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

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

======================================================================

 
                 WESTERN WATER SECURITY ENHANCEMENT ACT

                                _______
                                

               February 14, 2002.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                    DISSENTING AND ADDITIONAL VIEWS

                        [To accompany H.R. 3208]

      [Including cost estimate of the Congressional Budget Office]

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

SECTION 1. SHORT TITLE.

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

SEC. 2. TABLE OF CONTENTS.

  The table of contents for this Act is as follows:

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

                TITLE I--WESTERN WATER SECURITY PROGRAM

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

                  TITLE II--SMALL RECLAMATION PROJECTS

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

                        TITLE III--MISCELLANEOUS

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

SEC. 3. PURPOSES.

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

SEC. 4. DEFINITIONS.

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

                TITLE I--WESTERN WATER SECURITY PROGRAM

SEC. 101. INTERIM PROGRAM ACTIVITIES AND GOVERNANCE STRUCTURE.

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

SEC. 102. LONG-TERM GOVERNANCE AND MONITORING.

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

SEC. 103. CALIFORNIA WATER SUPPLY SECURITY.

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

SEC. 104. IMPLEMENTATION OF THE CALFED PROGRAM.

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

SEC. 105. COMPETITIVE GRANT PROGRAM.

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

SEC. 106. AUTHORIZATION AND APPROPRIATION PROCESS.

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

SEC. 107. ANNUAL REPORTS.

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

SEC. 108. TREATMENT OF FUNDS.

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

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

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

SEC. 110. ENVIRONMENTAL JUSTICE.

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

                  TITLE II--SMALL RECLAMATION PROJECTS

SEC. 201. SHORT TITLE; REFERENCES.

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

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

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

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

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

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

``SEC. 102. PROPOSAL CONTENTS AND REQUIREMENTS.

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

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

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

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

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

``SEC. 105. CONTRACT TERMS AND CONDITIONS.

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

                    ``TITLE II--PARTNERSHIP PROGRAM

``SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.

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

``SEC. 202. REPAYMENT OF LOANS.

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

``SEC. 203. ELIGIBLE ACTIVITIES.

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

``SEC. 204. APPLICATION PROCESS.

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

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

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

``SEC. 206. LIMITATION ON PROJECT PROPOSALS.

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

                      ``TITLE III--LOAN GUARANTEES

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

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

``SEC. 302. PROGRAM REQUIREMENTS.

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

``SEC. 303. SUNSET.

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

                     ``TITLE IV--GENERAL PROVISIONS

``SEC. 401. PROPOSAL FEE.

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

``SEC. 402. MISCELLANEOUS PROVISIONS.

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

SEC. 203. ADDITIONAL APPROPRIATIONS.

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

SEC. 204. GUIDELINES.

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

SEC. 205. EFFECTIVE DATE.

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

SEC. 206. LIMITATION.

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

                        TITLE III--MISCELLANEOUS

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

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

SEC. 302. WILLARD BAY RESERVOIR ENLARGEMENT STUDY.

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

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

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

``SEC. 12. FUND AUTHORIZATIONS.

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

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

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

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

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

                          Purpose of the Bill

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

                  Background and Need for Legislation

        california: a growing population and a thirst for water

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

              california bay-delta and the calfed program

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

 california, colorado river basin states, and other reclamation states

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

California and the Colorado River Basin States

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

Reclamation States

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

                               conclusion

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

                      Section-by-Section Analysis

Section 1. Short title

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

Section 2. Table of contents

    This section provides a table of contents for the bill.

Section 3. Purposes

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

Section 4. Definitions

    This section defines several terms used throughout the 
bill.

                TITLE I--WESTERN WATER SECURITY PROGRAM

Section 101. Interim Program activities and governance structure

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

Section 102. Long-term governance and monitoring

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

Section 103. California water supply security

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

Section 104. Implementation of the CALFED Program

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

Section 105. Competitive Grant Program

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

Section 106. Authorization and appropriation process

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

Section 107. Annual reports

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

Section 108. Treatment of funds

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

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

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

Section 110. Environmental justice

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

                  TITLE II--SMALL RECLAMATION PROJECTS

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

                        TITLE III--MISCELLANEOUS

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

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

Section 302. Willard Bay Reservoir enlargement study

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

Section 303. Amendments to the Federal Water Project Recreation Act

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

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

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

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

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

                            Committee Action

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

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

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

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

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

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

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

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

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

                    Compliance With House Rule XIII

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

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

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

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

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

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

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

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

         Changes in Existing Law Made by the Bill, as Reported

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

                 SMALL RECLAMATION PROJECTS ACT OF 1956

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

     TITLE I--STATE AND LOCAL PARTICIPATION IN RECLAMATION PROJECTS

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

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

SEC. 102. PROPOSAL CONTENTS AND REQUIREMENTS.

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

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

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

SEC. 104. APPROVAL OR DISAPPROVAL OF PROJECTS.

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

SEC. 105. CONTRACT TERMS AND CONDITIONS.

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

                     TITLE II--PARTNERSHIP PROGRAM

SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.

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

SEC. 202. REPAYMENT OF LOANS.

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

SEC. 203. ELIGIBLE ACTIVITIES.

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

SEC. 204. APPLICATION PROCESS.

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

SEC. 205. TERMS AND CONDITIONS OF PROJECT WORK.

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

SEC. 206. LIMITATION ON PROJECT PROPOSALS.

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

                       TITLE III--LOAN GUARANTEES

SEC. 301. ESTABLISHMENT OF LOAN GUARANTEE PROGRAM.

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

SEC. 302. PROGRAM REQUIREMENTS.

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

SEC. 303. SUNSET.

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

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. PROPOSAL FEE.

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

SEC. 402. MISCELLANEOUS PROVISIONS.

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

                  FEDERAL WATER PROJECT RECREATION ACT

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

SEC. 12. FUND AUTHORIZATIONS.

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

                            DISSENTING VIEWS

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

                        introduction and context

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

                title i. western water security program

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

Sec. 103. California water supply security

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

Sec. 105. Competitive Grant Program

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

Sec. 106. Authorization and appropriation process

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

                  title ii. small reclamation projects

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

                        title iii. miscellaneous

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

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

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

                            ADDITIONAL VIEWS

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

                                   George Miller.
                                   Nick Rahall.

                                  
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