A bill to direct the Secretary of the Interior to establish a rural water supply program in the Reclamation States to provide a clean, safe, affordable, and reliable water supply to rural residents.

SECTION 1. SHORT TITLE.

    This Act may be cited as ``The Reclamation Rural Water Supply Act 
of 2003''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Construct.--The term ``construct'' means to--
                    (A) install new infrastructure; and
                    (B) upgrade or replace existing facilities that are 
                associated with the new infrastructure authorized under 
                this Act.
            (2) Indian tribe.--The term ``Indian tribe'' means any 
        Indian entity that is--
                    (A) included on the list of recognized tribes that 
                the Secretary publishes in the Federal Register in 
                accordance with section 104 of the Federally Recognized 
                Indian Tribe List Act of 1994 (25 U.S.C. 479a-1); and
                    (B) recognized by the Secretary as eligible to 
                receive services from the Federal Government.
            (3) Non-federal project entity.--The term ``non-Federal 
        project entity'' means a State, regional, or local authority, 
        Indian tribe, or other qualifying entity, such as a water 
        conservation district, water conservancy district, or rural 
        water district or association.
            (4) Program.--The term ``program'' means the rural water 
        supply program established under section 3(a).
            (5) Project.--
                    (A) In general.--The term ``project'' means a water 
                supply project for communities, an Indian tribe, or 
                dispersed homesites with domestic or rural water.
                    (B) Inclusion.--The term ``project'' includes 
                incidental livestock watering.
            (6) Reclamation law.--The term ``Reclamation law'' means 
        the Act of June 17, 1902 (32 Stat. 388, chapter 1093), and Acts 
        supplemental to and amendatory of that Act (43 U.S.C. 371 et 
        seq.)).
            (7) Reclamation state.--The term ``Reclamation State'' 
        means each of the States identified in the first section of the 
        Act of June 17, 1902 (43 U.S.C. 391).
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 3. RURAL WATER SUPPLY PROGRAM.

    (a) In General.--The Secretary, in cooperation with non-Federal 
project entities, may carry out a rural water supply program to plan, 
design, and construct projects in Reclamation States.
    (b) Eligibility Criteria.--
            (1) In general.--The Secretary shall develop and publish in 
        the Federal Register criteria for determining the eligibility 
        of a project for assistance under the program.
            (2) Considerations.--The criteria developed under paragraph 
        (1) shall take into account such factors as--
                    (A) whether a project serves--
                            (i) rural areas and communities; or
                            (ii) Indian tribes;
                    (B) whether there is an urgent and compelling need 
                for a project that would--
                            (i) result in continuous, measurable, and 
                        significant water quality benefits;
                            (ii) address current or future water supply 
                        shortages; or
                            (iii) improve the health or aesthetic 
                        quality of water;
                    (C) whether a project helps meet any applicable 
                legal requirements;
                    (D) whether a project--
                            (i) promotes and applies a regional or 
                        watershed perspective to water resource 
                        management or cross-boundary issues;
                            (ii) implements an integrated resources 
                        management approach;
                            (iii) increases water management 
                        flexibility; or
                            (iv) forms a partnership with other 
                        entities; and
                    (E) whether a project provides benefits outside the 
                region in which the project is carried out.
    (c) Cost-Sharing Requirement.--
            (1) Federal share.--The Federal share of the cost of the 
        planning and construction of a project shall be the amount 
        established by the Secretary in the feasibility report for the 
        project under section 5(c)(1)(D)(i).
            (2) Non-federal share.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the non-Federal share shall be not less than 25 
                percent of the cost of planning and construction of the 
                project, but not more than the amount established by 
                the Secretary in the feasibility report for the project 
                under section 5(c)(1)(D)(i).
                    (B) Reduced non-federal share.--The Secretary may 
                reduce the non-Federal share of the cost of the 
                planning and construction of a project under 
                subparagraph (A) if the Secretary determines that the 
                amount of the non-Federal share required by that 
                subparagraph would result in economic hardship for the 
                non-Federal project entity.
                    (C) Limitation.--Grants from other Federal sources 
                shall not be credited toward the non-Federal share 
                required by this paragraph.

SEC. 4. APPRAISAL INVESTIGATIONS.

    (a) In General.--On request of a non-Federal project entity, the 
Secretary, in cooperation with the non-Federal project entity and in 
consultation with appropriate State, regional, local, and tribal 
authorities, may conduct an appraisal investigation of a project to 
determine whether--
            (1) the project meets the criteria developed under section 
        (3)(b); and
            (2) the Secretary should initiate a feasibility study under 
        section 5(a).
    (b) Report.--On completion of the investigation under subsection 
(a), the Secretary shall prepare an appraisal report that includes any 
recommendations of the Secretary with respect to whether a feasibility 
study should be initiated for the project under section 5(a).
    (c) Costs.--The Secretary shall pay the costs of any appraisal 
investigations conducted under this section.

SEC. 5. FEASIBILITY STUDIES.

    (a) In General.--The Secretary, in cooperation with a non-Federal 
project entity, may carry out studies to determine the feasibility of 
rural water supply systems recommended for study under section 4(b).
    (b) Study Considerations.--In conducting a feasibility study under 
this section, the Secretary shall consider--
            (1) the need for the proposed project;
            (2) short- and long-term water demand and supplies in the 
        study area;
            (3) an evaluation of whether the resources in the study 
        area are capable of providing a safe and reliable source of 
        potable water to the communities and rural areas to be served;
            (4) any reasonable alternatives to the proposed project 
        (including nonstructural alternatives) that satisfy the need 
        for action, including an alternative that is within the ability 
        of the non-Federal project entity to pay operation, 
        maintenance, and repair costs of the proposed project;
            (5) the economic feasibility and cost effectiveness of the 
        proposed project;
            (6) impacts of the proposed project on the natural and 
        human environment;
            (7) appropriate water conservation measures; and
            (8) the financial ability of the non-Federal project entity 
        to pay--
                    (A) the non-Federal share of any planning and 
                construction costs of the proposed project; and
                    (B) 100 percent of the operation, maintenance, and 
                replacement costs allocated under subsection 
                (c)(1)(C)(i).
    (c) Report.--
            (1) In general.--On completion of a feasibility study under 
        subsection (a), the Secretary shall prepare a report that--
                    (A) describes the engineering, environmental, and 
                economic activities of the Secretary carried out under 
                the study;
                    (B) takes into consideration--
                            (i) the range of potential solutions for, 
                        and the circumstances and needs of, the area to 
                        be served by the proposed project;
                            (ii) the potential benefits to the people 
                        of the study area; and
                            (iii) appropriate water conservation 
                        measures;
                    (C) includes a schedule that identifies--
                            (i) the amount of operation, maintenance, 
                        and replacement costs that should be allocated 
                        to each non-Federal project entity 
                        participating in the project; and
                            (ii) the current and expected financial 
                        ability of each non-Federal project entity to 
                        pay the allocated operation, maintenance, and 
                        replacement costs;
                    (D)(i) specifies the Federal and non-Federal share 
                of the planning and construction costs of the project; 
                and
                    (ii) allocates the non-Federal share among project 
                beneficiaries; and
                    (E) includes the recommendations of the Secretary 
                as to whether the project should be carried out under 
                this Act.
            (2) Submission to congress.--With respect to any project 
        that the Secretary recommends under paragraph (1)(E), the 
        Secretary shall submit to Congress--
                    (A) the feasibility report for the proposed project 
                prepared under paragraph (1);
                    (B) any environmental reports associated with the 
                proposed project; and
                    (C) a request to develop and construct the proposed 
                project, as appropriate.
    (d) Priorities.--The Secretary shall establish priorities for 
carrying out projects under this Act based on--
            (1) the extent to which the project takes advantage of--
                    (A) economic incentives; and
                    (B) the use of market-based mechanisms;
            (2) the cost benefit of the project versus other 
        alternatives such as desalination;
            (3) whether non-Federal project entities have adequate 
        fiscal controls in place to manage the project; and
            (4) the extent to which the project involves partnerships.
    (e) Cost-Sharing Requirement.--
            (1) Federal share.--The Federal share of the cost of a 
        feasibility study carried out under this section shall not 
        exceed 50 percent of the study costs.
            (2) Form of non-federal share.--The non-Federal share under 
        paragraph (1) may be in the form of any in-kind services that 
        the Secretary determines would contribute substantially toward 
        the conduct and completion of the study.
    (f) Reimbursement of Costs.--If a project is constructed under the 
program, the Federal share of feasibility studies shall be--
            (1) considered to be project costs; and
            (2) reimbursed in accordance with Reclamation law.

SEC. 6. OPERATION, MAINTENANCE, AND REPLACEMENT COSTS.

    (a) In General.--To be eligible to carry out a project under this 
Act, a non-Federal project entity shall establish, to the satisfaction 
of the Secretary, that the non-Federal project entity has the ability 
to pay all operation, maintenance, and replacement costs of the project 
facilities.
    (b) Plan.--The non-Federal project entity, in consultation with the 
Secretary, shall develop an operation, maintenance, and replacement 
plan to provide the necessary framework to assist the non-Federal 
project entity in establishing rates and fees for project 
beneficiaries.

SEC. 7. MISCELLANEOUS PROVISIONS.

    (a) Authority of Secretary.--The Secretary may enter into 
contracts, financial assistance agreements, and such other agreements, 
and promulgate such regulations, as are necessary to carry out this 
Act.
    (b) Limitation on Use of Funds.--None of the funds made available 
to the Secretary for planning or construction of a rural water supply 
project developed under the program may be used to plan or construct 
facilities used to supply water for irrigation.
    (c) Title to Projects.--Title to the components of rural water 
supply projects planned, designed, and constructed under the program 
shall be held by the non-Federal project entity.

SEC. 8. EFFECT ON FEDERAL RECLAMATION LAW.

    Nothing in this Act supersedes or amends--
            (1) Reclamation law; or
            (2) any Federal law associated with a project, or portion 
        of a project constructed under Reclamation law.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated to carry 
out this Act $70,000,000 for fiscal year 2004 and each fiscal year 
thereafter.
    (b) Construction Cost Indexing.--
            (1) In general.--Any amounts appropriated for the planning 
        and construction of projects under this Act shall include such 
        sums as are necessary to defray increases in development costs 
        reflected in appropriate engineering cost indices after the 
        completion date of the applicable feasibility report, to remain 
        available until expended.
            (2) Cost sharing.--The Federal and non-Federal share of 
        cost increases due to inflation shall be allocated in amounts 
        that are proportionate to the allocation determined under 
        section 3(c).

Summary: The Reclamation Rural Water Supply Act of 2003 - Authorizes the Secretary of the Interior to carry out a rural water supply program in Reclamation States. Directs the Secretary to develop and publish in the Federal Register criteria for determining the eligibility of a water supply project for assistance under this Act, including: (1) whether a project serves rural areas or Indian tribes. (2) whether there is an urgent need for a project that would result in continuous, measurable, and significant water quality benefits, address current or future water supply shortages, or improve the health or aesthetic quality of water, (3) whether a project helps meet any applicable legal requirements. (4) whether a project promotes a regional perspective to water resource management issues, implements an integrated resources management approach, increases water management flexibility, or forms a partnership with other entities. And (5) whether a project provides benefits outside the region in which the project is carried on. Authorizes the Secretary to: (1) conduct appraisal investigations of proposed rural water supply projects. And (2) carry out feasibility studies of proposed rural water supply systems. Requires State and local authorities, Indian Tribes, or other entities carrying out rural water supply projects under this Act to demonstrate the ability to pay all operation, maintenance, and replacement costs of such projects.