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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2218 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2218

  To direct the Secretary of the Interior to establish a rural water 
supply program in the Reclamation States for the purpose of providing a 
 clean, safe, affordable, and reliable water supply to rural residents 
and for other purposes, to authorize the Secretary to conduct appraisal 
and feasibility studies for rural water projects, and to establish the 
       guidelines for any projects authorized under this program.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2004

 Mr. Domenici introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL

 
  To direct the Secretary of the Interior to establish a rural water 
supply program in the Reclamation States for the purpose of providing a 
 clean, safe, affordable, and reliable water supply to rural residents 
and for other purposes, to authorize the Secretary to conduct appraisal 
and feasibility studies for rural water projects, and to establish the 
       guidelines for any projects authorized under this program.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reclamation Rural Water Supply Act 
of 2004''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Federal reclamation laws.--The term ``Federal 
        Reclamation laws'' means the Act of June 17, 1902, 43 U.S.C. 
        371 et seq., as amended and supplemented.
            (2) Indian lands.--The term ``Indian lands'' means those 
        lands held by the United States in trust for a tribe or 
        individual member(s) of an Indian tribe or those lands owned by 
        a tribe or individual member(s) of an Indian tribe subject to a 
        Federal restriction on alienation.
            (3) Indian tribe.--The term ``Indian tribe'' means a tribe 
        included on the list of recognized tribes which the Secretary 
        publishes under the Federally Recognized Indian Tribe List Act 
        of 1994 (25 U.S.C. 479a-1), and which are eligible for the 
        special programs and services provided by the United States to 
        Indians because of their status as Indians.
            (4) Indian.--The term ``Indian'' means a person who is a 
        member of an Indian tribe.
            (5) Non-federal project entity.--The term ``non-Federal 
        project entity'' means a State, regional, or other local 
        authority, Indian tribe or tribal organization, or other 
        qualifying entity such as a water conservation district, water 
        conservancy district, or rural water district or association.
            (6) Reclamation.--The term ``Reclamation'' means the Bureau 
        of Reclamation, an agency within the Department of the 
        Interior.
            (7) Reclamation states.--The term ``Reclamation States'' 
        means the States and areas referred to in section 1 of the 
        Reclamation Act of 1902 (Act of June 17, 1902, 43 U.S.C. 371 et 
        seq.), as amended.
            (8) Rural water supply project.--The term ``rural water 
        supply project'' means a water supply project identified to 
        serve a group of communities, Indian tribes, tribal 
        organizations, dispersed homesites, or rural areas with 
        domestic, residential, and industrial water, and which can 
        include incidental livestock watering, but which does not 
        include commercial irrigation. The terms ``rural'' and ``rural 
        area'' mean any open country, or any place, town, village, or 
        city which is not part of or associated with a metropolitan 
        statistical area and shall be further clarified for the 
        purposes of this program in the criteria developed under 
        section 3(d). Rural water infrastructure includes pumps, pipes, 
        wells, water treatment facilities, and appurtenances, but does 
        not include major impoundment structures.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (10) Tribal organization.--The term ``tribal organization'' 
        means the recognized governing body of any Indian tribe; any 
        legally established organization of Indians which is 
        controlled, sanctioned, or chartered by such governing body or 
        which is democratically elected by the adult members of the 
        Indian community to be served by such organization and which 
        includes the maximum participation of Indians in all phases of 
        its activities: Provided, That in any case where a contract is 
        let or grant made to an organization to perform services 
        benefiting more than one Indian tribe, the approval of each 
        such Indian tribe shall be a prerequisite to the letting or 
        making of such contract or grant.
            (11) Construct.--The term ``construct'' means to install 
        new infrastructure and to upgrade or replace existing 
        facilities where they are associated with the new 
        infrastructure authorized under the Act.
            (12) Operations, maintenance, and replacement costs.--The 
        term ``operations, maintenance, and replacement costs'' means 
        all costs for the operations of the project that are necessary 
        for the safe, efficient and continued functioning of the 
        project to produce the benefits set forth in the feasibility 
        study. This includes repairs of a routine nature that maintain 
        the project in a well kept condition, replacement of worn-out 
        project elements and rehabilitation activities necessary to 
        bring a deteriorated project back to its original condition.

SEC. 3. RURAL WATER SUPPLY PROGRAM.

    (a) In General.--The Secretary is authorized to undertake a 
competitive program based upon the criteria developed under subsection 
(d) to plan, design and construct rural water supply projects in 
cooperation with non-Federal project entities.
    (b) Reclamation States.--The program established in this Act shall 
be limited to the Reclamation States.
    (c) Non-Federal Project Entity.--Each rural water supply project 
under the program established in this Act shall be performed in 
cooperation with a qualifying non-Federal project entity as defined in 
section 2(e) of this Act.
    (d) Eligibility Criteria.--The Secretary shall develop and publish 
criteria for determining which projects are eligible for participation 
under the program established in this Act. The Secretary, to the 
maximum extent possible, shall consider--
            (1) whether a rural water supply project--
                    (A) serves rural areas and communities or Indian 
                tribes;
                    (B) shows economic benefits;
                    (C) is cost-effective; and
                    (D) whether and to what extent the local project 
                sponsors can meet the cost-share and repayment criteria 
                described in section 3(e), section 4, and section 5;
            (2) whether there is an urgent and compelling need for a 
        rural water supply project that would address current or future 
        water supply shortages, and/or improve the health and/or 
        aesthetic based quality of water in a manner that results in 
        continuous, measurable, and significant water quality benefits;
            (3) whether a rural water supply project helps meet 
        existing legal requirements;
            (4) whether a rural water supply 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;
            (5) whether a rural water supply project provides benefits 
        outside the region in which the project occurs; and
            (6) the availability of water rights to support project 
        development and actual water delivery.
    (e) Limitation on Use of Federal Funds.--
            (1) In general.--Notwithstanding any other provision of law 
        and except as provided in paragraph (2), the Federal share of 
        the costs of any individual project authorized by Congress 
        under the program established in this Act shall not exceed the 
        portion of those project costs in excess of the non-Federal 
        entities' capability-to-pay, as generally described in section 
        5(e). Except as provided in paragraph (2), the local 
        contribution shall be based upon the non-Federal entities' 
        capability to pay and shall be no less than 35 percent of the 
        projected total project costs.
            (2) Reduced non-federal share.--The Secretary may increase 
        the Federal share of the cost of a project authorized under the 
        program established in this Act to an amount that is greater 
        than the amount specified in paragraph (1) of this subsection 
        if the Secretary determines that--
                    (A) the project is for the benefit of an Indian 
                tribe; and
                    (B) application of paragraph (1) would result in 
                economic hardship for such Indian tribe.

SEC. 4. APPRAISAL INVESTIGATIONS.

    (a) In General.--Upon request of a non-Federal project entity and 
consistent with section 3 (d) and (e) of this Act, the Secretary may 
undertake, in cooperation with such non-Federal project entity, 
appraisal investigations to identify and study opportunities for 
construction of rural water supply projects to determine if they meet 
the criteria to be promulgated under Section (3)(d). The appraisal 
report shall include a determination of whether or not to recommend the 
initiation of a feasibility study for a proposed rural water supply 
project.
    (b) Cooperation.--The Secretary shall consult and cooperate with 
appropriate State, regional, tribal and local authorities during the 
performance of each appraisal investigation conducted pursuant to this 
Act.
    (c) Costs.--The Federal obligations for costs of such appraisal 
investigations shall conform with Reclamation policy (Reclamation 
Manual number CMP-05-01).

SEC. 5. FEASIBILITY STUDIES, PROJECT DEVELOPMENT, AND COST SHARE.

    (a)  In General.--The Secretary, in cooperation with a non-Federal 
project entity, is authorized to undertake studies to determine the 
feasibility of rural water supply systems recommended for such study 
pursuant to section 4 of this Act. The feasibility report shall 
document the Secretary's engineering, environmental, and economic 
investigation of a proposed rural water supply project, taking into 
consideration the range of potential solutions and the circumstances 
and needs of the area to be served by the proposed project, the 
potential benefits to the people of that area, and appropriate water 
conservation measures. The highest priority in selecting alternatives 
shall be determined by evaluating factors that include, but are not 
limited to, the following: the level of net economic benefits; the 
extent to which the project and alternatives take advantage of economic 
incentives and the use of market-based mechanisms; whether a proposed 
project is ``rural'' or in a ``rural area'', as defined in section 1(h) 
and clarified in the eligibility criteria developed under section 3(d); 
a benefit-cost analysis, containing an analysis comparing different 
structural and non-structural options for meeting water needs; whether 
non-Federal entities have adequate fiscal controls in place to manage 
the project; the extent to which the project involves partnerships with 
other State, local, tribal government, or Federal entities; and the 
extent to which projects intended for Indian tribes and tribal 
organizations address the need for economic self sufficiency. The 
Secretary shall indicate in the Feasibility report whether the project 
is recommended for implementation.
    (b) Federal Cost Share.--The Federal share of the costs of such 
feasibility studies shall not exceed 50 percent of the total study 
costs, except that the Secretary may increase the Federal share of the 
costs of such feasibility studies for an Indian tribe or tribal 
organization if the Secretary determines that they would be unable to 
contribute at least 50 percent of the costs of such study based on 
criteria established by the Secretary in regulations. The Secretary may 
accept as part of the non-Federal cost share, the contribution of such 
in-kind services by the non-Federal project entity that the Secretary 
determines will contribute toward the conduct and completion of the 
study.
    (c) Study Considerations.--In addition to the requirements of other 
Federal laws, feasibility studies conducted under the program 
established in this Act shall consider--
            (1) the need for action;
            (2) near- and long-term water demand and supplies in the 
        study area;
            (3) an evaluation of resource capabilities within the study 
        area to provide a safe and reliable source of potable water to 
        the communities and rural areas to be served;
            (4) all reasonable alternatives, including non-structural 
        alternatives, that satisfy the need for action, including an 
        alternative that is within the non-Federal entity's capability 
        to pay annual Operations, Maintenance, and Replacement costs;
            (5) economic feasibility (measure of project benefits and 
        costs) and cost effectiveness (least cost method of attaining 
        desired result);
            (6) impacts to the natural and human environment;
            (7) appropriate water conservation and other demand 
        management measures;
            (8) the financial capability of the non-Federal project 
        entity to fund its proportionate share of the project's capital 
        construction costs and 100 percent of the identified annual 
        operation, maintenance, and replacement costs associated with 
        the proposed project as established in section 5(e). Financial 
        capability shall be determined by evaluating factors for the 
        project area, relative to the regional average, that include, 
        but are not limited to, the following: per capita income, 
        median household income, poverty rate, the ability of the non-
        Federal entity to raise tax revenues, the ``strength'' of the 
        non-Federal entity's balance sheet, and the existing cost of 
        water;
            (9) whether the project sponsor has diligently pursued 
        other sources of Federal and non-Federal assistance to meet 
        their water needs, and can demonstrate that no other options 
        are viable for meeting the communities' water needs; and
            (10) the soundness of any future growth projections being 
        used to justify either the need for the project, or the project 
        sponsor's ability to pay their cost-share or the operation, 
        maintenance, and replacement costs.
    (d) Capability To Pay.--
            (1) Construction costs.--In evaluating a project, the 
        Secretary shall consider the capability of the private sources 
        and State and local government and tribal sources to pay for 
        the capital construction costs and shall set forth the 
        Secretary's determination of the Federal and non-Federal cost 
        share.
            (2) Allocation.--The Secretary shall determine, based on 
        the findings in the feasibility report, the Federal and non-
        Federal costs for a rural water supply project recommended to 
        be constructed under the program established in this Act and 
        apportion those costs in accordance with the benefits received 
        and allocate the non-Federal costs to the project 
        beneficiaries. Grants from other Federal sources cannot be 
        credited toward the non-Federal cost share determined under 
        provisions of this Act, unless the other Federal source is used 
        by an Indian tribe or tribal organization to offset their 
        allocation of project costs.
            (3) Tribes.--In determining the capability-to-pay of Indian 
        project beneficiaries, the Secretary shall consider non-tribal 
        users living or working on tribal lands as non-Indian 
        beneficiaries; The Secretary may defer the collection of all 
        non-Federal construction costs apportioned to Indian project 
        beneficiaries unless or until the Secretary determines that 
        such beneficiaries should pay the costs allocated to it or an 
        appropriate portion of such costs.

SEC. 6. OPERATION, MAINTENANCE, AND REPLACEMENT COSTS.

    (a) In General.--Except as provided in subsection (b), non-Federal 
entities must have the capability to pay all operation, maintenance, 
and replacement costs of the project facilities.
            (1) Operation, maintenance, and replacement costs plan.--
        The non-Federal project entity, in consultation with the 
        Secretary, shall develop an operation, maintenance, and 
        replacement costs plan to provide the necessary framework to 
        establish rates and fees for beneficiaries of the project.
            (2) Feasibility report.--The Secretary shall include in the 
        feasibility report a schedule identifying the annual operation, 
        maintenance, and replacement costs that should be allocated to 
        each non-Federal entity participating in the project, as well 
        as the current and expected financial capability of each non-
        Federal entity to pay its allocated annual operation, 
        maintenance, and replacement costs.
            (3) Replacement costs responsibility.--The non-Federal 
        project entity shall be responsible for all project replacement 
        costs.
            (4) Oversight costs.--Federal oversight costs, as 
        determined by the Secretary, shall be considered project 
        operation, maintenance, and replacement costs.
            (5) Operation, maintenance, and replacement costs for 
        indian project beneficiaries.--In the exercise of the 
        Secretary's discretion under this subsection, if there is a 
        difference between actual operation, maintenance and 
        replacement costs allocated to Indian project beneficiaries and 
        the revenues anticipated from Indian beneficiaries, and if the 
        Secretary determines that the Indian project beneficiaries do 
        not have the capability to pay operation, maintenance, and 
        replacement costs, in order to assist in payment of such 
        operation, maintenance, and replacement costs, the Secretary 
        may seek appropriations in amounts necessary to fulfill the 
        purposes of this subsection.

SEC. 7. FEDERAL RECLAMATION PROJECTS.

    Nothing in this Act shall supersede or amend the provisions of 
Federal Reclamation law or law associated with any project, or portion 
of any project constructed under any authority of Federal Reclamation 
law.

SEC. 8. GENERAL AUTHORITY.

    (a) In General.--The Secretary is authorized to enter into 
contracts, financial assistance agreements and other such agreements 
and to promulgate such regulations as may be necessary to carry out the 
purposes and provisions of this Act.
    (b) Determinations.--All determinations, including modifications, 
by the Secretary and the methodologies selected for making such 
determinations shall be final and not subject to judicial review. Such 
determinations shall include, but not be limited to, the following: 
whether or not to recommend initiation of feasibility studies; 
feasibility of a project, all project costs, including operation, 
maintenance, and replacement costs; payment capability; payment terms 
and conditions; allocation or apportionment of costs; allocation or 
apportionment of water; and deferral of cost collection.

SEC. 9. REPORTS TO CONGRESS.

    The Secretary is directed to submit to Congress feasibility reports 
described in section 5 for those projects the Secretary recommends, and 
to seek, as the Secretary deems appropriate, specific authority to 
develop and construct such recommended projects. This report shall 
include good faith letters of intent by the non-Federal project entity 
or entities that they will share the allocated costs as determined by 
the Secretary.

SEC. 10. COORDINATION WITH OTHER FEDERAL AND STATE RURAL WATER SUPPLY 
              PROGRAMS.

    The Secretary shall coordinate with existing Federal and State 
rural water and wastewater programs to determine the most appropriate 
agency to undertake the project, and to otherwise facilitate the most 
efficient and effective solution to meeting the water needs of the non-
Federal project sponsors.

SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

    (a)  In General.--There is hereby authorized to be appropriated 
$70,000,000 per year to carry out the appraisal and feasibility study 
authorized pursuant to this Act and the construction activities to be 
authorized consistent with this Act.
    (b)  Construction Cost Indexing.--Appropriations to plan and 
construct projects authorized under this Act shall include such sums as 
are necessary to defray increases in development costs reflected in 
appropriate engineering cost indices after the completion date of the 
applicable feasibility report, and such sums shall remain available 
until expended. The Federal and non-Federal share of cost increases due 
to inflation will be allocated proportionate with the original cost 
share split.

SEC. 12. PROHIBITION ON USE OF FUNDS FOR IRRIGATION PURPOSES.

    None of the funds made available to the Secretary for planning or 
construction of a rural water supply project developed under the 
program established in this Act may be used to plan or construct 
facilities used to supply water for the purpose of irrigation.

SEC. 13. PROJECT OWNERSHIP.

    Title to the components of rural water supply projects planned, 
designed, and constructed under the program established in this Act 
shall be held by the non-Federal project entity.

SEC. 14. APPLICATION OF INDIAN SELF-DETERMINATION ACT.

    Any pre-construction or construction activity for any project 
authorized pursuant to this Act may be subject to the requirements of 
title I or title IV of the Indian Self-Determination and Education 
Assistance Act, as amended (Public Law 93-638; 25 U.S.C. 450 et seq.). 
Notwithstanding subsections 105(b), 106(b) and 106(l) of the Indian 
Self-Determination and Education Assistance Act, or any other provision 
of law, in the case of amounts appropriated pursuant to this Act which 
are made available to an Indian project beneficiary under a self-
determination contract or a self-governance agreement, all project 
revenues, including any interest earned shall be--
            (1) reported by the Indian project beneficiary to the 
        Secretary in a manner determined to be adequate by the 
        Secretary;
            (2) expended by the Indian project beneficiary only for the 
        purposes for which they were originally appropriated or for the 
        purposes for which they were authorized pursuant to the 
        provisions of this Act; and
            (3) considered by the Secretary in determining the amount 
        of funds otherwise obligated to the contract or agreement in 
        subsequent years.

SEC. 15. SAVINGS CLAUSE.

    (a) Nothing in this Act shall be construed to--
            (1) affect any Indian water rights or land claims of Indian 
        tribes or individual Indians, whether located inside or outside 
        the external boundaries of an Indian reservation or on Indian 
        lands; or
            (2) affect or extinguish tribal sovereignty or the trust 
        status of Indian lands.
    (b) Individual rural water projects constructed under the authority 
of this Act may be used to satisfy, in part or in whole, the terms of 
Indian Water Rights settlements, to the extent that such arrangements 
are spelled out in settlement language.
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