SECTION 1. DEFINITIONS.

    For the purposes of this section, the following definitions apply:
            (1) District.--The term ``District'' means the Fallbrook 
        Public Utility District, San Diego County, California.
            (2) Project.--The term ``Project'' means the impoundment, 
        recharge, treatment, and other facilities the construction, 
        operation, and maintenance of which is authorized under 
        subsection (b).

SEC. 2. AUTHORIZATION FOR CONSTRUCTION OF LOWER SANTA MARGARITA 
              CONJUNCTIVE USE PROJECT.

    (a) Authorization.--The Secretary, acting pursuant to the Federal 
reclamation laws (Act of June 17, 1902; 32 Stat. 388), and Acts 
amendatory thereof or supplementary thereto, as far as those laws are 
not inconsistent with the provisions of this Act, is authorized to 
construct, operate, and maintain to make the yield of the Lower Santa 
Margarita Conjunctive Use Project to be located below the confluence of 
De Luz Creek with the Santa Margarita River on Camp Joseph H. 
Pendleton, the Fallbrook Annex of the Naval Weapons Station, and 
surrounding lands within the service area of the District available for 
irrigation, municipal, domestic, military, and other uses for the 
District and such other users as herein provided.
    (b) Conditions.--The Secretary of the Interior may construct the 
Project only after the Secretary of the Interior determines that the 
following conditions have occurred:
            (1) The District has entered into a contract under section 
        9(d) of the Reclamation Project Act of 1939 to repay to the 
        United States appropriate portions, as determined by the 
        Secretary, of the actual costs of constructing, operating, and 
        maintaining the Project, together with interest as hereinafter 
        provided.
            (2) The officer or agency of the State of California 
        authorized by law to grant permits for the appropriation of 
        water has granted such permits to the Bureau of Reclamation for 
        the benefit of the Department of the Navy and the District as 
        permitees for rights to the use of water for storage and 
        diversion as provided in this Act, including approval of all 
        requisite changes in points of diversion and storage, and 
        purposes and places of use.
            (3) The District has agreed that it will not assert against 
        the United States any prior appropriative right the District 
        may have to water in excess of the quantity deliverable to it 
        under this Act, and will share in the use of the waters 
        impounded by the Project on the basis of equal priority and in 
        accordance with the ratio prescribed in section 4(b). This 
        agreement and waiver and the changes in points of diversion and 
        storage under paragraph (2), shall become effective and binding 
        only when the Project has been completed and put into 
        operation.
            (4) The Secretary of the Interior has determined that the 
        Project has economic, environmental, and engineering 
        feasibility.

SEC. 3. COSTS.

    The Department of the Navy shall not be responsible for any costs 
in connection with the Project, except upon completion and then shall 
be charged in reasonable proportion to its use of the Project under 
regulations agreed upon by the Secretary of the Navy and Secretary of 
the Interior.

SEC. 4. OPERATION; YIELD ALLOTMENT; DELIVERY.

    (a) Operation.--The operation of the Project may be by the 
Secretary of the Interior or otherwise as agreed upon by the 
Secretaries of the Interior and the Navy and the District, under 
regulations satisfactory to the Secretary of the Navy with respect to 
the Navy's share of the impounded water and national security.
    (b) Yield Allotment.--Except as otherwise agreed between the 
parties, the Department of the Navy and the District shall participate 
in the water impounded by the Project on the basis of equal priority 
and in accordance with the following ratio:
            (1) 60 percent of the Project's yield is allotted to the 
        Secretary of the Navy.
            (2) 40 percent of the Project's yield is allotted to the 
        District.
    (c) Contracts for Delivery of Water.--
            (1) In general.--If the Secretary of the Navy certifies 
        that the Department of the Navy does not have immediate need 
        for any portion of the 60 percent yield allotted under 
        subsection (b), the official agreed upon to administer the 
        Project may enter into temporary contracts for the delivery of 
        the excess water.
            (2) First right for excess water.--The first right of the 
        Secretary of the Navy to demand that water without charge and 
        without obligation on the part of the United States after 30 
        days notice shall be included as a condition of contracts 
        entered into under this subsection. The first right to water 
        available under paragraph (1) shall be given the District, if 
        otherwise consistent with the laws of the State of California.
            (3) Disposition of funds.--Moneys paid to the United States 
        under a contract under this subsection shall be covered into 
        the general Treasury or to the Secretary of the Navy, as 
        services in lieu of payment for operation and maintenance of 
        the Project, and shall not be applied against the indebtedness 
        of the District to the United States.
            (4) Modification of rights and obligations related to water 
        yield.--The rights and obligations of the United States and the 
        District regarding the ratio or amounts of Project yield 
        delivered may be modified by an agreement between the parties.

SEC. 5. REPAYMENT OBLIGATION OF THE DISTRICT.

    (a) In General.--The general repayment obligation of the District 
shall be determined by the Secretary of the Interior consistent with 
the Water Supply Act of 1958; provided, however, that for the purposes 
of calculating interest and determining the time when the District's 
repayment obligation to the United States commences, the pumping and 
treatment of groundwater from the Project shall be deemed equivalent to 
the first use of water from a water storage project.
    (b) Modification of Rights and Obligation by Agreement.--The rights 
and obligations of the United States and the District regarding the 
repayment obligation of the District may be modified by an agreement 
between the parties.

SEC. 6. TRANSFER OF CARE, OPERATION, AND MAINTENANCE.

    The Secretary may transfer to the District, or a mutually agreed 
upon third party, the care, operation, and maintenance of the Project 
under conditions satisfactory to that Secretary and the District, and 
with respect to the portion of the Project that is located within the 
boundaries of Camp Pendleton, satisfactory also to the Secretary of the 
Navy. If such a transfer takes place, the District shall be entitled to 
an equitable credit for the costs associated with the Secretary's 
proportionate share of the operation and maintenance of the Project. 
The amount of such costs shall be applied against the indebtedness of 
the District to the United States.

SEC. 7. SCOPE OF ACT.

    For the purpose of this Act, the basis, measure, and limit of all 
rights of the United States pertaining to the use of water shall be the 
laws of the State of California. That nothing in this Act shall be 
construed--
            (1) as a grant or a relinquishment by the United States of 
        any rights to the use of water that it acquired according to 
        the laws of the State of California, either as a result of its 
        acquisition of the lands comprising Camp Joseph H. Pendleton 
        and adjoining naval installations, and the rights to the use of 
        water as a part of that acquisition, or through actual use or 
        prescription or both since the date of that acquisition, if 
        any;
            (2) to create any legal obligation to store any water in 
        the Project, to the use of which the United States has such 
        rights;
            (3) to constitute a recognition of, or an admission that, 
        the District has any rights to the use of water in the Santa 
        Margarita River, which rights, if any, exist only by virtue of 
        the laws of the State of California; or
            (4) to require the division under this Act of water to 
        which the United States has such rights.

SEC. 8. LIMITATIONS ON OPERATION AND ADMINISTRATION.

    Unless otherwise agreed by the Secretary of the Navy, the Project--
            (1) shall be operated in a manner which allows the free 
        passage of all of the water to the use of which the United 
        States is entitled according to the laws of the State of 
        California either as a result of its acquisition of the lands 
        comprising Camp Joseph H. Pendleton and adjoining naval 
        installations, and the rights to the use of water as a part of 
        those acquisitions, or through actual use or prescription, or 
        both, since the date of that acquisition, if any; and
            (2) shall not be administered or operated in any way which 
        will impair or deplete the quantities of water the use of which 
        the United States would be entitled under the laws of the State 
        of California had the Project not been built.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated, out of any money in the 
Treasury of the United States not otherwise appropriated, the 
following:
            (1) $60,000,000 (the current estimated construction cost of 
        the Project, plus or minus such amounts as may be indicated by 
        the engineering cost indices for this type of construction); 
        and
            (2) such sums as may be required to operate and maintain 
        the said project.

SEC. 10. REPORTS TO CONGRESS.

    Not later than 1 year after the date of the enactment of this Act 
and periodically thereafter, the Secretary of the Interior and the 
Secretary of the Navy shall each report to the Congress regarding if 
the conditions specified in section 2(b) have been met and if so, the 
details of how they were met.

            Passed the House of Representatives October 4, 2004.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.
(Sec. 2) Authorizes the Secretary of the Interior to construct, operate, and maintain facilities to provide water for irrigation, municipal, domestic, military, and other uses for the Fallbrook Public Utility District, San Diego County, from the Santa Margarita River, California.

Authorizes Project construction only after determining that: (1) the District has entered into a contract to repay to the United States specified costs, with interest; (2) the authorized California officer or agency has granted water use permits to the Bureau of Reclamation for the benefit of the Department of the Navy and the District; (3) the District has agreed that it will not assert against the United States any prior right it may have to water in excess of the quantity deliverable under this Act and will share water (as specified in section 4); and (4) the Secretary has determined that the Project has economic and engineering feasibility.

(Sec. 3) Limits Navy Department responsibility for Project costs.

(Sec. 4) Directs that, except as otherwise agreed between the parties, the Navy Department and the District participate in the water impounded by the Project on the basis of equal priority with 60 percent of the Project's yield allotted to the Secretary of the Navy and 40 percent allotted to the District. Authorizes: (1) temporary contracts for the delivery of excess water by the Navy Department; and (2) modification of rights and obligations by agreement between the parties.

(Sec. 5) Directs that the District's general repayment obligation be determined by the Secretary of the Interior consistent with the Water Supply Act of 1958, but, for purposes of calculating interest and determining the time when the District's repayment obligation to the United States commences, deems the pumping and treatment of Project groundwater to be equivalent to the first use of water from a water storage project.

(Sec. 6) Authorizes the Secretary to transfer the Project's care, operation, and maintenance to the District or a mutually agreed upon third party under specified conditions.

(Sec. 7) Makes the laws of California the basis of all Federal rights pertaining to the use of water under this Act.

(Sec. 8) Directs that, unless otherwise agreed by the Secretary of the Navy, the Project: (1) shall be operated in a manner which allows the free passage of all of the water to which the United States is entitled either as a result of its acquisition of the lands comprising Camp Joseph H. Pendleton and adjoining naval installations and the water rights as a part of those acquisitions, or through actual use or prescription, or both, since the date of any acquisition; and (2) shall not be administered in any way which will impair or deplete the quantities of water to which the United States would be entitled had the Project not been built.

(Sec. 9) Authorizes appropriations.

(Sec. 10) Sets forth reporting requirements by the Secretary of the Interior and the Secretary of the Navy.
To authorize the Secretary of the Interior to construct facilities to provide water for irrigation, municipal, domestic, military, and other uses from the Santa Margarita River, California, and for other purposes.