II 

Calendar No. 240 

109TH CONGRESS 

1ST SESSION S. 895 

[Report No. 109–148] 

To direct the Secretary of the Interior to establish a rural water supply 

program in the Reclamation States to provide a clean, safe, affordable, 

and reliable water supply to rural residents. 

IN THE SENATE OF THE UNITED STATES 

APRIL 25, 2005 

Mr. DOMENICI (for himself, Mr. BINGAMAN, Ms. MURKOWSKI, Mr. BENNETT, 

Mr. JOHNSON, Mr. DORGAN, Mr. SALAZAR, Mr. BURNS, Mr. KYL, and 

Mrs. FEINSTEIN) introduced the following bill; which was read twice and 

referred to the Committee on Energy and Natural Resources 

OCTOBER 19, 2005 

Reported by Mr. DOMENICI, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To direct the Secretary of the Interior to establish a rural 

water supply program in the Reclamation States to provide a clean, safe, affordable, and reliable water supply 

to rural residents. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Rural Water Supply Act of 2005’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—RECLAMATION RURAL WATER SUPPLY ACT OF 2005 

Sec. 101. Short title. 

Sec. 102. Definitions. 

Sec. 103. Rural water supply program. 

Sec. 104. Rural water programs assessment. 

Sec. 105. Appraisal investigations. 

Sec. 106. Feasibility studies. 

Sec. 107. Miscellaneous. 

Sec. 108. Authorization of appropriations. 

TITLE II—TWENTY-FIRST CENTURY WATER WORKS ACT 

Sec. 201. Short title. 

Sec. 202. Definitions. 

Sec. 203. Project eligibility. 

Sec. 204. Loan guarantees. 

Sec. 205. Operations, maintenance, and replacement costs. 

Sec. 206. Title to newly constructed facilities. 

Sec. 207. Water rights. 

Sec. 208. Interagency coordination and cooperation. 

Sec. 209. Authorization of appropriations. 

6 TITLE I—RECLAMATION RURAL 

7 WATER SUPPLY ACT OF 2005 

8 SEC. 101. SHORT TITLE. 

9 This title may be cited as the ‘‘Reclamation Rural 

10 Water Supply Act of 2005’’. 

11 SEC. 102. DEFINITIONS. 

12 In this title: 

13 (1) FEDERAL RECLAMATION LAW.—The term 

14 ‘‘Federal reclamation law’’ means the Act of June 

15 17, 1902 (32 Stat. 388, chapter 1093), and Acts 
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1 supplemental to and amendatory of that Act (43 

2 U.S.C. 371 et seq.). 

3 (2) INDIAN.—The term ‘‘Indian’’ means an in4 dividual who is a member of an Indian tribe. 

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

6 has the meaning given the term in section 4 of the 

7 Indian Self-Determination and Education Assistance 

8 Act (25 U.S.C. 450b). 

9 (4) NON-FEDERAL PROJECT ENTITY.—The 

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

11 regional, or local authority, Indian tribe or tribal or12 ganization, or other qualifying entity, such as a 

13 water conservation district, water conservancy dis14 trict, or rural water district or association. 

15 (5) OPERATIONS, MAINTENANCE, AND RE16 PLACEMENT COSTS.— 

17 (A) IN GENERAL.—The term ‘‘operations, 

18 maintenance, and replacement costs’’ means all 

19 costs for the operation of a rural water supply 

20 project that are necessary for the safe, efficient, 

21 and continued functioning of the project to 

22 produce the benefits described in a feasibility 

23 study. 
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1 (B) INCLUSIONS.—The term ‘‘operations, 

2 maintenance, and replacement costs’’ in3 cludes— 

4 (i) repairs of a routine nature that 

5 maintain a rural water supply project in a 

6 well kept condition; 

7 (ii) replacement of worn-out project 

8 elements; and 

9 (iii) rehabilitation activities necessary 

10 to bring a deteriorated project back to the 

11 original condition of the project. 

12 (C) EXCLUSION.—The term ‘‘operations, 

13 maintenance, and replacement costs’’ does not 

14 include construction costs. 

15 (6) PROGRAM.—The term ‘‘program’’ means 

16 the rural water supply program established under 

17 section 103. 

18 (7) RECLAMATION STATES.—The term ‘‘rec19 lamation States’’ means the States and areas re20 ferred to in the first section of the Act of June 17, 

21 1902 (43 U.S.C. 391). 

22 (8) RURAL WATER SUPPLY PROJECT.— 

23 (A) IN GENERAL.—The term ‘‘rural water 

24 supply project’’ means a project that is de25 signed to serve a group of communities, which 
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1 may include Indian tribes and tribal organiza2 tions, dispersed homesites, or rural areas with 

3 domestic, industrial, municipal, and residential 

4 water, each of which has a population of not 

5 more than 50,000 inhabitants. 

6 (B) INCLUSION.—The term ‘‘rural water 

7 supply project’’ includes— 

8 (i) incidental noncommercial livestock 

9 watering and noncommercial irrigation of 

10 vegetation and small gardens of less than 

11 1 acre; and 

12 (ii) a project to improve rural water 

13 infrastructure, including— 

14 (I) pumps, pipes, wells, and other 

15 diversions; 

16 (II) storage tanks and small im17 poundments; 

18 (III) water treatment facilities 

19 for potable water supplies; 

20 (IV) equipment and management 

21 tools for water conservation, ground22 water recovery, and water recycling; 

23 and 

24 (V) appurtenances. 
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1 (C) EXCLUSION.—The term ‘‘rural water 

2 supply project’’ does not include— 

3 (i) commercial irrigation; or 

4 (ii) major impoundment structures. 

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

6 the Secretary of the Interior. 

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

8 organization’’ means— 

9 (A) the recognized governing body of an 

10 Indian tribe; and 

11 (B) any legally established organization of 

12 Indians that is controlled, sanctioned, or char13 tered by the governing body or democratically 

14 elected by the adult members of the Indian 

15 community to be served by the organization. 

16 SEC. 103. RURAL WATER SUPPLY PROGRAM. 

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

18 with non-Federal project entities and consistent with this 

19 title, shall establish and carry out a rural water supply 

20 program in reclamation States to— 

21 (1) investigate and identify opportunities to en22 sure safe and adequate rural water supply projects 

23 for municipal and industrial use in small commu24 nities and rural areas of the reclamation States; and 
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1 (2) plan the design and construction, through 

2 the conduct of appraisal investigations and feasi3 bility studies, of rural water supply projects in rec4 lamation States. 

5 (b) NON-FEDERAL PROJECT ENTITY.—Any activity 

6 carried out under this title shall be carried out in coopera7 tion with a qualifying non-Federal project entity, con8 sistent with this title. 

9 (c) ELIGIBILITY CRITERIA.—Not later than 1 year 

10 after the date of enactment of this Act, the Secretary 

11 shall, consistent with this title, develop and publish in the 

12 Federal Register criteria for— 

13 (1) determining the eligibility of a rural com14 munity for assistance under the program; and 

15 (2) prioritizing requests for assistance under 

16 the program. 

17 (d) FACTORS.—The criteria developed under sub18 section (c) shall take into account such factors as wheth19 er— 

20 (1) a rural water supply project— 

21 (A) serves— 

22 (i) rural areas and small communities; 

23 or 

24 (ii) Indian tribes; or 
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1 (B) promotes and applies a regional or wa2 tershed perspective to water resources manage3 ment; 

4 (2) there is an urgent and compelling need for 

5 a rural water supply project that would— 

6 (A) improve the health or aesthetic quality 

7 of water; 

8 (B) result in continuous, measurable, and 

9 significant water quality benefits; or 

10 (C) address current or future water supply 

11 needs; 

12 (3) a rural water supply project helps meet ap13 plicable requirements established by law; and 

14 (4) a rural water supply project is cost effec15 tive. 

16 (e) INCLUSIONS.—The Secretary may include— 

17 (1) to the extent that connection provides a reli18 able water supply, a connection to preexisting infra19 structure (including dams and conveyance channels) 

20 as part of a rural water supply project; and 

21 (2) notwithstanding the limitation in section 

22 102(8), a town or community with a population in 

23 excess of 50,000 inhabitants in an area served by a 

24 rural water supply project if, at the discretion of the 
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1 Secretary, the town or community is considered to 

2 be a critical partner in the rural supply project. 

3 SEC. 104. RURAL WATER PROGRAMS ASSESSMENT. 

4 (a) IN GENERAL.—In consultation with the Secretary 

5 of Agriculture, the Administrator of the Environmental 

6 Protection Agency, and the Director of the Indian Health 

7 Service, the Secretary shall develop an assessment of— 

8 (1) the status of all rural water supply projects 

9 under the jurisdiction of the Secretary authorized 

10 but not completed prior to the date of enactment of 

11 this Act, including appropriation amounts, the phase 

12 of development, total anticipated costs, and obstacles 

13 to completion; 

14 (2) the current plan (including projected finan15 cial and workforce requirements) for the completion 

16 of the rural water supply projects within the time 

17 frames established under the provisions of law au18 thorizing the projects or the final engineering re19 ports for the projects; 

20 (3) the demand for rural water supply projects; 

21 (4) programs within other agencies that can, 

22 and a description of the extent to which the pro23 grams, provide support for rural water supply 

24 projects and water treatment programs in reclama25 tion States, including an assessment of the require-
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1 ments, funding levels, and conditions for eligibility 

2 for the programs assessed; and 

3 (5) the extent of the unmet needs that the Sec4 retary can meet with the program that complements 

5 activities undertaken under the authorities already 

6 within the jurisdiction of the Secretary and the 

7 heads of the agencies with whom the Secretary 

8 consults. 

9 (b) REPORT.—Not later than 2 years after the date 

10 of enactment of this Act, the Secretary shall submit to 

11 the Committee on Energy and Natural Resources of the 

12 Senate and the Committee on Resources of the House of 

13 Representatives a detailed report on the assessment con14 ducted under subsection (a). 

15 SEC. 105. APPRAISAL INVESTIGATIONS. 

16 (a) IN GENERAL.—On request of a non-Federal 

17 project entity with respect to a proposed rural water sup18 ply project that meets the eligibility criteria published 

19 under section 103(c) and subject to the availability of ap20 propriations, the Secretary may— 

21 (1) receive and review an appraisal investiga22 tion that is— 

23 (A) developed by the non-Federal project 

24 entity independent of support from the Sec25 retary; and 
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1 (B) submitted to the Secretary by the non2 Federal project entity; 

3 (2) conduct an appraisal investigation; or 

4 (3) provide a grant to, or enter into a coopera5 tive agreement with, the non-Federal project entity 

6 to conduct an appraisal investigation, if the Sec7 retary determines that— 

8 (A) the non-Federal project entity is quali9 fied to complete the appraisal investigation in 

10 accordance with the criteria published under 

11 section 103(c); and 

12 (B) using the non-Federal project entity to 

13 conduct the appraisal investigation is the lowest 

14 cost alternative for completing the appraisal in15 vestigation. 

16 (b) DEADLINE.—An appraisal investigation con17 ducted under subsection (a) shall be scheduled for comple18 tion not later than 2 years after the date on which the 

19 appraisal investigation is initiated. 

20 (c) APPRAISAL REPORT.—As soon as practicable 

21 after an appraisal investigation is submitted to the Sec22 retary under subsection (a)(1) or completed under para23 graph (2) or (3) of subsection (a), the Secretary shall pre24 pare an appraisal report that— 

25 (1) considers— 
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1 (A) whether the project meets— 

2 (i) the appraisal criteria developed 

3 under subsection (d); and 

4 (ii) the eligibility criteria developed 

5 under section 103(c); 

6 (B) whether viable water supplies and 

7 water rights exist to supply the project, includ8 ing all practicable water sources such as lower 

9 quality waters, nonpotable waters, and water 

10 reuse-based water supplies; 

11 (C) whether the project has a positive ef12 fect on public health and safety; 

13 (D) whether the project will meet water de14 mand, including projected future needs; 

15 (E) the extent to which the project pro16 vides environmental benefits, including source 

17 water protection; 

18 (F) the ability of the project to supply 

19 water consistent with Indian trust responsibil20 ities, as appropriate; 

21 (G) whether the project applies a regional 

22 or watershed perspective and promotes benefits 

23 in the region in which the project is carried out; 

24 (H) whether the project— 
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1 (i)(I) implements an integrated re2 sources management approach; or 

3 (II) enhances water management 

4 flexibility, including providing for— 

5 (aa) local control to manage 

6 water supplies under varying water 

7 supply conditions; and 

8 (bb) participation in water bank9 ing and markets for domestic and en10 vironmental purposes; and 

11 (ii) promotes long-term protection of 

12 water supplies; 

13 (I) preliminary cost estimates for the 

14 project; and 

15 (J) whether the non-Federal project entity 

16 has the capability to pay 100 percent of the 

17 costs associated with the operations, mainte18 nance, and replacement of the facilities con19 structed or developed as part of the rural water 

20 supply project; and 

21 (2) provides recommendations on whether a fea22 sibility study should be initiated under section 

23 106(a). 

24 (d) APPRAISAL CRITERIA.— 
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1 (1) IN GENERAL.—Not later than 1 year after 

2 the date of enactment of this Act, the Secretary 

3 shall promulgate criteria (including appraisal factors 

4 listed under subsection (c)) against which the ap5 praisal investigations shall be assessed for complete6 ness and appropriateness for a feasibility study. 

7 (2) INCLUSIONS.—To minimize the cost of a 

8 rural water supply project to a non-Federal project 

9 entity, the Secretary shall include in the criteria 

10 methods to scale the level of effort needed to com11 plete the appraisal investigation relative to the total 

12 size and cost of the proposed rural water supply 

13 project. 

14 (e) REVIEW OF APPRAISAL INVESTIGATION.—Not 

15 later than 180 days after the date of submission of an 

16 appraisal investigation under subsection (a)(1) or the com17 pletion of an appraisal investigation under paragraph (2) 

18 or (3) of subsection (a), the Secretary shall— 

19 (1) with respect to an appraisal investigation 

20 conducted by a non-Federal project entity under 

21 subsection (a)(1), provide to the non-Federal entity 

22 an evaluation of whether the appraisal investigation 

23 satisfies the criteria promulgated under subsection 

24 (d); 
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1 (2) make available to the public, on request, the 

2 results of each appraisal investigation conducted 

3 under this title; and 

4 (3) promptly publish in the Federal Register a 

5 notice of the availability of the results. 

6 (f) COSTS.— 

7 (1) FEDERAL SHARE.—The Federal share of an 

8 appraisal investigation conducted under subsection 

9 (a) shall be 100 percent of the total cost of the ap10 praisal investigation, up to $200,000. 

11 (2) NON-FEDERAL SHARE.— 

12 (A) IN GENERAL.—Except as provided in 

13 subparagraph (B), if the cost of conducting an 

14 appraisal investigation is more than $200,000, 

15 the non-Federal share of the costs in excess of 

16 $200,000 shall be 50 percent. 

17 (B) EXCEPTION.—The Secretary may re18 duce the non-Federal share required under sub19 paragraph (A) if the Secretary determines that 

20 there is an overwhelming Federal interest in the 

21 appraisal investigation. 

22 (g) CONSULTATION; IDENTIFICATION OF FUNDING

23 SOURCES.—In conducting an appraisal investigation 

24 under subsection (a)(2), the Secretary shall— 
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1 (1) consult and cooperate with the non-Federal 

2 project entity and appropriate State, tribal, regional, 

3 and local authorities; 

4 (2) consult with the heads of appropriate Fed5 eral agencies to— 

6 (A) ensure that the proposed rural water 

7 supply project does not duplicate a project car8 ried out under the authority of the agency head; 

9 and 

10 (B) if a duplicate project is being carried 

11 out, identify the authority under which the du12 plicate project is being carried out; and 

13 (3) identify what funding sources are available 

14 for the proposed rural water supply project. 

15 SEC. 106. FEASIBILITY STUDIES. 

16 (a) IN GENERAL.—On completion of an appraisal re17 port under section 105(c) that recommends undertaking 

18 a feasibility study and subject to the availability of appro19 priations, the Secretary shall— 

20 (1) in cooperation with a non-Federal project 

21 entity, carry out a study to determine the feasibility 

22 of the proposed rural water supply project; 

23 (2) receive and review a feasibility study that 

24 is— 
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1 (A) developed by the non-Federal project 

2 entity independent of support from the Sec3 retary; and 

4 (B) submitted to the Secretary by the non5 Federal project entity; or 

6 (3) provide a grant to, or enter into a coopera7 tive agreement with, a non-Federal project entity to 

8 conduct a feasibility study, for submission to the 

9 Secretary, if the Secretary determines that— 

10 (A) the non-Federal entity is qualified to 

11 complete the feasibility study in accordance 

12 with the criteria promulgated under subsection 

13 (d); and 

14 (B) using the non-Federal project entity to 

15 conduct the feasibility study is the lowest cost 

16 alternative for completing the appraisal inves17 tigation. 

18 (b) REVIEW OF NON-FEDERAL FEASIBILITY STUD19 IES.— 

20 (1) IN GENERAL.—In conducting a review of a 

21 feasibility study submitted under paragraph (2) or 

22 (3) of subsection (a), the Secretary shall— 

23 (A) in accordance with the feasibility fac24 tors described in subsection (c) and the criteria 
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1 promulgated under subsection (d), assess the 

2 completeness of the feasibility study; and 

3 (B) if the Secretary determines that a fea4 sibility study is not complete, notify the non5 Federal entity of the determination. 

6 (2) REVISIONS.—If the Secretary determines 

7 under paragraph (1)(B) that a feasibility study is 

8 not complete, the non-Federal entity shall pay any 

9 costs associated with revising the feasibility study. 

10 (c) FEASIBILITY FACTORS.—Feasibility studies au11 thorized or reviewed under this title shall include an as12 sessment of— 

13 (1) near- and long-term water demand in the 

14 region to be served by the rural water supply 

15 project; 

16 (2) advancement of public health and safety of 

17 any existing rural water supply project and other 

18 benefits of the proposed rural water supply project; 

19 (3) alternative new water supplies in the study 

20 area, including any opportunities to treat and use 

21 low-quality water, nonpotable water, water reuse22 based supplies, and brackish and saline waters 

23 through innovative and economically viable treat24 ment technologies; 
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1 (4) environmental quality and source water pro2 tection issues related to the rural water supply 

3 project; 

4 (5) innovative opportunities for water conserva5 tion in the study area to reduce water use and water 

6 system costs, including— 

7 (A) nonstructural approaches to reduce the 

8 need for the project; and 

9 (B) demonstration technologies; 

10 (6) the extent to which the project and alter11 natives take advantage of economic incentives and 

12 the use of market-based mechanisms; 

13 (7)(A) the construction costs and projected op14 erations, maintenance, and replacement costs of all 

15 alternatives; and 

16 (B) the economic feasibility and lowest cost 

17 method of obtaining the desired results of each alter18 native, taking into account the Federal cost-share; 

19 (8) the availability of guaranteed loans for a 

20 proposed rural water supply project; 

21 (9) the financial capability of the non-Federal 

22 project entity to pay the non-Federal project entity’s 

23 proportionate share of the design and construction 

24 costs and 100 percent of operations, maintenance, 

25 and replacement costs, including the allocation of 
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1 costs to each non-Federal project entity in the case 

2 of multiple entities; 

3 (10) whether the non-Federal project entity has 

4 developed an operations, management, and replace5 ment plan to assist the non-Federal project entity in 

6 establishing rates and fees for beneficiaries of the 

7 rural water supply project; 

8 (11)(A) the non-Federal project entity adminis9 trative organization that would implement construc10 tion, operations, maintenance, and replacement ac11 tivities; and 

12 (B) the fiscal, administrative, and operational 

13 controls to be implemented to manage the project; 

14 (12) the extent to which the project addresses 

15 Indian trust responsibilities, as appropriate; 

16 (13) the extent to which assistance for rural 

17 water supply is available under other Federal au18 thorities; 

19 (14) the engineering, environmental, and eco20 nomic activities to be undertaken to carry out the 

21 study; 

22 (15) the extent to which the project involves 

23 partnerships with other State, local, or tribal govern24 ments or Federal entities; and 
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1 (16) in the case of a project intended for Indian 

2 tribes and tribal organizations, the extent to which 

3 the project addresses the goal of economic self-suffi4 ciency. 

5 (d) FEASIBILITY STUDY CRITERIA.— 

6 (1) IN GENERAL.—Not later than 18 months 

7 after the date of enactment of this Act, the Sec8 retary shall promulgate criteria (including the feasi9 bility factors listed under subsection (c)) under 

10 which the feasibility studies shall be assessed for 

11 completeness and appropriateness. 

12 (2) INCLUSIONS.—The Secretary shall include 

13 in the criteria promulgated under paragraph (1) 

14 methods to scale the level of effort needed to com15 plete the feasibility assessment relative to the total 

16 size and cost of the proposed rural water supply 

17 project and reduce total costs to non-Federal enti18 ties. 

19 (e) FEASIBILITY REPORT.— 

20 (1) IN GENERAL.—After completion of appro21 priate feasibility studies for rural water supply 

22 projects that address the factors described in sub23 section (c) and the criteria promulgated under sub24 section (d), the Secretary shall— 
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1 (A) develop a feasibility report that in2 cludes— 

3 (i) a recommendation of the Secretary 

4 on— 

5 (I) whether the rural water sup6 ply project should be authorized for 

7 construction; and 

8 (II) the appropriate non-Federal 

9 share of construction costs, which 

10 shall be— 

11 (aa) at least 25 percent of 

12 the total construction costs; and 

13 (bb) determined based on an 

14 analysis of the capability-to-pay 

15 information considered under 

16 subsections (c)(9) and (f); and 

17 (ii) if the Secretary recommends that 

18 the project should be authorized for con19 struction— 

20 (I) what amount of grants, loan 

21 guarantees, or combination of grants 

22 and loan guarantees should be used to 

23 provide the Federal cost share; 

24 (II) a schedule that identifies the 

25 annual operations, maintenance, and 
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1 replacement costs that should be allo2 cated to each non-Federal entity par3 ticipating in the rural water supply 

4 project; and 

5 (III) an assessment of the finan6 cial capability of each non-Federal en7 tity participating in the rural water 

8 supply project to pay the allocated an9 nual operation, maintenance, and re10 placement costs for the rural water 

11 supply project; 

12 (B) submit the report to the Committee on 

13 Energy and Natural Resources of the Senate 

14 and the Committee on Resources of the House 

15 of Representatives; 

16 (C) make the report publicly available, 

17 along with associated study documents; and 

18 (D) publish in the Federal Register a no19 tice of the availability of the results. 

20 (f) CAPABILITY-TO-PAY.— 

21 (1) IN GENERAL.—In evaluating a proposed 

22 rural water supply project under this section, the 

23 Secretary shall— 

24 (A) consider the financial capability of any 

25 non-Federal project entities participating in the 
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1 rural water supply project to pay the capital 

2 construction costs of the rural water supply 

3 project; and 

4 (B) recommend an appropriate Federal 

5 share and non-Federal share of the capital con6 struction costs, as determined by the Secretary. 

7 (2) FACTORS.—In determining the financial ca8 pability of non-Federal project entities to pay for a 

9 rural water supply project under paragraph (1), the 

10 Secretary shall evaluate factors for the project area, 

11 relative to the State and county average, including— 

12 (A) per capita income; 

13 (B) median household income; 

14 (C) the poverty rate; 

15 (D) the ability of the non-Federal project 

16 entity to raise tax revenues or assess fees; 

17 (E) the strength of the balance sheet of 

18 the non-Federal project entity; and 

19 (F) the existing cost of water in the re20 gion. 

21 (3) INDIAN TRIBES.—In determining the capa22 bility-to-pay of Indian tribe project beneficiaries, the 

23 Secretary may consider deferring the collection of all 

24 or part of the non-Federal construction costs appor25 tioned to Indian tribe project beneficiaries unless or 
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1 until the Secretary determines that the Indian tribe 

2 project beneficiaries should pay— 

3 (A) the costs allocated to the beneficiaries; 

4 or 

5 (B) an appropriate portion of the costs. 

6 (g) COST-SHARING REQUIREMENT.— 

7 (1) IN GENERAL.—Except as otherwise pro8 vided in this subsection, the Federal share of the 

9 cost of a feasibility study carried out under this sec10 tion shall not exceed 50 percent of the study costs. 

11 (2) FORM.—The non-Federal share under para12 graph (1) may be in the form of any in-kind services 

13 that the Secretary determines would contribute sub14 stantially toward the conduct and completion of the 

15 study. 

16 (3) FINANCIAL HARDSHIP.—The Secretary may 

17 increase the Federal share of the costs of a feasi18 bility study if the Secretary determines, based on a 

19 demonstration of financial hardship, that the non20 Federal participant is unable to contribute at least 

21 50 percent of the costs of the study. 

22 (4) LARGER COMMUNITIES.—In conducting a 

23 feasibility study of a rural water supply system that 

24 includes a community with a population in excess of 

25 50,000 inhabitants, the Secretary may require the 
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1 community to pay a greater percentage of the non2 Federal share than that required for communities 

3 with less than 50,000 inhabitants. 

4 (h) CONSULTATION AND COOPERATION.—In addition 

5 to the non-Federal project entity, the Secretary shall con6 sult and cooperate with appropriate Federal, State, tribal, 

7 regional, and local authorities during the conduct of each 

8 feasibility assessment and development of the feasibility 

9 report conducted under this title. 

10 SEC. 107. MISCELLANEOUS. 

11 (a) AUTHORITY OF SECRETARY.—The Secretary may 

12 enter into contracts, financial assistance agreements, and 

13 such other agreements, and promulgate such regulations, 

14 as are necessary to carry out this title. 

15 (b) TRANSFER OF PROJECTS.—Nothing in this title 

16 authorizes the transfer of pre-existing facilities or pre-ex17 isting components of any water system from Federal to 

18 private ownership or from private to Federal ownership. 

19 (c) FEDERAL RECLAMATION LAW.—Nothing in this 

20 title supersedes or amends any Federal law associated 

21 with a project, or portion of a project, constructed under 

22 Federal reclamation law. 

23 (d) INTERAGENCY COORDINATION.—The Secretary 

24 shall coordinate the program carried out under this title 

25 with existing Federal and State rural water and waste-
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1 water programs to facilitate the most efficient and effec2 tive solution to meeting the water needs of the non-Fed3 eral project sponsors. 

4 (e) MULTIPLE INDIAN TRIBES.—In any case in 

5 which a contract is entered into with, or a grant is made, 

6 to an organization to perform services benefitting more 

7 than 1 Indian tribe under this title, the approval of each 

8 such Indian tribe shall be a prerequisite to entering into 

9 the contract or making the grant. 

10 (f) OWNERSHIP OF FACILITIES.—Title to any facility 

11 planned, designed, and recommended for construction 

12 under this title is intended to be held by the non-Federal 

13 project entity. 

14 (g) EFFECT ON STATE WATER LAW.— 

15 (1) IN GENERAL.—Nothing in this title pre16 empts or affects State water law or an interstate 

17 compact governing water. 

18 (2) COMPLIANCE REQUIRED.—The Secretary 

19 shall comply with State water laws in carrying out 

20 this title. 

21 (h) NO ADDITIONAL REQUIREMENTS.—Nothing in 

22 this title requires a feasibility study for, or imposes any 

23 other additional requirements with respect to, rural water 

24 supply projects or programs that are authorized before the 

25 date of enactment of this Act. 
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1 SEC. 108. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) IN GENERAL.—There is authorized to be appro3 priated to carry out this title $20,000,000 for the period 

4 of fiscal years 2006 through 2015, to remain available 

5 until expended. 

6 (b) RURAL WATER PROGRAMS ASSESSMENT.—Of the 

7 amounts made available under subsection (a), not more 

8 than $1,000,000 may be made available to carry out sec9 tion 104 for each of fiscal years 2006 and 2007. 

10 (c) LIMITATION.—No amounts made available under 

11 this section shall be used to pay construction costs associ12 ated with any rural water supply project. 

13 TITLE II—TWENTY-FIRST 

14 CENTURY WATER WORKS ACT 

15 SEC. 201. SHORT TITLE. 

16 This title may be cited as the ‘‘Twenty-First Century 

17 Water Works Act’’. 

18 SEC. 202. DEFINITIONS. 

19 In this title: 

20 (1) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

21 has the meaning given the term in section 4 of the 

22 Indian Self-Determination and Education Assistance 

23 Act (25 U.S.C. 450b). 

24 (2) LENDER.—The term ‘‘lender’’ means any 

25 non-Federal qualified institutional buyer (as defined 

26 in section 230.144A(a) of title 17, Code of Federal 
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1 Regulation (or any successor regulation), known as 

2 Rule 144A(a) of the Securities and Exchange Com3 mission and issued under the Securities Act of 1933 

4 (15 U.S.C. 77a et seq.)). 

5 (3) LOAN GUARANTEE.—The term ‘‘loan guar6 antee’’ means any guarantee, insurance, or other 

7 pledge by the Secretary to pay all or part of the 

8 principal of, and interest on, a loan or other debt ob9 ligation of a non-Federal borrower to a lender. 

10 (4) NON-FEDERAL BORROWER.—The term 

11 ‘‘non-Federal borrower’’ means— 

12 (A) a State (including a department, agen13 cy, or political subdivision of a State); or 

14 (B) a conservancy district, irrigation dis15 trict, canal company, water users’ association, 

16 Indian tribe, an agency created by interstate 

17 compact, or any other entity that has the ca18 pacity to contract with the United States under 

19 Federal reclamation law. 

20 (5) PROJECT.—The term ‘‘project’’ means— 

21 (A) a rural water supply project (as de22 fined in section 102(8)); or 

23 (B) an extraordinary operation and main24 tenance activity for, or the rehabilitation of, a 

25 facility— 
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1 (i) that is authorized by Federal rec2 lamation law and constructed by the 

3 United States under such law; or 

4 (ii) in connection with which there is 

5 a repayment or water service contract exe6 cuted by the United States under Federal 

7 reclamation law. 

8 (6) SECRETARY.—The term ‘‘Secretary’’ means 

9 the Secretary of the Interior. 

10 SEC. 203. PROJECT ELIGIBILITY. 

11 (a) ELIGIBILITY CRITERIA.— 

12 (1) IN GENERAL.—The Secretary shall develop 

13 and publish in the Federal Register criteria for de14 termining the eligibility of a project for financial as15 sistance under section 204. 

16 (2) INCLUSIONS.—Eligibility criteria shall in17 clude— 

18 (A) submission of an application by the 

19 lender to the Secretary; 

20 (B) demonstration of the creditworthiness 

21 of the project, including a determination by the 

22 Secretary that any financing for the project has 

23 appropriate security features to ensure repay24 ment; 
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1 (C) demonstration by the non-Federal bor2 rower, to the satisfaction of the Secretary, of 

3 the ability of the non-Federal borrower to repay 

4 the project financing from user fees or other 

5 dedicated revenue sources; 

6 (D) demonstration by the non-Federal bor7 rower, to the satisfaction of the Secretary, of 

8 the ability of the non-Federal borrower to pay 

9 all operations, maintenance, and replacement 

10 costs of the project facilities; and 

11 (E) such other criteria as the Secretary de12 termines to be appropriate. 

13 (b) WAIVER.—The Secretary may waive any of the 

14 criteria in subsection (a)(2) that the Secretary determines 

15 to be duplicative or rendered unnecessary because of an 

16 action already taken by the United States. 

17 (c) PROJECTS PREVIOUSLY AUTHORIZED.—A project 

18 that was authorized for construction under Federal rec19 lamation laws prior to the date of enactment of this Act 

20 shall be eligible for assistance under this title, subject to 

21 the criteria established by the Secretary under subsection 

22 (a). 

23 (d) CRITERIA FOR RURAL WATER SUPPLY

24 PROJECTS.—A rural water supply project that is deter-
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1 mined to be feasible under section 106 is eligible for a 

2 loan guarantee under section 204. 

3 SEC. 204. LOAN GUARANTEES. 

4 (a) AUTHORITY.—Subject to the availability of ap5 propriations, the Secretary may make available to lenders 

6 for a project meeting the eligibility criteria established in 

7 section 203 loan guarantees to supplement private-sector 

8 or lender financing for the project. 

9 (b) TERMS AND LIMITATIONS.— 

10 (1) IN GENERAL.—Loan guarantees under this 

11 section for a project shall be on such terms and con12 ditions and contain such covenants, representations, 

13 warranties, and requirements as the Secretary deter14 mines to be appropriate to protect the financial in15 terests of the United States. 

16 (2) MAXIMUM AMOUNT.—The amount of a loan 

17 guarantee shall not exceed 90 percent of the reason18 ably anticipated eligible project costs. 

19 (3) INTEREST RATE.—The interest rate on a 

20 loan guarantee shall be negotiated between the non21 Federal borrower and the lender with the consent of 

22 the Secretary. 

23 (4) AMORTIZATION.—A loan guarantee under 

24 this section shall provide for complete amortization 
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1 of the loan guarantee within not more than 40 

2 years. 

3 (5) NON-SUBORDINATION.—In case of bank4 ruptcy, insolvency, or liquidation of the non-Federal 

5 borrower, a loan guarantee shall not be subordinated 

6 to the claims of any holder of project obligations. 

7 (c) PREPAYMENT AND REFINANCING.—Any prepay8 ment or refinancing terms on a loan guarantee shall be 

9 negotiated between the non-Federal borrower and the 

10 lender with the consent of the Secretary. 

11 SEC. 205. OPERATIONS, MAINTENANCE, AND REPLACE12 MENT COSTS. 

13 (a) IN GENERAL.—The non-Federal share of oper14 ations, maintenance, and replacement costs for a project 

15 receiving Federal assistance under this title shall be 100 

16 percent. 

17 (b) PLAN.—On request of the non-Federal borrower, 

18 the Secretary may assist in the development of an oper19 ation, maintenance, and replacement plan to provide the 

20 necessary framework to assist the non-Federal borrower 

21 in establishing rates and fees for project beneficiaries. 

22 SEC. 206. TITLE TO NEWLY CONSTRUCTED FACILITIES. 

23 (a) NEW PROJECTS AND FACILITIES.—All new 

24 projects or facilities constructed in accordance with this 

25 title shall remain under the jurisdiction and control of the 
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1 non-Federal borrower subject to the terms of the repay2 ment agreement. 

3 (b) EXISTING PROJECTS AND FACILITIES.—Nothing 

4 in this title affects the title of— 

5 (1) reclamation projects authorized prior to the 

6 date of enactment of this Act; 

7 (2) works supplemental to existing reclamation 

8 projects; or 

9 (3) works constructed to rehabilitate existing 

10 reclamation projects. 

11 SEC. 207. WATER RIGHTS. 

12 (a) IN GENERAL.—Nothing in this title preempts or 

13 affects State water law or an interstate compact governing 

14 water. 

15 (b) COMPLIANCE REQUIRED.—The Secretary shall 

16 comply with State water laws in carrying out this title. 

17 Nothing in this title affects or preempts State water law 

18 or an interstate compact governing water. 

19 SEC. 208. INTERAGENCY COORDINATION AND COOPERA20 TION. 

21 The Secretary and the Secretary of Agriculture shall 

22 enter into a memorandum of agreement providing for De23 partment of Agriculture financial appraisal functions and 

24 loan guarantee administration for activities carried out 

25 under this title. 
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1 SEC. 209. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated such sums 

3 as are necessary to carry out this title, to remain available 

4 until expended. 

5 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

6 (a) SHORT TITLE.—This Act may be cited as the 

7 ‘‘Rural Water Supply Act of 2005’’. 

8 (b) TABLE OF CONTENTS.—The table of contents of this 

9 Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—RECLAMATION RURAL WATER SUPPLY ACT OF 2005 

Sec. 101. Short title. 

Sec. 102. Definitions. 

Sec. 103. Rural water supply program. 

Sec. 104. Rural water programs assessment. 

Sec. 105. Appraisal investigations. 

Sec. 106. Feasibility studies. 

Sec. 107. Miscellaneous. 

Sec. 108. Authorization of appropriations. 

TITLE II—TWENTY-FIRST CENTURY WATER WORKS ACT 

Sec. 201. Short title. 

Sec. 202. Definitions. 

Sec. 203. Project eligibility. 

Sec. 204. Loan guarantees. 

Sec. 205. Operations, maintenance, and replacement costs. 

Sec. 206. Title to newly constructed facilities. 

Sec. 207. Water rights. 

Sec. 208. Interagency coordination and cooperation. 

Sec. 209. Authorization of appropriations. 

10 TITLE I—RECLAMATION RURAL 

11 WATER SUPPLY ACT OF 2005 

12 SEC. 101. SHORT TITLE. 

13 This title may be cited as the ‘‘Reclamation Rural 

14 Water Supply Act of 2005’’. 
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1 SEC. 102. DEFINITIONS. 

2 In this title: 

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

4 means the installation of new infrastructure and the 

5 upgrading of existing facilities in locations in which 

6 the infrastructure or facilities are associated with the 

7 new infrastructure of a rural water project rec8 ommended by the Secretary pursuant to this title. 

9 (2) FEDERAL RECLAMATION LAW.—The term 

10 ‘‘Federal reclamation law’’ means the Act of June 17, 

11 1902 (32 Stat. 388, chapter 1093), and Acts supple12 mental to and amendatory of that Act (43 U.S.C. 371 

13 et seq.). 

14 (3) INDIAN.—The term ‘‘Indian’’ means an indi15 vidual who is a member of an Indian tribe. 

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

17 the meaning given the term in section 4 of the Indian 

18 Self-Determination and Education Assistance Act (25 

19 U.S.C. 450b). 

20 (5) NON-FEDERAL PROJECT ENTITY.—The term 

21 ‘‘non-Federal project entity’’ means a State, regional, 

22 or local authority, Indian tribe or tribal organiza23 tion, or other qualifying entity, such as a water con24 servation district, water conservancy district, or rural 

25 water district or association. 
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1 (6) OPERATIONS, MAINTENANCE, AND REPLACE2 MENT COSTS.— 

3 (A) IN GENERAL.—The term ‘‘operations, 

4 maintenance, and replacement costs’’ means all 

5 costs for the operation of a rural water supply 

6 project that are necessary for the safe, efficient, 

7 and continued functioning of the project to 

8 produce the benefits described in a feasibility 

9 study. 

10 (B) INCLUSIONS.—The term ‘‘operations, 

11 maintenance, and replacement costs’’ includes— 

12 (i) repairs of a routine nature that 

13 maintain a rural water supply project in a 

14 well kept condition; 

15 (ii) replacement of worn-out project 

16 elements; and 

17 (iii) rehabilitation activities necessary 

18 to bring a deteriorated project back to the 

19 original condition of the project. 

20 (C) EXCLUSION.—The term ‘‘operations, 

21 maintenance, and replacement costs’’ does not 

22 include construction costs. 

23 (7) PROGRAM.—The term ‘‘Program’’ means the 

24 rural water supply program established under section 

25 103. 
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1 (8) RECLAMATION STATES.—The term ‘‘Rec2 lamation States’’ means the States and areas referred 

3 to in the first section of the Act of June 17, 1902 (43 

4 U.S.C. 391). 

5 (9) RURAL WATER SUPPLY PROJECT.— 

6 (A) IN GENERAL.—The term ‘‘rural water 

7 supply project’’ means a project that is designed 

8 to serve a community or group of communities, 

9 each of which has a population of not more than 

10 50,000 inhabitants, which may include Indian 

11 tribes and tribal organizations, dispersed home12 sites, or rural areas with domestic, industrial, 

13 municipal, and residential water. 

14 (B) INCLUSION.—The term ‘‘rural water 

15 supply project’’ includes— 

16 (i) incidental noncommercial livestock 

17 watering and noncommercial irrigation of 

18 vegetation and small gardens of less than 1 

19 acre; and 

20 (ii) a project to improve rural water 

21 infrastructure, including— 

22 (I) pumps, pipes, wells, and other 

23 diversions; 

24 (II) storage tanks and small im25 poundments; 
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1 (III) water treatment facilities for 

2 potable water supplies, including de3 salination facilities; 

4 (IV) equipment and management 

5 tools for water conservation, ground6 water recovery, and water recycling; 

7 and 

8 (V) appurtenances. 

9 (C) EXCLUSION.—The term ‘‘rural water 

10 supply project’’ does not include— 

11 (i) commercial irrigation; or 

12 (ii) major impoundment structures. 

13 (10) SECRETARY.—The term ‘‘Secretary’’ means 

14 the Secretary of the Interior. 

15 (11) TRIBAL ORGANIZATION.—The term ‘‘tribal 

16 organization’’ means— 

17 (A) the recognized governing body of an In18 dian tribe; and 

19 (B) any legally established organization of 

20 Indians that is controlled, sanctioned, or char21 tered by the governing body or democratically 

22 elected by the adult members of the Indian com23 munity to be served by the organization. 
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1 SEC. 103. RURAL WATER SUPPLY PROGRAM. 

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

3 non-Federal project entities and consistent with this title, 

4 shall establish and carry out a rural water supply program 

5 in Reclamation States to— 

6 (1) investigate and identify opportunities to en7 sure safe and adequate rural water supply projects for 

8 domestic, municipal, and industrial use in small 

9 communities and rural areas of the Reclamation 

10 States; 

11 (2) plan the design and construction, through the 

12 conduct of appraisal investigations and feasibility 

13 studies, of rural water supply projects in Reclamation 

14 States; and 

15 (3) oversee, as appropriate, the construction of 

16 rural water supply projects in Reclamation States 

17 that are recommended by the Secretary in a feasi18 bility report developed pursuant to section 106 and 

19 subsequently authorized by Congress. 

20 (b) NON-FEDERAL PROJECT ENTITY.—Any activity 

21 carried out under this title shall be carried out in coopera22 tion with a qualifying non-Federal project entity, consistent 

23 with this title. 

24 (c) ELIGIBILITY CRITERIA.—Not later than 1 year 

25 after the date of enactment of this Act, the Secretary shall, 
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1 consistent with this title, develop and publish in the Federal 

2 Register criteria for— 

3 (1) determining the eligibility of a rural commu4 nity for assistance under the Program; and 

5 (2) prioritizing requests for assistance under the 

6 Program. 

7 (d) FACTORS.—The criteria developed under sub8 section (c) shall take into account such factors as whether— 

9 (1) a rural water supply project— 

10 (A) serves— 

11 (i) rural areas and small communities; 

12 or 

13 (ii) Indian tribes; or 

14 (B) promotes and applies a regional or wa15 tershed perspective to water resources manage16 ment; 

17 (2) there is an urgent and compelling need for 

18 a rural water supply project that would— 

19 (A) improve the health or aesthetic quality 

20 of water; 

21 (B) result in continuous, measurable, and 

22 significant water quality benefits; or 

23 (C) address current or future water supply 

24 needs; 
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1 (3) a rural water supply project helps meet ap2 plicable requirements established by law; and 

3 (4) a rural water supply project is cost effective. 

4 (e) INCLUSIONS.—The Secretary may include— 

5 (1) to the extent that connection provides a reli6 able water supply, a connection to preexisting infra7 structure (including impoundments and conveyance 

8 channels) as part of a rural water supply project; and 

9 (2) notwithstanding the limitation on population 

10 under section 102(9)(A), a town or community with 

11 a population in excess of 50,000 inhabitants in an 

12 area served by a rural water supply project if, at the 

13 discretion of the Secretary, the town or community is 

14 considered to be a critical partner in the rural supply 

15 project. 

16 SEC. 104. RURAL WATER PROGRAMS ASSESSMENT. 

17 (a) IN GENERAL.—In consultation with the Secretary 

18 of Agriculture, the Administrator of the Environmental 

19 Protection Agency, the Director of the Indian Health Serv20 ice, the Secretary of Housing and Urban Development, and 

21 the Secretary of the Army, the Secretary shall develop an 

22 assessment of— 

23 (1) the status of all rural water supply projects 

24 under the jurisdiction of the Secretary authorized but 

25 not completed prior to the date of enactment of this 
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1 Act, including appropriation amounts, the phase of 

2 development, total anticipated costs, and obstacles to 

3 completion; 

4 (2) the current plan (including projected finan5 cial and workforce requirements) for the completion of 

6 the projects identified in paragraph (1) within the 

7 time frames established under the provisions of law 

8 authorizing the projects or the final engineering re9 ports for the projects; 

10 (3) the demand for new rural water supply 

11 projects; 

12 (4) rural water programs within other agencies 

13 and a description of the extent to which those pro14 grams provide support for rural water supply projects 

15 and water treatment programs in Reclamation 

16 States, including an assessment of the requirements, 

17 funding levels, and conditions of eligibility for the 

18 programs assessed; 

19 (5) the extent of the demand that the Secretary 

20 can meet with the Program; 

21 (6) how the Program will complement authori22 ties already within the jurisdiction of the Secretary 

23 and the heads of the agencies with whom the Sec24 retary consults; and 
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1 (7) improvements that can be made to coordinate 

2 and integrate the authorities of the agencies with pro3 grams evaluated under paragraph (4), including any 

4 recommendations to consolidate some or all of the ac5 tivities of the agencies with respect to rural water 

6 supply. 

7 (b) CONSULTATION WITH STATES.—Before finalizing 

8 the assessment developed under subsection (a), the Secretary 

9 shall solicit comments from States with identified rural 

10 water needs. 

11 (c) REPORT.—Not later than 2 years after the date of 

12 enactment of this Act, the Secretary shall submit to the 

13 Committee on Energy and Natural Resources of the Senate 

14 and the Committee on Resources of the House of Representa15 tives a detailed report on the assessment conducted under 

16 subsection (a). 

17 SEC. 105. APPRAISAL INVESTIGATIONS. 

18 (a) IN GENERAL.—On request of a non-Federal project 

19 entity with respect to a proposed rural water supply project 

20 that meets the eligibility criteria published under section 

21 103(c) and subject to the availability of appropriations, the 

22 Secretary may— 

23 (1) receive and review an appraisal investiga24 tion that is— 
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1 (A) developed by the non-Federal project en2 tity, with or without support from the Secretary; 

3 and 

4 (B) submitted to the Secretary by the non5 Federal project entity; 

6 (2) conduct an appraisal investigation; or 

7 (3) provide a grant to, or enter into a coopera8 tive agreement with, the non-Federal project entity to 

9 conduct an appraisal investigation, if the Secretary 

10 determines that— 

11 (A) the non-Federal project entity is quali12 fied to complete the appraisal investigation in 

13 accordance with the criteria published under sec14 tion 103(c); and 

15 (B) using the non-Federal project entity to 

16 conduct the appraisal investigation is a cost-ef17 fective alternative for completing the appraisal 

18 investigation. 

19 (b) DEADLINE.—An appraisal investigation conducted 

20 under subsection (a) shall be scheduled for completion not 

21 later than 2 years after the date on which the appraisal 

22 investigation is initiated. 

23 (c) APPRAISAL REPORT.—In accordance with sub24 section (f), after an appraisal investigation is submitted to 

25 the Secretary under subsection (a)(1) or completed under 
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1 paragraph (2) or (3) of subsection (a), the Secretary shall 

2 prepare an appraisal report that— 

3 (1) considers— 

4 (A) whether the project meets— 

5 (i) the appraisal criteria developed 

6 under subsection (d); and 

7 (ii) the eligibility criteria developed 

8 under section 103(c); 

9 (B) whether viable water supplies and 

10 water rights exist to supply the project, includ11 ing all practicable water sources such as lower 

12 quality waters, nonpotable waters, and water 

13 reuse-based water supplies; 

14 (C) whether the project has a positive effect 

15 on public health and safety; 

16 (D) whether the project will meet water de17 mand, including projected future needs; 

18 (E) the extent to which the project provides 

19 environmental benefits, including source water 

20 protection; 

21 (F) whether the project applies a regional or 

22 watershed perspective and promotes benefits in 

23 the region in which the project is carried out; 

24 (G) whether the project— 
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1 (i)(I) implements an integrated re2 sources management approach; or 

3 (II) enhances water management flexi4 bility, including providing for— 

5 (aa) local control to manage 

6 water supplies under varying water 

7 supply conditions; and 

8 (bb) participation in water bank9 ing and markets for domestic and envi10 ronmental purposes; and 

11 (ii) promotes long-term protection of 

12 water supplies; 

13 (H) preliminary cost estimates for the 

14 project; and 

15 (I) whether the non-Federal project entity 

16 has the capability to pay 100 percent of the costs 

17 associated with the operations, maintenance, and 

18 replacement of the facilities constructed or devel19 oped as part of the rural water supply project; 

20 and 

21 (2) provides recommendations on whether a fea22 sibility study should be initiated under section 

23 106(a). 

24 (d) APPRAISAL CRITERIA.— 
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1 (1) IN GENERAL.—Not later than 1 year after 

2 the date of enactment of this Act, the Secretary shall 

3 promulgate criteria (including appraisal factors list4 ed under subsection (c)) against which the appraisal 

5 investigations shall be assessed for completeness and 

6 appropriateness for a feasibility study. 

7 (2) INCLUSIONS.—To minimize the cost of a 

8 rural water supply project to a non-Federal project 

9 entity, the Secretary shall include in the criteria 

10 methods to scale the level of effort needed to complete 

11 the appraisal investigation relative to the total size 

12 and cost of the proposed rural water supply project. 

13 (e) REVIEW OF APPRAISAL INVESTIGATION.— 

14 (1) IN GENERAL.—Not later than 90 days after 

15 the date of submission of an appraisal investigation 

16 under paragraph (1) or (3) of subsection (a), the Sec17 retary shall provide to the non-Federal entity that 

18 conducted the investigation a determination of wheth19 er the investigation has included the information nec20 essary to determine whether the proposed rural water 

21 supply project satisfies the criteria promulgated 

22 under subsection (d). 

23 (2) NO SATISFACTION OF CRITERIA.—If the Sec24 retary determines that the appraisal investigation 

25 submitted by a non-Federal entity does not satisfy the 
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1 criteria promulgated under subsection (d), the Sec2 retary shall inform the non-Federal entity of the rea3 sons why the appraisal investigation is deficient. 

4 (3) RESPONSIBILITY OF SECRETARY.—If an ap5 praisal investigation as first submitted by a non-Fed6 eral entity does not provide all necessary information, 

7 as defined by the Secretary, the Secretary shall have 

8 no obligation to conduct further analysis until the 

9 non-Federal project entity submitting the appraisal 

10 study conducts additional investigation and resubmits 

11 the appraisal investigation under this subsection. 

12 (f) APPRAISAL REPORT.—Once the Secretary has de13 termined that an investigation provides the information 

14 necessary under subsection (e), the Secretary shall— 

15 (1) complete the appraisal report required under 

16 subsection (c); 

17 (2) make available to the public, on request, the 

18 appraisal report prepared under this title; and 

19 (3) promptly publish in the Federal Register a 

20 notice of the availability of the results. 

21 (g) COSTS.— 

22 (1) FEDERAL SHARE.—The Federal share of an 

23 appraisal investigation conducted under subsection 

24 (a) shall be 100 percent of the total cost of the ap25 praisal investigation, up to $200,000. 
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1 (2) NON-FEDERAL SHARE.— 

2 (A) IN GENERAL.—Except as provided in 

3 subparagraph (B), if the cost of conducting an 

4 appraisal investigation is more than $200,000, 

5 the non-Federal share of the costs in excess of 

6 $200,000 shall be 50 percent. 

7 (B) EXCEPTION.—The Secretary may re8 duce the non-Federal share required under sub9 paragraph (A) if the Secretary determines that 

10 there is an overwhelming Federal interest in the 

11 appraisal investigation. 

12 (C) FORM.—The non-Federal share under 

13 subparagraph (A) may be in the form of any in14 kind services that the Secretary determines 

15 would contribute substantially toward the con16 duct and completion of the appraisal investiga17 tion. 

18 (h) CONSULTATION; IDENTIFICATION OF FUNDING

19 SOURCES.—In conducting an appraisal investigation 

20 under subsection (a)(2), the Secretary shall— 

21 (1) consult and cooperate with the non-Federal 

22 project entity and appropriate State, tribal, regional, 

23 and local authorities; 

24 (2) consult with the heads of appropriate Federal 

25 agencies to— 
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1 (A) ensure that the proposed rural water 

2 supply project does not duplicate a project car3 ried out under the authority of the agency head; 

4 and 

5 (B) if a duplicate project is being carried 

6 out, identify the authority under which the du7 plicate project is being carried out; and 

8 (3) identify what funding sources are available 

9 for the proposed rural water supply project. 

10 SEC. 106. FEASIBILITY STUDIES. 

11 (a) IN GENERAL.—On completion of an appraisal re12 port under section 105(c) that recommends undertaking a 

13 feasibility study and subject to the availability of appro14 priations, the Secretary shall— 

15 (1) in cooperation with a non-Federal project en16 tity, carry out a study to determine the feasibility of 

17 the proposed rural water supply project; 

18 (2) receive and review a feasibility study that 

19 is— 

20 (A) developed by the non-Federal project en21 tity, with or without support from the Secretary; 

22 and 

23 (B) submitted to the Secretary by the non24 Federal project entity; or 
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1 (3) provide a grant to, or enter into a coopera2 tive agreement with, a non-Federal project entity to 

3 conduct a feasibility study, for submission to the Sec4 retary, if the Secretary determines that— 

5 (A) the non-Federal entity is qualified to 

6 complete the feasibility study in accordance with 

7 the criteria promulgated under subsection (d); 

8 and 

9 (B) using the non-Federal project entity to 

10 conduct the feasibility study is a cost-effective al11 ternative for completing the appraisal investiga12 tion. 

13 (b) REVIEW OF NON-FEDERAL FEASIBILITY STUD14 IES.— 

15 (1) IN GENERAL.—In conducting a review of a 

16 feasibility study submitted under paragraph (2) or 

17 (3) of subsection (a), the Secretary shall— 

18 (A) in accordance with the feasibility fac19 tors described in subsection (c) and the criteria 

20 promulgated under subsection (d), assess the 

21 completeness of the feasibility study; and 

22 (B) if the Secretary determines that a feasi23 bility study is not complete, notify the non-Fed24 eral entity of the determination. 
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1 (2) REVISIONS.—If the Secretary determines 

2 under paragraph (1)(B) that a feasibility study is not 

3 complete, the non-Federal entity shall pay any costs 

4 associated with revising the feasibility study. 

5 (c) FEASIBILITY FACTORS.—Feasibility studies au6 thorized or reviewed under this title shall include an assess7 ment of— 

8 (1) near- and long-term water demand in the 

9 area to be served by the rural water supply project; 

10 (2) advancement of public health and safety of 

11 any existing rural water supply project and other 

12 benefits of the proposed rural water supply project; 

13 (3) alternative new water supplies in the study 

14 area, including any opportunities to treat and use 

15 low-quality water, nonpotable water, water reuse16 based supplies, and brackish and saline waters 

17 through innovative and economically viable treatment 

18 technologies; 

19 (4) environmental quality and source water pro20 tection issues related to the rural water supply 

21 project; 

22 (5) innovative opportunities for water conserva23 tion in the study area to reduce water use and water 

24 system costs, including— 
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1 (A) nonstructural approaches to reduce the 

2 need for the project; and 

3 (B) demonstration technologies; 

4 (6) the extent to which the project and alter5 natives take advantage of economic incentives and the 

6 use of market-based mechanisms; 

7 (7)(A) the construction costs and projected oper8 ations, maintenance, and replacement costs of all al9 ternatives; and 

10 (B) the economic feasibility and lowest cost 

11 method of obtaining the desired results of each alter12 native, taking into account the Federal cost-share; 

13 (8) the availability of guaranteed loans for a 

14 proposed rural water supply project; 

15 (9) the financial capability of the non-Federal 

16 project entity to pay the non-Federal project entity’s 

17 proportionate share of the design and construction 

18 costs and 100 percent of operations, maintenance, and 

19 replacement costs, including the allocation of costs to 

20 each non-Federal project entity in the case of multiple 

21 entities; 

22 (10) whether the non-Federal project entity has 

23 developed an operations, management, and replace24 ment plan to assist the non-Federal project entity in 

25 establishing rates and fees for beneficiaries of the 
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1 rural water supply project that includes a schedule 

2 identifying the annual operations, maintenance, and 

3 replacement costs that should be allocated to each 

4 non-Federal entity participating in the project; 

5 (11)(A) the non-Federal project entity adminis6 trative organization that would implement construc7 tion, operations, maintenance, and replacement ac8 tivities; and 

9 (B) the fiscal, administrative, and operational 

10 controls to be implemented to manage the project; 

11 (12) the extent to which assistance for rural 

12 water supply is available under other Federal au13 thorities; 

14 (13) the engineering, environmental, and eco15 nomic activities to be undertaken to carry out the 

16 proposed rural water supply project; 

17 (14) the extent to which the project involves part18 nerships with other State, local, or tribal governments 

19 or Federal entities; and 

20 (15) in the case of a project intended for Indian 

21 tribes and tribal organizations, the extent to which 

22 the project addresses the goal of economic self-suffi23 ciency. 

24 (d) FEASIBILITY STUDY CRITERIA.— 
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1 (1) IN GENERAL.—Not later than 18 months 

2 after the date of enactment of this Act, the Secretary 

3 shall promulgate criteria (including the feasibility 

4 factors listed under subsection (c)) under which the 

5 feasibility studies shall be assessed for completeness 

6 and appropriateness. 

7 (2) INCLUSIONS.—The Secretary shall include in 

8 the criteria promulgated under paragraph (1) meth9 ods to scale the level of effort needed to complete the 

10 feasibility assessment relative to the total size and 

11 cost of the proposed rural water supply project and 

12 reduce total costs to non-Federal entities. 

13 (e) FEASIBILITY REPORT.— 

14 (1) IN GENERAL.—After completion of appro15 priate feasibility studies for rural water supply 

16 projects that address the factors described in sub17 section (c) and the criteria promulgated under sub18 section (d), the Secretary shall— 

19 (A) develop a feasibility report that in20 cludes— 

21 (i) a recommendation of the Secretary 

22 on— 

23 (I) whether the rural water sup24 ply project should be authorized for 

25 construction; and 
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1 (II) the appropriate non-Federal 

2 share of construction costs, which shall 

3 be— 

4 (aa) at least 25 percent of 

5 the total construction costs; and 

6 (bb) determined based on an 

7 analysis of the capability-to-pay 

8 information considered under sub9 sections (c)(9) and (f); and 

10 (ii) if the Secretary recommends that 

11 the project should be authorized for con12 struction— 

13 (I) what amount of grants, loan 

14 guarantees, or combination of grants 

15 and loan guarantees should be used to 

16 provide the Federal cost share; 

17 (II) a schedule that identifies the 

18 annual operations, maintenance, and 

19 replacement costs that should be allo20 cated to each non-Federal entity par21 ticipating in the rural water supply 

22 project; and 

23 (III) an assessment of the finan24 cial capability of each non-Federal en25 tity participating in the rural water 
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1 supply project to pay the allocated an2 nual operation, maintenance, and re3 placement costs for the rural water 

4 supply project; 

5 (B) submit the report to the Committee on 

6 Energy and Natural Resources of the Senate and 

7 the Committee on Resources of the House of Rep8 resentatives; 

9 (C) make the report publicly available, 

10 along with associated study documents; and 

11 (D) publish in the Federal Register a notice 

12 of the availability of the results. 

13 (f) CAPABILITY-TO-PAY.— 

14 (1) IN GENERAL.—In evaluating a proposed 

15 rural water supply project under this section, the Sec16 retary shall— 

17 (A) consider the financial capability of any 

18 non-Federal project entities participating in the 

19 rural water supply project to pay 25 percent or 

20 more of the capital construction costs of the rural 

21 water supply project; and 

22 (B) recommend an appropriate Federal 

23 share and non-Federal share of the capital con24 struction costs, as determined by the Secretary. 
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1 (2) FACTORS.—In determining the financial ca2 pability of non-Federal project entities to pay for a 

3 rural water supply project under paragraph (1), the 

4 Secretary shall evaluate factors for the project area, 

5 relative to the State average, including— 

6 (A) per capita income; 

7 (B) median household income; 

8 (C) the poverty rate; 

9 (D) the ability of the non-Federal project 

10 entity to raise tax revenues or assess fees; 

11 (E) the strength of the balance sheet of the 

12 non-Federal project entity; and 

13 (F) the existing cost of water in the region. 

14 (3) INDIAN TRIBES.—In determining the capa15 bility-to-pay of Indian tribe project beneficiaries, the 

16 Secretary may consider deferring the collection of all 

17 or part of the non-Federal construction costs appor18 tioned to Indian tribe project beneficiaries unless or 

19 until the Secretary determines that the Indian tribe 

20 project beneficiaries should pay— 

21 (A) the costs allocated to the beneficiaries; 

22 or 

23 (B) an appropriate portion of the costs. 

24 (g) COST-SHARING REQUIREMENT.— 
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1 (1) IN GENERAL.—Except as otherwise provided 

2 in this subsection, the Federal share of the cost of a 

3 feasibility study carried out under this section shall 

4 not exceed 50 percent of the study costs. 

5 (2) FORM.—The non-Federal share under para6 graph (1) may be in the form of any in-kind services 

7 that the Secretary determines would contribute sub8 stantially toward the conduct and completion of the 

9 study. 

10 (3) FINANCIAL HARDSHIP.—The Secretary may 

11 increase the Federal share of the costs of a feasibility 

12 study if the Secretary determines, based on a dem13 onstration of financial hardship, that the non-Federal 

14 participant is unable to contribute at least 50 percent 

15 of the costs of the study. 

16 (4) LARGER COMMUNITIES.—In conducting a 

17 feasibility study of a rural water supply system that 

18 includes a community with a population in excess of 

19 50,000 inhabitants, the Secretary may require the 

20 non-Federal project entity to pay more than 50 per21 cent of the costs of the study. 

22 (h) CONSULTATION AND COOPERATION.—In addition 

23 to the non-Federal project entity, the Secretary shall consult 

24 and cooperate with appropriate Federal, State, tribal, re25 gional, and local authorities during the conduct of each fea-
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1 sibility assessment and development of the feasibility report 

2 conducted under this title. 

3 SEC. 107. MISCELLANEOUS. 

4 (a) AUTHORITY OF SECRETARY.—The Secretary may 

5 enter into contracts, financial assistance agreements, and 

6 such other agreements, and promulgate such regulations, as 

7 are necessary to carry out this title. 

8 (b) TRANSFER OF PROJECTS.—Nothing in this title 

9 authorizes the transfer of pre-existing facilities or pre-exist10 ing components of any water system from Federal to pri11 vate ownership or from private to Federal ownership. 

12 (c) FEDERAL RECLAMATION LAW.—Nothing in this 

13 title supersedes or amends any Federal law associated with 

14 a project, or portion of a project, constructed under Federal 

15 reclamation law. 

16 (d) INTERAGENCY COORDINATION.—The Secretary 

17 shall coordinate the Program carried out under this title 

18 with existing Federal and State rural water and waste19 water programs to facilitate the most efficient and effective 

20 solution to meeting the water needs of the non-Federal 

21 project sponsors. 

22 (e) MULTIPLE INDIAN TRIBES.—In any case in which 

23 a contract is entered into with, or a grant is made, to an 

24 organization to perform services benefitting more than 1 In25 dian tribe under this title, the approval of each such Indian 
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1 tribe shall be a prerequisite to entering into the contract 

2 or making the grant. 

3 (f) OWNERSHIP OF FACILITIES.—Title to any facility 

4 planned, designed, and recommended for construction under 

5 this title shall be held by the non-Federal project entity. 

6 (g) EXPEDITED PROCEDURES.—If the Secretary deter7 mines that a community to be served by a proposed rural 

8 water supply project has urgent and compelling water 

9 needs, the Secretary shall, to the maximum extent prac10 ticable, expedite appraisal investigations and reports con11 ducted under section 105 and feasibility studies and reports 

12 conducted under section 106. 

13 (h) EFFECT ON STATE WATER LAW.— 

14 (1) IN GENERAL.—Nothing in this title preempts 

15 or affects State water law or an interstate compact 

16 governing water. 

17 (2) COMPLIANCE REQUIRED.—The Secretary 

18 shall comply with State water laws in carrying out 

19 this title. 

20 (i) NO ADDITIONAL REQUIREMENTS.—Nothing in this 

21 title requires a feasibility study for, or imposes any other 

22 additional requirements with respect to, rural water supply 

23 projects or programs that are authorized before the date of 

24 enactment of this Act. 
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1 SEC. 108. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) IN GENERAL.—There is authorized to be appro3 priated to carry out this title $20,000,000 for the period 

4 of fiscal years 2006 through 2015, to remain available until 

5 expended. 

6 (b) RURAL WATER PROGRAMS ASSESSMENT.—Of the 

7 amounts made available under subsection (a), not more 

8 than $1,000,000 may be made available to carry out section 

9 104 for each of fiscal years 2006 and 2007. 

10 (c) LIMITATION.—No amounts made available under 

11 this section shall be used to pay construction costs associ12 ated with any rural water supply project. 

13 TITLE II—TWENTY-FIRST 

14 CENTURY WATER WORKS ACT 

15 SEC. 201. SHORT TITLE. 

16 This title may be cited as the ‘‘Twenty-First Century 

17 Water Works Act’’. 

18 SEC. 202. DEFINITIONS. 

19 In this title: 

20 (1) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has 

21 the meaning given the term in section 4 of the Indian 

22 Self-Determination and Education Assistance Act (25 

23 U.S.C. 450b). 

24 (2) LENDER.—The term ‘‘lender’’ means any 

25 non-Federal qualified institutional buyer (as defined 

26 in section 230.144A(a) of title 17, Code of Federal 
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1 Regulation (or any successor regulation), known as 

2 Rule 144A(a) of the Securities and Exchange Com3 mission and issued under the Securities Act of 1933 

4 (15 U.S.C. 77a et seq.)). 

5 (3) LOAN GUARANTEE.—The term ‘‘loan guar6 antee’’ has the meaning given the term ‘‘loan guar7 antee’’ in section 502 of the Federal Credit Reform 

8 Act of 1990 (2 U.S.C. 661a). 

9 (4) NON-FEDERAL BORROWER.—The term ‘‘non10 Federal borrower’’ means— 

11 (A) a State (including a department, agen12 cy, or political subdivision of a State); or 

13 (B) a conservancy district, irrigation dis14 trict, canal company, water users’ association, 

15 Indian tribe, an agency created by interstate 

16 compact, or any other entity that has the capac17 ity to contract with the United States under 

18 Federal reclamation law. 

19 (5) OBLIGATION.—The term ‘‘obligation’’ means 

20 a loan or other debt obligation that is guaranteed 

21 under this section. 

22 (6) PROJECT.—The term ‘‘project’’ means— 

23 (A) a rural water supply project (as defined 

24 in section 102(9)); or 
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1 (B) an extraordinary operation and main2 tenance activity for, or the rehabilitation of, a 

3 facility— 

4 (i) that is authorized by Federal rec5 lamation law and constructed by the United 

6 States under such law; or 

7 (ii) in connection with which there is 

8 a repayment or water service contract exe9 cuted by the United States under Federal 

10 reclamation law. 

11 (7) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of the Interior. 

13 SEC. 203. PROJECT ELIGIBILITY. 

14 (a) ELIGIBILITY CRITERIA.— 

15 (1) IN GENERAL.—The Secretary shall develop 

16 and publish in the Federal Register criteria for deter17 mining the eligibility of a project for financial assist18 ance under section 204. 

19 (2) INCLUSIONS.—Eligibility criteria shall in20 clude— 

21 (A) submission of an application by the 

22 lender to the Secretary; 

23 (B) demonstration of the creditworthiness of 

24 the project, including a determination by the 

25 Secretary that any financing for the project has 
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1 appropriate security features to ensure repay2 ment; 

3 (C) demonstration by the non-Federal bor4 rower, to the satisfaction of the Secretary, of the 

5 ability of the non-Federal borrower to repay the 

6 project financing from user fees or other dedi7 cated revenue sources; 

8 (D) demonstration by the non-Federal bor9 rower, to the satisfaction of the Secretary, of the 

10 ability of the non-Federal borrower to pay all 

11 operations, maintenance, and replacement costs 

12 of the project facilities; and 

13 (E) such other criteria as the Secretary de14 termines to be appropriate. 

15 (b) WAIVER.—The Secretary may waive any of the cri16 teria in subsection (a)(2) that the Secretary determines to 

17 be duplicative or rendered unnecessary because of an action 

18 already taken by the United States. 

19 (c) PROJECTS PREVIOUSLY AUTHORIZED.—A project 

20 that was authorized for construction under Federal rec21 lamation laws prior to the date of enactment of this Act 

22 shall be eligible for assistance under this title, subject to 

23 the criteria established by the Secretary under subsection 

24 (a). 
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1 (d) CRITERIA FOR RURAL WATER SUPPLY

2 PROJECTS.—A rural water supply project that is deter3 mined to be feasible under section 106 is eligible for a loan 

4 guarantee under section 204. 

5 SEC. 204. LOAN GUARANTEES. 

6 (a) AUTHORITY.—Subject to the availability of appro7 priations, the Secretary may make available to lenders for 

8 a project meeting the eligibility criteria established in sec9 tion 203 loan guarantees to supplement private-sector or 

10 lender financing for the project. 

11 (b) TERMS AND LIMITATIONS.— 

12 (1) IN GENERAL.—Loan guarantees under this 

13 section for a project shall be on such terms and condi14 tions and contain such covenants, representations, 

15 warranties, and requirements as the Secretary deter16 mines to be appropriate to protect the financial inter17 ests of the United States. 

18 (2) AMOUNT.—Loan guarantees by the Secretary 

19 shall not exceed an amount equal to 90 percent of the 

20 cost of the project that is the subject of the loan guar21 antee, as estimated at the time at which the loan 

22 guarantee is issued. 

23 (3) INTEREST RATE.—An obligation shall bear 

24 interest at a rate that does not exceed a level that the 

25 Secretary determines to be appropriate, taking into 
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1 account the prevailing rate of interest in the private 

2 sector for similar loans and risks. 

3 (4) AMORTIZATION.—A loan guarantee under 

4 this section shall provide for complete amortization of 

5 the loan guarantee within not more than 40 years. 

6 (5) NONSUBORDINATION.—An obligation shall be 

7 subject to the condition that the obligation is not sub8 ordinate to other financing. 

9 (c) PREPAYMENT AND REFINANCING.—Any prepay10 ment or refinancing terms on a loan guarantee shall be ne11 gotiated between the non-Federal borrower and the lender 

12 with the consent of the Secretary. 

13 SEC. 205. DEFAULTS. 

14 (a) PAYMENTS BY SECRETARY.— 

15 (1) IN GENERAL.—If a borrower defaults on the 

16 obligation, the holder of the loan guarantee shall have 

17 the right to demand payment of the unpaid amount 

18 from the Secretary. 

19 (2) PAYMENT REQUIRED.—By such date as may 

20 be specified in the loan guarantee or related agree21 ments, the Secretary shall pay to the holder of the 

22 loan guarantee the unpaid interest on, and unpaid 

23 principal of, the obligation with respect to which the 

24 borrower has defaulted, unless the Secretary finds that 

25 there was not default by the borrower in the payment 
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1 of interest or principal or that the default has been 

2 remedied. 

3 (3) FORBEARANCE.—Nothing in this subsection 

4 precludes any forbearance by the holder of the obliga5 tion for the benefit of the non-Federal borrower that 

6 may be agreed on by the parties to the obligation and 

7 approved by the Secretary. 

8 (b) SUBROGATION.— 

9 (1) IN GENERAL.—If the Secretary makes a pay10 ment under subsection (a), the Secretary shall be sub11 rogated to the rights of the recipient of the payment 

12 as specified in the loan guarantee or related agree13 ments, including, as appropriate, the authority 

14 (nothwithstanding any other provision of law) to— 

15 (A) complete, maintain, operate, lease, or 

16 otherwise dispose of any property acquired pur17 suant to the loan guarantee or related agree18 ments; or 

19 (B) permit the non-Federal borrower, pur20 suant to an agreement with the Secretary, to 

21 continue to pursue the purposes of the project if 

22 the Secretary determines the purposes to be in 

23 the public interest. 

24 (2) SUPERIORITY OF RIGHTS.—The rights of the 

25 Secretary, with respect to any property acquired pur-
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1 suant to a loan guarantee or related agreement, shall 

2 be superior to the rights of any other person with re3 spect to the property. 

4 (c) PAYMENT OF PRINCIPAL AND INTEREST BY SEC5 RETARY.—With respect to any obligation guaranteed under 

6 this section, the Secretary may enter into a contract to pay, 

7 and pay, holders of the obligation, for and on behalf of the 

8 non-Federal borrower, from funds appropriated for that 

9 purpose, the principal and interest payments that become 

10 due and payable on the unpaid balance of the obligation 

11 if the Secretary finds that— 

12 (1)(A) the non-Federal borrower is unable to 

13 meet the payments and is not in default; 

14 (B) it is in the public interest to permit the non15 Federal borrower to continue to pursue the purposes 

16 of the project; and 

17 (C) the probable net benefit to the Federal Gov18 ernment in paying the principal and interest will be 

19 greater than that which would result in the event of 

20 a default; 

21 (2) the amount of the payment that the Sec22 retary is authorized to pay shall be no greater than 

23 the amount of principal and interest that the non24 Federal borrower is obligated to pay under the agree25 ment being guaranteed; and 
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1 (3) the borrrower agrees to reimburse the Sec2 retary for the payment (including interest) on terms 

3 and conditions that are satisfactory to the Secretary. 

4 (d) ACTION BY ATTORNEY GENERAL.— 

5 (1) NOTIFICATION.—If the non-Federal borrower 

6 defaults on an obligation, the Secretary shall notify 

7 the Attorney General of the default. 

8 (2) RECOVERY.—On notification, the Attorney 

9 General shall take such action as is appropriate to re10 cover the unpaid principal and interest due from— 

11 (A) such assets of the defaulting non-Fed12 eral borrower as are associated with the obliga13 tion; or 

14 (B) any other security pledged to secure the 

15 obligation. 

16 SEC. 206. OPERATIONS, MAINTENANCE, AND REPLACEMENT 

17 COSTS. 

18 (a) IN GENERAL.—The non-Federal share of oper19 ations, maintenance, and replacement costs for a project re20 ceiving Federal assistance under this title shall be 100 per21 cent. 

22 (b) PLAN.—On request of the non-Federal borrower, 

23 the Secretary may assist in the development of an oper24 ation, maintenance, and replacement plan to provide the 
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1 necessary framework to assist the non-Federal borrower in 

2 establishing rates and fees for project beneficiaries. 

3 SEC. 207. TITLE TO NEWLY CONSTRUCTED FACILITIES. 

4 (a) NEW PROJECTS AND FACILITIES.—All new 

5 projects or facilities constructed in accordance with this 

6 title shall remain under the jurisdiction and control of the 

7 non-Federal borrower subject to the terms of the repayment 

8 agreement. 

9 (b) EXISTING PROJECTS AND FACILITIES.—Nothing in 

10 this title affects the title of— 

11 (1) reclamation projects authorized prior to the 

12 date of enactment of this Act; 

13 (2) works supplemental to existing reclamation 

14 projects; or 

15 (3) works constructed to rehabilitate existing rec16 lamation projects. 

17 SEC. 208. WATER RIGHTS. 

18 (a) IN GENERAL.—Nothing in this title preempts or 

19 affects State water law or an interstate compact governing 

20 water. 

21 (b) COMPLIANCE REQUIRED.—The Secretary shall 

22 comply with State water laws in carrying out this title. 

23 Nothing in this title affects or preempts State water law 

24 or an interstate compact governing water. 
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1 SEC. 209. INTERAGENCY COORDINATION AND COOPERA2 TION. 

3 (a) CONSULTATION.—The Secretary shall consult with 

4 the Secretary of Agriculture before promulgating criteria 

5 with respect to financial appraisal functions and loan 

6 guarantee administration for activities carried out under 

7 this title. 

8 (b) MEMORANDUM OF AGREEMENT.—The Secretary 

9 and the Secretary of Agriculture may enter into a memo10 randum of agreement providing for Department of Agri11 culture financial appraisal functions and loan guarantee 

12 administration for activities carried out under this title. 

13 SEC. 210. RECORDS; AUDITS. 

14 (a) IN GENERAL.—A recipient of a loan guarantee 

15 shall keep such records and other pertinent documents as 

16 the Secretary shall prescribe by regulation, including such 

17 records as the Secretary may require to facilitate an effec18 tive audit. 

19 (b) ACCESS.—The Secretary and the Comptroller Gen20 eral of the United States, or their duly authorized represent21 atives, shall have access, for the purpose of audit, to the 

22 records and other pertinent documents. 

23 SEC. 211. FULL FAITH AND CREDIT. 

24 The full faith and credit of the United States is pledged 

25 to the payment of all guarantees issued under this section 

26 with respect to principal and interest. 
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1 SEC. 212. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated such sums as 

3 are necessary to carry out this title, to remain available 

4 until expended. 

Calendar No. 240 

109TH CONGRESS 

1ST SESSION S. 895 

[Report No. 109–148] 

A BILL 

To direct the Secretary of the Interior to establish 

reliable water supply to rural residents. States to provide a clean, safe, affordable, and a rural water supply program in the Reclamation 

OCTOBER 19, 2005 

Reported with an amendment