Irrigation and Other

Contract No.

I75r-2555-LTR1

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

STONE CORRAL IRRIGATION DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM FRIANT DIVISION

Table of Contents

Article No. Title Page No.

Preamble ..............................................................................................................1

Explanatory Recitals .........................................................................................1-5

1 Definitions ......................................................................................................5-10

2 Term of Contract ..........................................................................................10-14

3 Water to be Made Available and Delivered to the Contractor .....................14-19

4 Time for Delivery of Water ..........................................................................19-22

5 Point of Diversion and Responsibility for Distribution of Water .................22-24

6 Measurement of Water Within the Service Area .........................................24-26

7 Rates and Method of Payment for Water .....................................................26-32

8 Non-Interest Bearing Operation and Maintenance Deficits ..............................32

9 Sales, Transfers, or Exchanges of Water ......................................................32-34

10 Application of Payments and Adjustments ..................................................34-35

11 Temporary Reductions--Return Flows .........................................................35-36

12 Constraints on the Availability of Water ......................................................36-39

13 Unavoidable Groundwater Percolation ..............................................................39

14 Rules and Regulations ..................................................................................39-40

15 Water and Air Pollution Control ........................................................................40

16 Quality of Water ...........................................................................................40-41

17 Water Acquired by the Contractor Other Than From the United States ......41-44

18 Opinions and Determinations ............................................................................44

19 Coordination and Cooperation .....................................................................44-46

20 Charges for Delinquent Payments ................................................................46-47

21 Equal Opportunity ........................................................................................47-48

22 General Obligation--Benefits Conditioned Upon Payment ...............................48
23 Compliance With Civil Rights Laws and Regulations ...................................48-49

Article No. Title Page No.

24 Privacy Act Compliance ..............................................................................49-50

25 Contractor to Pay Certain Miscellaneous Costs ................................................50

26 Water Conservation ......................................................................................50-51

27 Existing or Acquired Water or Water Rights .....................................................52

28 Operation and Maintenance by Non-Federal Entity .....................................52-54

29 Contingent on Appropriation or Allotment of Funds .........................................54

30 Books, Records, and Reports.............................................................................54

31 Assignment Limited--Successors and Assigns Obligated .................................55

32 Severability ...................................................................................................55-56

33 Resolution of Disputes ........................................................................................56

34 Officials Not to Benefit ......................................................................................56

35 Changes in Contractor's Service Area ...........................................................56-57

36 Federal Laws......................................................................................................57

37 Notices...............................................................................................................57

38 Confirmation of Contract......................................................................................58

Signature Page

Exhibit A

Exhibit B
Contract No. I75r-2555-LTR1

1 UNITED STATES

2 DEPARTMENT OF THE INTERIOR

3 BUREAU OF RECLAMATION

4 Central Valley Project, California

5 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

6 AND

7 STONE CORRAL IRRIGATION DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM FRIANT DIVISION

THIS CONTRACT, made this 20th 10 day of January , 2001, in pursuance generally

11 of the Act of June 17, 1902 (32 Stat. 388), and acts amendatory or supplementary thereto, including, but

12 not limited to, the Acts of August 26, 1937 (50 Stat. 844), as amended and supplemented, August 4, 1939

13 (53 Stat. 1187), as amended and supplemented, July 2, 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68),

14 October 12, 1982 (96 Stat. 1262), October 27, 1986 (100 Stat. 3050), as amended, and Title XXXIV of

15 the Act of October 30, 1992 (106 Stat. 4706), all collectively hereinafter referred to as Federal

16 Reclamation law, between THE UNITED STATES OF AMERICA, hereinafter referred to as the United

17 States, and STONE CORRAL IRRIGATION DISTRICT, hereinafter referred to as the Contractor, a

18 public agency of the State of California, duly organized, existing, and acting pursuant to the laws thereof,

19 with its principal place of business in California;

20 WITNESSETH, That:

21 EXPLANATORY RECITALS

[1st 22 ] WHEREAS, the United States has constructed and is operating the Central Valley Project,

23 California, for diversion, storage, carriage, distribution and beneficial use, for flood control, irrigation,
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24 municipal, domestic, industrial, fish and wildlife mitigation, protection and restoration, generation and

25 distribution of electric energy, salinity control, navigation and other beneficial uses, of waters of the

26 Sacramento River, the American River, the Trinity River, and the San Joaquin River and their tributaries; and

[2nd 27 ] WHEREAS, the United States constructed Friant Dam (thereby creating Millerton Lake)

28 and the Friant-Kern and Madera Canals, hereinafter collectively referred to as the Friant Division facilities,

29 which will be used in part for the furnishing of water to the Contractor pursuant to the terms of this Contract;

30 and

[3rd 31 ] WHEREAS, pursuant to Section 8 of the Act of June 17, 1902 (32 Stat. 388), the United

32 States has acquired water rights and other rights to the flows of the San Joaquin River, including without

33 limitation the permits issued as the result of Decision 935 by the California State Water Resource Control

34 Board and the contracts described in subdivision (n) of Article 3 of this Contract, pursuant to which the

35 Contracting Officer develops, diverts, stores and delivers Project Water stored or flowing through Millerton

36 Lake in accordance with State and Federal law for the benefit of Project Contractors in the Friant Division;

37 and

38 [3.1] WHEREAS, the water supplied to the Contractor pursuant to this Contract is Project Water

39 developed through the exercise of the rights described in the third (3rd) Explanatory Recital of this Contract;

40 and

[4th 41 ] WHEREAS, the Contractor and the United States entered into Contract No. I75r-2555, as

42 amended, which established terms for the delivery to the Contractor of Project Water from the Friant

43 Division from December 13, 1950, to February 28, 1991; and
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[5th 44 ] WHEREAS, the Contractor and the United States entered into Renewal Contract 

45 No. I75r-2555R, which provided for continued water service to the Contractor from the Friant Division

46 from March 1, 1991, through February 28, 2029, but, in light of the Ninth Circuit Court of Appeals Opinion

47 in the lawsuit entitled Natural Resources Defense Council, et al. v. Roger Patterson, et al., that contract was

48 replaced by Interim Renewal Contract No. I75r-2555-IR1, dated July 10, 1998, which provides for

49 continued water service to the Contractor from the Friant Division from September 14, 1998, through

50 February 28, 2001; and

[6th 51 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of interim and

52 existing long-term Project Water service contracts following completion of appropriate environmental

53 documentation, including a programmatic environmental impact statement (PEIS) pursuant to the National

54 Environmental Policy Act analyzing the direct and indirect impacts and benefits of implementing the CVPIA

55 and the potential renewal of all existing contracts for Project Water; and

[7th 56 ] WHEREAS, the United States has completed the PEIS and all other appropriate

57 environmental review necessary to provide for long-term renewal of the Existing Contract; and

[8th 58 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing Contract,

59 pursuant to the terms of the Existing Contract, Federal Reclamation law, and the laws of the State of

60 California, for water service from the Central Valley Project; and

[9th 61 ] WHEREAS, the United States has determined that the Contractor has fulfilled all of its

62 obligations under the Existing Contract; and
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[10th 63 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting Officer

64 that the Contractor has utilized the Project Water supplies available to it for reasonable and beneficial use

65 and/or has demonstrated projected future demand for water use such that the Contractor has the capability

66 and expects to utilize fully for reasonable and beneficial use the quantity of Project Water to be made

67 available to it pursuant to this Contract; and

[11th 68 ] WHEREAS, water obtained from the Central Valley Project has been relied upon by urban

69 and agricultural areas within California for more than fifty (50) years, and is considered by the Contractor as

70 an essential portion of its water supply; and

[12th 71 ] WHEREAS, the economies of regions within the Central Valley Project, including the

72 Contractor’s, depend upon the continued availability of water, including water service from the Central

73 Valley Project; and

[13th 74 ] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships to

75 pursue measures to improve water supply, water quality, and reliability of the Project for all Project

76 purposes; and

[14th 77 ] WHEREAS, the mutual goals of the United States and the Contractor include: to provide

78 for reliable Project Water supplies; to control costs of those supplies; to achieve repayment of the Central

79 Valley Project as required by law; to guard reasonably against Project Water shortages; to achieve a

80 reasonable balance among competing demands for use of Project Water; and to comply with all applicable

81 environmental statutes, all consistent with the legal obligations of the United States relative to the Central

82 Valley Project; and
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[15th 83 ] Omitted;

84 [15.1] WHEREAS, during Uncontrolled Seasons, Friant Division Project Contractors utilize

85 undependable Class 2 Water in their service areas to, among other things, assist in the management and

86 alleviation of groundwater overdraft in the Friant Division service area, provide opportunities for

87 environmental enhancement, including restoration of the San Joaquin River below Friant Dam, minimize

88 flooding along the San Joaquin River, encourage optimal water management, and maximize the reasonable

89 and beneficial use of the water; and

90 [15.2] WHEREAS, the parties desire and intend that this Contract not provide a disincentive to

91 the Friant Division Project Contractors continuing to carry out the beneficial activities set out in the

92 Explanatory Recital immediately above; and

[16th 93 ] WHEREAS, the United States and the Contractor are willing to enter into this Contract

94 pursuant to Federal Reclamation law on the terms and conditions set forth below;

95 NOW, THEREFORE, in consideration of the mutual and dependent covenants herein contained, it

96 is hereby mutually agreed by the parties hereto as follows:

97 DEFINITIONS

98 1. When used herein unless otherwise distinctly expressed, or manifestly incompatible with the

99 intent of the parties as expressed in this Contract, the term:

100 (a) “Calendar Year” shall mean the period January 1 through December 31, both dates

101 inclusive;

102 (b) “Charges” shall mean the payments required by Federal Reclamation law in addition
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103 to the Rates and Tiered Pricing Components specified in this Contract as determined annually by the

104 Contracting Officer pursuant to this Contract;

105 (b2) "Class 1 Water" shall mean that supply of water stored in or flowing through

106 Millerton Lake which, subject to the contingencies hereinafter described in Articles 3, 11, and 12 of this

107 Contract, will be available for delivery from Millerton Lake and the Friant-Kern and Madera Canals as a

108 dependable water supply during each Year;

109 (b3) "Class 2 Water" shall mean that supply of water which can be made available

110 subject to the contingencies hereinafter described in Articles 3, 11, and 12 of this Contract for delivery from

111 Millerton Lake and the Friant-Kern and Madera Canals in addition to the supply of Class 1 Water. 

112 Because of its uncertainty as to availability and time of occurrence, such water will be undependable in

113 character and will be furnished only if, as, and when it can be made available as determined by the

114 Contracting Officer;

115 (c) “Condition of Shortage” shall mean a condition respecting the Project during any

116 Year such that the Contracting Officer is unable to deliver sufficient water to meet the Contract Total;

117 (d) “Contracting Officer” shall mean the Secretary of the Interior’s duly authorized

118 representative acting pursuant to this Contract or applicable Reclamation law or regulation;

119 (e) “Contract Total” shall mean the maximum amount of Class 1 Water, plus the

120 maximum amount of Class 2 Water to which the Contractor is entitled under subdivision (a) of Article 3 of

121 this Contract;

122 (f) “Contractor's Service Area" shall mean the area to which the Contractor is
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123 permitted to provide Project Water under this Contract as described in Exhibit “A” attached hereto, 

124 which may be modified from time to time in accordance with Article 35 of this Contract without amendment

125 of this Contract;

126 (g) “CVPIA” shall mean the Central Valley Project Improvement Act, Title XXXIV of

127 the Act of October 30, 1992 (106 Stat. 4706);

128 (h) “Eligible Lands” shall mean all lands to which Irrigation Water may be delivered in

129 accordance with Section 204 of the Reclamation Reform Act of October 12, 1982 (96 Stat. 1263), as

130 amended, hereinafter referred to as RRA;

131 (i) “Excess Lands” shall mean all lands in excess of the limitations contained in 

132 Section 204 of the RRA, other than those lands exempt from acreage limitation under Federal Reclamation

133 law;

134 (j) “Full Cost Rate” shall mean that water rate described in Sections 205(a)(3) or

135 202(3) of the RRA, whichever is applicable;

136 (k) “Ineligible Lands” shall mean all lands to which Irrigation Water may not be

137 delivered in accordance with Section 204 of the RRA;

138 (l) “Irrigation Full Cost Water Rate” shall have the same meaning as “full cost” as that

139 term is used in paragraph (3) of Section 202 of the RRA;

140 (m) “Irrigation Water” shall mean water made available from the Project that is used

141 primarily in the production of agricultural crops or livestock, including domestic use incidental thereto, and
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142 watering of livestock. Irrigation Water shall not include water used for purposes such as the watering of

143 landscaping or pasture for animals (e.g., horses) which are kept for personal enjoyment or water delivered

144 to landholdings operated in units of less than five (5) acres unless the Contractor establishes to the

145 satisfaction of the Contracting Officer that the use of water delivered to any such landholding is a use

146 described in this subdivision of this Article;

147 (n) “Landholder” shall mean a party that directly or indirectly owns or leases nonexempt

148 land, as provided in 43 CFR 426.2;

149 (n2) “Long Term Historic Average” shall mean the average of the final forecast of Water

Made Available to the Contractor pursuant to this Contract and the contracts referenced in the fourth (4th 150 )

and fifth (5th 151 ) Explanatory Recitals of this Contract;

152 (o) Omitted;

153 (p) “M&I Full Cost Water Rate” shall mean the annual rate, which, as determined by

154 the Contracting Officer, shall amortize the expenditures for construction allocable to Project M&I facilities in

155 service, including, O&M deficits funded, less payments, over such periods as may be required under

156 Federal Reclamation law with interest accruing from the dates such costs were first incurred plus the

157 applicable rate for the O&M of such Project facilities. Interest rates used in the calculation of the M&I Full

158 Cost Rate shall comply with the Interest Rate methodology contained in Section 202 (3) (B) and (C) of the

159 RRA;

160 (q) “Operation and Maintenance” or “O&M" shall mean normal and reasonable care,

161 control, operation, repair, replacement (other than Capital replacement), and maintenance of Project

162 facilities;
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163 (r) “Operating Non-Federal Entity" shall mean the Friant Water Users Authority, a 

164 Non-Federal entity which has the obligation to operate and maintain all or a portion of the Friant Division

165 facilities pursuant to an agreement with the United States, and which may have funding obligations with

166 respect thereto;

167 (r2) "Other Water" shall mean water from the Project other than Irrigation Water as

168 described in subdivision (l) of this Article, which is used for a purpose that is considered to be an irrigation

169 use pursuant to State law such as the watering of landscaping or pasture for animals (e.g., horse) which are

170 kept for the personal enjoyment. For purposes of this Contract, Other Water shall be paid for at Rates and

171 Charges identical to those established for municipal and industrial water pursuant to the then current

172 Municipal and Industrial (M&I) Ratesetting Policy ;

173 (s) “Project” shall mean the Central Valley Project owned by the United States and

174 managed by the Department of the Interior, Bureau of Reclamation;

175 (t) “Project Contractors” shall mean all parties who have water service contracts for

176 Project Water from the Project with the United States pursuant to Federal Reclamation law;

177 (u) “Project Water” shall mean all water that is developed, diverted, stored, or

178 delivered by the Secretary in accordance with the statutes authorizing the Project and in accordance with the

179 terms and conditions of water rights acquired pursuant to California law;

180 (v) “Rates” shall mean the payments determined annually by the Contracting Officer in

181 accordance with the then current applicable water ratesetting policies for the Project, as described in

182 subdivision (a) of Article 7 of this Contract;
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183 (w) Omitted;

184 (x) “Secretary” shall mean the Secretary of the Interior, a duly appointed successor, or

185 an authorized representative acting pursuant to any authority of the Secretary and through any agency of the

186 Department of the Interior;

187

188 (y) “Tiered Pricing Component” shall be the incremental amount to be paid for each

189 acre-foot of Water Delivered as described in subdivision (j) of Article 7 of this Contract; 

190 (z) “Water Delivered” or “Delivered Water” shall mean Project Water diverted for use

191 by the Contractor at the point(s) of delivery approved by the Contracting Officer;

192 (aa) “Water Made Available” shall mean the estimated amount of Project Water that can

193 be delivered to the Contractor for the upcoming Year as declared by the Contracting Officer, pursuant to

194 subdivision (a) of Article 4 of this Contract;

195 (bb) “Water Scheduled” shall mean Project Water made available to the Contractor for

196 which times and quantities for delivery have been established by the Contractor and Contracting Officer,

197 pursuant to subdivision (b) of Article 4 of this Contract; and

198 (cc) "Year" shall mean the period from and including March 1 of each Calendar Year

199 through the last day of February of the following Calendar Year.

200 TERM OF CONTRACT 

201 2. (a) This Contract shall be effective March 1, 2001, through February 28, 2026. In the

202 event the Contractor wishes to renew the Contract beyond February 28, 2026, the Contractor shall submit
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203 a request for renewal in writing to the Contracting Officer no later than two (2) years prior to the date this

204 Contract expires. The renewal of this Contract insofar as it pertains to the furnishing of Irrigation Water to

205 the Contractor shall be governed by subdivision (b) of this Article.

206 (b) (1) Under terms and conditions of a renewal contract that are mutually

207 agreeable to the parties hereto, and upon a determination by the Contracting Officer that at the time of

208 contract renewal the conditions set forth in subdivision (b)(2) of this Article are met, and subject to Federal

209 and State law, this Contract, insofar as it pertains to the furnishing of Irrigation Water to the Contractor, shall

210 be renewed for a period of twenty-five (25) years.

211 (2) The conditions which must be met for this Contract to be renewed are: (i)

212 the Contractor has prepared a water conservation plan that has been determined by the Contracting Officer

213 in accordance with Article 26 of this Contract to meet the conservation and efficiency criteria for evaluating

214 such plans established under Federal law; (ii) the Contractor is implementing an effective water conservation

215 and efficiency program based on the Contractor’s water conservation plan as required by Article 26 of this

216 Contract; (iii) the Contractor is operating and maintaining all water measuring devices and implementing all

217 water measurement methods as approved by the Contracting Officer pursuant to Article 6 of this Contract;

218 (iv) the Contractor has reasonably and beneficially used the Project Water supplies made available to it and,

219 based on projected demands, is reasonably anticipated and expects fully to utilize for reasonable and

220 beneficial use the quantity of Project Water to be made available to it pursuant to such renewal; (v) the

221 Contractor is complying with all terms and conditions of this Contract and all legal obligations of the

222 Contractor, if any, set forth in an enforceable court order, final judgment and/or settlement relating to
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223 restoration of the San Joaquin River; and (vi) the Contractor has the physical and legal ability to deliver

224 Project Water.

225 (3) The terms and conditions of the renewal contract described in subdivision

226 (b)(1) of this Article and any subsequent renewal contracts shall be developed consistent with the parties’

227 respective legal rights and obligations, and in consideration of all relevant facts and circumstances, as those

228 circumstances exist at the time of renewal, including, without limitation, the Contractor’s need for continued

229 delivery of Project Water; environmental conditions affected by implementation of the Contract to be

230 renewed, and specifically changes in those conditions that occurred during the life of the Contract to be

231 renewed; the Secretary’s progress toward achieving the purposes of the CVPIA as set out in Section 3402

232 and in implementing the specific provisions of the CVPIA; and current and anticipated economic

233 circumstances of the region served by the Contractor.

234 (c) This Contract, insofar as it pertains to the furnishing of Other Water to the

235 Contractor, shall be renewed for a period of twenty-five (25) years and thereafter shall be renewed for

236 successive periods of up to forty (40) years each, which periods shall be consistent with the then-existing

237 Reclamation-wide policy, under terms and conditions mutually agreeable to the parties and consistent with

238 Federal and State law. The present Reclamation-wide policy, dated March 20, 2000, provides that the

239 term of such contracts shall be no more than twenty-five (25) years each, subject to a variance to allow a

240 longer term in appropriate circumstances. The Contractor shall be afforded the opportunity to comment to

241 the Contracting Officer on the proposed adoption and application of any revised Reclamation-wide policy

242 applicable to the delivery of Project Other Water that would affect the term of any subsequent renewal
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243 contract with the Contractor for the furnishing of Other Water.

244 (d) The Contracting Officer anticipates that by December 31, 2024, all authorized

245 Project construction expected to occur will have occurred, and on that basis the Contracting Officer agrees

246 by that date to allocate all costs that are properly assignable to the Contractor, and agrees further that, at

247 any time after such allocation is made, and subject to satisfaction of the conditions set out in this subdivision

248 of this Article, this Contract shall, at the request of the Contractor, be converted to a contract under

249 subsection (c)(1) and (d) of Section 9, of the Reclamation Project Act of 1939, subject to applicable

250 Federal law and under stated terms and conditions mutually agreeable to the Contractor and the Contracting

251 Officer. A condition for such conversion to occur shall be a determination by the Contracting Officer that,

252 account being taken of the amount credited to return by the Contractor as provided for under Reclamation

253 law, the remaining amount of construction costs assignable for ultimate return by the Contractor can

254 probably be repaid to the United States within the term of a contract under said subsection 9(c)(1) and (d). 

255 If the remaining amount of costs that are properly assignable to the Contractor cannot be determined by

256 December 31, 2024, the Contracting Officer shall notify the Contractor, and provide the reason(s) why such

257 a determination could not be made. Further, the Contracting Officer shall make such a determination as

258 soon thereafter as possible so as to permit, upon request of the Contractor and satisfaction of the conditions

259 set out above, conversion to a contract under said subsection 9(c)(1) and (d). In the event such

260 determination of costs has not been made at a time which allows conversion of this Contract during the term

261 of this Contract or the Contractor has not requested conversion of this Contract within such term, the parties

262 shall incorporate in any subsequent renewal contract as described in Articles 2(b) and (c) a provision that

263 carries forth in substantially identical terms the provisions of this Article 2(d). In the event the Contracting
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264 Officer is able to make a determination of the remaining amount of costs that are properly assignable to the

265 Contractor before December 31, 2024, the Contracting Officer shall do so at the earliest time he/she has

266 such ability.

267 (e) The parties hereto acknowledge and agree that Part A of Contract 

268 No. I75r-2555, hereinafter referred to as the Original Contract, as amended, is replaced by this Contract.

269 The respective duties, covenants, and obligations of the parties in Original Contract, as amended, which are

270 not replaced by this Contract shall continue in full force and effect, pending prompt completion of good faith

271 negotiations between the parties to agree upon an amendatory contract. Part B of the Original Contract

272 provides for the construction, operation, maintenance and repayment of a distribution system which part

273 remains in force and effect.

274 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

275 3. (a) During each Year, consistent with all applicable State water rights, permits, and

276 licenses; Federal law; and subject to the provisions set forth in Articles 11 and 12 of this Contract, the

277 Contracting Officer shall make available for delivery to the Contractor 10,000 acre-feet of Class 1 Water

278 for irrigation purposes. The quantity of Water Delivered to the Contractor in 

279 accordance with this subdivision shall be scheduled and paid for pursuant to the provisions of Articles 4 and

280 7 of this Contract.

281 (b) Omitted.

282 (c) The Contractor shall utilize the Project Water in accordance with all applicable legal

283 requirements.
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284 (d) The Contractor shall make reasonable and beneficial use of all Project Water or

285 other water furnished pursuant to this Contract. Groundwater recharge programs, groundwater banking

286 programs, surface water storage programs, and other similar programs utilizing Project Water or other water

287 furnished pursuant to this Contract conducted within the Contractor’s Service Area which are consistent

288 with applicable State law and result in use consistent with Reclamation law will be allowed; Provided, That

289 any direct recharge program(s) is (are) described in the Contractor’s Water Conservation Plan submitted

290 pursuant to Article 26 of this Contract; Provided, further, That such Water Conservation Plan demonstrates

291 sufficient lawful uses exist in the Contractor’s Service Area so that using a long-term average, the quantity of

292 Delivered Water is demonstrated to be reasonable for such uses and in compliance with Reclamation law. 

293 Groundwater recharge programs, groundwater banking programs, surface water storage programs, and

294 other similar programs utilizing Project Water or other water furnished pursuant to this Contract conducted

295 outside the Contractor’s Service Area may be permitted upon written approval of the Contracting Officer,

296 which approval will be based upon environmental documentation, Project Water rights, and Project

297 operational concerns. The Contracting Officer will address such concerns in regulations, policies, or

298 guidelines.

299 (e) The Contractor shall comply with requirements applicable to the Contractor in

300 biological opinion(s) prepared as a result of a consultation regarding the execution of this Contract

301 undertaken pursuant to Section 7 of the Endangered Species Act of 1973, as amended, that are within the

302 Contractor’s legal authority to implement. The Contractor shall comply with the limitations or requirements

303 imposed by environmental documentation applicable to the Contractor and within its legal authority to
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304 implement regarding specific activities. Nothing herein shall be construed to prevent the Contractor from

305 challenging or seeking judicial relief in a court of competent jurisdiction with respect to any biological opinion

306 or other environmental documentation referred to in this Article.

307 (f) Subject to subdivisions (l) and (n) of Article 3 of this Contract, following the

308 declaration of Water Made Available under Article 4 of this Contract, the Contracting Officer will make a

309 determination whether Project Water, or other water available to the Project, can be made available to the

310 Contractor in addition to the Contract Total under Article 3 of this Contract during the Year without

311 adversely impacting other Project Contractors. At the request of the Contractor, the Contracting Officer

312 will consult with the Contractor prior to making such a determination. Subject to subdivisions (l) and (n) of

313 Article 3 of this Contract, if the Contracting Officer determines that Project Water, or other water available

314 to the Project, can be made available to the Contractor, the Contracting Officer will announce the availability

315 of such water and shall so notify the Contractor as soon as practical. The Contracting Officer will thereafter

316 meet with the Contractor and other Project Contractors capable of taking such water to determine the most

317 equitable and efficient allocation of such water. If the Contractor requests the delivery of any quantity of

318 such water, the Contracting Officer shall make such water available to the Contractor in accordance with

319 applicable statutes, regulations, guidelines, and policies.

320 (g) The Contractor may request permission to reschedule for use during the subsequent

321 Year some or all of the Water Made Available to the Contractor during the current Year referred to as

322 “carryover.” The Contractor may request permission to use during the current Year a quantity of Project

323 Water which may be made available by the United States to the Contractor during the subsequent Year
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324 referred to as “preuse.” The Contracting Officer’s written approval may permit such uses in accordance

325 with applicable statutes, regulations, guidelines, and policies.

326 (h) The Contractor’s right pursuant to Federal Reclamation law and applicable State

327 law to the reasonable and beneficial use of Water Delivered pursuant to this Contract during the term thereof

328 and any subsequent renewal contracts, as described in Article 2 of this Contract, during the terms thereof

329 shall not be disturbed so long as the Contractor shall fulfill all of its obligations under this Contract and any

330 renewals thereof. Nothing in the preceding sentence shall affect the Contracting Officer’s ability to impose

331 shortages under Article 11 or subdivision (b) of Article 12 of this Contract or applicable provisions of any

332 subsequent renewal contracts.

333 (i) Project Water furnished to the Contractor pursuant to this Contract may be

334 delivered for purposes other than those described in subdivisions (m) and (r2) of Article 1 of this Contract

335 upon written approval by the Contracting Officer in accordance with the terms and conditions of such

336 approval.

337 (j) The Contracting Officer shall make reasonable efforts to protect the water rights and

338 other rights described in the third (3rd) Explanatory Recital of this Contract and to provide the water

339 available under this Contract. The Contracting Officer shall not object to participation by the Contractor, in

340 the capacity and to the extent permitted by law, in administrative proceedings related to the water rights and

341 other rights described in the third (3rd) Explanatory Recital of this 

342 Contract; Provided, however, That the Contracting Officer retains the right to object to the substance of the

343 Contractor’s position in such a proceeding.
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344 (k) Project Water furnished to the Contractor during any month designated in a

345 schedule or revised schedule submitted by the Contractor and approved by the Contracting Officer shall be

346 deemed to have been accepted by the Contractor as Class 1 Water to the extent that Class 1 Water is

347 called for in such schedule for such month and shall be deemed to have been accepted as Class 2 Water to

348 the extent Class 2 Water is called for in such schedule for such month. If in any month the Contractor

349 diverts a quantity of water in addition to the total amount of Class 1 Water and Class 2 Water set forth in

350 the Contractor's approved schedule or revised schedule for such month, such additional diversions shall be

351 charged first against the Contractor's remaining Class 2 Water supply available in the current Year. To the

352 extent the Contractor's remaining Class 2 Water supply available in the current Year is not sufficient to

353 account for such additional diversions, such additional diversions shall be charged against the Contractor's

354 remaining Class 1 Water supply available in the current Year. To the extent the Contractor's remaining

355 Class 1 Water and Class 2 Water supplies available in the current Year are not sufficient to account for such

356 additional diversions, such additional diversions shall be charged first against the Contractor's available

357 Class 2 Water supply and then against the Contractor's available Class 1 Water supply, both for the

358 following Year. Payment for all additional diversions of water shall be made in accordance with Article 7 of

359 this Contract.

360 (l) If the Contracting Officer determines there is a Project Water supply available at

361 Friant Dam as the result of an unusually large water supply not otherwise storable for Project purposes or

362 infrequent and otherwise unmanaged flood flows of short duration, such water will be made available to the

363 Contractor and others under Section 215 of the RRA pursuant to the priorities specified below if the
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364 Contractor enters into a temporary contract with the United States not to exceed one (1) year for the

365 delivery of such water or, as otherwise provided for in Federal Reclamation law and associated regulations. 

366 Such water may be identified by the Contractor either (i) as additional water to supplement the supply of

367 Class 1 Water and/or Class 2 Water made available to it pursuant to this Contract or, (ii) upon written

368 notification to the Contracting Officer, as water to be credited against the Contractor's Class 2 Water supply

369 available pursuant to this Contract. The Contractor shall deliver such water to Eligible Lands, or to Excess

370 Lands in accordance with this Article. The Contracting Officer shall make water determined to be available

371 pursuant to this subsection according to the following priorities: first, to long-term contractors for Class 1

372 Water and/or Class 2 Water within the Friant Division; second, to long-term contractors in the Cross Valley

373 Division of the Project. The Contracting Officer will consider and seek to accommodate requests from

374 other parties for Section 215 Water for use within the area identified as the Friant Division service area in

375 the environmental assessment developed in connection with the execution of this Contract.

376 (m) Nothing in this Contract, nor any action or inaction of the Contractor or Contracting

377 Officer in connection with the implementation of this Contract, is intended to override, modify, supersede or

378 otherwise interfere with any term or condition of the water rights and other rights referred in the third (3rd)

379 Explanatory Recital of this Contract.

380 (n) The rights of the Contractor under this Contract are subject to the terms of the

381 contract for exchange waters, dated July 27, 1939, between the United States and the San Joaquin and

382 Kings River Canal and Irrigation Company, Incorporated, et al., (hereinafter referred to as the Exchange

383 Contractors), Contract No. I1r-1144, as amended. The United States agrees that it will not deliver to the

384 Exchange Contractors thereunder waters of the San Joaquin River unless and until required by the terms of
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385 said contract, and the United States further agrees that it will not voluntarily and knowingly determine itself

386 unable to deliver to the Exchange Contractors entitled thereto from water that is available or that may

387 become available to it from the Sacramento River and its tributaries or the Sacramento-San Joaquin Delta

388 those quantities required to satisfy the obligations of the United States under said Exchange Contract and

389 under Schedule 2 of the Contract for Purchase of Miller and Lux Water Rights (Contract I1r-1145, dated

390 July 27, 1939).

391 TIME FOR DELIVERY OF WATER

392 4. (a) On or about February 20 of each Calendar Year, the Contracting Officer shall

393 announce the Contracting Officer’s expected declaration of the Water Made Available. The declaration will

394 be updated monthly, and more frequently if necessary, based on then-current operational and hydrologic

395 conditions and a new declaration with changes, if any, to the Water Made Available will be made. The

396 Contracting Officer shall provide forecasts of Project operations and the basis of the estimate, with relevant

397 supporting information, upon the written request of the Contractor. Concurrently with the declaration of the

398 Water Made Available, the Contracting Officer shall provide the Contractor with the updated Long Term

399 Historic Average. The declaration of Project operations will be expressed in terms of both Water Made

400 Available and the Long Term Historic Average.

401 (b) On or before each March 1 and at such other times as necessary, the Contractor

402 shall submit to the Contracting Officer a written schedule, satisfactory to the Contracting Officer, showing

403 the monthly quantities of Project Water to be delivered by the United States to the Contractor pursuant to

404 this Contract for the Year commencing on such March 1. The Contracting Officer shall use all reasonable
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405 means to deliver Project Water according to the approved schedule for the Year commencing on such

406 March 1.

407 (c) The Contractor shall not schedule Project Water in excess of the quantity of Project

408 Water the Contractor intends to put to reasonable and beneficial use within the Contractor's Service Area,

409 or to sell, transfer or exchange pursuant to Article 9 of this Contract during any Year.

410 (d) Subject to the conditions set forth in subdivision (a) of Article 3 of this Contract, the

411 United States shall deliver Project Water to the Contractor in accordance with the initial schedule submitted

412 by the Contractor pursuant to subdivision (b) of this Article, or any written revision(s), satisfactory to the

413 Contracting Officer, thereto submitted within a reasonable time prior to the date(s) on which the requested

414 change(s) is/are to be implemented; Provided, That the total amount of water requested in that schedule or

415 revision does not exceed the quantities announced by the Contracting Officer pursuant to the provisions of

416 subdivision (a) of Article 3, and the Contracting Officer determines that there will be sufficient capacity

417 available in the appropriate Friant Division facilities to deliver the water in accordance with that schedule:

418 Provided, further, That the Contractor shall not schedule the delivery of any water during any period as to

419 which the Contractor is notified by the Contracting Officer or Operating Non-Federal Entity that Project

420 facilities required to make deliveries to the Contractor will not be in operation because of scheduled O&M.

421 (e) The Contractor may, during the period from and including November 1 of each

422 Year through and including the last day of February of that Year, request delivery of any amount of the

423 Class 1 Water estimated by the Contracting Officer to be made available to it during the following Year. 

424 The Contractor may, during the period from and including January 1 of each Year (or such earlier date as
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425 may be determined by the Contracting Officer) through and including the last day of February of that Year,

426 request delivery of any amount of Class 2 Water estimated by the Contracting Officer to be made available

427 to it during the following Year. Such water shall hereinafter be referred to as preuse water. Such request

428 must be submitted in writing by the Contractor for a specified quantity of preuse and shall be subject to the

429 approval of the Contracting Officer. Payment for preuse water so requested shall be at the appropriate

430 rate(s) for the following Year in accordance with Article 7 of this Contract and shall be made in advance of

431 delivery of any preuse water. The Contracting Officer shall deliver such preuse water in accordance with a

432 schedule or any revision thereof submitted by the Contractor and approved by the Contracting Officer, to

433 the extent such water is available and to the extent such deliveries will not interfere with the delivery of

434 Project Water entitlements to other Friant Division contractors or the physical maintenance of the Project

435 facilities. The quantities of preuse water delivered pursuant to this subdivision shall be deducted from the

436 quantities of water that the Contracting Officer would otherwise be obligated to make available to the

437 Contractor during the following Year; Provided, That the quantity of preuse water to be deducted from the

438 quantities of either Class 1 Water or Class 2 Water to be made available to the Contractor in the following

439 Year shall be specified by the Contractor at the time the preuse water is requested or as revised in its first

440 schedule for the following Year submitted in accordance with subdivision (b) of this Article, based on the

441 availability of the following Year water supplies as determined by the Contracting Officer.

442 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

443 5. (a) Project Water scheduled pursuant to subdivision (b) of Article 4 of this Contract

444 shall be delivered to the Contractor at a point or points of delivery either on Project facilities or another
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445 location or locations mutually agreed to in writing by the Contracting Officer and the Contractor.

446 (b) The Contracting Officer, the Operating Non-Federal Entity, or other appropriate

447 entity shall make all reasonable efforts to maintain sufficient flows and levels of water in the Friant-Kern

448 Canal to deliver Project Water to the Contractor at specific turnouts established pursuant to subdivision (a)

449 of this Article.

450 (c) The Contractor shall deliver Irrigation Water and Other Water in accordance with

451 any applicable land classification provisions of Federal Reclamation law and the associated 

452 regulations. The Contractor shall not deliver Project Water to land outside the Contractor's Service Area

453 unless approved in advance by the Contracting Officer.

454 (d) All Water Delivered to the Contractor pursuant to this Contract shall be measured

455 and recorded with equipment furnished, installed, operated, and maintained by the United States, the

456 Operating Non-Federal Entity or other appropriate entity as designated by the Contracting Officer

457 (hereafter “other appropriate entity”) at the point or points of delivery established pursuant to subdivision (a)

458 of this Article. Upon the request of either party to this Contract, the Contracting Officer shall investigate, or

459 cause to be investigated by the responsible Operating Non-Federal Entity, the accuracy of such

460 measurements and shall take any necessary steps to adjust any errors appearing therein. For any period of

461 time when accurate measurements have not been made, the Contracting Officer shall consult with the

462 Contractor and the responsible Operating Non-Federal Entity prior to making a final determination of the

463 quantity delivered for that period of time.
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464 (e) Neither the Contracting Officer nor any Operating Non-Federal Entity shall be

465 responsible for the control, carriage, handling, use, disposal, or distribution of Project Water Delivered to

466 the Contractor pursuant to this Contract beyond the delivery points specified in subdivision (a) of this

467 Article. The Contractor shall indemnify the United States, its officers, employees, agents, and assigns on

468 account of damage or claim of damage of any nature whatsoever for which there is legal responsibility,

469 including property damage, personal injury, or death arising out of or connected with the control, carriage,

470 handling, use, disposal, or distribution of such Project Water beyond such delivery points, except for any

471 damage or claim arising out of: (i) acts or omissions of the Contracting Officer or any of its officers,

472 employees, agents, or assigns, including any responsible Operating Non-Federal Entity, with the intent of

473 creating the situation resulting in any damage or claim; (ii) willful misconduct of the Contracting Officer or

474 any of its officers, employees, agents, or assigns, including any responsible Operating Non-Federal Entity;

475 (iii) negligence of the Contracting Officer or any of its officers, employees, agents, or assigns including any

476 responsible Operating Non-Federal Entity; or (iv) damage or claims resulting from a malfunction of facilities

477 owned and/or operated by the United States or responsible Operating Non-Federal Entity; Provided, That

478 the Contractor is not the Operating Non-Federal Entity that owned or operated the malfunctioning

479 facility(ies) from which the damage claim arose.

480 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

481 6. (a) The Contractor established a measurement program satisfactory to the Contracting

482 Officer, all surface water delivered for irrigation purposes within the Contractor’s Service Area is measured

483 at each agricultural turnout. The water measuring devices or water measuring methods of comparable
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484 effectiveness must be acceptable to the Contracting Officer. The Contractor shall be responsible for

485 installing, operating, and maintaining and repairing all such measuring devices and implementing all such

486 water measuring methods at no cost to the United States. The Contractor shall use the information obtained

487 from such water measuring devices or water measuring methods to ensure its proper management of the

488 water, to bill water users for water delivered by the Contractor. Nothing herein contained, however, shall

489 preclude the Contractor from establishing and collecting any charges, assessments, or other revenues

490 authorized by California law. The Contractor shall include a summary of all its annual surface water

491 deliveries in the annual report described in subdivision (c) of Article 26 of this Contract.

492 (b) To the extent the information has not otherwise been provided, upon execution of

493 this Contract, the Contractor shall provide to the Contracting Officer a written report describing the

494 measurement devices or water measuring methods being used or to be used to implement subdivision (a) of

495 this Article and identifying the agricultural turnouts or alternative measurement programs approved by the

496 Contracting Officer, at which such measurement devices or water measuring methods are being used, and, if

497 applicable, identifying the locations at which such devices and/or methods are not yet being used including a

498 time schedule for implementation at such locations. The Contracting Officer shall advise the Contractor in

499 writing within sixty (60) days as to the adequacy of, and necessary modifications, if any, of the measuring

500 devices or water measuring methods identified in the Contractor’s report and if the Contracting Officer does

501 not respond in such time, they shall be deemed adequate. If the Contracting Officer notifies the Contractor

502 that the measuring devices or methods are inadequate, the parties shall within sixty (60) days following the

503 Contracting Officer‘s response, negotiate in good faith the earliest practicable date by which the Contractor
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504 shall modify said measuring devices and/or measuring methods as required by the Contracting Officer to

505 ensure compliance with subdivision (a) of this Article.

506 (c) All new surface water delivery systems installed within the Contractor's Service

507 Area after the effective date of this Contract shall also comply with the measurement provisions described in

508 subdivision (a) of this Article.

509 (d) The Contractor shall inform the Contracting Officer and the State of California in

510 writing by April 30 of each Year of the monthly volume of surface water delivered within the Contractor’s

511 Service Area during the previous Year.

512 (e) The Contractor shall inform the Contracting Officer and the Operating 

Non-Federal Entity on or before the twentieth (20th 513 ) calendar day of each month of the quantity of Irrigation

514 and Other Water taken during the preceding month.

515 RATES AND METHOD OF PAYMENT FOR WATER

516 7. (a) The Contractor shall pay the United States as provided in this Article for all

517 Delivered Water at Rates, Charges, and the Tiered Pricing Component established in accordance with: (i)

518 the Secretary’s ratesetting policy for Irrigation Water adopted in 1988 and the Secretary’s then-existing

519 ratesetting policy for M&I Water. Such ratesetting policies shall be amended, modified, or superseded only

520 through a public notice and comment procedure; (ii) applicable Reclamation law and associated rules and

521 regulations, or policies; and (iii) other applicable provisions of this Contract. Payments shall be made by

522 cash transaction, wire, or any other mechanism as may be agreed to in writing by the Contractor and the

523 Contracting Officer. The Rates, Charges, and Tiered Pricing Components applicable to the Contractor
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524 upon execution of this Contract are set forth in Exhibit “B”, as may be revised annually.

525 (b) The Contracting Officer shall notify the Contractor of the Rates, Charges, and

526 Tiered Pricing Components as follows:

527 (1) Prior to July 1 of each Calendar Year, the Contracting Officer shall provide

528 the Contractor an estimate of the Charges for Project Water that will be applied to the period October 1, of

529 the current Calendar Year, through September 30, of the following Calendar Year, and the basis for such

530 estimate. The Contractor shall be allowed not less than two (2) months to review and comment on such

531 estimates. On or before September 15 of each Calendar Year, the Contracting Officer shall notify the

532 Contractor in writing of the Charges to be in effect during the period 

533 October 1 of the current Calendar Year, through September 30, of the following Calendar Year, and such

534 notification shall revise Exhibit “B.”

535 (2) Prior to October 1 of each Calendar Year, the Contracting Officer shall

536 make available to the Contractor an estimate of the Rates and Tiered Pricing Components for Project Water

537 for the following Year and the computations and cost allocations upon which those Rates are based. The

538 Contractor shall be allowed not less than two (2) months to review and comment on such computations and

539 cost allocations. By December 31 of each Calendar Year, the Contracting Officer shall provide the

540 Contractor with the final Rates and Tiered Pricing Components to be in effect for the upcoming Year, and

541 such notification shall revise Exhibit “B.”

542 (c) At the time the Contractor submits the initial schedule for the delivery of Project

543 Water for each Year pursuant to subdivision (b) of Article 4 of this Contract, the Contractor shall make an
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544 advance payment to the United States equal to the total amount payable pursuant to the applicable Rate(s)

545 set under subdivision (a) of this Article, for the Project Water scheduled to be delivered pursuant to this

546 Contract during the first two (2) calendar months of the Year. Before the end of the first month and before

547 the end of each calendar month thereafter, the Contractor shall make an advance payment to the United

548 States, at the Rate(s) set under subdivision (a) of this Article, for the Water Scheduled to be delivered

549 pursuant to this Contract during the second month immediately following. Adjustments between advance

550 payments for Water Scheduled and payments at Rates due for Water Delivered shall be made before the

551 end of the following month; Provided, That any revised schedule submitted by the Contractor pursuant to

552 Article 4 of this Contract which increases the amount of Water Delivered pursuant to this Contract during

553 any month shall be accompanied with appropriate advance payment, at the Rates then in effect, to assure

554 that Project Water is not delivered to the Contractor in advance of such payment. In any month in which the

555 quantity of Water Delivered to the Contractor pursuant to this Contract equals the quantity of Water

556 Scheduled and paid for by the Contractor, no additional Project Water shall be delivered to the Contractor

557 unless and until an advance payment at the Rates then in effect for such additional Project Water is made. 

558 Final adjustment between the advance payments for the Water Scheduled and payments for the quantities of

559 Water Delivered during each Year pursuant to this Contract shall be made as soon as practicable but no

560 later than April 30th of the following Year, or sixty (60) days after the delivery of Project Water carried

561 over under subdivision (f) of Article 3 of this Contract if such water is not delivered by the last day of

562 February.

563 (d) The Contractor shall also make a payment in addition to the Rate(s) in subdivision
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564 (c) of this Article to the United States for Water Delivered, at the Charges and the appropriate Tiered

565 Pricing Component then in effect, before the end of the month following the month of delivery; Provided,

566 That the Contractor may be granted an exception from the Tiered Pricing Component pursuant to

567 subdivision (j)(2) of this Article. The payments shall be consistent with the quantities of Irrigation Water and

568 Other Water Delivered as shown in the water delivery report for the subject month prepared by the

569 Operating Non-Federal Entity or, if there is no Operating Non-Federal Entity, by the Contracting Officer. 

570 Such water delivery report shall be the basis for payment of Charges and Tiered Pricing Components by the

571 Contractor, and shall be provided to the Contractor by the Operating Non-Federal Entity or the Contracting

572 Officer (as applicable) within 

573 five (5) days after the end of the month of delivery. The water delivery report shall be deemed a bill for the

574 payment of Charges and the applicable Tiered Pricing Component for Water Delivered. Adjustment for

575 overpayment or underpayment of Charges shall be made through the adjustment of payments due to the

576 United States for Charges for the next month. Any amount to be paid for past due payment of Charges and

577 the Tiered Pricing Component shall be computed pursuant to Article 20 of this Contract.

578 (e) The Contractor shall pay for any Water Delivered under subdivision (d), (f), or (g)

579 of Article 3 of this Contract as determined by the Contracting Officer pursuant to applicable statutes,

580 associated regulations, any applicable provisions of guidelines or ratesetting policies; Provided, That the

581 Rate for Water Delivered under subdivision (d) of Article 3 of this Contract shall be no more than the

582 otherwise applicable Rate for Irrigation Water or Other Water under subdivision (a) of this Article.

583 (f) Payments to be made by the Contractor to the United States under this Contract
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584 may be paid from any revenues available to the Contractor.

585 (g) All revenues received by the United States from the Contractor relating to the

586 delivery of Project Water or the delivery of non-project water through Project facilities shall be allocated

587 and applied in accordance with Federal Reclamation law and the associated rules or regulations, and the

588 then current Project ratesetting policies for M&I Water or Irrigation Water.

589 (h) The Contracting Officer shall keep its accounts pertaining to the administration of the

590 financial terms and conditions of its long-term contracts, in accordance with applicable Federal standards, so

591 as to reflect the application of Project costs and revenues. The Contracting Officer shall, each Year upon

592 request of the Contractor, provide to the Contractor a detailed accounting of all Project and Contractor

593 expense allocations, the disposition of all Project and Contractor revenues, and a summary of all water

594 delivery information. The Contracting Officer and the Contractor shall enter into good faith negotiations to

595 resolve any discrepancies or disputes relating to accountings, reports, or information.

596 (i) The parties acknowledge and agree that the efficient administration of this Contract

597 is their mutual goal. Recognizing that experience has demonstrated that mechanisms, policies, and

598 procedures used for establishing Rates, Charges, and Tiered Pricing Components, and/or for making and

599 allocating payments, other than those set forth in this Article may be in the mutual best interest of the parties,

600 it is expressly agreed that the parties may enter into agreements to modify the mechanisms, policies, and

601 procedures for any of those purposes while this Contract is in effect without amending this Contract.

602 (j) (1) Beginning at such time as the total of the deliveries of Class 1 Water and

603 Class 2 Water in a Year exceed eighty (80%) percent of the Contract Total, then before the end of the
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604 month following the month of delivery the Contractor shall make an additional payment to the United States

605 equal to the applicable Tiered Pricing Component. The Tiered Pricing Component for the total of the

606 deliveries of Class 1 Water and Class 2 Water in excess of eighty (80%) percent of the Contract Total, but

607 less than or equal to ninety (90%) percent of the Contract Total, shall equal the one-half of the difference

608 between the Rate established under subdivision (a) of Article 7 of this Contract and the Irrigation Full Cost

609 Water Rate or M&I Full Cost Water Rate, whichever is applicable. The Tiered Pricing Component for the

610 total of the deliveries of Class 1 Water and Class 2 Water which exceeds ninety (90%) percent of the

611 Contract Total shall equal the difference between (i) the Rate established under subdivision (a) of Article 7

612 of this Contract and (ii) the Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is

613 applicable.

614 (2) Subject to the Contracting Officer’s written approval, the Contractor may

615 request and receive an exemption from such Tiered Pricing Components for Project Water delivered to

616 produce a crop which the Contracting Officer determines will provide significant and quantifiable habitat

617 values for waterfowl in fields where the water is used and the crops are produced; Provided, That the

618 exemption from the Tiered Pricing Components for Irrigation Water shall apply only if such habitat values

619 can be assured consistent with the purposes of CVPIA through binding agreements executed with or

620 approved by the Contracting Officer prior to use of such water.

621 (3) For purposes of determining the applicability of the Tiered Pricing

622 Components pursuant to this Article, Water Delivered shall include Project Water that the Contractor

623 transfers to others but shall not include Project Water transferred and delivered to the Contractor.
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624 (k) For the term of this Contract, Rates under the respective ratesetting policies will be

625 established to recover only reimbursable “operation and maintenance” (including any deficits) and capital

626 costs of the Project, as those terms are used in the then-current Project ratesetting policies, and interest,

627 where appropriate, except in instances where a minimum Rate is applicable in accordance with the relevant

628 Project ratesetting policy. Changes of significance in practices which implement the Contracting Officer’s

629 ratesetting policies will not be implemented until the Contracting Officer has provided the Contractor an

630 opportunity to discuss the nature, need, and impact of the proposed change.

631 (l) Except as provided in subsections 3405(a)(1)(B) and 3405(f) of the CVPIA, the

632 Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates adjusted upward or

633 downward to reflect the changed costs of delivery (if any) of the transferred Project Water to the

634 transferee’s point of delivery in accordance with the then applicable CVP Ratesetting Policy. If the

635 Contractor is receiving lower Rates and Charges because of inability to pay and is transferring Project

636 Water to another entity whose Rates and Charges are not adjusted due to inability to pay, the Rates and

637 Charges for transferred Project Water shall be the Contractor’s Rates and Charges unadjusted for ability to

638 pay.

639 (m) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the Contracting Officer

640 is authorized to adjust determinations of ability to pay every five (5) years.

641 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

642 8. The Contractor and the Contracting Officer concur that, as of the effective date of this

643 Contract, the Contractor has no non-interest bearing operation and maintenance deficits and shall have no
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644 further liability therefor.

645 SALES, TRANSFERS, OR EXCHANGES OF WATER

646 9. (a) The right to receive Project Water provided for in this Contract may be sold,

647 transferred, or exchanged to others for reasonable and beneficial uses within the State of California if such

648 sale, transfer, or exchange is authorized by applicable Federal and State laws, and applicable guidelines or

649 regulations then in effect. No sale, transfer, or exchange of Project Water under this Contract may take

650 place without the prior written approval of the Contracting Officer, except as provided for in subdivision (b)

651 of this Article, and no such sales, transfers, or exchanges shall be approved absent compliance with

652 appropriate environmental documentation including but not limited to the National Environmental Policy Act

653 and the Endangered Species Act. Such environmental documentation should include, as appropriate, an

654 analysis of groundwater impacts and economic and social effects, including environmental justice, of the

655 proposed water transfers on both the transferor and transferee.

656 (b) In order to facilitate efficient water management by means of water transfers of the

657 type historically carried out among Project Contractors located within the same geographical area and to

658 allow the Contractor to participate in an accelerated water transfer program during the term of this Contract,

659 the Contracting Officer shall prepare, as appropriate, necessary environmental documentation including, but

660 not limited to, the National Environmental Policy Act and the Endangered Species Act analyzing annual

661 transfers within such geographical areas and the Contracting Officer shall determine whether such transfers

662 comply with applicable law. Following the completion of the environmental documentation, such transfers

663 addressed in such documentation shall be conducted with advance notice to the Contracting Officer, but
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664 shall not require prior written approval by the Contracting Officer. Such environmental documentation and

665 the Contracting Officer’s compliance determination shall be reviewed every five (5) years and updated, as

666 necessary, prior to the expiration of the then existing five (5) -year period. All subsequent environmental

667 documentation shall include an alternative to evaluate not less than the quantity of Project Water historically

668 transferred within the same geographical area.

669 (c) For a water transfer to qualify under subdivision (b) of this Article, such water

670 transfer must: (i) be for irrigation purposes for lands irrigated within the previous three (3) years, for M&I

671 use, groundwater recharge, groundwater banking, similar groundwater activities, surface water storage, or

672 fish and wildlife resources; not lead to land conversion; and be delivered to established cropland, wildlife

673 refuges, groundwater basins or municipal and industrial use; (ii) occur within a single Year; (iii) occur

674 between a willing seller and a willing buyer; (iv) convey water through existing facilities with no new

675 construction or modifications to facilities and be between existing Project Contractors and/or the Contractor

676 and the United States, Department of the Interior; and (v) comply with all applicable Federal, State, and

677 local or tribal laws and requirements imposed for protection of the environment and Indian Trust Assets, as

678 defined under Federal law.

679 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

680 10. (a) The amount of any overpayment by the Contractor of the Contractor’s O&M,

681 Capital, and deficit (if any) obligations for the Year shall be applied first to any current liabilities of the

682 Contractor arising out of this Contract then due and payable. Overpayments of more than One Thousand

683 Dollars ($1,000) shall be refunded at the Contractor’s request. In lieu of a refund, any amount of such
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684 overpayment at the option of the Contractor, may be credited against amounts to become due to the United

685 States by the Contractor. With respect to overpayment, such refund or adjustment shall constitute the sole

686 remedy of the Contractor or anyone having or claiming to have the right to the use of any of the Project

687 Water supply provided for herein. All credits and refunds of overpayments shall be made within thirty (30)

688 days of the Contracting Officer obtaining direction as to how to credit or refund such overpayment in

689 response to the notice to the Contractor that it has finalized the accounts for the Year in which the

690 overpayment was made.

691 (b) All advances for miscellaneous costs incurred for work requested by the Contractor

692 pursuant to Article 25 of this Contract shall be adjusted to reflect the actual costs when the work has been

693 completed. If the advances exceed the actual costs incurred, the difference will be refunded to the

694 Contractor. If the actual costs exceed the Contractor's advances, the Contractor will be billed for the

695 additional costs pursuant to Article 25 of this Contract.

696 TEMPORARY REDUCTIONS--RETURN FLOWS

697 11. (a) Subject to: (i) the authorized purposes and priorities of the Project and the

698 requirements of Federal law and (ii) the obligations of the United States under existing contracts, or renewals

699 thereof, providing for water deliveries from the Project, the Contracting Officer shall make all reasonable

700 efforts to optimize Project Water deliveries to the Contractor as provided in this Contract.

701 (b) The Contracting Officer or Operating Non-Federal Entity may temporarily

702 discontinue or reduce the quantity of Water Delivered to the Contractor as herein provided for the purposes
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703 of investigation, inspection, maintenance, repair, or replacement of any of the Project facilities or any part

704 thereof necessary for the delivery of Project Water to the Contractor, but so far as feasible the Contracting

705 Officer or Operating Non-Federal Entity will give the Contractor due notice in advance of such temporary

706 discontinuance or reduction, except in case of emergency, in which case no notice need be given; Provided,

707 That the United States shall use its best efforts to avoid any discontinuance or reduction in such service. 

708 Upon resumption of service after such reduction or discontinuance, and if requested by the Contractor, the

709 United States will, if possible, 

710 deliver the quantity of Project Water which would have been delivered hereunder in the absence of such

711 discontinuance or reduction.

712 (c) The United States reserves the right to all seepage and return flow water derived

713 from Water Delivered to the Contractor hereunder which escapes or is discharged beyond the Contractor's

714 Service Area; Provided, That this shall not be construed as claiming for the United States any right as

715 seepage or return flow to water being used pursuant to this Contract for surface irrigation or underground

716 storage either being put to reasonable and beneficial use pursuant to this Contract within the Contractor’s

717 Service Area by the Contractor or those claiming by, through, or under the Contractor. For purposes of this

718 subdivision, groundwater recharge, groundwater banking and all similar groundwater activities will be

719 deemed to be underground storage.

720 CONSTRAINTS ON THE AVAILABILITY OF WATER

721 12. (a) In its operation of the Project, the Contracting Officer will use all reasonable means
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722 to guard against a Condition of Shortage in the quantity of water to be made available to the Contractor

723 pursuant to this Contract. In the event the Contracting Officer determines that a Condition of Shortage

724 appears probable, the Contracting Officer will notify the Contractor of said determination as soon as

725 practicable.

726 (b) If there is a Condition of Shortage because of errors in physical operations of the

727 Project, drought, other physical causes beyond the control of the Contracting Officer or actions taken by the

728 Contracting Officer to meet legal obligations then, except as provided in subdivision (a) of Article 18 of this

729 Contract, no liability shall accrue against the United States or any of its officers, agents, or employees for

730 any damage, direct or indirect, arising therefrom.

731 (c) The United States shall not execute contracts which together with this Contract, shall

732 in the aggregate provide for furnishing during the life of this Contract or any renewals hereof Class 1 Water

733 in excess of 800,000 acre-feet per Year or Class 2 Water in excess of 1,401,475 acre-feet per Year;

734 Provided, That, subject to subdivision (l) of Article 3 of this Contract, the limitation placed on Class 2 Water

735 contracts shall not prohibit the United States from entering into temporary contracts of one year or less in

736 duration for delivery of Project Water to other entities if such water is not necessary to meet the schedules

737 as may be submitted by all Friant Division long-term water service contractors entitled to receive Class 1

738 Water and/or Class 2 Water under their water service contracts. Nothing in this subdivision shall limit the

739 Contracting Officer’s ability to take actions that result in the availability of new water supplies to be used for

740 Project purposes and allocating such new supplies; Provided, That the Contracting Officer shall not take

741 such actions until after consultation with the Friant Division Project Contractors.
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742 (d) The Contracting Officer shall not deliver any Class 2 Water pursuant to this or any

743 other contract for water service heretofore or hereafter entered into any Year unless and until the

744 Contracting Officer determines that the cumulative total quantity of Class 1 Water specified in subdivision (c)

745 of this Article will be available for delivery in said Year. If the Contracting Officer determines there is or will

746 be a shortage in any Year in the quantity of Class 1 Water available for delivery, the Contracting Officer

747 shall apportion the available Class 1 Water among all contractors entitled to receive such water that will be

748 made available at Friant Dam in accordance with the following:

749 (1) A determination shall be made of the total quantity of Class 1 Water at

750 Friant Dam which is available for meeting Class 1 Water contractual commitments, the amount so

751 determined being herein referred to as the available supply.

752 (2) The total available Class 1 supply shall be divided by the Class 1 Water

753 contractual commitments, the quotient thus obtained being herein referred to as the Class 1 apportionment

754 coefficient.

755 (3) The total quantity of Class 1 Water under Article 3 of this Contract shall be

756 multiplied by the Class 1 apportionment coefficient and the result shall be the quantity of Class 1 Water

757 required to be delivered by the Contracting Officer to the Contractor for the respective Year, but in no

758 event shall such amount exceed the total quantity of Class 1 Water specified in subdivision (a) of Article 3 of

759 this Contract.

760 (e) If the Contracting Officer determines there is less than the quantity of Class 2 Water
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761 which the Contractor otherwise would be entitled to receive pursuant to Article 3 of this Contract, the

762 quantity of Class 2 Water which shall be furnished to the Contractor by the Contracting Officer will be

763 determined in the manner set forth in paragraphs (1), (2), and (3), of subdivision (d) of this Article

764 substituting the term "Class 2" for the term "Class 1."

765 (f) In the event that in any Year there is made available to the Contractor, by reason of

766 any shortage or apportionment as provided in subdivisions (a), (d) or (e) of this Article, or any

767 discontinuance or reduction of service as set forth in subdivision (a) of Article 11 of this Contract, less than

768 the quantity of water which the Contractor otherwise would be entitled to receive hereunder, there shall be

769 made an adjustment on account of the amounts already paid to the Contracting Officer by the Contractor for

770 Class 1 Water and Class 2 Water for said Year in accordance with Article 10 of this Contract.

771 UNAVOIDABLE GROUNDWATER PERCOLATION

772 13. To the extent applicable, the Contractor shall not be deemed to have delivered Irrigation

773 Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such lands are irrigated with

774 groundwater that reaches the underground strata as an unavoidable result of the delivery of Irrigation Water

775 by the Contractor to Eligible Lands.

776 RULES AND REGULATIONS

777 14. (a) The parties agree that the delivery of Irrigation Water or use of Federal facilities

778 pursuant to this Contract is subject to Federal Reclamation law, including but not limited to, the Reclamation

779 Reform Act of 1982 (43 U.S.C.390aa et seq.), as amended and supplemented, and the rules and

780 regulations promulgated by the Secretary of the Interior under Federal Reclamation law.

781 (b) The terms of this Contract are subject to any enforceable order, judgment and/or

782 settlement in NRDC v. Patterson, No. CIVS 88-1658-LKK-EM and shall be timely modified as necessary
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783 to effectuate or facilitate any final order, judgment or settlement in said litigation.

784 (c) The parties acknowledge that, as of the effective date of this Contract, active

785 settlement discussions are underway in NRDC v. Patterson between Friant Division water service

786 contractors, representatives of the Contracting Officer, and the plaintiffs in NRDC v. Patterson. The mutual

787 goals of the parties to those discussions are (i) to expeditiously evaluate and implement, on a mutually

788 acceptable basis, instream and related measures that will restore ecological functions and hydrologic and

789 geomorphologic processes of the San Joaquin River below Friant Dam to a level 

790 that restores and maintains fish populations in good condition, including but not limited to 

791 naturally-reproducing, self-sustaining populations of chinook salmon and (ii) to accomplish these restoration

792 goals while not adversely impacting the overall sufficiency, reliability and cost of water supplies to Friant

793 Division water users. The Contractor has been actively participating, and intends to continue to participate

794 in such settlement discussions. Except as provided in this Contract, this Contract does not add to the

795 obligations of the parties, if any, relating to the San Joaquin River. This Contract does not limit or detract

796 from the obligations of the parties, if any, relating to the San Joaquin River. 

797 WATER AND AIR POLLUTION CONTROL

798 15. The Contractor, in carrying out this Contract, shall comply with all applicable water and air

799 pollution laws and regulations of the United States and the State of California, and shall obtain all required

800 permits or licenses from the appropriate Federal, State, or local authorities.

801 QUALITY OF WATER

802 16. (a) Project facilities used to deliver Project Water to the Contractor pursuant to this

803 Contract shall be operated and maintained to enable the United States to deliver Project Water to the

804 Contractor in accordance with the water quality standards specified in subsection 2(b) of the Act of August
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805 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 27, 1986 (100 Stat. 3050) or

806 other existing Federal laws. The United States is under no obligation to construct or furnish water treatment

807 facilities to maintain or to improve the quality of Water Delivered to the Contractor pursuant to this

808 Contract. The United States does not warrant the quality of Water Delivered to the Contractor pursuant to

809 this Contract.

810 (b) The Operation and Maintenance of Project facilities shall be performed in such

811 manner as is practicable to maintain the quality of raw water made available through such facilities at the

812 highest level reasonably attainable as determined by the Contracting Officer. The Contractor shall be

813 responsible for compliance with all State and Federal water quality standards applicable to surface and

814 subsurface agricultural drainage discharges generated through the use of Federal or Contractor facilities or

815 Project Water provided by the Contractor within the Contractor's Service Area.

816 WATER ACQUIRED BY THE CONTRACTOR

817 OTHER THAN FROM THE UNITED STATES

818 17. (a) Water or water rights now owned or hereafter acquired by the Contractor other

819 than from the United States and Irrigation Water furnished pursuant to the terms of this Contract may be

820 simultaneously transported through the same distribution facilities of the Contractor subject to the following: 

821 (i) if the facilities utilized for commingling Irrigation Water and non-project water were constructed without

822 funds made available pursuant to Federal Reclamation law, the provisions of Federal Reclamation law will

823 be applicable only to the Landholders of lands which receive Irrigation Water; (ii) the eligibility of land to

824 receive Irrigation Water must be established through the certification requirements as specified in the
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825 Acreage Limitation Rules and Regulations (43 CFR 

826 Part 426); (iii) the water requirements of Eligible Lands within the Contractor's Service Area can be

827 established and the quantity of Irrigation Water to be utilized is less than or equal to the quantity necessary to

828 irrigate such Eligible Lands; and (iv) if the facilities utilized for commingling Irrigation Water and non-project

829 water are/were constructed with funds made available pursuant to Federal Reclamation law, the non-project

830 water will be subject to the acreage limitation provisions of Federal Reclamation law, unless the Contractor

831 pays to the United States the incremental fee described in 43 CFR 426.15. In determining the incremental

832 fee, the Contracting Officer will calculate annually the cost to the Federal Government, including interest of

833 storing or delivering non-project water, which for purposes of this Contract shall be determined as follows:

834 The quotient shall be the unpaid distribution system costs divided by the total irrigable acreage within the

835 Contractor’s Service Area. The incremental fee per acre is the mathematical result of such quotient times

836 the interest rate determined using Section 202 (3) of the Act of October 12, 1982 (96 Stat. 1263). Such

837 incremental fee will be charged to each acre of excess or full cost land within the Contractor’s Service Area

838 that receives non-project water through Federally financed or constructed facilities. The incremental fee

839 calculation methodology will continue during the term of this Contract absent the promulgation of a contrary

840 Reclamation-wide rule, regulation or policy adopted after the Contractor has been afforded the opportunity

841 to review and comment on the proposed rule, regulation or policy. If such rule, regulation or policy is

842 adopted it shall supersede this provision. 

843 (b) Water or water rights now owned or hereafter acquired by the Contractor, other

844 than from the United States or adverse to the Project or its contractors (i.e., non-project water), may be
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845 stored, conveyed and/or diverted through Project facilities, subject to the completion of appropriate

846 environmental documentation, with the approval of the Contracting Officer and the execution of any contract

847 determined by the Contracting Officer to be necessary, consistent with the following provisions:

848 (1) The Contractor may introduce non-project water into Project facilities and

849 deliver said water to lands within the Contractor’s Service Area, including Ineligible Lands, subject to

850 payment to the United States and/or to any applicable Operating Non-Federal Entity of an appropriate rate

851 as determined by the CVP Ratesetting Policy and the RRA, each as amended, modified or superseded from

852 time to time. In addition, if electrical power is required to pump 

853 non-project water through the facilities, the Contractor shall be responsible for obtaining the necessary

854 power and paying the necessary charges therefor.

855 (2) Delivery of such non-project water in and through Project facilities shall only

856 be allowed to the extent such deliveries do not: (i) interfere with other Project purposes as determined by

857 the Contracting Officer; (ii) reduce the quantity or quality of water available to other Project water service

858 contractors; (iii) interfere with the delivery of contractual water entitlements to any other Project water

859 service contractors; or (iv) interfere with the physical maintenance of the Project facilities.

860 (3) Neither the United States nor the Operating Non-Federal Entity shall be

861 responsible for control, care or distribution of the non-project water before it is introduced into or after it is

862 delivered from the Project facilities. The Contractor hereby releases and agrees to defend and indemnify the

863 United States and the Operating Non-Federal Entity, and their respective officers, agents, and employees,

864 from any claim for damage to persons or property, direct or indirect, resulting from Contractor’s diversion
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865 or extraction of non-project water from any source.

866 (4) Diversion of such non-project water into Project facilities shall be consistent

867 with all applicable laws, and if involving groundwater, consistent with any groundwater management plan for

868 the area from which it was extracted.

869 (5) After Project purposes are met, as determined by the Contracting Officer,

870 the United States and the Contractor shall share priority to utilize the remaining capacity of the facilities

871 declared to be available by the Contracting Officer for conveyance and transportation of 

872 non-project water prior to any such remaining capacity being made available to non-Project contractors.

873 OPINIONS AND DETERMINATIONS

874 18. (a) Where the terms of this Contract provide for actions to be based upon the opinion

875 or determination of either party to this Contract, said terms shall not be construed as permitting such action

876 to be predicated upon arbitrary, capricious, or unreasonable opinions or determinations. Both parties,

877 notwithstanding any other provisions of this Contract, expressly reserve the right to seek relief from and

878 appropriate adjustment for any such arbitrary, capricious, or unreasonable opinion or determination. Each

879 opinion or determination by either party shall be provided in a timely manner. Nothing in subdivision (a) of

880 Article 18 of this Contract is intended to 

881 or shall affect or alter the standard of judicial review applicable under federal law to any opinion or

882 determination implementing a specific provision of federal law embodied in statute or regulation. 

883 (b) The Contracting Officer shall have the right to make determinations necessary to
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884 administer this Contract that are consistent with the provisions of this Contract, the laws of the United States

885 and of the State of California, and the rules and regulations promulgated by the Secretary of the Interior. 

886 Such determinations shall be made in consultation with the Contractor to the extent reasonably practicable.

887 COORDINATION AND COOPERATION

888 19. (a) In order to further their mutual goals and objectives, the Contracting Officer and the

889 Contractor shall communicate, coordinate, and cooperate with each other, and with other affected Project

890 Contractors, in order to improve the operation and management of the Project. The communication,

891 coordination, and cooperation regarding operations and management shall include, but not be limited to, any

892 action which will or may materially affect the quantity or quality of Project Water supply, the allocation of

893 Project Water supply, and Project financial matters including, but not limited to, budget issues. The

894 communication, coordination, and cooperation provided for hereunder shall extend to all provisions of this

895 Contract. Each party shall retain exclusive decision making authority for all actions, opinion, and

896 determinations to be made by the respective party.

897 (b) Within one-hundred twenty (120) days following the effective date of this Contract,

898 the Contractor, other affected Project Contractors, and the Contracting Officer shall arrange to meet with

899 interested Project Contractors to develop a mutually agreeable, written Project-wide process, which may be

900 amended as necessary separate and apart from this Contract. The goal of this process shall be to provide,

901 to the extent practicable, the means of mutual communication and interaction regarding significant decisions

902 concerning Project operation and management on a 

903 real-time basis.

904 (c) In light of the factors referred to in subdivision (b) of Article 3 of this Contract, it is
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905 the intent of the Secretary to improve water supply reliability. To carry out this intent:

906 (1) The Contracting Officer will, at the request of the Contractor, assist in the

907 development of integrated resource management plans for the Contractor. Further, the Contracting Officer

908 will, as appropriate, seek authorizations for implementation of partnerships to improve water supply, water

909 quality, and reliability.

910 (2) The Secretary will, as appropriate, pursue program and project

911 implementation and authorization in coordination with Project Contractors to improve the water supply,

912 water quality, and reliability of the Project for all Project purposes.

913 (3) The Secretary will coordinate with Project Contractors and the State of

914 California to seek improved water resource management.

915 (4) The Secretary will coordinate actions of agencies within the Department of

916 the Interior that may impact the availability of water for Project purposes.

917 (5) The Contracting Officer shall periodically, but not less than annually, hold

918 division level meetings to discuss Project operations, division level water management activities, and other

919 issues as appropriate.

920 (d) Without limiting the contractual obligations of the Contracting Officer hereunder,

921 nothing in this Contract shall be construed to limit or constrain the Contracting Officer’s ability to

922 communicate, coordinate, and cooperate with the Contractor or other interested stakeholders or to make

923 decisions in a timely fashion as needed to protect health, safety, physical integrity of structures or facilities, or

924 the Contracting Officer’s ability to comply with applicable laws.
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925 CHARGES FOR DELINQUENT PAYMENTS

926 20. (a) The Contractor shall be subject to interest, administrative and penalty charges on

927 delinquent installments or payments. When a payment is not received by the due date, the Contractor shall

928 pay an interest charge for each day the payment is delinquent beyond the due date. When a payment

929 becomes sixty (60) days delinquent, the Contractor shall pay an administrative charge to cover additional

930 costs of billing and processing the delinquent payment. When a payment is delinquent ninety (90) days or

931 more, the Contractor shall pay an additional penalty charge of six (6%) percent per year for each day the

932 payment is delinquent beyond the due date. Further, the Contractor shall pay any fees incurred for debt

933 collection services associated with a delinquent payment.

934 (b) The interest charge rate shall be the greater of the rate prescribed quarterly in the

935 Federal Register by the Department of the Treasury for application to overdue payments, or the interest rate

936 of one-half of one (0.5%) percent per month prescribed by Section 6 of the Reclamation Project Act of

937 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due date and remain

938 fixed for the duration of the delinquent period.

939 (c) When a partial payment on a delinquent account is received, the amount received

940 shall be applied, first to the penalty, second to the administrative charges, third to the accrued interest, and

941 finally to the overdue payment.

942 EQUAL OPPORTUNITY

943 21. During the performance of this Contract, the Contractor agrees as follows:

944 (a) The Contractor will not discriminate against any employee or applicant for

945 employment because of race, color, religion, sex, or national origin. The Contractor will take affirmative

946 action to ensure that applicants are employed, and that employees are treated during employment, without

947 regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to,

948 the following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or

949 termination, rates of payment or other forms of compensation; and selection for training, including

950 apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants

951 for employment, notices to be provided by the Contracting Officer setting forth the provisions of this

952 nondiscrimination clause.

953 (b) The Contractor will, in all solicitations or advertisements for employees placed by or

954 on behalf of the Contractor, state that all qualified applicants will receive consideration for employment

955 without discrimination because of race, color, religion, sex, or national origin.
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956 (c) The Contractor will send to each labor union or representative of workers with

957 which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided

958 by the Contracting Officer, advising the said labor union or workers' representative of the Contractor's

959 commitments under Section 202 of Executive Order 11246 of September 24, 1965, and shall post copies

960 of the notice in conspicuous places available to employees and applicants for employment.

961 (d) The Contractor will comply with all provisions of Executive Order 

962 No. 11246 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders of the

963 Secretary of Labor. 

964 (e) The Contractor will furnish all information and reports required by said amended

965 Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto,

966 and will permit access to its books, records, and accounts by the Contracting Officer and the Secretary of

967 Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

968 (f) In the event of the Contractor's noncompliance with the nondiscrimination clauses of

969 this Contract or with any of the said rules, regulations, or orders, this Contract may be canceled, terminated,

970 or suspended, in whole or in part, and the Contractor may be declared ineligible for further Government

971 contracts in accordance with procedures authorized in said amended Executive Order, and such other

972 sanctions may be imposed and remedies invoked as provided in said Executive Order, or by rule, regulation,

973 or order of the Secretary of Labor, or as otherwise provided by law.

974 (g) The Contractor will include the provisions of paragraphs (a) through (g) in every

975 subcontract or purchase order unless exempted by the rules, regulations, or orders of the Secretary of

976 Labor issued pursuant to Section 204 of said amended Executive Order, so that such provisions will be

977 binding upon each subcontractor or vendor. The Contractor will take such action with respect to any

978 subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such

979 provisions, including sanctions for noncompliance: Provided, however, That in the event the Contractor

980 becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such

981 direction, the Contractor may request the United States to enter into such litigation to protect the interests of

982 the United States.

983 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

984 22. (a) The obligation of the Contractor to pay the United States as provided in this

985 Contract is a general obligation of the Contractor notwithstanding the manner in which the obligation may be

986 distributed among the Contractor's water users and notwithstanding the default of individual water users in

987 their obligations to the Contractor.
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988 (b) The payment of charges becoming due hereunder is a condition precedent to

989 receiving benefits under this Contract. The United States shall not make water available to the Contractor

990 through Project facilities during any period in which the Contractor may be in arrears in the advance

991 payment of water rates due the United States. The Contractor shall not furnish water made available

992 pursuant to this Contract for lands or parties which are in arrears in the advance payment of water rates

993 levied or established by the Contractor.

994 (c) With respect to subdivision (b) of this Article, the Contractor shall have no

995 obligation to require advance payment for water rates which it levies.

996 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

997 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42

998 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age

999 Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as well as

1000 with their respective implementing regulations and guidelines imposed by the U.S. Department of the Interior

1001 and/or Bureau of Reclamation.

1002 (b) These statutes require that no person in the United States shall, on the grounds of

1003 race, color, national origin, handicap, or age, be excluded from participation in, be denied the benefits of, or

1004 be otherwise subjected to discrimination under any program or activity receiving financial assistance from the

1005 Bureau of Reclamation. By executing this Contract, the Contractor agrees to immediately take any

1006 measures necessary to implement this obligation, including permitting officials of the United States to inspect

1007 premises, programs, and documents.

1008 (c) The Contractor makes this agreement in consideration of and for the purpose of

1009 obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal financial

1010 assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including

1011 installment payments after such date on account of arrangements for Federal financial assistance which were

1012 approved before such date. The Contractor recognizes and agrees that such Federal assistance will be

1013 extended in reliance on the representations and agreements made in this Article, and that the United States

1014 reserves the right to seek judicial enforcement thereof.

1015 PRIVACY ACT COMPLIANCE

1016 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) (the

1017 Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et seq.) in

1018 maintaining Landholder acreage certification and reporting records, required to be submitted to the
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1019 Contractor for compliance with Sections 206 and 228 of the Reclamation Reform Act of 1982 (96 Stat.

1020 1266), and pursuant to 43 CFR 426.18.

1021 (b) With respect to the application and administration of the criminal penalty provisions

1022 of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees responsible for maintaining

1023 the certification and reporting records referenced in (a) above are considered to be employees of the

1024 Department of the Interior. See 5 U.S.C. 552a(m).

1025 (c) The Contracting Officer or a designated representative shall provide the Contractor

1026 with current copies of the Interior Department Privacy Act regulations and the Bureau of Reclamation

1027 Federal Register Privacy Act System of Records Notice (Acreage Limitation--Interior, Reclamation-31)

1028 which govern the maintenance, safeguarding, and disclosure of information contained in the Landholder's

1029 certification and reporting records.

1030 (d) The Contracting Officer shall designate a full-time employee of the Bureau of

1031 Reclamation to be the System Manager who shall be responsible for making decisions on denials pursuant to

1032 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is authorized to

1033 grant requests by individuals for access to their own records.

1034 (e) The Contractor shall forward promptly to the System Manager each proposed

1035 denial of access under 43 CFR 2.64; and each request for amendment of records filed under 

1036 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System Manager with

1037 information and records necessary to prepare an appropriate response to the requester. These requirements

1038 do not apply to individuals seeking access to their own certification and reporting forms filed with the

1039 Contractor pursuant to 43 CFR 426.18, unless the requester elects to cite the Privacy Act as a basis for the

1040 request.

1041 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1042 25. In addition to all other payments to be made by the Contractor pursuant to this Contract, the

1043 Contractor shall pay to the United States, within sixty (60) days after receipt of a bill and detailed statement

1044 submitted by the Contracting Officer to the Contractor for such specific items of direct cost incurred by the

1045 United States for work requested by the Contractor associated with this Contract plus indirect costs in

1046 accordance with applicable Bureau of Reclamation policies and procedures. All such amounts referred to in
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1047 this Article shall not exceed the amount agreed to in writing in advance by the Contractor. This Article shall

1048 not apply to costs for routine contract administration.

1049 WATER CONSERVATION

1050 26. (a) Prior to the delivery of water provided from or conveyed through Federally

1051 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be implementing an

1052 effective water conservation and efficiency program based on the Contractor's water conservation plan that

1053 has been determined by the Contracting Officer to meet the conservation and efficiency criteria for

1054 evaluating water conservation plans established under Federal law. The water conservation and efficiency

1055 program shall contain definite water conservation objectives, appropriate economically feasible water

1056 conservation measures, and time schedules for meeting those objectives. Continued Project Water delivery

1057 pursuant to this Contract shall be contingent upon the Contractor’s continued implementation of such water

1058 conservation program. In the event the Contractor's water conservation plan or any revised water

1059 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not yet been

1060 determined by the Contracting Officer to meet such criteria, due to circumstances which the Contracting

1061 Officer determines are beyond the control of the Contractor, water deliveries shall be made under this

1062 Contract so long as the Contractor diligently works with the Contracting Officer to obtain such

1063 determination at the earliest practicable date, and thereafter the Contractor immediately begins implementing

1064 its water conservation and efficiency program in accordance with the time schedules therein.

1065 (b) Omitted. 

1066 (c) The Contractor shall submit to the Contracting Officer a report on the status of its
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1067 implementation of the water conservation plan on the reporting dates specified in the then existing

1068 conservation and efficiency criteria established under Federal law. 

1069 (d) At five (5) -year intervals, the Contractor shall revise its water conservation plan to

1070 reflect the then current conservation and efficiency criteria for evaluating water conservation plans

1071 established under Federal law and submit such revised water management plan to the Contracting Officer

1072 for review and evaluation. The Contracting Officer will then determine if the water conservation plan meets

1073 Reclamation’s then current conservation and efficiency criteria for evaluating water conservation plans

1074 established under Federal law. 

1075 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall be

1076 described in the Contractor’s water conservation plan.

1077 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1078 27. Except as specifically provided in Article 17 of this Contract, the provisions of this Contract

1079 shall not be applicable to or affect non-project water or water rights now owned or hereafter acquired by

1080 the Contractor or any user of such water within the Contractor's Service Area. Any such water shall not be

1081 considered Project Water under this Contract. In addition, this Contract shall not be construed as limiting or

1082 curtailing any rights which the Contractor or any water user within the Contractor's Service Area acquires or

1083 has available under any other contract pursuant to Federal Reclamation law.

1084 OPERATION AND MAINTENANCE BY NON-FEDERAL ENTITY

1085 28. (a) The Operation and Maintenance of a portion of the Project facilities which serve the
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1086 Contractor, and responsibility for funding a portion of the costs of such Operation and Maintenance, have

1087 been transferred to the Operating Non-Federal Entity by separate agreement between the United States and

1088 the Operating Non-Federal Entity. That separate agreement shall not interfere with or affect the rights or

1089 obligations of the Contractor or the United States hereunder.

1090 (b) The Contracting Officer has previously notified the Contractor in writing that the

1091 Operation and Maintenance of a portion of the Project facilities which serve the Contractor has been

1092 transferred to the Operating Non-Federal Entity, and therefore, the Contractor shall pay directly to the

1093 Operating Non-Federal Entity, or to any successor approved by the Contracting Officer under the terms

1094 and conditions of the separate agreement between the United States and the Operating Non-Federal Entity

1095 described in subdivision (a) of this Article, all rates, charges or assessments of any kind, including any

1096 assessment for reserve funds, which the Operating Non-Federal Entity or such successor determines, sets or

1097 establishes for (i) the Operation and Maintenance of the portion of the Project facilities operated and

1098 maintained by the Operating Non-Federal Entity or such successor, or (ii) the Friant Division’s share of the

1099 operation, maintenance and replacement costs for physical works and appurtenances associated with the

1100 Tracy Pumping Plant, the Delta-Mendota Canal, the O'Neill Pumping/Generating Plant, the federal share of

1101 the O'Neill Forebay, the Mendota Pool, and the federal share of San Luis Unit joint use conveyance and

1102 conveyance pumping facilities. Such direct payments to the Operating Non-Federal Entity or such

1103 successor shall not relieve the Contractor of its obligation to pay directly to the United States the

1104 Contractor’s share of the Project Rates, Charges, and Tiered Pricing Components except to the extent the

1105 Operating Non-Federal Entity collects payments on behalf of the United States in accordance with the
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1106 separate agreement identified in subdivision (a) of this Article.

1107 (c) For so long as the Operation and Maintenance of any portion of the Project facilities

1108 serving the Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the

1109 Contracting Officer shall adjust those components of the Rates for Water Delivered under this Contract

1110 representing the cost associated with the activity being performed by the Operating Non-Federal Entity or

1111 its successor.

1112 (d) In the event the Operation and Maintenance of the Project facilities operated and

1113 maintained by the Operating Non-Federal Entity is re-assumed by the United States during the term of this

1114 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the Contractor a

1115 revised Exhibit “B” which shall include the portion of the Rates to be paid by the Contractor for Project

1116 Water under this Contract representing the Operation and Maintenance costs of the portion of such Project

1117 facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of written notification

1118 from the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered Pricing Component(s)

1119 specified in the revised Exhibit “B” directly to the United States in compliance with Article 7 of this Contract.

1120 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1121 29. The expenditure or advance of any money or the performance of any obligation of the

1122 United States under this Contract shall be contingent upon appropriation or allotment of funds. Absence of

1123 appropriation or allotment of funds shall not relieve the Contractor from any obligations under this Contract. 

1124 No liability shall accrue to the United States in case funds are not appropriated or allotted.

1125 BOOKS, RECORDS, AND REPORTS

1126 30. (a) The Contractor shall establish and maintain accounts and other books and records

1127 pertaining to administration of the terms and conditions of this Contract, including: the Contractor's financial

1128 transactions, water supply data, and Project land and right-of-way agreements; the water users' land-use

1129 (crop census), land ownership, land-leasing and water use data; and other matters that the Contracting
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1130 Officer may require. Reports thereon shall be furnished to the Contracting Officer in such form and on such

1131 date or dates as the Contracting Officer may require. Subject to applicable Federal laws and regulations,

1132 each party to this Contract shall have the right during office hours to examine and make copies of the other

1133 party's books and records relating to matters covered by this Contract.

1134 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, records,

1135 or other information shall be requested from the Contractor by the Contracting Officer unless such books,

1136 records, or information are reasonably related to the administration or performance of this Contract. Any

1137 such request shall allow the Contractor a reasonable period of time within which to provide the requested

1138 books, records, or information.

1139 (c) At such time as the Contractor provides information to the Contracting Officer

1140 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the Operating

1141 Non-Federal Entity.

1142 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1143 31. (a) The provisions of this Contract shall apply to and bind the successors and assigns of

1144 the parties hereto, but no assignment or transfer of this Contract or any right or interest therein shall be valid

1145 until approved in writing by the Contracting Officer.

1146 (b) The assignment of any right or interest in this Contract by either party shall not

1147 interfere with the rights or obligations of the other party to this Contract absent the written concurrence of

1148 said other party.

1149 (c) The Contracting Officer shall not unreasonably condition or withhold approval of

1150 any proposed assignment.

1151 SEVERABILITY
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1152 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor (ii) a

1153 person or entity that receives Project Water from a party to a Project contract, nor (iii) an association or

1154 other form of organization whose primary function is to represent parties to Project contracts, brings an

1155 action in a court of competent jurisdiction challenging the legality or enforceability of a provision included in

1156 this Contract and said person, entity, association, or organization obtains a final court decision holding that

1157 such provision is legally invalid or unenforceable and the Contractor has not intervened in that lawsuit in

1158 support of the plaintiff(s), the parties to this Contract shall use their best efforts to (i) within thirty (30) days

1159 of the date of such final court decision identify by mutual agreement the provisions in this Contract which

1160 must be revised and (ii) within three (3) months thereafter promptly agree on the appropriate revision(s). 

1161 The time periods specified above may be extended by mutual agreement of the parties. Pending the

1162 completion of the actions designated above, to the extent it can do so without violating any applicable

1163 provisions of law, the United States shall continue to make the quantities of Project Water specified in this

1164 Contract available to the Contractor pursuant to the provisions of this Contract which were not found to be

1165 legally invalid or unenforceable in the final court decision.

1166 RESOLUTION OF DISPUTES

1167 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ rights

1168 and obligations thereunder, the parties shall meet and confer in an attempt to resolve the dispute. Prior to

1169 the Contractor commencing any legal action, or the Contracting Officer referring any matter to Department

1170 of Justice, the party shall provide to the other party thirty (30) days’ written notice of the intent to take such

1171 action; Provided, That such notice shall not be required where a delay in commencing an action would
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1172 prejudice the interests of the party that intends to file suit. During the thirty (30) -day notice period, the

1173 Contractor and the Contracting Officer shall meet and confer in an attempt to resolve the dispute. Except as

1174 specifically provided, nothing herein is intended to waive or abridge any right or remedy that the Contractor

1175 or the United States may have.

1176 OFFICIALS NOT TO BENEFIT

1177 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the

1178 Contractor shall benefit from this Contract other than as a water user or landowner in the same manner as

1179 other water users or landowners.

1180 CHANGES IN CONTRACTOR’S SERVICE AREA

1181 35. (a) While this Contract is in effect, no change may be made in the Contractor's Service

1182 Area or boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise,

1183 except upon the Contracting Officer's written consent.

1184 (b) Within thirty (30) days of receipt of a request for such a change, the Contracting

1185 Officer will notify the Contractor of any additional information required by the Contracting Officer for

1186 processing said request, and both parties will meet to establish a mutually agreeable schedule for timely

1187 completion of the process. Such process will analyze whether the proposed change is likely to: (i) result in

1188 the use of Project Water contrary to the terms of this Contract; (ii) impair the ability of the Contractor to pay

1189 for Project Water furnished under this Contract or to pay for any Federally-constructed facilities for which

1190 the Contractor is responsible; and (iii) have an impact on any Project Water rights applications, permits, or

1191 licenses. In addition, the Contracting Officer shall comply with the National Environmental Policy Act and

1192 the Endangered Species Act. The Contractor will be responsible for all costs incurred by the Contracting

1193 Officer in this process, and such costs will be paid in accordance with Article 25 of this Contract.
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1194 FEDERAL LAWS

1195 36. By entering into this Contract, the Contractor does not waive its rights to contest the validity

1196 or application in connection with the performance of the terms and conditions of this Contract of any Federal

1197 law or regulation; Provided, That the Contractor agrees to comply with the terms and conditions of this

1198 Contract unless and until relief from application of such Federal law or regulation to the implementing

1199 provision of the Contract is granted by a court of competent jurisdiction.

1200 NOTICES

1201 37. Any notice, demand, or request authorized or required by this Contract shall be deemed to

1202 have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered to the Area

1203 Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 93721, and on behalf

1204 of the United States, when mailed, postage prepaid, or delivered to the Board of Directors of the Stone

1205 Corral Irrigation District, 37656 Road 172, Visalia, California 93292. The designation of the addressee or

1206 the address may be changed by notice given in the same manner as provided in this Article for other notices.

1207 CONFIRMATION OF CONTRACT

1208 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a decree

1209 of a court of competent jurisdiction of the State of California, confirming the execution of this Contract. The

1210 Contractor shall furnish the United States a certified copy of the final decree, the validation proceedings, and

1211 all pertinent supporting records of the court approving and confirming this Contract, and decreeing and

1212 adjudging it to be lawful, valid, and binding on the Contractor.
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1213 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day 

1214 and year first above written.

THE UNITED STATES OF AMERICA

By: /s/ William H. Luce, Jr. 

Acting Regional Director, Mid-Pacific Region

Bureau of Reclamation

(SEAL)

STONE CORRAL IRRIGATION DISTRICT

By: /s/ George Simms 

President of the Board of Directors

Attest:

By: /s/ Roger D, Price 

Secretary of the Board of Directors

STON.WPD
Contract No. I75r-2555-LTR1

EXHIBIT A

[Map or Description of Service Area]
Contract No. I75r-2555-LTR1

EXHIBIT B

[Initial Rates and Charges]