II 

109TH CONGRESS 

1ST SESSION S. 1118 

To amend the Reclamation Reform Act of 1982 to reduce irrigation subsidies, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 25, 2005 

Mr. FEINGOLD introduced the following bill; which was read twice and 

referred to the Committee on Energy and Natural Resources 

A BILL 

To amend the Reclamation Reform Act of 1982 to reduce 

irrigation subsidies, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Irrigation Subsidy Re5 duction Act of 2005’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) the Federal reclamation program has been 

9 in existence for over 90 years, with an estimated 

10 taxpayer investment of over $70,000,000,000; 
2 

•S 1118 IS

1 (2) the program has had and continues to have 

2 an enormous effect on the water resources and 

3 aquatic environments of the western States; 

4 (3) irrigation water made available from Fed5 eral water projects in the West is a very valuable re6 source for which there are increasing and competing 

7 demands; 

8 (4) the justification for providing water at less 

9 than full cost was to benefit and promote the devel10 opment of small family farms and exclude large cor11 porate farms, but this purpose has been frustrated 

12 over the years due to inadequate implementation of 

13 subsidy and acreage limits; 

14 (5) below-cost water prices tend to encourage 

15 excessive use of scarce water supplies in the arid re16 gions of the West, and reasonable price increases to 

17 the wealthiest western farmers would provide an eco18 nomic incentive for greater water conservation; 

19 (6) the Federal Government has increasingly 

20 applied eligibility tests based on income for Federal 

21 entitlement and subsidy programs, measures that 

22 are consistent with the historic approach of the rec23 lamation program’s acreage limitations that seek to 

24 limit water subsidies to smaller farms; and 
3 

•S 1118 IS

1 (7) including a means test based on gross in2 come in the reclamation program will increase the 

3 effectiveness of carrying out the family farm goals of 

4 the Federal reclamation laws. 

5 SEC. 3. AMENDMENTS. 

6 (a) DEFINITIONS.—Section 202 of the Reclamation 

7 Reform Act of 1982 (43 U.S.C. 390bb) is amended— 

8 (1) by redesignating paragraphs (7), (8), (9), 

9 (10), and (11) as paragraphs (9), (10), (11), (12), 

10 and (13), respectively; 

11 (2) in paragraph (6), by striking ‘‘owned or op12 erated under a lease which’’ and inserting ‘‘that is 

13 owned, leased, or operated by an individual or legal 

14 entity and that’’; 

15 (3) by inserting after paragraph (6) the fol16 lowing: 

17 ‘‘(7) LEGAL ENTITY.—The term ‘legal entity’ 

18 includes a corporation, association, partnership, 

19 trust, joint tenancy, or tenancy in common, or any 

20 other entity that owns, leases, or operates a farm 

21 operation for the benefit of more than 1 individual 

22 under any form of agreement or arrangement. 

23 ‘‘(8) OPERATOR.— 

24 ‘‘(A) IN GENERAL.—The term ‘operator’— 
4 

•S 1118 IS

1 ‘‘(i) means an individual or legal enti2 ty that operates a single farm operation on 

3 a parcel (or parcels) of land that is owned 

4 or leased by another person (or persons) 

5 under any form of agreement or arrange6 ment (or agreements or arrangements); 

7 and 

8 ‘‘(ii) if the individual or legal entity— 

9 ‘‘(I) is an employee of an indi10 vidual or legal entity, includes the in11 dividual or legal entity; or 

12 ‘‘(II) is a legal entity that con13 trols, is controlled by, or is under 

14 common control with another legal en15 tity, includes each such other legal en16 tity. 

17 ‘‘(B) OPERATION OF A FARM OPER18 ATION.—For the purposes of subparagraph (A), 

19 an individual or legal entity shall be considered 

20 to operate a farm operation if the individual or 

21 legal entity is the person that performs the 

22 greatest proportion of the decisionmaking for 

23 and supervision of the agricultural enterprise on 

24 land served with irrigation water.’’; and 

25 (4) by adding at the end the following: 
5 

•S 1118 IS

1 ‘‘(14) SINGLE FARM OPERATION.— 

2 ‘‘(A) IN GENERAL.—The term ‘single farm 

3 operation’ means the total acreage of land 

4 served with irrigation water for which an indi5 vidual or legal entity is the operator. 

6 ‘‘(B) RULES FOR DETERMINING WHETHER

7 SEPARATE PARCELS ARE OPERATED AS A SIN8 GLE FARM OPERATION.— 

9 ‘‘(i) EQUIPMENT–AND LABOR–SHAR10 ING ACTIVITIES.—The conduct of 

11 equipment- and labor-sharing activities on 

12 separate parcels of land by separate indi13 viduals or legal entities shall not by itself 

14 serve as a basis for concluding that the 

15 farming operations of the individuals or 

16 legal entities constitute a single farm oper17 ation. 

18 ‘‘(ii) PERFORMANCE OF CERTAIN

19 SERVICES.—The performance by an indi20 vidual or legal entity of an agricultural 

21 chemical application, pruning, or har22 vesting for a farm operation on a parcel of 

23 land shall not by itself serve as a basis for 

24 concluding that the farm operation on that 

25 parcel of land is part of a single farm op-
6 

•S 1118 IS

1 eration operated by the individual or entity 

2 on other parcels of land.’’. 

3 (b) IDENTIFICATION OF OWNERS, LESSEES, AND OP4 ERATORS AND OF SINGLE FARM OPERATIONS.—The Rec5 lamation Reform Act of 1982 (43 U.S.C. 390aa et seq.) 

6 is amended by inserting after section 201 the following: 

7 ‘‘SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND 

8 OPERATORS AND OF SINGLE FARM OPER9 ATIONS. 

10 ‘‘(a) IN GENERAL.—Subject to subsection (b), for 

11 each parcel of land to which irrigation water is delivered 

12 or proposed to be delivered, the Secretary shall identify 

13 a single individual or legal entity as the owner, lessee, or 

14 operator. 

15 ‘‘(b) SHARED DECISIONMAKING AND SUPER16 VISION.—If the Secretary determines that no single indi17 vidual or legal entity is the owner, lessee, or other indi18 vidual that performs the greatest proportion of decision19 making for and supervision of the agricultural enterprise 

20 on a parcel of land— 

21 ‘‘(1) all individuals and legal entities that own, 

22 lease, or perform a proportion of decisonmaking and 

23 supervision that is equal as among themselves but 

24 greater than the proportion performed by any other 
7 

•S 1118 IS

1 individual or legal entity shall be considered jointly 

2 to be the owner, lessee, or operator; and 

3 ‘‘(2) all parcels of land of which any such indi4 vidual or legal entity is the owner, lessee, or oper5 ator shall be considered to be part of the single farm 

6 operation of the owner, lessee, or operator identified 

7 under subsection (1).’’. 

8 (c) PRICING.—Section 205 of the Reclamation Re9 form Act of 1982 (43 U.S.C. 390ee) is amended by adding 

10 at the end the following: 

11 ‘‘(d) SINGLE FARM OPERATIONS GENERATING MORE

12 THAN $500,000 IN GROSS FARM INCOME.— 

13 ‘‘(1) IN GENERAL.—Notwithstanding sub14 sections (a), (b), and (c), in the case of— 

15 ‘‘(A) a qualified recipient that reports 

16 gross farm income from a single farm operation 

17 in excess of $500,000 for a taxable year; or 

18 ‘‘(B) a limited recipient that received irri19 gation water on or before October 1, 1981, and 

20 that reports gross farm income from a single 

21 farm operation in excess of $500,000 for a tax22 able year; 

23 irrigation water may be delivered to the single farm 

24 operation of the qualified recipient or limited recipi25 ent at less than full cost to a number of acres that 
8 

•S 1118 IS

1 does not exceed the number of acres determined 

2 under paragraph (2). 

3 ‘‘(2) MAXIMUM NUMBER OF ACRES TO WHICH

4 IRRIGATION WATER MAY BE DELIVERED AT LESS

5 THAN FULL COST.—The number of acres determined 

6 under this subparagraph is the number equal to the 

7 number of acres of the single farm operation multi8 plied by a fraction, the numerator of which is 

9 $500,000 and the denominator of which is the 

10 amount of gross farm income reported by the quali11 fied recipient or limited recipient in the most recent 

12 taxable year. 

13 ‘‘(3) INFLATION ADJUSTMENT.— 

14 ‘‘(A) IN GENERAL.—The $500,000 amount 

15 under paragraphs (1) and (2) for any taxable 

16 year beginning in a calendar year after 2004 

17 shall be equal to the product of— 

18 ‘‘(i) $500,000, multiplied by 

19 ‘‘(ii) the inflation adjustment factor 

20 for the taxable year. 

21 ‘‘(B) INFLATION ADJUSTMENT FACTOR.— 

22 The term ‘inflation adjustment factor’ means, 

23 with respect to any calendar year, a fraction the 

24 numerator of which is the GDP implicit price 

25 deflator for the preceding calendar year and the 
9 

•S 1118 IS

1 denominator of which is the GDP implicit price 

2 deflator for 2004. Not later than April 1 of any 

3 calendar year, the Secretary shall publish the 

4 inflation adjustment factor for the preceding 

5 calendar year. 

6 ‘‘(C) GDP IMPLICIT PRICE DEFLATOR.— 

7 For purposes of subparagraph (B), the term 

8 ‘GDP implicit price deflator’ means the first re9 vision of the implicit price deflator for the gross 

10 domestic product as computed and published by 

11 the Secretary of Commerce. 

12 ‘‘(D) ROUNDING.—If any increase deter13 mined under subparagraph (A) is not a multiple 

14 of $100, the increase shall be rounded to the 

15 next lowest multiple of $100.’’. 

16 (d) CERTIFICATION OF COMPLIANCE.—Section 206 

17 of the Reclamation Reform Act of 1982 (43 U.S.C. 390ff) 

18 is amended to read as follows: 

19 ‘‘SEC. 206. CERTIFICATION OF COMPLIANCE. 

20 ‘‘(a) IN GENERAL.—As a condition to the receipt of 

21 irrigation water for land in a district that has a contract 

22 described in section 203, each owner, lessee, or operator 

23 in the district shall furnish the district, in a form pre24 scribed by the Secretary, a certificate that the owner, les25 see, or operator is in compliance with this title, including 
10 

•S 1118 IS

1 a statement of the number of acres owned, leased, or oper2 ated, the terms of any lease or agreement pertaining to 

3 the operation of a farm operation, and, in the case of a 

4 lessee or operator, a certification that the rent or other 

5 fees paid reflect the reasonable value of the irrigation 

6 water to the productivity of the land. 

7 ‘‘(b) DOCUMENTATION.—The Secretary may require 

8 a lessee or operator to submit for the Secretary’s examina9 tion— 

10 ‘‘(1) a complete copy of any lease or other 

11 agreement executed by each of the parties to the 

12 lease or other agreement; and 

13 ‘‘(2) a copy of the return of income tax imposed 

14 by chapter 1 of the Internal Revenue Code of 1986 

15 for any taxable year in which the single farm oper16 ation of the lessee or operator received irrigation 

17 water at less than full cost.’’. 

18 (e) TRUSTS.—Section 214 of the Reclamation Re19 form Act of 1982 (43 U.S.C. 390nn) is repealed. 

20 (f) ADMINISTRATIVE PROVISIONS.— 

21 (1) PENALTIES.—Section 224(c) of the Rec22 lamation Reform Act of 1982 (43 U.S.C. 390ww(c)) 

23 is amended— 

24 (A) by striking ‘‘(c) The Secretary’’ and 

25 inserting the following: 
11 

•S 1118 IS

1 ‘‘(c) REGULATIONS; DATA COLLECTION; PEN2 ALTIES.— 

3 ‘‘(1) REGULATIONS; DATA COLLECTION.—The 

4 Secretary’’; and 

5 (B) by adding at the end the following: 

6 ‘‘(2) PENALTIES.—Notwithstanding any other 

7 provision of law, the Secretary shall establish appro8 priate and effective penalties for failure to comply 

9 with any provision of this Act or any regulation 

10 issued under this Act.’’. 

11 (2) INTEREST.—Section 224(i) of the Reclama12 tion Reform Act of 1982 (43 U.S.C. 390ww(i)) is 

13 amended by striking the last sentence and inserting 

14 the following: ‘‘The interest rate applicable to under15 payments shall be equal to the rate applicable to ex16 penditures under section 202(3)(C).’’. 

17 (g) REPORTING.—Section 228 of the Reclamation 

18 Reform Act of 1982 (43 U.S.C. 390zz) is amended by in19 serting ‘‘operator or’’ before ‘‘contracting entity’’ each 

20 place it appears. 

21 (h) MEMORANDUM OF UNDERSTANDING.—The Rec22 lamation Reform Act of 1982 (43 U.S.C. 390aa et seq.) 

23 is amended— 

24 (1) by redesignating sections 229 and 230 as 

25 sections 230 and 231; and 
12 

•S 1118 IS

1 (2) by inserting after section 228 the following: 

2 ‘‘SEC. 229. MEMORANDUM OF UNDERSTANDING. 

3 ‘‘The Secretary, the Secretary of the Treasury, and 

4 the Secretary of Agriculture shall enter into a memo5 randum of understanding or other appropriate instrument 

6 to permit the Secretary, notwithstanding section 6103 of 

7 the Internal Revenue Code of 1986, to have access to and 

8 use of available information collected or maintained by the 

9 Department of the Treasury and the Department of Agri10 culture that would aid enforcement of the ownership and 

11 pricing limitations of Federal reclamation law.’’. 

Æ