the Contractor shall install and maintain such measuring equipment and
distribution facilities and maintain such records as may be necessary to
determine the amounts of water delivered to Excess Lands served by the
Contractor. The Contractor shall not within any month deliver to
Ineligible Lands water in excess of the non-Project Water, including
Base Supply, for that month. The Contracting Officer or authorized
representative shall have the right at all reasonable times to inspect
such records and measuring equipment.

\(c\) The Contractor will not be considered in violation of the
requirement that Project Water be delivered only to Eligible Lands
during any month of the irrigation season that the water requirement for
beneficial use on Eligible Lands for that month is equal to or in excess
of the Project Water for that month as shown on Exhibit A or any
revision thereof pursuant to subdivision (c) of Article 3. The water
requirement for beneficial use on Eligible Lands will be determined by
multiplying:

\(1\) the number of irrigable acres of the particular types of crops
grown in that year on the acreage designated as eligible by

\(2\) the Unit Duties as set forth in Exhibit C attached hereto and made
a part hereof, or by such other Unit Duties mutually agreed upon by the
Contractor and the Contracting Officer. In order to make the computation
of the water requirement for Eligible Lands, on April 1 of each Year and
concurrently with its order for water for the irrigation season, the
Contractor shall designate the acreage of and type of crops to be grown
on its Eligible Lands that irrigation season. During any month the water
requirement as above determined for crops growing on Eligible Lands
during such month is equal to or in excess of the Project Water for that
month as provided herein the Contractor shall not be required to measure
the water delivered to Excess Lands. Any month the said water
requirement is less than the amount of Project Water as provided herein,
the Contractor will be required to measure water delivered to excess
land in accordance with subdivision (b) hereof.

[BOOKS, RECORDS, AND REPORTS]{.underline}

19\. The Contractor shall establish and maintain accounts and other
books and records pertaining to administration of the terms and
conditions of this Settlement Contract, including: the Contractor\'s
financial transactions, water supply data, and Project land and
right-of-way agreements; the water users\' land-use (crop census), land
ownership, land-leasing and water use data; and other matters that the
Contracting Officer may require. Reports thereon shall be furnished to
the Contracting Officer in such form and on such date or dates as the
Contracting Officer may require. Subject to applicable Federal laws and
regulations, each party to this Settlement Contract shall have the right
during office hours to examine and make copies of each other's books and
official records relating to matters covered by this Settlement
Contract.

# 

# CHANGE OF PLACE OF USE OR ORGANIZATION

20\. (a) Unless the written consent of the United States is first
obtained no change shall be made in the place of water use shown on
Exhibit B.

\(b\) While this Settlement Contract is in effect, no change shall be
made in the area of the Contractor as shown on its Exhibit B, by
inclusion, exclusion, annexation or detachment of lands, by dissolution,
consolidation, or merger or otherwise, except upon the Contracting
Officer's written consent thereto. Such consent will not be unreasonably
withheld and a decision will be provided in a timely manner. **\[*There
may need to be Contractor specific language added*.\]**

\(c\) In the event lands are annexed to or detached from the area of the
Contractor, as provided herein, the quantity of Project Water to be
diverted may be increased or decreased, as may be appropriate, pursuant
to a supplemental agreement to be executed in respect thereto.

# CONSOLIDATION OF CONTRACTING ENTITIES

# 21. Consolidation of Contractors may be approved by the Contracting Officer provided: (i) the Contracting Officer approves the form and organization of the resulting entity and the utilization by it of the Contract Total; and (ii) the obligations of the Contractors are assumed by such entity.

# No such consolidation shall be valid unless and until approved by the Contracting Officer.

# NOTICES

22\. Any notice, demand, or request authorized or required by this
Settlement Contract shall be deemed to have been given, on behalf of the
Contractor, when mailed, postage prepaid, or delivered to the Area
Manager, Northern California Area Office, Bureau of Reclamation, 16349
Shasta Dam Blvd., Shasta Lake, California, 96019, and on behalf of the
United States, when mailed, postage prepaid, or delivered to [the Board
of Directors of the Reclamation District No.1004, 134 5th Street,
Colusa, California 95932]{.mark}. The designation of the addressee or
the address may be changed by notice given in the same manner as
provided in this Article for other notices.

# ASSIGNMENT LIMITED\--SUCCESSORS AND ASSIGNS OBLIGATED

23\. (a) The provisions of this Settlement Contract shall apply to and
bind the successors and assigns of the parties hereto, but no assignment
or transfer of this Settlement Contract or any right or interest therein
shall be valid until approved in writing by the Contracting Officer.

\(b\) The assignment of any right or interest in this Settlement
Contract by either party shall not interfere with the rights or
obligations of the other party to this Settlement Contract absent the
written concurrence of said other party.

\(c\) The Contracting Officer shall not unreasonably condition or
withhold his approval of any proposed assignment.

# OFFICIALS NOT TO BENEFIT

# 24. (a) No Member of or Delegate to Congress, Resident Commissioner, or official of the Contractor shall benefit from this Settlement Contract other than as a water user or landowner in the same manner as other water users or landowners.

# 

# (b) No officer or member of the governing board of the Contractor shall receive any benefit that may arise by reason of this Settlement Contract other than as a landowner within the Contractor's service area and in the same manner as other landowners within the said service area.

# CONTINGENT UPON APPROPRIATION OR ALLOTMENT OF FUNDS

25\. The expenditure or advance of any money or the performance of any
obligation of the United States under this Settlement Contract shall be
contingent upon appropriation or allotment of funds. Absence of
appropriation or allotment of funds shall not relieve the Contractor
from any obligations under this Settlement Contract. No liability shall
accrue to the United States in case funds are not appropriated or
allotted.

[CONFIRMATION OF SETTLEMENT CONTRACT]{.underline}

26\. The Contractor, after the execution of this Settlement Contract,
shall promptly seek to secure a decree of a court of competent
jurisdiction of the State of California, if appropriate, confirming the
execution of this Settlement Contract. The Contractor shall furnish the
United States a certified copy of the final decree, the validation
proceedings, and all pertinent supporting records of the court approving
and confirming this Settlement Contract, and decreeing and adjudging it
to be lawful, valid, and binding on the Contractor. This Settlement
Contract shall not be binding on the United States until such final
decree has been secured.

## UNAVOIDABLE GROUNDWATER PERCOLATION

27\. To the extent applicable, the Contractor shall not be deemed to
have delivered Project Water to Excess Lands or Ineligible Lands if such
lands are irrigated with groundwater that reaches the underground strata
as an unavoidable result of the delivery of Project Water by the
Contractor to Eligible Lands.

# PRIVACY ACT COMPLIANCE

28\. (a) The Contractor shall comply with the Privacy Act of 1974 (5
U.S.C. 552a) (the Act) and the Department of the Interior rules and
regulations under the Act (43 CFR 2.45 et seq.) in maintaining
Landholder acreage certification and reporting records, required to be
submitted to the Contractor for compliance with Sections 206 and 228 of
the Reclamation Reform Act of 1982 (96 Stat. 1266), and pursuant to 43
CFR 426.18.

\(b\) With respect to the application and administration of the criminal
penalty provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the
Contractor\'s employees responsible for maintaining the certification
and reporting records referenced in (a) above are considered to be
employees of the Department of the Interior. See 5 U.S.C. 552a(m).

\(c\) The Contracting Officer or a designated representative shall
provide the Contractor with current copies of the Interior Department
Privacy Act regulations and the Bureau of Reclamation Federal Register
Privacy Act System of Records Notice (Acreage Limitation\--Interior,
Reclamation-31) which govern the maintenance, safeguarding, and
disclosure of information contained in the Landholder\'s certification
and reporting records.

\(d\) The Contracting Officer shall designate a full-time employee of
the Bureau of Reclamation to be the System Manager who shall be
responsible for making decisions on denials pursuant to 43 CFR 2.61 and
2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is
authorized to grant requests by individuals for access to their own
records.

\(e\) The Contractor shall forward promptly to the System Manager each
proposed denial of access under 43 CFR 2.64; and each request for
amendment of records filed under 43 CFR 2.71; notify the requester
accordingly of such referral; and provide the System Manager with
information and records necessary to prepare an appropriate response to
the requester. These requirements do not apply to individuals seeking
access to their own certification and reporting forms filed with the
Contractor pursuant to 43 CFR 426.18, unless the requester elects to
cite the Privacy Act as a basis for the request.

## WATER CONSERVATION

29\. (a) Prior to the diversion of Project Water, the Contractor shall
be implementing an effective water conservation and efficiency program
based on the Basin-Wide Water Management Plan and/or Contractor\'s water
conservation plan that has been determined by the Contracting Officer to
meet the conservation and efficiency criteria for evaluating water
conservation plans established under Federal law. The water conservation
and efficiency program shall contain definite water conservation
objectives, appropriate economically feasible water conservation
measures, and time schedules for meeting those objectives. Continued
diversion of Project Water pursuant to this Settlement Contract shall be
contingent upon the Contractor's continued implementation of such water
conservation program. In the event the Contractor\'s water conservation
plan or any revised water conservation plan completed pursuant to
subdivision (c) of Article 29 of this Settlement Contract have not yet
been determined by the Contracting Officer to meet such criteria, due to
circumstances which the Contracting Officer determines are beyond the
control of the Contractor, Project Water deliveries shall be made under
this Settlement Contract so long as the Contractor diligently works with
the Contracting Officer to obtain such determination at the earliest
practicable date, and thereafter the Contractor immediately begins
implementing its water conservation and efficiency program in accordance
with the time schedules therein.

\(b\) The Contractor shall submit to the Contracting Officer a report on
the status of its implementation of the water conservation plan on the
reporting dates specified in the then existing conservation and
efficiency criteria established under Federal law.

\(c\) At five year intervals, the Contractor shall revise its water
conservation plan to reflect the then current conservation and
efficiency criteria for evaluating water conservation plans established
under Federal law and submit such revised water management plan to the
Contracting Officer for review and evaluation. The Contracting Officer
will then determine if the water conservation plan meets Reclamation's
then current conservation and efficiency criteria for evaluating water
conservation plans established under Federal law.

\(d\) If the Contractor is engaged in direct ground-water recharge, such
activity shall be described in the Contractor's water conservation plan.

\(e\) In order to provide incentives for water conservation, the
Contractor may reduce the amount of Project Water for which payment is
required under Article 8(a) in accordance with the provisions of this
Article 29(e).

\(1\) On or before February 15 of any Water Year, the Contractor may
file with Reclamation an offer to reduce Project Water use, hereinafter
referred to as Offer. The Offer shall specify the maximum quantity of
Project Water to be diverted by the Contractor for each month that
Project Water is available for that Water Year under this Settlement
Contract. The Contracting Officer shall provide the Contractor with a
decision, in writing, to the Offer on or before March 15 of that Water
Year. The dates specified in this Article 29(e)(1) can be changed if
mutually agreed to, in writing, by the Contractor and Contracting
Officer.

\(2\) If Reclamation accepts the Offer, the Contractor's payment
obligation under Article 8(a)(1) shall be reduced to the maximum
quantity of Project Water to be diverted by the Contractor as specified
in the Offer. The Contractor shall not divert Project Water in excess of
the quantities set forth in the Offer: [Provided]{.underline},
[however]{.underline}, if the Contractor's diversions of Project Water
exceed the quantities set forth in the Offer, the Contractor shall pay
to Reclamation the applicable Rates and Charges plus an amount equal to
the applicable Rates and Charges, unadjusted for ability to pay, for
each acre-foot of Project Water diverted in excess of the quantities set
forth in the Offer.

\(3\) If Reclamation decides not to accept the Offer, the Contractor's
payment obligation will remain as specified in Article 8(a)(1).

\(4\) The provisions of this Article 29(e) shall be in addition to and
shall not affect the provisions of Article 3(e) pertaining to the sale,
transfer, exchange or other disposal of the Contract Total designated in
Exhibit A.

# OPINIONS AND DETERMINATIONS

30\. (a) Where the terms of this Settlement Contract provide for actions
to be based upon the opinion or determination of either party to this
Settlement Contract, said terms shall not be construed as permitting
such action to be predicated upon arbitrary, capricious, or unreasonable
opinions or determinations. Both parties, notwithstanding any other
provisions of this Settlement Contract, expressly reserve the right to
seek relief from and appropriate adjustment for any such arbitrary,
capricious, or unreasonable opinion or determination. Each opinion or
determination by either party shall be provided in a timely manner.
Nothing in subdivision (a) of Article 30 of this Settlement Contract is
intended to or shall affect or alter the standard of judicial review
applicable under Federal law to any opinion or determination
implementing a specific provision of Federal law embodied in statute or
regulation.

\(b\) The Contracting Officer shall have the right to make
determinations necessary to administer this Settlement Contract that are
consistent with the provisions of this Settlement Contract, the laws of
the United States and of the State of California, and the rules and
regulations promulgated by the Secretary of the Interior. Such
determinations shall be made in consultation with the Contractor to the
extent reasonably practicable.

~~(c) In the event that the United States, as a result of litigation or
agreement, or failure to require an agreement, gives substantially more
favorable treatment to any other diverter from the Sacramento River
under similar circumstances than that accorded under this Settlement
Contract to the Contractor, the United States agrees to renegotiate this
Settlement Contract to provide comparable treatment to the Contractor
hereunder.~~

# CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

# 31. (a) In addition to all other payments to be made by the Contractor pursuant to this Settlement Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and detailed statement submitted by the Contracting Officer to the Contractor for such specific items of direct cost incurred by the United States for work requested by the Contractor associated with this Settlement Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies and procedures. All such amounts referred to in this Article shall not exceed the amount agreed to in writing in advance by the Contractor. This Article shall not apply to costs for routine contract administration.

\(b\) All advances for miscellaneous costs incurred for work requested
by the Contractor pursuant to Article 31 of this Settlement Contract
shall be adjusted to reflect the actual costs when the work has been
completed. If the advances exceed the actual costs incurred, the
difference will be refunded to the Contractor. If the actual costs
exceed the Contractor\'s advances, the Contractor will be billed for the
additional costs pursuant to Article 31 of this Settlement Contract.

# WAIVER OF DEFAULT

32\. The waiver by either party to this Settlement Contract as to any
default shall not be construed as a waiver of any other default or as
authority of the other party to continue such default or to make, do, or
perform, or not to make, do, or perform, as the case may be, any act or
thing which would constitute a default.

IN WITNESS WHEREOF, the parties hereto have executed this Settlement
Contract as of the day and year first hereinabove written.

THE UNITED STATES OF AMERICA

By: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Regional Director, Mid-Pacific Region

Bureau of Reclamation

(SEAL)

> [RECLAMATION DISTRICT NO. 1004]{.mark},

By:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

President

ATTEST:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Secretary

Exhibit A

[Reclamation District No. 1004]{.mark}

[Contract No. 14-06-200-890A-R1]{.mark}

Sacramento River

[]{.mark}

[]{.mark}

[SCHEDULE OF MONTHLY DIVERSIONS OF WATER]{.underline}

[Base Supply]{.underline} [Project Water]{.underline} [Total
Supply]{.underline}

(acre-feet) (acre-feet) (acre-feet)

April [[6,300]{.underline}]{.mark} [[0]{.underline}]{.mark}
[[6,300]{.underline}]{.mark}

May [[14,700]{.underline}]{.mark} [[0]{.underline}]{.mark}
[[14,700]{.underline}]{.mark}

June [[12,200]{.underline}]{.mark} [[0]{.underline}]{.mark}
[[12,200]{.underline}]{.mark}

July [[6,100]{.underline}]{.mark} [[6,000]{.underline}]{.mark}
[[12,100]{.underline}]{.mark}

August [[3,600]{.underline}]{.mark} [[8,400]{.underline}]{.mark}
[[12,000]{.underline}]{.mark}

September [[8,200]{.underline}]{.mark} [[600]{.underline}]{.mark}
[[8,800]{.underline}]{.mark}

October [[5,300]{.underline}]{.mark} [[0]{.underline}]{.mark}
[[5,300]{.underline}]{.mark}

Total [[56,400]{.underline}]{.mark} [[15,000]{.underline}]{.mark}
[[71,400]{.underline}]{.mark}

[Points of Diversion:]{.underline} [[84.28L, 85.3L,
89.12L,112.1L]{.underline}]{.mark}

[Dated:]{.underline}

Exhibit B

(Map to be inserted to identify area covered by contract)

[Reclamation District No. 1004]{.mark}

[Contract No. 14-06-200-890A-R1]{.mark}

Sacramento River

Exhibit C

[Reclamation District No. 1004]{.mark}

[Contract No. 14-06-200-890A-R1]{.mark}

Sacramento River

[UNIT DUTY]{.underline}

(In Acre-Feet Per Acre)

Alfalfa and General

[Rice]{.underline} [Irrigated Pasture]{.underline} [Crops]{.underline}

June 1.80 0.80 0.60

July 1.90 1.00 0.70

August 1.80 0.80 0.70

[Dated:]{.underline}

Exhibit D

[Reclamation District No. 1004]{.mark}

[Contract No. 14-06-200-890A-R1]{.mark}

Sacramento River

[WATER RATES AND CHARGES]{.underline}

*[Note: Rates and Charges shown are 2003 rates. This exhibit will be
updated prior to execution of the contract to reflect the Rates and
Charges for 2004.]{.mark}*

COST OF SERVICE RATES: [Per Acre-Foot]{.underline}

Capital Rates \$[4.53]{.mark}

O&M Rates:

Water Marketing \$[6.28]{.mark}

Storage \$[5.57]{.mark}

Deficit Rates:

Interest Bearing \$[3.41]{.mark}

[CFO/PFR Adjustment Rate 1/ \$[1.28]{.underline}]{.mark}

TOTAL \$[[21.07]{.underline}]{.mark}

FULL-COST RATES:

Section 202(3) Rate is applicable to a

Qualified Recipient or to a Limited

Recipient receiving irrigation water

on or before October 1, 1981. \$[[26.01]{.underline}]{.mark}

Section 205(a)(3) Rate is

applicable to a Limited Recipient that

did not receive irrigation water on or

before October 1, 1981. \$[[28.73]{.underline}]{.mark}

CHARGES UNDER P.L. 102-575 TO THE

RESTORATION FUND 2/

Restoration Payments (3407(d)(2)(A)) \$[[7.69]{.underline}]{.mark}

[1/ Chief Financial Officer (CFO) adjustment and Provision for
Replacement (PFR) expense is being distributed over a 5-year period
beginning in FY 2003 for those contractors that requested those costs be
deferred.]{.mark}

2/ Restoration fund charges are payments in addition to the water rates
and were determined pursuant to Title XXXIV of Public Law 102-575.
Restoration fund charges are on a fiscal year basis (10/1 - 9/30).