89–010 

Calendar No. 659 

115TH CONGRESS REPORT " ! SENATE 2d Session 115–373 

CLEAN WATER FOR RURAL COMMUNITIES ACT 

NOVEMBER 15, 2018.—Ordered to be printed 

Ms. MURKOWSKI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany S. 685] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Natural Resources, to which was 

referred the bill (S. 685) to authorize the Dry-Redwater Regional 

Water Authority System and the Musselshell-Judith Rural Water 

System in the States of Montana and North Dakota, and for other 

purposes, having considered the same, reports favorably thereon 

with an amendment in the nature of a substitute and an amendment to the title, and recommends that the bill, as amended, do 

pass. 

The amendments are as follows: 

1. Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Clean Water for Rural Communities Act’’. 

SEC. 2. PURPOSE. 

The purpose of this Act is to ensure a safe and adequate municipal, rural, and 

industrial water supply for the citizens of— 

(1) Dawson, Garfield, McCone, Prairie, Richland, Judith Basin, Wheatland, 

Golden Valley, Fergus, Yellowstone, and Musselshell Counties in the State of 

Montana; and 

(2) McKenzie County, North Dakota. 

SEC. 3. DEFINITIONS. 

In this Act: 

(1) AUTHORITY.—The term ‘‘Authority’’ means— 

(A) the Central Montana Regional Water Authority, a publicly owned 

nonprofit water authority formed in accordance with Mont. Code Ann. Sec. 

75–6-302 (2007); and 

(B) any nonprofit successor entity to the Authority described in subparagraph (A). 

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(2) MUSSELSHELL-JUDITH RURAL WATER SYSTEM.—The term ‘‘Musselshell-Judith Rural Water System’’ means the Musselshell-Judith Rural Water System 

authorized under section 4(a), with a project service area that includes— 

(A) Judith Basin, Wheatland, Golden Valley, and Musselshell Counties in 

the State; 

(B) the portion of Yellowstone County in the State within 2 miles of State 

Highway 3 and within 4 miles of the county line between Golden Valley 

and Yellowstone Counties in the State, inclusive of the Town of Broadview, 

Montana; and 

(C) the portion of Fergus County in the State within 2 miles of U.S. Highway 87 and within 4 miles of the county line between Fergus and Judith 

Basin Counties in the State, inclusive of the Town of Moore, Montana. 

(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Interior. 

(4) STATE.—The term ‘‘State’’ means the State of Montana. 

SEC. 4. MUSSELSHELL-JUDITH RURAL WATER SYSTEM. 

(a) AUTHORIZATION.—The Secretary may carry out the planning, design, and construction of the Musselshell-Judith Rural Water System in a manner that is substantially in accordance with the feasibility report entitled ‘‘Musselshell-Judith 

Rural Water System Feasibility Report’’ (including any and all revisions of the report). 

(b) COOPERATIVE AGREEMENT.—The Secretary shall enter into a cooperative agreement with the Authority to provide Federal assistance for the planning, design, and 

construction of the Musselshell-Judith Rural Water System. 

(c) COST-SHARING REQUIREMENT.— (1) FEDERAL SHARE.— (A) IN GENERAL.—The Federal share of the costs relating to the planning, 

design, and construction of the Musselshell-Judith Rural Water System 

shall not exceed 65 percent of the total cost of the Musselshell-Judith Rural 

Water System. 

(B) LIMITATION.—Amounts made available under subparagraph (A) shall 

not be returnable or reimbursable under the reclamation laws. 

(2) USE OF FEDERAL FUNDS.— (A) GENERAL USES.—Subject to subparagraph (B), the Musselshell-Judith 

Rural Water System may use Federal funds made available to carry out 

this section for— 

(i) facilities relating to— 

(I) water pumping; 

(II) water treatment; 

(III) water storage; 

(IV) water supply wells; 

(V) distribution pipelines; and 

(VI) control systems; 

(ii) transmission pipelines; 

(iii) pumping stations; 

(iv) appurtenant buildings, maintenance equipment, and access 

roads; 

(v) any interconnection facility that connects a pipeline of the 

Musselshell-Judith Rural Water System to a pipeline of a public water 

system; 

(vi) electrical power transmission and distribution facilities required 

for the operation and maintenance of the Musselshell-Judith Rural 

Water System; 

(vii) any other facility or service required for the development of a 

rural water distribution system, as determined by the Secretary; and 

(viii) any property or property right required for the construction or 

operation of a facility described in this subsection. 

(B) LIMITATION.—Federal funds made available to carry out this section 

shall not be used for the operation, maintenance, or replacement of the 

Musselshell-Judith Rural Water System. 

(C) TITLE.—Title to the Musselshell-Judith Rural Water System shall be 

held by the Authority. 

SEC. 5. DRY-REDWATER FEASIBILITY STUDY. 

(a) DEFINITIONS.—In this section: 

(1) DRY-REDWATER REGIONAL WATER AUTHORITY.—The term ‘‘Dry-Redwater 

Regional Water Authority’’ means— 

(A) the Dry-Redwater Regional Water Authority, a publicly owned nonprofit water authority formed in accordance with Mont. Code Ann. 75–6– 

302 (2007); and 

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(B) any nonprofit successor entity to the Authority described in subparagraph (A). 

(2) DRY-REDWATER REGIONAL WATER AUTHORITY SYSTEM.—The term ‘‘DryRedwater Regional Water Authority System’’ means the project entitled the 

‘‘Dry-Redwater Regional Water Authority System’’, with a project service area 

that includes— 

(A) Garfield and McCone Counties in the State; 

(B) the area west of the Yellowstone River in Dawson and Richland Counties in the State; 

(C) T. 15 N. (including the area north of the Township) in Prairie County 

in the State; and 

(D) the portion of McKenzie County, North Dakota, that includes all land 

that is located west of the Yellowstone River in the State of North Dakota. 

(3) RECLAMATION FEASIBILITY STANDARDS.—The term ‘‘reclamation feasibility 

standards’’ means the eligibility criteria and feasibility study requirements described in section 106 of the Reclamation Rural Water Supply Act of 2006 (43 

U.S.C. 2405) (as in effect on September 29, 2016). 

(4) SUBMITTED FEASIBILITY STUDY.—The term ‘‘submitted feasibility study’’ 

means the feasibility study entitled ‘‘Dry-Redwater Regional Water System Feasibility Study’’ (including revisions of the study), which received funding from 

the Bureau of Reclamation on September 1, 2010. 

(b) STUDY.— 

(1) IN GENERAL.—The Secretary, in consultation with the Dry-Redwater Regional Water Authority, may undertake a study, including a review of the submitted feasibility study, to determine the feasibility of constructing the DryRedwater Regional Water System. 

(2) REQUIREMENT.—The study under paragraph (1) shall comply with the reclamation feasibility standards. 

(c) COOPERATIVE AGREEMENT.—If the Secretary determines that the study under 

subsection (b) does not comply with the reclamation feasibility standards, the Secretary may enter into a cooperative agreement with the Dry-Redwater Regional 

Water Authority to complete additional work to ensure that the study complies with 

the reclamation feasibility standards. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated 

to the Secretary $5,000,000 to carry out this section. 

(e) TERMINATION.—The authority provided by this section shall expire on the date 

that is 5 years after the date of enactment of this Act. 

SEC. 6. WATER RIGHTS. 

Nothing in this Act— 

(1) preempts or affects any State water law; or 

(2) affects any authority of a State, as in effect on the date of enactment of 

this Act, to manage water resources within that State. 

SEC. 7. AUTHORIZATION OF APPROPRIATIONS. 

(a) AUTHORIZATION.—There is authorized to be appropriated to carry out the planning, design, and construction of the Musselshell-Judith Rural Water System, substantially in accordance with the cost estimate set forth in the feasibility report described in section 4(a), $56,650,000. 

(b) COST INDEXING.—The amount authorized to be appropriated under subsection 

(a) may be increased or decreased in accordance with ordinary fluctuations in development costs incurred after November 1, 2014, as indicated by any available engineering cost indices applicable to construction activities that are similar to the construction of the Musselshell-Judith Rural Water System. 

2. Amend the title so as to read: ‘‘A bill to authorize the construction of the Musselshell-Judith Rural Water System and study of 

the Dry-Redwater Regional Water Authority System in the States 

of Montana and North Dakota, and for other purposes.’’. 

PURPOSE

The purpose of S. 685 is to authorize the construction of the 

Musselshell-Judith Rural Water System and study of the DryRedwater Regional Water Authority System in the States of Montana and North Dakota. 

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BACKGROUND AND NEED

The Rural Water Supply Act (43 U.S.C. 2405) was enacted in 

2006 to authorize the Secretary of the Interior (Secretary), acting 

through the Bureau of Reclamation (BOR or Bureau), to work with 

rural communities and tribes to assess potable water supply needs, 

identify options to address those needs through investigations and 

studies, and recommend if a project should be authorized for construction. Further Congressional authorization is required for BOR 

to participate in or provide funding for the design and construction 

of a rural water project. 

Project sponsors have been working through the Bureau’s rural 

water program to assess the feasibility of the Dry-Redwater and 

Musselshell-Judith Rural Water Projects. The Musselshell-Judith 

Rural Water System is designed to provide drinking water to about 

6,500 residents through the Central Montana Regional Water Authority. The population served by this project currently relies on 

low quality groundwater, drought-sensitive surface supplies and, in 

some cases, hauled water. Water quality is also poor in the service 

area and concentrations of total dissolved solids, sulfates, iron, and 

manganese exceed secondary drinking water standards. 

The proposed Musselshell-Judith project would include a well 

field, four new buried water storage tanks, a pumping station, and 

distribution system. Over $3 million in Federal, State, and local 

funds have been spent on studies and planning, and in January 10, 

2017, the Bureau of Reclamation Commissioner notified the Office 

of Management and Budget that the final feasibility report found 

the project to be feasible and met the criteria set forth in the Rural 

Water Supply Act. 

The Dry-Red Water Authority System would treat and deliver 

water to communities in Eastern Montana and North Dakota. Currently, individual municipal water systems, reliant on groundwater 

that is high in sodium, sulfates, and fluoride, serve residents in 

these communities and often do not meet primary drinking water 

standards without expensive treatment. At least one of these systems is also out of compliance with the Clean Water Act due to 

high levels of sodium and dissolved solids. 

The Dry-Redwater Regional Water Authority submitted a feasibility study to BOR for the Dry-Redwater Regional Water Authority System in 2012, but the Bureau found that the proposal did not 

meet economic feasibility requirements. That project would deliver 

water from the Fort Peck Reservoir and require construction of 

storage tanks, pump stations, and pipelines. 

The Dry-Redwater Regional Water Authority has been working 

to revise initial plans for the system since that time, but a project 

meeting BOR’s feasibility criteria has not been reviewed or approved at this time. Because the Rural Water Supply Act has expired, further authorization is necessary for BOR to continue working with the Dry-Redwater Regional Water Authority to find a feasible project. 

LEGISLATIVE HISTORY

Senators Daines introduced S. 685 on March 21, 2017. The Subcommittee on Water and Power held a hearing on S. 685 on June 

14, 2017. 

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Representative Gianforte introduced companion legislation, H.R. 

5073, in the House of Representatives on February 20, 2017, which 

was referred to the Natural Resources Committee. 

In the 114th Congress, Senator Daines introduced similar legislation, S. 1552, on June 11, 2015. The Subcommittee on Water and 

Power held a hearing on the bill on June 18, 2015. 

The measure was also included in Title III of S. 2902, legislation 

introduced by Senators Flake, Barrasso, Daines, Heller, McCain, 

and Risch on May 9, 2016. The Subcommittee on Water and Power 

held a hearing on S. 2902 on June 18, 2016. The Committee on Energy and Natural Resources met in open business session on July 

13, 2016, and ordered S. 2902 favorably reported as amended. 

Representative Zinke introduced companion legislation, H.R. 

3867, in the House of Representatives on October 29, 2015, which 

was referred to the Natural Resources Committee. 

The Senate Committee on Energy and Natural Resources met in 

an open business session on October 2, 2018, and ordered S. 685 

favorably reported, as amended. 

COMMITTEE RECOMMENDATION

The Senate Committee on Energy and Natural Resources, in 

open business session on October 2, 2018, by a majority voice vote 

of a quorum present, recommends that the Senate pass S. 685, if 

amended as described herein. Senator Lee asked to be recorded as 

voting no. 

COMMITTEE AMENDMENTS

During its consideration of S. 685, the Committee adopted an 

amendment in the nature of a substitute and an amendment to the 

title. The substitute amendment lowered the federal cost share for 

the design and construction of the Musselshell-Judith project from 

75 percent to 65 percent and changed the authorization of appropriations from ‘‘such sums as are necessary’’ to $56,650,000. The 

amendment also deleted the design and construction authorization 

for the Dry-Redwater Project and replaced it with an authorization 

to complete a feasibility study, and an authorization for appropriations for that action. The substitute amendment also made conforming and technical changes and is further described in the section-by-section analysis. The amendment to the title reflects the 

change in the authorization of the Dry-Redwater Project made by 

the substitute amendment. 

SECTION-BY-SECTION ANALYSIS

Sec. 1. Short title 

Section 1 sets forth the short title. 

Sec. 2. Purpose 

Section 2 states the bill’s purpose. 

Sec. 3. Definitions 

Section 3 defines key terms. 

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Sec. 4. Musselshell-Judith Rural Water System 

Subsection (a) authorizes the Secretary to plan, design and construct the Musselshell-Judith Rural Water System in substantial 

accordance with the Musselshell-Judith Rural Water System Feasibility Report. 

Subsection (b) directs the Secretary to enter into a cooperative 

agreement with the Central Montana Regional Water Authority to 

provide Federal assistance in furtherance of subsection (a). 

Subsection (c) limits the Federal cost share to 65 percent of the 

total project cost and makes clear that such Federal cost share 

funds shall not be returnable or reimbursable. The subsection further outlines the allowable uses for Federal funds, prohibits Federal funding for the operation, maintenance, and replacement of 

the Musselshell-Judith Rural Water System, and specifies that title 

to the Musselshell-Judith Rural Water System shall be held by the 

Central Montana Regional Water Authority. 

Sec. 5. Dry-Redwater feasibility study 

Subsection (a) defines key terms for the section. 

Subsection (b) authorizes the Secretary, in consultation with the 

Dry-Redwater Regional Water Authority, to study the feasibility of 

constructing the Dry-Redwater Regional Water System. This subsection further states that the study must comply with reclamation 

feasibility standards. 

Subsection (c) authorizes the Secretary to enter into a cooperative agreement with the Dry-Redwater Regional Water Authority to 

complete additional work to ensure that the study complies with 

reclamation feasibility standards. 

Subsection (d) authorizes $5 million to carry out this section. 

Subsection (e) terminates the authority provided under this section five years after the date of enactment. 

Sec. 6. Water rights 

Section 6 states that nothing in the Act preempts state water law 

or affects a State’s authority to manage its water resources. 

Sec. 7. Authorization of appropriations 

Section 7 authorizes $56,650,000 to be appropriated for the planning, design and construction of the Musselshell-Judith Rural 

Water System and authorizes the indexing of the authorized 

amount based on cost fluctuations after November 1, 2014. 

COST AND BUDGETARY CONSIDERATIONS

The following estimate of the costs of this measure has been provided by the Congressional Budget Office: 

Summary: S. 685 would authorize the Bureau of Reclamation 

(BOR) to study, plan, and construct projects to secure water supplies in rural areas in Montana and North Dakota. Using information from BOR, CBO estimates that implementing the bill would 

cost $52 million over the 2019–2023 period, assuming appropriation of the authorized and necessary amounts. 

Enacting S. 685 would not affect direct spending or revenues; 

therefore, pay-as-you-go procedures do not apply. 

7 

CBO estimates that enacting S. 685 would not increase net direct 

spending or on-budget deficits in any of the four consecutive 10- 

year periods beginning in 2029. 

S. 685 contains no intergovernmental or private-sector mandates 

as defined in the Unfunded Mandates Reform Act (UMRA). 

Estimated cost to the Federal Government: The estimated budgetary effect of S. 685 is shown in the following table. The costs of 

the legislation fall within budget function 300 (natural resources 

and environment). 

By fiscal year, in millions of dollars— 

2019 2020 2021 2022 2023 2019– 

2023 

INCREASES IN SPENDING SUBJECT TO APPROPRIATION 

Musselshell-Judith Rural Water System: 

Estimated Authorization Level ................................................................... 5 12 12 13 13 55 

Estimated Outlays ...................................................................................... 3 8 11 12 13 47 

Dry-Redwater Feasibility Study: 

Estimated Authorization Level ................................................................... 2 2 1 0 0 5 

Estimated Outlays ...................................................................................... 1 2 1 1 0 5 

Total: 

Estimated Authorization Level .......................................................... 7 14 13 13 13 60 

1Estimated Outlays ........................................................................... 4 10 12 13 13 52 

Basis of estimate: For this estimate, CBO assumes that S. 685 

will be enacted in 2019. The bill would authorize the appropriation 

of specific amounts but does not specify in which year the appropriation should be provided. CBO has estimated how much would 

need to be provided each year based on historical patterns. Estimated outlays are based on historical spending patterns for similar 

programs. CBO estimates that implementing the bill would cost 

$52 million over the 2019–2023 period, assuming appropriation of 

the authorized and necessary amounts. 

S. 685 would authorize BOR to construct the Musselshell-Judith 

Rural Water Project in central Montana. The project would include 

planning, designing, and constructing groundwater wells and distribution facilities to deliver water to rural communities. The federal share (65 percent) of costs to construct the project would total 

about $57 million; the project could be completed in about six 

years. Including adjustments for anticipated inflation as authorized 

by the bill, CBO estimates that the federal cost to implement those 

provisions would total $47 million over the 2019–2023 period; the 

remainder of the federal costs would occur after 2023. 

The bill also would authorize BOR to study the feasibility of constructing the Dry-Redwater Rural Water Project in Montana. The 

project would provide water treatment and distribution facilities to 

deliver water to existing storage tanks in rural communities in 

eastern Montana and in northwestern North Dakota. CBO estimates that completing the study would cost $5 million over the 

2019–2023 period, assuming the appropriation of the specified 

amount. 

Pay-As-You-Go considerations: None. 

Increase in long–term direct spending and deficits: CBO estimates that enacting S. 685 would not increase net direct spending 

or on-budget deficits in any of the four consecutive 10-year periods 

beginning in 2029. 

8 

S. 685 contains no intergovernmental or private-sector mandates 

as defined in UMRA. 

Estimate prepared by: Federal costs: Aurora Swanson; Mandates: 

Zachary Byrum. 

Estimate reviewed by: Kim P. Cawley, Chief, Natural and Physical Resources Cost Estimates Unit; H. Samuel Papenfuss, Deputy 

Assistant Director for Budget Analysis. 

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

S. 685. The bill is not a regulatory measure in the sense of imposing Government-established standards or significant economic responsibilities on private individuals and businesses. 

No personal information would be collected in administering the 

program. Therefore, there would be no impact on personal privacy. 

Little, if any, additional paperwork would result from the enactment of S. 685, as ordered reported. 

CONGRESSIONALLY DIRECTED SPENDING

S. 685, as ordered reported, authorizes $56,650,000 to be appropriated for the planning, design, and construction of the 

Musselshell-Judith Rural Water System in the State of Montana. 

EXECUTIVE COMMUNICATIONS

The testimony provided by the Department of the Interior at the 

June 14, 2017, hearing on S. 685 follows: 

STATEMENT OF SCOTT CAMERON, ACTING ASSISTANT SECRETARY—WATER AND SCIENCE, U.S. DEPARTMENT OF THE

INTERIOR

Chairman Flake, Ranking Member King, and members 

of the Subcommittee, I am Scott Cameron, Acting Assistant Secretary for Water and Science at the Department of 

the Interior. Thank you for the opportunity to provide the 

views of the Department of the Interior (Department) on 

S. 685, the Clean Water for Rural Communities Act, which 

would authorize construction of the Dry-Redwater Regional Water Authority System and the Musselshell-Judith 

Rural Water System in the States of Montana and North 

Dakota. 

In the 114th Congress, Reclamation provided testimony 

on S. 2902 and S. 1552, which contained language identical to S. 685. My testimony today will update Reclamation’s previous statements on these projects to include recent events; however, the Department’s position overall on 

funding has not changed from these earlier testimonies. 

Like the sponsors of this legislation, the Department 

supports the goals of encouraging a vibrant rural economy 

and ensuring safe, reliable sources of drinking water in 

Montana and North Dakota. Rural water projects help 

build strong, secure communities and are important to 

supporting the livelihood of local economies. Public Law 

9 

109–451, which expired September 30, 2016, authorized 

Reclamation to establish a Rural Water Supply Program to 

help rural communities and Tribes in the western United 

States analyze and develop options for meeting water supply needs through the completion of appraisal investigations and feasibility studies. 

While the Department acknowledges the important functions rural water projects offer to communities across the 

West, we have concerns with S. 685 as currently written. 

We request the opportunity to work with the Committee to 

adequately address our concerns, as identified below. 

The legislation authorizes construction of two separate 

projects and my statement will speak to each of those 

projects separately. 

Dry-Redwater 

Section 4(a)(1) of S. 685 applies to the planning, design, 

and construction of the regional Dry-Redwater Rural 

Water Authority System in eastern Montana and a small 

service area in northwest North Dakota, and would authorize the Federal Government to provide up to 75 percent of the System’s overall construction cost. Reclamation 

estimates that this authorization would amount to Federal 

appropriations of at least $200 million dollars. The Department last testified before this Subcommittee on legislation 

related to the Dry-Redwater Project in May of 2016, and 

prior to that, in June 2015, May 2011, and July of 2009. 

Since 2016, two things have occurred; the Dry-Redwater 

Regional Water Authority (Authority) changed their 

project plans from that provided in the initial study by 

adding the cities of Sidney and Glendive, Montana, to the 

Authority’s service area which changed the population 

served from 15,000 to over 26,500; and secondly, Reclamation’s authority to continue work on rural water appraisal 

and feasibilities studies under P.L. 109–451 expired. Reclamation did not receive a feasibility study that was evaluated and determined to be economically feasible for the 

new project envisioned by the Authority. 

The Department is concerned about language in the legislation authorizing a project for construction without a 

complete Feasibility Study. Specifically, the potential 

strain on Reclamation’s budget that could come about from 

this authorization, the cost share requirement proposed in 

the bill, and the proposed use of power from the Pick-Sloan 

Missouri Basin Program (P–SMBP) for non-irrigation purposes are a problematic issues. 

In 2012, the Authority submitted a Feasibility Study to 

Reclamation for review. Upon initial review of the Feasibility Study, Reclamation was unable to identify a technically viable water supply alternative that presented a 

National Economic Development (NED) plan with net positive benefits to the nation. Reclamation informed the Authority that the Feasibility Study could not be supported 

as being financially or economically feasible under the requirements of Reclamation’s Rural Water Supply Program. 

10 

Consequently, there are significant review findings and 

recommendations that must be addressed to bring the Feasibility Study up to Reclamation’s standards. Since project 

costs have not been fully developed by the Sponsor and reviewed by Reclamation, there is also the potential for this 

project to be financially unsustainable for the project sponsors. 

Because of the importance of this issue, a Reclamation 

Design, Cost Estimating, and Construction (DEC) review 

further evaluated the Feasibility Study in 2012 in order to 

provide an independent analysis. The estimated cost to address the DEC Report Findings and Recommendations in 

2012 was in excess of $5.5 million. Neither Reclamation 

nor the Authority had sufficient funding to revise the Feasibility Study to address the DEC Report Findings. The 

authority for Reclamation to further review the feasibility 

study expired in 2016. In order to maintain their original 

service area and related project benefits, the Authority 

ruled out a scaled down approach. 

As a result of this decision, Reclamation entered into a 

Memorandum of Understanding (MOU) with the Authority 

on April 27, 2015, with the objective of completing a summary report that documented the current status of the 

draft Feasibility Study and identified the additional level 

of effort needed to revise the Feasibility Study technically 

in order to meet the requirements of Reclamation’s Rural 

Water Supply Program. However, before a final summary 

report could be completed, Reclamation’s authority under 

the program expired and Reclamation was required to generate a Feasibility Study Concluding Report (Concluding 

Report) since the Feasibility Study was not completed. The 

Concluding Report was completed in September 2016 and 

provided an overview of the Feasibility Study up to the 

point of concluding it, and identified the reasons for ending 

the Feasibility Study. The Concluding Report provided 

findings that primarily due to the economics of the proposed alternative and the incomplete level of the Feasibility Study, Reclamation is not in a position to support 

the project as financially viable or able to verify that the 

total project cost estimate is economically sound. 

The Department is also concerned about the non-Federal 

cost share for the System. As stated above, S. 685 contemplates that the United States would fund 75 percent of 

the cost of constructing the System for the benefit of Montana citizens of Dawson, Garfield, McCone, Prairie, Richland Counties, and North Dakota citizens of McKenzie 

County. While this has been the cost share level proposed 

in other rural water projects enacted into law, it represents the maximum Federal cost share previously allowed under Title I of the Rural Water Supply Act of 2006 

(P.L. 109–451, now expired), which included a requirement 

for a Feasibility Report that comprised an analysis of the 

sponsor’s capability-to-pay and identified an appropriate 

contribution by the local sponsors. 

11 

Section 5 of S. 685 authorizes the delivery of 1.5 

megawatts of P–SMBP pumping power to be used and delivered between May 1 and October 31 for the benefit of 

this System at the firm power rate. Section 5(b)(2)(A) of 

the bill requires that the System be operated on a ‘‘not-forprofit basis’’ in order to be eligible to receive power under 

those terms. Reclamation is not certain of the impact the 

bill’s requirements could have on Western Area Power Administration’s existing contractual power obligations. In 

addition to those concerns mentioned above, we have yet 

to verify whether or not water rights issues associated 

with the System have been adequately addressed. 

Reclamation’s authority to continue work on rural water 

appraisal and feasibilities studies has expired. At this 

time, there is no general programmatic authority for continued work by Reclamation on rural water appraisal and 

feasibility studies. Reclamation’s review of Dry—Redwater 

Authority’s proposed system was conducted under the authority of the Rural Water Supply Act of 2006 (Title I of 

Public Law 109–451) and this authority expired on September 30, 2016. Reclamation generated a Concluding Report which provided an overview of the Feasibility Study 

up to the point of concluding it and identified the reasons 

for ending the study. 

If legislative authority is granted, we suggest System 

sponsors work with Reclamation to evaluate the System 

for scale and economic viability in an effort to refine the 

National Economic Development accounting such that the 

ratio of total benefits exceeds costs. The System should 

meet appropriate guidelines and be updated to include 

new infrastructure required to accommodate the large increase in population served. S. 685 allows the Authority to 

acquire property and existing systems. Details of these 

systems should be fully identified and incorporated into 

the new evaluation and the evaluation should incorporate 

recommendations from the DEC review or, if necessary, require a new DEC review be conducted. It should address 

all federal environmental compliance activities. There are 

substantial costs believed to be in the millions of dollars 

associated with these efforts that are outside of any costs 

projections previously considered. We also recommend that 

they work with the Western Area Power Administration 

and their contractors on the issues related to the System’s 

pumping power needs. 

Musselshell-Judith 

Section 4(a)(2) of S. 685 would authorize the planning, 

design, and construction of the Musselshell-Judith Rural 

Water System in central Montana and would authorize appropriations of 75 percent of total project costs. Since the 

total estimated construction cost of the project is 

$87,102,000, Reclamation estimates that the total Federal 

contribution of 75 percent would equate to $65,327,000 

(2014 dollars). While a 75 percent cost share level has 

been proposed in other rural water projects enacted into 

12 

law, this represents the maximum Federal cost share previously allowed under the Rural Water Supply Act of 2006. 

In 2015, the Central Montana Rural Water Authority’s 

(Authority) Musselshell-Judith Rural Water System Feasibility Study (Feasibility Study) was submitted to Reclamation for technical review under Public Law 109–451. The 

Department found the proposed project to be feasible and 

to meet the broad criteria of the program, however, the 

Department is concerned about our ability to fund even 

currently authorized rural water projects, and does not 

want to unreasonably raise expectations that new authorized projects would receive the desired federal funding. 

Common Both Water Systems 

Section 7(b) of S. 685 addresses the cost indexing for the 

authorization of appropriations. As previously testified, 

Reclamation is not aware of a specific rationale for the differing indexing dates prescribed in the legislation. For the 

Dry-Redwater System, appropriations are to be indexed to 

January 1, 2008. For the Musselshell-Judith, the appropriations are to be indexed to November 1, 2014. 

Authorized rural water projects compete with a number 

of priorities within Reclamation’s Budget, including aging 

infrastructure, Indian water rights settlements, environmental compliance, restoration actions, developing sustainable water supply strategies, and other priorities intended 

to address future water and energy related challenges. 

The Department has concerns about adding to the backlog of Reclamation’s authorized rural water projects seeking Federal construction funding. Discretionary rural 

water funding has enabled Reclamation to make progress 

in promoting certainty, sustainability, and resiliency in 

support of basic drinking water needs of rural western 

communities. However, Reclamation’s ability to make Federal investments that match on-the-ground capabilities has 

its limitations. Of Reclamation’s six currently authorized 

rural water projects under construction or funded at some 

level today, all of the projects pre-date Title I of the Rural 

Water Supply Act of 2006 (now expired). Authorizing additional rural water projects may delay rural water projects 

that are already under construction. 

Conclusion 

The Department recognizes that the people who would 

be served by S. 685 have legitimate needs for better quality drinking water. We are concerned, given the past history and future prospects of funding for the rural water 

program, not to raise unreasonable expectations for future 

federal funding should this bill become law. 

That concludes my written statement. I am pleased to 

answer questions at the appropriate time. 

13 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, the Committee notes that no changes in existing law are made by the bill as ordered reported. 

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