I 

113TH CONGRESS 

2D SESSION H. R. 3981 

To direct the Secretary of the Interior to allow for prepayment of repayment 

contracts between the United States and water users, to provide surface 

water storage enhancement, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 31, 2014 

Mr. HASTINGS of Washington introduced the following bill; which was referred 

to the Committee on Natural Resources 

A BILL 

To direct the Secretary of the Interior to allow for prepayment of repayment contracts between the United States 

and water users, to provide surface water storage enhancement, 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 ‘‘Accelerated Revenue, 

5 Repayment, and Surface Water Storage Enhancement 

6 Act’’. 

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1 SEC. 2. PREPAYMENT OF CERTAIN REPAYMENT CON2 TRACTS BETWEEN THE UNITED STATES AND 

3 CONTRACTORS OF FEDERALLY DEVELOPED 

4 WATER SUPPLIES. 

5 (a) CONVERSION AND PREPAYMENT OF CON6 TRACTS.— 

7 (1) CONVERSION.—Upon request of the con8 tractor, the Secretary of the Interior shall convert 

9 any water service contract in effect on the date of 

10 enactment of this Act and between the United 

11 States and a water users’ association to allow for 

12 prepayment of the repayment contract pursuant to 

13 paragraph (2) under mutually agreeable terms and 

14 conditions. The manner of conversion under this 

15 paragraph shall be as follows: 

16 (A) Water service contracts that were en17 tered into under section 9(e) of the Act of Au18 gust 4, 1939 (53 Stat. 1196), to be converted 

19 under this section shall be converted to repay20 ment contracts under section 9(d) of that Act 

21 (53 Stat. 1195). 

22 (B) Water service contracts that were en23 tered under subsection (c)(2) of section 9 of the 

24 Act of August 4, 1939 (53 Stat. 1194), to be 

25 converted under this section shall be converted 

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1 to a contract under subsection (c)(1) of section 

2 9 of that Act (53 Stat. 1195). 

3 (2) PREPAYMENT.—All contracts converted 

4 pursuant to paragraph (1)(A) shall— 

5 (A) upon request of the contractor, provide 

6 for the repayment, either in lump sum or by ac7 celerated prepayment, of the remaining net 

8 present value of the construction costs identi9 fied in water project specific irrigation rate re10 payment schedules, as adjusted to reflect pay11 ment not reflected in such schedule, and prop12 erly assignable for ultimate return by the con13 tractor, or if made in approximately equal in14 stallments, no later than 3 years after the effec15 tive date of the repayment contract; such 

amount to be discounted by 1 16 ⁄2 the Treasury 

17 rate. An estimate of the remaining net present 

18 value of construction costs, as adjusted, shall be 

19 provided by the Secretary to the contractor no 

20 later than 30 days following receipt of request 

21 of the contractor; 

22 (B) require that construction costs or 

23 other capitalized costs incurred after the effec24 tive date of the contract or not reflected in the 

25 rate schedule referenced in subparagraph (A), 

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1 and properly assignable to such contractor shall 

2 be repaid in not more than 5 years after notifi3 cation of the allocation if such amount is a re4 sult of a collective annual allocation of capital 

5 costs to the contractors exercising contract con6 versation under this subsection of less than 

7 $5,000,000. If such amount is $5,000,000 or 

8 greater, such cost shall be repaid as provided by 

9 applicable reclamation law; 

10 (C) provide that power revenues will not be 

11 available to aid in repayment of construction 

12 costs allocated to irrigation under the contract; 

13 and 

14 (D) continue so long as the contractor 

15 pays applicable charges, consistent with section 

16 9(c)(1) of the Act of August 4, 1939 (53 Stat. 

17 1195), and applicable law. 

18 (3) CONTRACT REQUIREMENTS.—The following 

19 shall apply with regard to all contracts converted 

20 pursuant to paragraph (1)(B): 

21 (A) Upon request of the contractor, pro22 vide for the repayment in lump sum of the re23 maining net present value of construction costs 

24 identified in water project specific municipal 

25 and industrial rate repayment schedules, as admstockstill on DSK4VPTVN1PROD with BILLS

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1 justed to reflect payments not reflected in such 

2 schedule, and properly assignable for ultimate 

3 return by the contractor. An estimate of the re4 maining net present value of construction costs, 

5 as adjusted, shall be provided by the Secretary 

6 to the contractor no later than 30 days after re7 ceipt of request of contractor. 

8 (B) The contract shall require that con9 struction costs or other capitalized costs in10 curred after the effective date of the contract or 

11 not reflected in the rate schedule referenced in 

12 subparagraph (A), and properly assignable to 

13 such contractor, shall be repaid in not more 

14 than 5 years after notification of the allocation 

15 if such amount is a result of a collective annual 

16 allocation of capital costs to the contractors ex17 ercising contract conversation under this sub18 section of less than $5,000,000. If such amount 

19 is $5,000,000 or greater, such cost shall be re20 paid as provided by applicable reclamation law; 

21 and 

22 (C) Continue so long as the contractor 

23 pays applicable charges, consistent with section 

24 9(c)(1) of the Act of August 4, 1939 (53 Stat. 

25 1195), and applicable law. 

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1 (4) CONDITIONS.—All contracts entered into 

2 pursuant to paragraphs (1), (2), and (3) shall— 

3 (A) not be adjusted on the basis of the 

4 type of prepayment financing used by the water 

5 users’ association; 

6 (B) conform to any other agreements, such 

7 as applicable settlement agreements and new 

8 constructed appurtenant facilities; and 

9 (C) not modify other water service, repay10 ment, exchange and transfer contractual rights 

11 between the water users’ association, and the 

12 Bureau of Reclamation, or any rights, obliga13 tions, or relationships of the water users’ asso14 ciation and their landowners as provided under 

15 State law. 

16 (b) ACCOUNTING.—The amounts paid pursuant to 

17 subsection (a) shall be subject to adjustment following a 

18 final cost allocation by the Secretary of the Interior. In 

19 the event that the final cost allocation indicates that the 

20 costs properly assignable to the contractor are greater 

21 than what has been paid by the contractor, the contractor 

22 shall be obligated to pay the remaining allocated costs. 

23 The term of such additional repayment contract shall be 

24 not less than one year and not more than 10 years, how25 ever, mutually agreeable provisions regarding the rate of 

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1 repayment of such amount may be developed by the par2 ties. In the event that the final cost allocation indicates 

3 that the costs properly assignable to the contractor are 

4 less than what the contractor has paid, the Secretary shall 

5 credit such overpayment as an offset against any out6 standing or future obligation of the contractor. 

7 (c) APPLICABILITY OF CERTAIN PROVISIONS.— 

8 (1) EFFECT OF EXISTING LAW.—Upon a con9 tractor’s compliance with and discharge of the obli10 gation of repayment of the construction costs pursu11 ant to a contract entered into pursuant to subsection 

12 (a)(2)(A), sections 213 (a) and (b) of the Reclama13 tion Reform Act of 1982 (96 Stat. 1269) shall apply 

14 to affected lands. 

15 (2) EFFECT OF OTHER OBLIGATIONS.—The ob16 ligation of a contractor to repay construction costs 

17 or other capitalized costs described in subsections 

18 (a)(2)(B), (a)(3)(B) or (b) shall not affect a contrac19 tor’s status as having repaid all of the construction 

20 costs assignable to the contractor or the applicability 

21 of sections 213 (a) and (b) of the Reclamation Re22 form Act of 1982 (96 Stat. 1269) once the amount 

23 required to be paid by the contractor under the re24 payment contract entered into pursuant to sub25 section (a)(2)(A) have been paid. 

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1 (d) EFFECT ON EXISTING LAW NOT ALTERED.—Im2 plementation of the provisions of this Act shall not alter 

3 the repayment obligation of any water service or repay4 ment contractor receiving water from the same water 

5 project, or shift any costs that would otherwise have been 

6 properly assignable to the water users’ association identi7 fied in subsections (a)(1), (a)(2), and (a)(3) absent this 

8 section, including operation and maintenance costs, con9 struction costs, or other capitalized costs incurred after 

10 the date of the enactment of this Act, or to other contrac11 tors. 

12 (e) SURFACE WATER STORAGE ENHANCEMENT PRO13 GRAM.— 

14 (1) IN GENERAL.—Three years following the 

15 date of enactment of this Act, all receipts generated 

16 from prepayment of contracts under this section be17 yond amounts necessary to cover the amount of re18 ceipts forgone from scheduled payments under cur19 rent law for the 10-year period following the date of 

20 enactment of this Act shall be directed to the Rec21 lamation Surface Water Storage Account under 

22 paragraph (2). 

23 (2) SURFACE STORAGE ACCOUNT.—The Sec24 retary shall allocate amounts collected under para25 graph (1) into the ‘‘Reclamation Surface Storage 

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1 Account’’ to fund or provide loans for the construc2 tion of surface water storage. The Secretary may 

3 also enter into cooperative agreements with water 

4 users’ associations for the construction of surface 

5 water storage and amounts within the Surface Stor6 age Account may be used to fund such construction. 

7 Surface water storage projects that are otherwise 

8 not federally authorized shall not be considered Fed9 eral facilities as a result of any amounts allocated 

10 from the Surface Storage Account for part or all of 

11 such facilities. 

12 (3) REPAYMENT.—Amounts used for surface 

13 water storage construction from the Account shall be 

14 fully reimbursed to the Account consistent with the 

15 requirements under Federal reclamation law (the 

16 law (the Act of June 17, 1902 (32 Stat. 388, chap17 ter 1093))), and Acts supplemental to and amend18 atory of that Act (43 U.S.C. 371 et seq.) except that 

19 all funds reimbursed shall be deposited in the Ac20 count established under paragraph (1). 

21 (4) AVAILABILITY OF AMOUNTS.—Amounts de22 posited in the Account under this subsection shall— 

23 (A) be made available in accordance with 

24 this section, without further appropriation; and 

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1 (B) be in addition to amounts appropriated 

2 for such purposes under any other provision of 

3 law. 

4 (5) PURPOSES OF SURFACE WATER STORAGE.— 

5 Construction of surface water storage under this sec6 tion shall be made for the following purposes: 

7 (A) Increased municipal and industrial 

8 water supply. 

9 (B) Agricultural floodwater, erosion, and 

10 sedimentation reduction. 

11 (C) Agricultural drainage improvements. 

12 (D) Agricultural irrigation. 

13 (E) Increased recreation opportunities. 

14 (F) Reduced adverse impacts to fish and 

15 wildlife from water storage or diversion projects 

16 within watersheds associated with water storage 

17 projects funded under this section. 

18 (G) Any other purposes consistent with 

19 reclamation laws or other Federal law. 

20 (f) DEFINITIONS.—For the purposes of this Act, the 

21 following definitions apply: 

22 (1) ACCOUNT.—The term ‘‘Account’’ means the 

23 Reclamation Surface Water Storage Account estab24 lished under subsection (e)(2). 

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1 (2) CONSTRUCTION.—The term ‘‘construction’’ 

2 means the designing, materials engineering and test3 ing, surveying, and building of surface water storage 

4 including additions to existing surface water storage 

5 and construction of new surface water storage facili6 ties, exclusive of any Federal statutory or regulatory 

7 obligations relating to any permit, review, approval, 

8 or other such requirement. 

9 (3) SURFACE WATER STORAGE.—The term 

10 ‘‘surface water storage’’ means any federally owned 

11 facility under the jurisdiction of the Bureau of Rec12 lamation or any non-Federal facility used for the 

13 surface storage and supply of water resources. 

14 (4) TREASURY RATE.—The term ‘‘Treasury 

15 rate’’ means the 20-year Constant Maturity Treas16 ury (CMT) rate published by the United States De17 partment of the Treasury existing on the effective 

18 date of the contract. 

19 (5) WATER USERS’ ASSOCIATION.—The term 

20 ‘‘water users’ association’’ means— 

21 (A) an entity organized and recognized 

22 under State laws that is eligible to enter into 

23 contracts with reclamation to receive contract 

24 water for delivery to and users of the water and 

25 to pay applicable charges; and 

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1 (B) includes a variety of entities with dif2 ferent names and differing functions, such as 

3 associations, conservatory district, irrigation 

4 district, municipality, and water project con5 tract unit. 

Æ 

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