I 

108TH CONGRESS 

2D SESSION H. R. 4691 

To authorize the Secretary of the Interior to engage in a feasibility study 

relating to long-term water needs for the area served by the FryingpanArkansas Project, Colorado, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 24, 2004 

Mr. HEFLEY (for himself, Mr. BEAUPREZ, and Mr. TANCREDO) introduced 

the following bill; which was referred to the Committee on Resources 

A BILL 

To authorize the Secretary of the Interior to engage in 

a feasibility study relating to long-term water needs for 

the area served by the Fryingpan-Arkansas Project, Colorado, 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. PURPOSES. 

4 The purposes of this Act are as follows: 

5 (1) To authorize the Secretary of the Interior 

6 (hereinafter referred to as ‘‘the Secretary’’) to en7 gage in a feasibility study relating to present and fu8 ture water supply and related storage requirements 
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1 of the area served by the Fryingpan-Arkansas 

2 Project, Colorado. 

3 (2) To amend the Act of August 16, 1962, as 

4 amended (76 Stat. 389 et seq.), to authorize the 

5 Secretary to enter into contracts for the use of ex6 cess storage and conveyance capacity of the 

7 Fryingpan-Arkansas Project, Colorado, for non8 project water for municipal, water banking, and 

9 other beneficial purposes. 

10 SEC. 2. FEASIBILITY STUDY. 

11 (a) AUTHORIZED.—Pursuant to Federal reclamation 

12 law (the Act of June 7, 1902, and all Acts amendatory 

13 thereof or supplementary thereto), the Secretary, through 

14 the Bureau of Reclamation, is authorized to conduct a fea15 sibility study to determine the most feasible method of 

16 meeting the present and future water supply and related 

17 storage requirements within the area served by the 

18 Fryingpan-Arkansas Project, including the potential en19 largement of Fryingpan-Arkansas facilities. In conducting 

20 such study, the Secretary shall take into consideration the 

21 Preferred Storage Options Plan Report published Sep22 tember 21, 2000, by the Southeastern Colorado Water and 

23 Storage Needs Assessment Enterprise and Final PSOP 

24 Implementation Committee Report dated April 19, 2001 

25 (hereinafter referred to as the ‘‘PSOP Reports’’), the 
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1 intergovernmental agreement dated May 27, 2004, among 

2 the City of Pueblo, the City of Aurora, the Southeastern 

3 Colorado Water Conservancy District, the City of Foun4 tain, the City of Colorado Springs, and the Board of 

5 Water Works of Pueblo, Colorado, and the need to ensure 

6 compliance with the Arkansas River Compact as executed 

7 by the States of Colorado and Kansas on December 14, 

8 1948. 

9 (b) FUNDING.—Before funds are expended for the 

10 study authorized by this section, the Southeastern Colo11 rado Water Activity Enterprise shall first agree to partici12 pate in the feasibility study and to fund, at a minimum, 

13 50 percent of the costs of such study. The Southeastern 

14 Colorado Water Activity Enterprise’s share of the costs 

15 may be provided partly or wholly in the form of services 

16 directly related to the conduct of the study, as determined 

17 by the Secretary. Costs incurred prior to the enactment 

18 of this Act to develop the PSOP Reports may be credited 

19 toward such Enterprise’s share of the costs of the feasi20 bility study, as determined by the Secretary. 

21 (c) STUDY TO BE SUBMITTED.—The Secretary shall 

22 submit the feasibility study authorized by this section to 

23 the President and the President Pro Tempore of the Sen24 ate and the Speaker of the House of Representatives. 
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1 (d) FURTHER AUTHORIZATION REQUIRED FOR CER2 TAIN EXPENDITURES.—No funds shall be expended for 

3 the construction of enlargements, or any other alternative 

4 identified in the feasibility study authorized by this section 

5 for which authority does not currently exist, without fur6 ther authorization by Congress. 

7 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

8 authorized to be appropriated $4,000,000 to conduct the 

9 feasibility study authorized by this section. 

10 SEC. 3. SECRETARY AUTHORIZED TO ENTER INTO CON11 TRACTS FOR THE USE OF EXCESS STORAGE 

12 AND CONVEYANCE CAPACITY OF THE 

13 FRYINGPAN-ARKANSAS PROJECT, COLO14 RADO. 

15 The Act of August 16, 1962 (76 Stat. 389 et seq., 

16 as amended), is amended by adding at the end the fol17 lowing new sections: 

18 ‘‘SEC. 8. (a)(1) Except as provided in section 9, and 

19 subject to the provisions of this Act, including, but not 

20 limited to section 5, and all other applicable Federal stat21 utes, the Secretary is authorized to enter into contracts 

22 with any entity, private or public, including those oper23 ating or participating in a water bank established pursu24 ant to Colorado law (hereinafter referred to as an ‘‘enti25 ty’’), for the use of excess capacity in the Fryingpan-Ar-
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1 kansas Project for the purpose of diverting, storing, im2 pounding, pumping, exchanging, or conveying nonproject 

3 water for irrigation, domestic, municipal and industrial, 

4 or any other beneficial purpose. 

5 ‘‘(2) In entering into such contracts, the Secretary 

6 shall take into consideration the Preferred Storage Op7 tions Plan Report published September 21, 2000, by the 

8 Southeastern Colorado Water and Storage Needs Assess9 ment Enterprise and Final PSOP Implementation Com10 mittee Report dated April 19, 2001 (hereinafter referred 

11 to as the ‘‘PSOP Reports’’), the intergovernmental agree12 ment dated May 27, 2004, among the City of Pueblo, the 

13 City of Aurora, the Southeastern Colorado Water Conser14 vancy District, the City of Fountain, the City of Colorado 

15 Springs, and the Board of Water Works of Pueblo, Colo16 rado, and the need to ensure compliance with the Arkan17 sas River Compact as executed by the States of Colorado 

18 and Kansas on December 14, 1948. 

19 ‘‘(b) The Secretary is authorized to enter into con20 tracts pursuant to this section provided that— 

21 ‘‘(1) such contracts shall not impair or other22 wise interfere with— 

23 ‘‘(A) the Fryingpan-Arkansas Project’s au24 thorized purposes; 
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1 ‘‘(B) the ability of those with prior 

2 Fryingpan-Arkansas Project contracts to meet 

3 such contractual obligations to the Secretary as 

4 existed at the time of the execution of a con5 tract pursuant to the authority of this section; 

6 ‘‘(C) such contractual obligations as the 

7 Secretary has to Fryingpan-Arkansas Project 

8 contractors at the time of the execution of a 

9 contract under the authority of this title; 

10 ‘‘(D) the storage allocations and limita11 tions pursuant to Contract No. 5–07–70– 

12 W0086, as amended, renewed or superseded, 

13 between the Southeastern Colorado Water Con14 servancy District and the United States, and 

15 the allocation principles adopted by the South16 eastern Colorado Water Conservancy District 

17 on November 29, 1979, and confirmed by the 

18 District Court of Pueblo County in Civil Action 

19 No. 40487 by decree dated December 18, 1979, 

20 including any subsequent modifications made by 

21 the District that are confirmed by the District 

22 Court; 

23 ‘‘(E) the yield of the Fryingpan-Arkansas 

24 Project from its West Slope and East Slope 

25 water rights; or 
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1 ‘‘(F) the ability of individuals or entities 

2 located within the natural basin of the Arkan3 sas River within Colorado to enter into con4 tracts for the use of excess water storage and 

5 conveyance capacity pursuant to section 8 of 

6 this Act or any other authority under Reclama7 tion law. 

8 ‘‘(2) To the extent such contracts are with an 

9 entity that does not have an allocation of Project 

10 carry over storage space pursuant to the allocation 

11 principles adopted by the Southeastern Colorado 

12 Water Conservancy District on November 29, 1979, 

13 and confirmed by the District Court of Pueblo Coun14 ty in Civil Action No. 40487 by decree dated Decem15 ber 18, 1979, including any subsequent modifica16 tions made by the District that are confirmed by the 

17 District Court (‘nonqualified’ entities); the contracts 

18 shall not impair or otherwise interfere with the abil19 ity of qualified entities located within the natural 

20 basin of the Arkansas River within Colorado to enter 

21 into contracts for the use of excess water storage and 

22 conveyance capacity pursuant to this section 8. Ex23 cept as provided in section 9, before entering into 

24 such a contract with an individual or entity that will 

25 use water stored or conveyed under such contact out-
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1 side of the natural basin of the Arkansas River within 

2 Colorado, the Secretary shall provide the South3 eastern Colorado Water Conservancy District a first 

4 right of refusal, exercisable within 90 days, to enter 

5 into contracts for the use of excess water storage and 

6 conveyance capacity made available to the individual 

7 or entity that will use water stored or conveyed under 

8 such contract outside of the natural basin of the Ar9 kansas River within Colorado. In no event shall the 

10 Southeastern Colorado Water Conservancy District 

11 enter into a subcontract with an individual or entity 

12 that will use water stored or conveyed under such 

13 contract outside of the natural basin of the Arkansas 

14 River. 

15 ‘‘(3) Nothing in sections 8 through 12 of this 

16 Act shall— 

17 ‘‘(A) increase diversions of Project water 

18 from the natural basin of the Colorado River; 

19 ‘‘(B) increase diversions of nonproject 

20 water from the natural basin of the Colorado 

21 River within Colorado into another river basin 

22 for delivery or storage, except as provided in 

23 section 12 of this Act; 

24 ‘‘(C) affect in any way contracts, or the re25 newal of contracts, entered into pursuant to au-
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1 thority other than section 8 of this Act, includ2 ing, but not limited to, Contract Nos. 

3 00XX6C0049 and 009D6C0048 between the 

4 Board of Water Works of Pueblo, Colorado, 

5 and the United States, or the renewal of Con6 tact Nos. 00XX6C0049 and 009D60048; Con7 tract No. 6–07–70–W0090 (formerly Agree8 ment No. 14–06–700–6019) between the Cities 

9 of Aurora and Colorado Springs and the United 

10 States; Contract No. 7–07–7010056 between 

11 Twin Lakes Reservoir and Canal Company and 

12 the United States; Contract No. 9–07–70– 

13 W0099 between the United States and High 

14 Line Canal Company; and Contract No. 

15 039E6C0117 between Board of Water Works of 

16 Pueblo and the United States; or 

17 ‘‘(D) affect the interpretation or implemen18 tation of existing law or legislation for any 

19 other congressionally authorized water project. 

20 ‘‘(c) Subject to the provisions of subsection (b), the 

21 Secretary may enter into contracts authorized by this sec22 tion upon such terms and conditions as the Secretary may 

23 determine to be just and equitable. The term of any such 

24 contract shall be for such period, not to exceed 40 years, 

25 as the Secretary deems appropriate. Upon expiration, such 
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1 contracts may be renewed upon such terms and conditions 

2 as may be mutually agreeable to the Secretary and the 

3 contractor for the use of excess capacity. 

4 ‘‘(d) The Secretary shall establish such charges, sub5 ject to subsection (e), for the use of excess capacity as 

6 the Secretary deems appropriate. Such charges shall con7 sist of the following components: 

8 ‘‘(1) One component shall reflect either— 

9 ‘‘(A) construction costs based on either the 

10 original cost, the estimated current costs, or 

11 other appropriate measure of costs, including 

12 interest as provided in paragraph (3) of this 

13 subsection, of constructing the Fryingpan-Ar14 kansas Project facilities involved; or 

15 ‘‘(B) another appropriate rate, such as a 

16 market rate. 

17 ‘‘(2) A second, separate component shall reflect 

18 an appropriate charge for operating, maintaining, 

19 and replacing these same facilities. 

20 ‘‘(3) Except in the case of a market based rate, 

21 when excess capacity in Fryingpan-Arkansas Project 

22 facilities will be used to divert, store, impound, 

23 pump, or convey nonproject water for municipal and 

24 industrial purposes, an interest component using the 
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1 rate determined by the Secretary in accordance with 

2 the Water Supply Act of 1958 (43 U.S.C. 390b). 

3 ‘‘(e) All charges established pursuant to this section 

4 shall be just and equitable as to the rates paid by those 

5 entities that receive project water from the Fryingpan-Ar6 kansas Project facilities. The project contractor rate shall 

7 be the baseline from which adjustments can be made based 

8 on the particular circumstances involved in the contract. 

9 ‘‘(f) Prior to the execution of any contracts under this 

10 section, the Secretary shall execute an agreement with the 

11 Southeastern Colorado Water Activity Enterprise to pro12 vide guidelines for the terms to be contained in the con13 tracts executed pursuant to this section. Such guidelines 

14 shall appropriately address impacts associated with water 

15 operations under the contracts, surcharges established by 

16 the Enterprise, reimbursement of costs incurred, and 

17 water quality monitoring, as identified by the South18 eastern Colorado Water Activity Enterprise and the Sec19 retary. 

20 ‘‘(g) Any contract executed under this section shall 

21 contain a provision pursuant to which the contracting enti22 ty agrees to cooperate in a voluntary flow management 

23 program designed to maintain a target minimum flow of 

24 100 cfs just below Pueblo Dam. 
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1 ‘‘SEC. 9. (a) The Secretary of the Interior may enter 

2 into new and renewal contracts with the City of Aurora, 

3 Colorado, or an enterprise of the City, for a term not to 

4 exceed the term referenced in section 8(c), for use of stor5 age or carrying capacity excess of the requirements of the 

6 Fryingpan-Arkansas Project, Colorado, for the purpose of 

7 impounding, storage, and carriage of nonproject water for 

8 domestic, municipal, industrial and other beneficial pur9 poses. Such contracts shall be— 

10 ‘‘(1) limited to the storage and carriage of wa11 ters appropriated from the Arkansas River held by 

12 the City of Aurora, Colorado, or an enterprise of the 

13 City that— 

14 ‘‘(A) are decreed water rights and owned 

15 by the City of Aurora, Colorado, or an enter16 prise of the City as of December 7, 2001; 

17 ‘‘(B) are water rights described in a Colo18 rado Water Court water rights application 

19 pending as of December 7, 2001, or an amend20 ment or refiling does not increase the draft of 

21 water from the Arkansas Basin that would have 

22 been available to the City of Aurora, Colorado, 

23 or an enterprise of the City under the original 

24 application; 
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1 ‘‘(C) result from water lease agreements 

2 existing as of December 7, 2001, including any 

3 renewal or replacement contact for no more 

4 than the existing amount of water; 

5 ‘‘(D) result from interruptible supply 

6 agreements or water bank transactions author7 ized under Colorado law, and operating no more 

8 than five calendar years during any period of 

9 ten consecutive calendar years; or 

10 ‘‘(E) is traded to, or exchanged with, the 

11 City of Aurora, Colorado, or an enterprise of 

12 the City for one of the foregoing items (A) 

13 through (C) as long as such trade or exchange 

14 does not increase the draft of water from the 

15 Arkansas River Basin that would have been 

16 available to the City of Aurora, Colorado, or an 

17 enterprise of the City under subparagraphs (A) 

18 through (C); 

19 ‘‘(2) are for water obtained by the City of Au20 rora, Colorado, or an enterprise of the City from the 

21 Colorado River consistent with section 12; 

22 ‘‘(3) contain a provision pursuant to which the 

23 City of Aurora agrees to cooperate in a voluntary 

24 flow management program designed to maintain a 
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1 target minimum flow of 100 cfs just below Pueblo 

2 dam; 

3 ‘‘(4) include a provision whereby the City of 

4 Aurora, Colorado, or an enterprise of the City, 

5 agrees to participate in a long-term water quality 

6 monitoring and management program as outlined in 

7 the Implementation Committee Report dated April 

8 19, 2001; and 

9 ‘‘(5) take into consideration the need to ensure 

10 compliance with the Arkansas River Compact as exe11 cuted by the States of Colorado and Kansas on De12 cember 14, 1948. 

13 ‘‘(b) Prior to the execution of any renewal contact 

14 with the City of Aurora, the Secretary of the Interior shall 

15 execute an Agreement with the Southeastern Colorado 

16 Water Activity Enterprise, which agreement shall provide 

17 guidelines for the terms to be contained in a renewal con18 tact executed pursuant to this section. Such guidelines 

19 shall appropriately address those impacts associated with 

20 water operations under the contracts, such as storage and 

21 convenience charges, surcharges established by the Enter22 prise, reimbursement of costs incurred, and water quality 

23 monitoring, as identified by the Southeastern Colorado 

24 Enterprise and the Secretary. 
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1 ‘‘(c) Any contract executed under the authority of 

2 subsection (a) or (b) shall be in compliance with the provi3 sions of section 8(b)(1). 

4 ‘‘(d) The Secretary shall establish such charges under 

5 this section 9 in a manner consistent with the provisions 

6 of section 8(d) and (e). 

7 ‘‘SEC. 10. (a) Except as provided under subsection 

8 (b), all revenue generated pursuant to contracts executed 

9 under sections 8 and 9 shall be credited as follows: 

10 ‘‘(1) That portion of the charges established 

11 pursuant to section 8(d) and 9(d) which is attrib12 utable to the component which reflects interest shall 

13 be credited as a general credit to the Reclamation 

14 Fund. 

15 ‘‘(2) That portion of the charges established 

16 pursuant to section 8(d)(2) and the comparable pro17 vision of 9(d) shall be credited against the appro18 priate project operation, maintenance, and replace19 ment costs. 

20 ‘‘(3) All remaining revenues in excess of those 

21 in paragraphs (1) and (2) of this subsection shall be 

22 credited as follows: 

23 ‘‘(A) If reimbursable Federal construction 

24 costs are outstanding for the Fryingpan-Arkan25 sas project at the time revenues are received, 
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1 then all remaining revenues shall be covered 

2 into the Reclamation Fund and credited to the 

3 Fryingpan-Arkansas Project. All remaining rev4 enues shall be credited against such reimburs5 able costs in a manner the Secretary deems to 

6 be just and equitable as to the reimbursable 

7 purposes which are involved. The revenues so 

8 credited shall not be applied so as to reduce the 

9 amount of the current annual payments due the 

10 Secretary from the project contractors or any 

11 other parties responsible for paying outstanding 

12 reimbursable project construction costs unless 

13 and until the party’s current annual payment 

14 due exceeds the remaining reimbursable con15 struction costs payable by the party. 

16 ‘‘(B) If no reimbursable Federal 

17 Fryingpan-Arkansas Project construction costs 

18 are outstanding at the time revenues are re19 ceived, then all remaining revenues shall be 

20 credited to a separate fund, established in the 

21 Treasury of the United States, to be known as 

22 the Fryingpan-Arkansas Project Fund, which 

23 shall remain available, without appropriation, 

24 for new federally funded construction on the 

25 project, including, but not limited to, additions, 
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1 rehabilitations and betterments, safety of dams 

2 modifications, and major capital replacements, 

3 applied against the Federal reimbursable costs, 

4 if any, of such new construction in such manner 

5 as the Secretary deems just and equitable as to 

6 the Federal reimbursable project purposes in7 volved. No expenditures may be made from the 

8 Fryingpan-Arkansas Project Fund without the 

9 express written consent of the Secretary and 

10 the Enterprise. 

11 ‘‘(b) DIRECT PAYMENTS.—Payments generated pur12 suant to contract terms established under section 8(f) and 

13 the comparable provisions of 9(b) shall be made directly 

14 by the contractors to the Southeastern Colorado Water 

15 Activity Enterprise. 

16 ‘‘SEC. 11. (a) Nonproject water diverted, stored, im17 pounded, pumped, exchanged, or conveyed under a con18 tract entered into pursuant to section 8 or 9 shall be ex19 empt from any acreage limitation provisions of the Act 

20 of June 17, 1902 (32 Stat. 388), and Acts amendatory 

21 thereof and supplementary thereto including, but not lim22 ited to, the Warren Act of 1911, the Reclamation Reform 

23 Act of 1982 (96 Stat. 1263; 43 U.S.C. 390aa et seq.) and 

24 from any farm unit size limitations established pursuant 
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1 to section 4(c)(5) of the Act of August 11, 1939 (Chapter 

2 717; 16 U.S.C. 590z–2(c)(5)). 

3 ‘‘(b) Notwithstanding subsection (a), if such non4 project water is commingled with project water in Rec5 lamation project facilities, and the resulting commingled 

6 supply is used to irrigate lands in a project contractor’s 

7 service area, then such commingled water shall bear the 

8 same acreage limitations or farm unit size limitations as 

9 the project water unless— 

10 ‘‘(1) contract provisions are in effect which pro11 vide that project or nonproject water, or both, will 

12 be accounted for on a quantitative basis, that project 

13 water will not be delivered to ineligible land, and 

14 that appropriate charges, as determined by the Sec15 retary, will be paid for the project water; and 

16 ‘‘(2) the charges for the use of the excess ca17 pacity include an appropriate interest component, as 

18 determined by the Secretary. 

19 ‘‘SEC. 12. (a) Excess water storage capacity of the 

20 Fryingpan-Arkansas project to divert, store, impound, 

21 pump, or convey nonproject water made available under 

22 contracts executed pursuant to the provisions of sections 

23 8 and 9 shall not be utilized so as to increase diversion 

24 of nonproject water from the natural basin of the Colorado 
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1 River within Colorado into another river basin for delivery 

2 or storage unless— 

3 ‘‘(1) the diversion is the subject of a decree en4 tered prior to the effective date of this section for 

5 which no new infrastructure or legal approvals are 

6 necessary to divert the water out of the natural 

7 basin; 

8 ‘‘(2) the diversion is the subject of an agree9 ment in existence on the date of the enactment of 

10 this section, contemplating additional diversions di11 verted through or stored in the facilities authorized 

12 by this Act, between the beneficiary of such 

13 transbasin diversion and the water conservation dis14 trict, as defined under Colorado law, from within 

15 whose boundaries the waters are proposed for diver16 sion; 

17 ‘‘(3) the diversion is the subject of an intergov18 ernmental agreement or other contractual arrange19 ment executed after the date of the enactment of 

20 this section, between the beneficiary of such 

21 transbasin diversion and the water conservation dis22 trict, as defined under Colorado law, from within 

23 whose boundaries the waters are proposed for diver24 sion; or 
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1 ‘‘(4) the beneficiary of such transbasin diver2 sion provides compensatory storage or alternate 

3 water supply in an amount equal to the quantity di4 verted out of the basin for the benefit of the water 

5 conservation district, as defined under Colorado law, 

6 from within whose boundaries the waters are pro7 posed for diversion. 

8 ‘‘(b) Prior to executing any agreement, or arrange9 ment or agreement for provision of compensatory storage 

10 or alternative water supply, that allows for increased di11 versions of nonproject water as described in subsection 

12 (a), the parties to such agreements or arrangements shall 

13 submit the agreement or arrangement to the Secretary, 

14 who, within 30 days, shall submit such agreement or ar15 rangement to the President Pro Tempore of the Senate 

16 and the Speaker of the House of Representatives for a 

17 period of not less than 60 days. 

18 ‘‘(c) This section shall not be considered as precedent 

19 for any other congressionally authorized project.’’. 

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