II 

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2

•S 2218 IS 

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Reclamation Rural 

3 Water Supply Act of 2004’’. 

4 SEC. 2. DEFINITIONS. 

5 In this Act: 

6 (1) FEDERAL RECLAMATION LAWS.—The term 

7 ‘‘Federal Reclamation laws’’ means the Act of June 

8 17, 1902, 43 U.S.C. 371 et seq., as amended and 

9 supplemented. 

10 (2) INDIAN LANDS.—The term ‘‘Indian lands’’ 

11 means those lands held by the United States in trust 

12 for a tribe or individual member(s) of an Indian 

13 tribe or those lands owned by a tribe or individual 

14 member(s) of an Indian tribe subject to a Federal 

15 restriction on alienation. 

16 (3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

17 means a tribe included on the list of recognized 

18 tribes which the Secretary publishes under the Fed19 erally Recognized Indian Tribe List Act of 1994 (25 

20 U.S.C. 479a–1), and which are eligible for the spe21 cial programs and services provided by the United 

22 States to Indians because of their status as Indians. 

23 (4) INDIAN.—The term ‘‘Indian’’ means a per24 son who is a member of an Indian tribe. 

25 (5) NON-FEDERAL PROJECT ENTITY.—The 

26 term ‘‘non-Federal project entity’’ means a State, 
3

•S 2218 IS 

1 regional, or other local authority, Indian tribe or 

2 tribal organization, or other qualifying entity such as 

3 a water conservation district, water conservancy dis4 trict, or rural water district or association. 

5 (6) RECLAMATION.—The term ‘‘Reclamation’’ 

6 means the Bureau of Reclamation, an agency within 

7 the Department of the Interior. 

8 (7) RECLAMATION STATES.—The term ‘‘Rec9 lamation States’’ means the States and areas re10 ferred to in section 1 of the Reclamation Act of 

11 1902 (Act of June 17, 1902, 43 U.S.C. 371 et seq.), 

12 as amended. 

13 (8) RURAL WATER SUPPLY PROJECT.—The 

14 term ‘‘rural water supply project’’ means a water 

15 supply project identified to serve a group of commu16 nities, Indian tribes, tribal organizations, dispersed 

17 homesites, or rural areas with domestic, residential, 

18 and industrial water, and which can include inci19 dental livestock watering, but which does not include 

20 commercial irrigation. The terms ‘‘rural’’ and ‘‘rural 

21 area’’ mean any open country, or any place, town, 

22 village, or city which is not part of or associated 

23 with a metropolitan statistical area and shall be fur24 ther clarified for the purposes of this program in the 

25 criteria developed under section 3(d). Rural water 
4

•S 2218 IS 

1 infrastructure includes pumps, pipes, wells, water 

2 treatment facilities, and appurtenances, but does not 

3 include major impoundment structures. 

4 (9) SECRETARY.—The term ‘‘Secretary’’ means 

5 the Secretary of the Interior. 

6 (10) TRIBAL ORGANIZATION.—The term ‘‘tribal 

7 organization’’ means the recognized governing body 

8 of any Indian tribe; any legally established organiza9 tion of Indians which is controlled, sanctioned, or 

10 chartered by such governing body or which is demo11 cratically elected by the adult members of the Indian 

12 community to be served by such organization and 

13 which includes the maximum participation of Indi14 ans in all phases of its activities: Provided, That in 

15 any case where a contract is let or grant made to 

16 an organization to perform services benefiting more 

17 than one Indian tribe, the approval of each such In18 dian tribe shall be a prerequisite to the letting or 

19 making of such contract or grant. 

20 (11) CONSTRUCT.—The term ‘‘construct’’ 

21 means to install new infrastructure and to upgrade 

22 or replace existing facilities where they are associ23 ated with the new infrastructure authorized under 

24 the Act. 
5

•S 2218 IS 

1 (12) OPERATIONS, MAINTENANCE, AND RE2 PLACEMENT COSTS.—The term ‘‘operations, mainte3 nance, and replacement costs’’ means all costs for 

4 the operations of the project that are necessary for 

5 the safe, efficient and continued functioning of the 

6 project to produce the benefits set forth in the feasi7 bility study. This includes repairs of a routine na8 ture that maintain the project in a well kept condi9 tion, replacement of worn-out project elements and 

10 rehabilitation activities necessary to bring a deterio11 rated project back to its original condition. 

12 SEC. 3. RURAL WATER SUPPLY PROGRAM. 

13 (a) IN GENERAL.—The Secretary is authorized to 

14 undertake a competitive program based upon the criteria 

15 developed under subsection (d) to plan, design and con16 struct rural water supply projects in cooperation with non17 Federal project entities. 

18 (b) RECLAMATION STATES.—The program estab19 lished in this Act shall be limited to the Reclamation 

20 States. 

21 (c) NON-FEDERAL PROJECT ENTITY.—Each rural 

22 water supply project under the program established in this 

23 Act shall be performed in cooperation with a qualifying 

24 non-Federal project entity as defined in section 2(e) of 

25 this Act. 
6

•S 2218 IS 

1 (d) ELIGIBILITY CRITERIA.—The Secretary shall de2 velop and publish criteria for determining which projects

3 are eligible for participation under the program estab4 lished in this Act. The Secretary, to the maximum extent 

5 possible, shall consider— 

6 (1) whether a rural water supply project— 

7 (A) serves rural areas and communities or 

8 Indian tribes; 

9 (B) shows economic benefits; 

10 (C) is cost-effective; and 

11 (D) whether and to what extent the local 

12 project sponsors can meet the cost-share and 

13 repayment criteria described in section 3(e), 

14 section 4, and section 5; 

15 (2) whether there is an urgent and compelling 

16 need for a rural water supply project that would ad17 dress current or future water supply shortages, and/

18 or improve the health and/or aesthetic based quality 

19 of water in a manner that results in continuous, 

20 measurable, and significant water quality benefits; 

21 (3) whether a rural water supply project helps 

22 meet existing legal requirements; 

23 (4) whether a rural water supply project pro24 motes and applies a regional or watershed perspec25 tive to water resource management or cross-bound-
7

•S 2218 IS 

1 ary issues, implements an integrated resources man2 agement approach, increases water management 

3 flexibility, or forms a partnership with other entities; 

4 (5) whether a rural water supply project pro5 vides benefits outside the region in which the project 

6 occurs; and 

7 (6) the availability of water rights to support 

8 project development and actual water delivery. 

9 (e) LIMITATION ON USE OF FEDERAL FUNDS.— 

10 (1) IN GENERAL.—Notwithstanding any other 

11 provision of law and except as provided in paragraph 

12 (2), the Federal share of the costs of any individual 

13 project authorized by Congress under the program 

14 established in this Act shall not exceed the portion 

15 of those project costs in excess of the non-Federal 

16 entities’ capability-to-pay, as generally described in 

17 section 5(e). Except as provided in paragraph (2), 

18 the local contribution shall be based upon the non19 Federal entities’ capability to pay and shall be no 

20 less than 35 percent of the projected total project 

21 costs. 

22 (2) REDUCED NON-FEDERAL SHARE.—The Sec23 retary may increase the Federal share of the cost of 

24 a project authorized under the program established 

25 in this Act to an amount that is greater than the 
8

•S 2218 IS 

1 amount specified in paragraph (1) of this subsection 

2 if the Secretary determines that— 

3 (A) the project is for the benefit of an In4 dian tribe; and 

5 (B) application of paragraph (1) would re6 sult in economic hardship for such Indian tribe. 

7 SEC. 4. APPRAISAL INVESTIGATIONS. 

8 (a) IN GENERAL.—Upon request of a non-Federal 

9 project entity and consistent with section 3 (d) and (e) 

10 of this Act, the Secretary may undertake, in cooperation 

11 with such non-Federal project entity, appraisal investiga12 tions to identify and study opportunities for construction 

13 of rural water supply projects to determine if they meet 

14 the criteria to be promulgated under Section (3)(d). The 

15 appraisal report shall include a determination of whether 

16 or not to recommend the initiation of a feasibility study 

17 for a proposed rural water supply project. 

18 (b) COOPERATION.—The Secretary shall consult and 

19 cooperate with appropriate State, regional, tribal and local 

20 authorities during the performance of each appraisal in21 vestigation conducted pursuant to this Act. 

22 (c) COSTS.—The Federal obligations for costs of such 

23 appraisal investigations shall conform with Reclamation 

24 policy (Reclamation Manual number CMP–05–01). 
9

•S 2218 IS 

1 SEC. 5. FEASIBILITY STUDIES, PROJECT DEVELOPMENT, 

2 AND COST SHARE. 

3 (a) IN GENERAL.—The Secretary, in cooperation 

4 with a non-Federal project entity, is authorized to under5 take studies to determine the feasibility of rural water 

6 supply systems recommended for such study pursuant to 

7 section 4 of this Act. The feasibility report shall document 

8 the Secretary’s engineering, environmental, and economic 

9 investigation of a proposed rural water supply project, tak10 ing into consideration the range of potential solutions and 

11 the circumstances and needs of the area to be served by 

12 the proposed project, the potential benefits to the people 

13 of that area, and appropriate water conservation meas14 ures. The highest priority in selecting alternatives shall 

15 be determined by evaluating factors that include, but are 

16 not limited to, the following: the level of net economic ben17 efits; the extent to which the project and alternatives take 

18 advantage of economic incentives and the use of market19 based mechanisms; whether a proposed project is ‘‘rural’’ 

20 or in a ‘‘rural area’’, as defined in section 1(h) and clari21 fied in the eligibility criteria developed under section 3(d); 

22 a benefit-cost analysis, containing an analysis comparing 

23 different structural and non-structural options for meeting 

24 water needs; whether non-Federal entities have adequate 

25 fiscal controls in place to manage the project; the extent 

26 to which the project involves partnerships with other 
10

•S 2218 IS 

1 State, local, tribal government, or Federal entities; and 

2 the extent to which projects intended for Indian tribes and 

3 tribal organizations address the need for economic self suf4 ficiency. The Secretary shall indicate in the Feasibility re5 port whether the project is recommended for implementa6 tion. 

7 (b) FEDERAL COST SHARE.—The Federal share of 

8 the costs of such feasibility studies shall not exceed 50 

9 percent of the total study costs, except that the Secretary 

10 may increase the Federal share of the costs of such feasi11 bility studies for an Indian tribe or tribal organization if 

12 the Secretary determines that they would be unable to 

13 contribute at least 50 percent of the costs of such study 

14 based on criteria established by the Secretary in regula15 tions. The Secretary may accept as part of the non-Fed16 eral cost share, the contribution of such in-kind services 

17 by the non-Federal project entity that the Secretary deter18 mines will contribute toward the conduct and completion 

19 of the study. 

20 (c) STUDY CONSIDERATIONS.—In addition to the re21 quirements of other Federal laws, feasibility studies con22 ducted under the program established in this Act shall 

23 consider— 

24 (1) the need for action;
11

•S 2218 IS 

1 (2) near- and long-term water demand and sup2 plies in the study area; 

3 (3) an evaluation of resource capabilities within 

4 the study area to provide a safe and reliable source 

5 of potable water to the communities and rural areas 

6 to be served; 

7 (4) all reasonable alternatives, including non8 structural alternatives, that satisfy the need for ac9 tion, including an alternative that is within the non10 Federal entity’s capability to pay annual Operations, 

11 Maintenance, and Replacement costs; 

12 (5) economic feasibility (measure of project ben13 efits and costs) and cost effectiveness (least cost 

14 method of attaining desired result); 

15 (6) impacts to the natural and human environ16 ment; 

17 (7) appropriate water conservation and other 

18 demand management measures; 

19 (8) the financial capability of the non-Federal 

20 project entity to fund its proportionate share of the 

21 project’s capital construction costs and 100 percent 

22 of the identified annual operation, maintenance, and 

23 replacement costs associated with the proposed 

24 project as established in section 5(e). Financial ca25 pability shall be determined by evaluating factors for 
12

•S 2218 IS 

1 the project area, relative to the regional average, 

2 that include, but are not limited to, the following: 

3 per capita income, median household income, pov4 erty rate, the ability of the non-Federal entity to 

5 raise tax revenues, the ‘‘strength’’ of the non-Fed6 eral entity’s balance sheet, and the existing cost of 

7 water; 

8 (9) whether the project sponsor has diligently 

9 pursued other sources of Federal and non-Federal 

10 assistance to meet their water needs, and can dem11 onstrate that no other options are viable for meeting 

12 the communities’ water needs; and 

13 (10) the soundness of any future growth projec14 tions being used to justify either the need for the 

15 project, or the project sponsor’s ability to pay their 

16 cost-share or the operation, maintenance, and re17 placement costs. 

18 (d) CAPABILITY TO PAY.— 

19 (1) CONSTRUCTION COSTS.—In evaluating a 

20 project, the Secretary shall consider the capability of 

21 the private sources and State and local government 

22 and tribal sources to pay for the capital construction 

23 costs and shall set forth the Secretary’s determina24 tion of the Federal and non-Federal cost share. 
13

•S 2218 IS 

1 (2) ALLOCATION.—The Secretary shall deter2 mine, based on the findings in the feasibility report, 

3 the Federal and non-Federal costs for a rural water 

4 supply project recommended to be constructed under 

5 the program established in this Act and apportion 

6 those costs in accordance with the benefits received 

7 and allocate the non-Federal costs to the project 

8 beneficiaries. Grants from other Federal sources 

9 cannot be credited toward the non-Federal cost 

10 share determined under provisions of this Act, un11 less the other Federal source is used by an Indian 

12 tribe or tribal organization to offset their allocation 

13 of project costs. 

14 (3) TRIBES.—In determining the capability-to15 pay of Indian project beneficiaries, the Secretary 

16 shall consider non-tribal users living or working on 

17 tribal lands as non-Indian beneficiaries; The Sec18 retary may defer the collection of all non-Federal 

19 construction costs apportioned to Indian project 

20 beneficiaries unless or until the Secretary determines 

21 that such beneficiaries should pay the costs allocated 

22 to it or an appropriate portion of such costs. 
14

•S 2218 IS 

1 SEC. 6. OPERATION, MAINTENANCE, AND REPLACEMENT 

2 COSTS. 

3 (a) IN GENERAL.—Except as provided in subsection 

4 (b), non-Federal entities must have the capability to pay 

5 all operation, maintenance, and replacement costs of the 

6 project facilities. 

7 (1) OPERATION, MAINTENANCE, AND REPLACE8 MENT COSTS PLAN.—The non-Federal project entity, 

9 in consultation with the Secretary, shall develop an 

10 operation, maintenance, and replacement costs plan 

11 to provide the necessary framework to establish 

12 rates and fees for beneficiaries of the project. 

13 (2) FEASIBILITY REPORT.—The Secretary shall 

14 include in the feasibility report a schedule identi15 fying the annual operation, maintenance, and re16 placement costs that should be allocated to each 

17 non-Federal entity participating in the project, as 

18 well as the current and expected financial capability 

19 of each non-Federal entity to pay its allocated an20 nual operation, maintenance, and replacement costs. 

21 (3) REPLACEMENT COSTS RESPONSIBILITY.—

22 The non-Federal project entity shall be responsible 

23 for all project replacement costs. 

24 (4) OVERSIGHT COSTS.—Federal oversight 

25 costs, as determined by the Secretary, shall be con-
15

•S 2218 IS 

1 sidered project operation, maintenance, and replace2 ment costs. 

3 (5) OPERATION, MAINTENANCE, AND REPLACE4 MENT COSTS FOR INDIAN PROJECT BENE5 FICIARIES.—In the exercise of the Secretary’s discre6 tion under this subsection, if there is a difference be7 tween actual operation, maintenance and replace8 ment costs allocated to Indian project beneficiaries 

9 and the revenues anticipated from Indian bene10 ficiaries, and if the Secretary determines that the 

11 Indian project beneficiaries do not have the capa12 bility to pay operation, maintenance, and replace13 ment costs, in order to assist in payment of such op14 eration, maintenance, and replacement costs, the 

15 Secretary may seek appropriations in amounts nec16 essary to fulfill the purposes of this subsection. 

17 SEC. 7. FEDERAL RECLAMATION PROJECTS. 

18 Nothing in this Act shall supersede or amend the pro19 visions of Federal Reclamation law or law associated with 

20 any project, or portion of any project constructed under 

21 any authority of Federal Reclamation law. 

22 SEC. 8. GENERAL AUTHORITY. 

23 (a) IN GENERAL.—The Secretary is authorized to 

24 enter into contracts, financial assistance agreements and 

25 other such agreements and to promulgate such regulations
16

•S 2218 IS 

1 as may be necessary to carry out the purposes and provi2 sions of this Act. 

3 (b) DETERMINATIONS.—All determinations, includ4 ing modifications, by the Secretary and the methodologies 

5 selected for making such determinations shall be final and 

6 not subject to judicial review. Such determinations shall 

7 include, but not be limited to, the following: whether or 

8 not to recommend initiation of feasibility studies; feasi9 bility of a project, all project costs, including operation, 

10 maintenance, and replacement costs; payment capability; 

11 payment terms and conditions; allocation or apportion12 ment of costs; allocation or apportionment of water; and 

13 deferral of cost collection. 

14 SEC. 9. REPORTS TO CONGRESS. 

15 The Secretary is directed to submit to Congress feasi16 bility reports described in section 5 for those projects the 

17 Secretary recommends, and to seek, as the Secretary 

18 deems appropriate, specific authority to develop and con19 struct such recommended projects. This report shall in20 clude good faith letters of intent by the non-Federal 

21 project entity or entities that they will share the allocated 

22 costs as determined by the Secretary. 
17

•S 2218 IS 

1 SEC. 10. COORDINATION WITH OTHER FEDERAL AND 

2 STATE RURAL WATER SUPPLY PROGRAMS. 

3 The Secretary shall coordinate with existing Federal 

4 and State rural water and wastewater programs to deter5 mine the most appropriate agency to undertake the 

6 project, and to otherwise facilitate the most efficient and 

7 effective solution to meeting the water needs of the non8 Federal project sponsors. 

9 SEC. 11. AUTHORIZATION OF APPROPRIATIONS. 

10 (a) IN GENERAL.—There is hereby authorized to be 

11 appropriated $70,000,000 per year to carry out the ap12 praisal and feasibility study authorized pursuant to this 

13 Act and the construction activities to be authorized con14 sistent with this Act. 

15 (b) CONSTRUCTION COST INDEXING.—Appropria16 tions to plan and construct projects authorized under this 

17 Act shall include such sums as are necessary to defray 

18 increases in development costs reflected in appropriate en19 gineering cost indices after the completion date of the ap20 plicable feasibility report, and such sums shall remain 

21 available until expended. The Federal and non-Federal 

22 share of cost increases due to inflation will be allocated 

23 proportionate with the original cost share split. 
18

•S 2218 IS 

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

2 PURPOSES. 

3 None of the funds made available to the Secretary 

4 for planning or construction of a rural water supply 

5 project developed under the program established in this 

6 Act may be used to plan or construct facilities used to 

7 supply water for the purpose of irrigation. 

8 SEC. 13. PROJECT OWNERSHIP. 

9 Title to the components of rural water supply projects 

10 planned, designed, and constructed under the program es11 tablished in this Act shall be held by the non-Federal 

12 project entity. 

13 SEC. 14. APPLICATION OF INDIAN SELF-DETERMINATION 

14 ACT. 

15 Any pre-construction or construction activity for any 

16 project authorized pursuant to this Act may be subject 

17 to the requirements of title I or title IV of the Indian Self18 Determination and Education Assistance Act, as amended 

19 (Public Law 93–638; 25 U.S.C. 450 et seq.). Notwith20 standing subsections 105(b), 106(b) and 106(l) of the In21 dian Self-Determination and Education Assistance Act, or 

22 any other provision of law, in the case of amounts appro23 priated pursuant to this Act which are made available to 

24 an Indian project beneficiary under a self-determination 

25 contract or a self-governance agreement, all project reve26 nues, including any interest earned shall be— 
19

•S 2218 IS 

1 (1) reported by the Indian project beneficiary to 

2 the Secretary in a manner determined to be ade3 quate by the Secretary; 

4 (2) expended by the Indian project beneficiary 

5 only for the purposes for which they were originally 

6 appropriated or for the purposes for which they were 

7 authorized pursuant to the provisions of this Act; 

8 and 

9 (3) considered by the Secretary in determining 

10 the amount of funds otherwise obligated to the con11 tract or agreement in subsequent years. 

12 SEC. 15. SAVINGS CLAUSE. 

13 (a) Nothing in this Act shall be construed to— 

14 (1) affect any Indian water rights or land 

15 claims of Indian tribes or individual Indians, wheth16 er located inside or outside the external boundaries 

17 of an Indian reservation or on Indian lands; or 

18 (2) affect or extinguish tribal sovereignty or the 

19 trust status of Indian lands. 

20 (b) Individual rural water projects constructed under 

21 the authority of this Act may be used to satisfy, in part 

22 or in whole, the terms of Indian Water Rights settlements, 

23 to the extent that such arrangements are spelled out in 

24 settlement language.

Æ