II

105TH CONGRESS

1ST SESSION S. 1230

To amend the Small Reclamation Projects Act of 1956 to provide for Federal

cooperation in non-Federal reclamation projects and for participation

by non-Federal agencies in Federal projects.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 26, 1997

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

to the Committee on Energy and Natural Resources

A BILL

To amend the Small Reclamation Projects Act of 1956 to

provide for Federal cooperation in non-Federal reclamation projects and for participation by non-Federal agencies in Federal projects.

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 ‘‘Small Reclamation

5 Water Resources Project Act of 1997’’.
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1 SEC. 2. AMENDMENT OF SMALL RECLAMATION PROJECTS

2 ACT OF 1956.

3 (a) The first section of the Small Reclamation

4 Projects Act of 1956 (70 Stat. 1044; 43 U.S.C. 422a) is

5 amended by striking ‘‘under the’’ and inserting ‘‘under

6 this Act and other’’ and by adding the following at the

7 end thereof: ‘‘Such projects may include, but shall not be

8 limited to, irrigation projects. Irrigation shall not be a re9 quired purpose for projects receiving assistance under this

10 Act.’’.

11 (b) Section 2 of the Small Reclamation Projects Act

12 of 1956 (70 Stat. 1044; 43 U.S.C. 422b) is amended as

13 follows:

14 (1) By amending subsection (d) to read as fol15 lows:

16 ‘‘(d) The term ‘project’ means a project carried out

17 by a non-Federal organization under the Federal reclama18 tion laws in 1 or more of the 17 western reclamation

19 States that is one of the following:

20 ‘‘(1) A single or multipurpose water resource

21 development project carried out by a non-Federal or22 ganization involving water conservation, energy con23 servation, fish and wildlife conservation, protection,

24 or enhancement, public safety, public outdoor recre25 ation, environmental education, archaeological sur26 veys, integrated resource planning, watershed man-
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1 agement, water quality improvements, rural water

2 supply, augmentation and management of local

3 water supplies, supplemental water for existing sup4 plies, technology transfer, groundwater management

5 or research, nonstructural flood control activities, or

6 total water resources management.

7 ‘‘(2) A project for the rehabilitation, better8 ment, or retrofit of any existing Federal or non-Fed9 eral water infrastructure for purposes of—

10 ‘‘(A) significant preservation, protection,

11 enhancement, or extension of water or energy

12 resources, or

13 ‘‘(B) those operational measures, habitat,

14 or physical features associated with the protec15 tion, preservation, enhancement, or recovery of

16 those fish and wildlife resources that are con17 sidered of importance and interest and which

18 shall include, but not be limited to, migratory

19 species, threatened or endangered species as

20 listed, or proposed for listing, under the Endan21 gered species Act, or other species, as deter22 mined by the Secretary, to be worthy of consid23 eration under these terms.’’.

24 (2) By adding the following at the end thereof:
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1 ‘‘(g) The term ‘water quality improvements’ shall

2 mean and involve those operational measures and physical

3 features associated with—

4 ‘‘(1) the reclamation and reuse of irrigation

5 drainage or municipal and industrial return flows,

6 including wastewater flows;

7 ‘‘(2) the reclamation, dilution, or control, of

8 brackish, toxic, or hazardous waters for beneficial

9 reuse or protection of other related water, land, or

10 environmental resources; or

11 ‘‘(3) flow augmentation from storage to achieve

12 national or State water quality goals.’’.

13 (c) Sections 3 through 8 of such Act are amended

14 to read as follows:

15 ‘‘TITLE I—STATE AND LOCAL PARTICIPATION

16 IN RECLAMATION PROJECTS

17 ‘‘SEC. 101. There is hereby established under this

18 title a program within the Bureau of Reclamation of the

19 Department of the Interior pursuant to which the Sec20 retary of the Interior may make grants and loans to orga21 nizations to carry out projects as defined in section 2(d).

22 ‘‘SEC. 102. (a) Any organization seeking assistance

23 under this title shall submit a proposal to the Secretary

24 in such form and manner as the Secretary may prescribe.

25 Any proposal for a project submitted under this title shall
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1 set forth a plan and estimated cost in detail comparable

2 to those included in preauthorization reports required for

3 a Federal reclamation project.

4 ‘‘(b) Each proposal submitted under this title shall

5 include a showing that the project sponsor holds or can

6 acquire all lands and interests in land (except public and

7 other lands and interest in land owned by the United

8 States which are within the administrative jurisdiction of

9 the Secretary and subject to disposition by the Secretary)

10 and rights, pursuant to applicable State law, to the use

11 of water necessary for the successful construction, oper12 ation, and maintenance of the project and that it is ready,

13 able, and willing to finance otherwise than by loan and

14 grant of Federal funds the non-Federal portion of the

15 costs of the project (which portion shall include all costs

16 of acquiring lands, interests in land, and rights to the use

17 of water except as provided in section 103(b)(2).

18 ‘‘(c) The Secretary shall require each organization to

19 contribute toward the cost of the project (other than by

20 loan or grant of Federal funds) not less than 25 percent

21 nor more than 40 percent of the allowable estimated costs

22 of the project. In determining the amount of such non23 Federal contribution for the proposed project, the Sec24 retary shall credit toward that amount—
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1 ‘‘(1) the cost of investigations, surveys, engi2 neering, and other services necessary to the prepara3 tion of proposals and plans for the proposed project

4 as required by the Secretary;

5 ‘‘(2) the costs of lands and rights-of-way acqui6 sition required of the proposed project;

7 ‘‘(3) amounts spent by the organization for con8 struction or acquisition of facilities for the proposed

9 project prior to project approval; and

10 ‘‘(4) the filing fee required by this Act. Such

11 proposal shall also include an investigation of soil

12 characteristics which might result in toxic or hazard13 ous return flows. The costs of measures to prevent

14 loss of and damage to existing fish and wildlife re15 sources shall be considered as non-Federal project

16 costs and allocated as may be appropriate among

17 project functions. The maximum allowable Federal

18 share per project shall be $30,000,000 plus or minus

19 an adjustment of such amount as may be deter20 mined by the Secretary using the Bureau of Rec21 lamation composite construction cost index for Janu22 ary of the year concerned.

23 ‘‘(d) Not later than one year after the time the initial

24 project proposal is submitted to the Secretary, the Sec25 retary shall make a determination whether the proposal
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1 is financially feasible and constitutes a reasonable risk

2 under the provisions of this title and either approve or

3 disapprove the proposal. The Secretary shall promptly

4 transmit any approved proposals to the Congress. Any Na5 tional Environmental Policy Act documentation for the

6 project shall be completed prior to Secretarial transmittal

7 of the proposal to the Congress.

8 ‘‘(e) At any time prior to the completion of construc9 tion of the project, the Secretary may increase the amount

10 of the requested loan or grant, or both, subject to the limi11 tations allowed by subsection (c), using the Bureau of Rec12 lamation composite construction cost index to compensate

13 for increases in construction costs due to price escalation.

14 ‘‘SEC. 103. (a) Upon approval of any project proposal

15 submitted under this title, the Secretary shall negotiate

16 a contract which shall set out the maximum amount of

17 any loan to be made to the organization and the time and

18 method of making the same available to the organization

19 or the maximum amount of any grant to be accorded the

20 organization.

21 ‘‘(b) A grant under this title shall not exceed the sum

22 of the following:

23 ‘‘(1) The costs of investigations, surveys, and

24 engineering and other services necessary to the prep25 aration of proposals and plans for the project alloca-
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1 ble to fish and wildlife enhancement or public recre2 ation.

3 ‘‘(2) One-half the costs of acquiring lands or in4 terests therein to serve exclusively the purposes of

5 fish and wildlife enhancement or public recreation,

6 plus the costs of acquiring joint use lands and inter7 ests therein properly allocable to fish and wildlife en8 hancement and public recreation.

9 ‘‘(3) One-half the costs of basic public outdoor

10 recreation facilities or facilities serving fish and

11 wildlfie enhancement purposes exclusively.

12 ‘‘(4) One-half the costs of construction of joint

13 use facilities properly allocable to fish and wildlife

14 enhancement or public recreation.

15 ‘‘(5) That portion of the estimated cost of con16 structing the project which, if it were constructed as

17 a Federal reclamation project, would be properly al18 locable to functions, other than recreation and fish

19 and wildlife enhancement and flood control, which

20 are nonreimbursable under general provisions of law

21 applicable to such projects.

22 ‘‘(6) That portion of the estimated cost of con23 structing the project which is allocable to flood con24 trol and which would be nonreimbursable under gen-
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1 eral provisions of law applicable to projects con2 structed by the Secretary of the Army.

3 ‘‘(c) The contract for each loan under this title shall

4 contain such terms and conditions as the Secretary deems

5 necessary or proper to provide assurance of and security

6 for prompt repayment and to ensure achievement of the

7 purposes for which the loan was made. The contract shall

8 include a plan for repayment by the organization within

9 not less than 15 years nor more than 25 years, except

10 that the organization shall have the right to repay the loan

11 without penalty. The contract for each loan under this title

12 shall require repayment of the principal of each loan, to13 gether with interest on those features required to bear in14 terest under Federal Reclamation laws at a rate deter15 mined by the Secretary of the Treasury as of the begin16 ning of the fiscal year in which the contract is executed

17 on the basis of the average market yields on outstanding

18 marketable obligations of the United States with remain19 ing periods to maturity comparable to the applicable re20 payment period of the project. The Secretary, at his dis21 cretion, may reduce the interest on any loan under this

22 title to not less than one-half the average market rate as

23 so determined, or to the extent that he determines that

24 the organization is unable to secure financing from other

25 sources under reasonable terms and conditions, and shall
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1 include letters from lenders or other written evidence in

2 support of any finding of an applicant’s inability to secure

3 such financing in any project proposal transmitted to the

4 Congress.

5 ‘‘TITLE II—PARTNERSHIP PROGRAM

6 ‘‘SEC. 201. There is hereby established within the De7 partment of the Interior’s Bureau of Reclamation the

8 Small Reclamation Water Resources Management Part9 nership Program for a small grant and loan program to

10 be carried out under this title. Grants under this title shall

11 not exceed $5,000,000 for any one project under such pro12 gram and shall be matched on a 50–50 basis. Loans under

13 this title shall not exceed $1,500,000 per project. The Sec14 retary is authorized to use up to $50,000,000 of the

15 amounts available under this Act for the purposes of this

16 title.

17 ‘‘SEC. 202. Once work is certified complete by the

18 Secretary, each loan made under this title shall be repaid

19 within a 5-year period and deposited in a revolving loan

20 fund that shall be established in the Department of the

21 Treasury. Money from the repayment of the loans shall

22 be available from the revolving loan program fund without

23 further appropriation to carry out the purposes of this

24 title.
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1 ‘‘SEC. 203. (a) The following types of activities shall

2 be eligible for grants or loans under this title:

3 ‘‘(1) WATER CONSERVATION.—

4 ‘‘(A) Rehabilitation of existing structures;

5 ‘‘(B) wastewater reuse systems;

6 ‘‘(C) groundwater recharge and develop7 ment systems;

8 ‘‘(D) watershed management programs;

9 ‘‘(E) water quality improvement projects;

10 ‘‘(F) conjunctive use projects;

11 ‘‘(G) metering of systems; and

12 ‘‘(H) public environmental education.

13 ‘‘(2) FISH AND WILDLIFE ENHANCEMENT.—

14 ‘‘(A) Fish and wildlife habitat improve15 ment and protection programs;

16 ‘‘(B) grassland/water/wetland areas;

17 ‘‘(C) stabilization of instream flows; and

18 ‘‘(D) Federal or State endangered species

19 habitat protection and enhancement where im20 provement or enhancement activities are within

21 normal operating criteria.

22 ‘‘(3) PUBLIC SAFETY.—

23 ‘‘(A) Downstream warning system projects;

24 ‘‘(B) canal fencing or canal modification

25 for public safety; and
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1 ‘‘(C) public access facilities.

2 ‘‘(4) PUBLIC OUTDOOR RECREATION.—

3 ‘‘(A) Replacement, repair, or improvement

4 of boat ramps, hiking and biking trails, bench5 es, picnic areas, parking facilities associated

6 with Federal reclamation projects; and

7 ‘‘(B) addition of public access facilities.

8 ‘‘(5) ARCHEOLOGICAL SURVEYS.—Site clear9 ances.

10 ‘‘(b) The Secretary may add to the list referred to

11 in subsection (a) as he deems appropriate, except that any

12 such addition shall not take effect until 60 days after the

13 Secretary publishes a notice of the proposed addition in

14 the Federal Register and has notified the Committee on

15 Resources of the House of Representatives and the Com16 mittee on Energy and Natural Resources of the United

17 States Senate in writing of the proposed addition and the

18 reasons therefor.

19 ‘‘SEC. 204. (a) Each applicant for a grant or loan

20 under this title shall submit a Notice of Intent to the Sec21 retary outlining the proposed project and the public bene22 fits thereof. The Secretary shall provide a written response

23 to the applicant within 30 days of receiving the application

24 either affirming or rejecting Bureau of Reclamation inter25 est in participating in the project. Upon notification of
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1 Bureau of Reclamation interest, the applicant shall submit

2 a project proposal for an appropriate loan or grant giving

3 details of the project and the associated public benefits.

4 The contents of any policy proposal under this title shall

5 include, but need not be limited to, each of the following:

6 ‘‘(1) A resolution by the board of directors of

7 the qualifying organization stating—

8 ‘‘(A) the total estimated cost;

9 ‘‘(B) the amount of the grant or loan re10 quested;

11 ‘‘(C) the amount of the local contribution

12 for the grant;

13 ‘‘(D) the sponsor’s ability to finance and

14 construct the project; and

15 ‘‘(E) the project objectives.

16 ‘‘(2) A summary of the proposal.

17 ‘‘(3) A brief description of the anticipated ef18 fects of the project on the natural, as well as man19 made environment.

20 ‘‘(4) Evidence that the applicant has all lands

21 and water rights needed for the project, or can ob22 tain them.

23 ‘‘(5) A description of the project plan, including

24 a general map showing the location of proposed

25 physical features, sufficient engineering drawings of
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1 major and typical structures, and general standards

2 for design.

3 ‘‘(6) A construction schedule, if applicable, with

4 dates and schedule of funding requirements under

5 this title, in sufficient detail to permit analysis of

6 the proposed construction program.

7 ‘‘(7) A determination of those portions of the

8 project costs which constitute the Federal grant/loan

9 amounts and the applicant’s local contribution.

10 ‘‘(b) The Secretary shall examine the proposal sub11 mitted under this title to determine if the project can rea12 sonably be expected to accomplish its purpose. Once ap13 proved by the Secretary, funding, subject to the availabil14 ity of appropriations or funds from repayments, shall be

15 provided within 60 days for the schedule of work within

16 that fiscal year. The cost of any investigations and prepa17 ration of any environmental documentation shall be borne

18 by the project applicant and any such costs shall be cred19 ited as part of the local cost share for grant funding. The

20 Secretary shall publish on a quarterly basis in the Federal

21 Register a listing of the activities and total funding re22 quired for work committed under this title.

23 ‘‘TITLE III—LOAN GUARANTEES

24 ‘‘SEC. 301. There is hereby established within the De25 partment of the Interior’s Bureau of Reclamation a dem-
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1 onstration program under this title to guarantee loans for

2 projects receiving, or eligible to receive, loans or grants

3 under title I or II of this Act.

4 ‘‘SEC. 302. (a) The Secretary may provide support

5 under the demonstration program to organizations

6 through the provision of loan guarantees to such pro7 grammatic needs as authorized under titles I and II of

8 this Act under such terms and conditions specified in this

9 section and under applicable laws. Any proposal for a

10 project submitted under this title shall set forth a plan

11 and estimated cost in detail comparable to those included

12 in preauthorization reports required for a Federal rec13 lamation project.

14 ‘‘(b) The Secretary is authorized to use up to 10 per15 cent of the amounts available under this Act for the loan

16 guarantee demonstration program under this title over the

17 6 fiscal years commencing after the enactment of this title.

18 ‘‘(c) The Secretary shall use competitive procedures

19 in the selection of entities to receive loan guarantees under

20 this section. The criteria used for the selection of the enti21 ties to receive the loan guarantee under this section shall

22 include, at a minimum, the following:

23 ‘‘(1) The extent to which the loan guarantees

24 would support new water supplies or more efficient

25 use of existing supplies.
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1 ‘‘(2) The extent to which the loan guarantees

2 are necessary as a result of no other financing mech3 anism being available to the requesting entity.

4 ‘‘(3) The extent to which the loan guarantee

5 can be repaid in the shortest period possible.

6 ‘‘(4) The extent to which the loan guarantee

7 would provide for a project of wide public purpose.

8 ‘‘(5) The extent to which the loan guarantee

9 would alleviate a problem with a Federal or State

10 environmental statute or mandate.

11 ‘‘(6) The ability of the program to assist other

12 local water purveyors.

13 ‘‘(7) The extent to which the program would

14 supplement, rather than duplicate, other available

15 water resource programs.

16 ‘‘(8) The likelihood that, within 10 years after

17 the commencement of assistance for a program

18 under this section that assistance from the Bureau

19 of Reclamation will not be necessary to sustain the

20 program.

21 ‘‘(9) The extent to which the annual use of loan

22 guarantee ceiling authority has not created an undue

23 fiscal burden on the reclamation program.

24 ‘‘(d) The total amount available for request by the

25 Administration for a fiscal year to cover the costs of loan
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1 guarantees under this section shall be divided between

2 projects receiving or eligible to receive loans under titles

3 I and II with title I projects receiving 75 percent and title

4 II projects receiving 25 percent. The maximum allowable

5 guarantee percentage for loans guaranteed under this sec6 tion may not exceed 75 percent of the total project cost:

7 Provided, That, as the project sponsor repays such guar8 anteed loan, the ceiling authority used under this section

9 for such guarantee shall revert back to the 10 percent ceil10 ing authorized under this section to serve as the basis for

11 future loan guarantees. Applicable report and document

12 requirements authorized under amendments contained in

13 titles I and II shall similarly apply to loan guarantee

14 projects. For purposes of this Act, any bonds issued under

15 this section by an entity receiving loan guarantees under

16 this section shall be considered federally guaranteed tax17 exempt bonds under applicable State law.

18 ‘‘(e) FULL FAITH AND CREDIT.—Any loan guarantee

19 issued pursuant to this section shall constitute an obliga20 tion, in accordance with the terms of such guarantee, of

21 the United States Government, and the full faith and cred22 it of the United States is hereby pledged to the full per23 formance of the obligations.

24 ‘‘(f) REPORT.—At the end of the third fiscal year

25 after the enactment of this Act, the Secretary shall submit
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1 a report to Congress on the beneficial use and suggested

2 improvements associated with the use of loan guarantees

3 as a mechanism for project construction.

4 ‘‘TITLE IV—GENERAL PROVISIONS

5 ‘‘SEC. 401. Each proposal for a loan, grant, or loan

6 guarantee under this Act shall be accompanied by a pay7 ment of $5,000 plus $1,000 for each $1,000,000 of the

8 estimated Federal share of project costs, or portion there9 of to defray in part the costs of examining the proposal.

10 Fifty percent of the payment shall accompany the applica11 tion and the remaining 50 percent shall be due upon ap12 proval of the project by the Secretary, if approved.

13 ‘‘SEC. 402. Title of all project works and facilities

14 constructed with assistance under this Act shall remain

15 in the name of the organization. Nothing contained in this

16 Act shall preclude the making of more than one loan or

17 grant or guarantee, or any combination thereof, to an or18 ganization so long as no two such loans or grants or guar19 antees, or combinations thereof, are for the same project,

20 as herein defined. In providing assistance under this Act,

21 the Secretary shall give priority to approved proposals

22 which are related to presently authorized Reclamation

23 projects that will benefit from the work carried out under

24 the proposal. The recipient of each loan, grant, or loan

25 guarantee under this Act shall be solely responsible for
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1 planning, constructing, operating, and maintaining any

2 project receiving a loan or grant under this title.

3 ‘‘SEC. 403. Upon request of an organization which

4 has made or intends to make a proposal under this Act,

5 the head of any Federal department or agency may make

6 available to the organization any existing engineering, eco7 nomic, hydrologic, or other appropriate information and

8 printed material that it may have and that will be useful

9 in connection with the planning, design, construction, or

10 operation and maintenance of the project concerned. The

11 reasonable cost of any plans, specifications, and other

12 unpublished material furnished by the Secretary pursuant

13 to this section and the cost of making and administering

14 any provision under this Act shall, to the extent that they

15 would not be nonreimbursable in the case of a project con16 structed under the Federal Reclamation Laws, be treated

17 as a loan and covered in the provisions of the contract

18 entered into under title I unless they are otherwise paid

19 for by the organization.

20 ‘‘SEC. 404. For those projects where the planning

21 and construction of projects undertaken pursuant to this

22 Act is subject to the provisions of the Fish and Wildlife

23 Coordination Act, the cost of such provisions shall be a

24 Federal expense and the Secretary is authorized, as may

25 be provided in Appropriation Acts, to transfer to the Fish
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1 and Wildlife Service or to the National Marine Fisheries

2 Service, such funds as may be necessary to conduct the

3 investigations required to carry out the purposes of this

4 Act, except that the Secretary may not use any funds ap5 propriated for the purposes of projects or programs under

6 the Bureau of Reclamation. No grant, loan, guarantee, or

7 other assistance provided under this Act shall be consid8 ered to be a new or supplemental benefit under Reclama9 tion law.’’.

10 SEC. 3. (a) Sections 9 through 13 of such Act are

11 redesignated as sections 405 through 499 respectively.

12 (b) Section 406 of such Act, as redesignated by para13 graph (1) of this subsection, is amended by striking ‘‘sec14 tion 3’’ and inserting ‘‘title I’’.

15 (c) Section 402 of such Act, as redesignated by para16 graph (1) of this subsection, is amended by striking ‘‘sec17 tion 4(c)’’ and inserting ‘‘title I’’.

18 (d) Within 120 days after the enactment of this Act,

19 the Secretary of the Interior shall promulgate such regula20 tions as may be necessary to carry out the amendments

21 made by this Act.

22 (e) The amendments made by this Act shall take ef23 fect on the date of the enactment of this Act. Nothing

24 in this Act or in any amendment made by this Act shall
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1 affect any loan or grant that has been approved before

2 the date of the enactment of this Act.

Æ