IB 
Union Calendar No. 441 
108TH CONGRESS 
2D SESSION 
H. R. 4389 
[Report No. 108–718, Part 1] 
To authorize the Secretary of the Interior to construct facilities to provide 
water for irrigation, municipal, domestic, military, and other uses from 
the Santa Margarita River, California, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 19, 2004 
Mr. ISSA introduced the following bill; which was referred to the Committee 
on Resources, and in addition to the Committee on Armed Services, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
OCTOBER 4, 2004 
Reported from the Committee on Resources 
OCTOBER 4, 2004 
Referral to the Committee on Armed Services extended for a period ending 
not later than October 4, 2004 
OCTOBER 4, 2004 
The Committee on Armed Services discharged; committed to the Committee 
of the Whole House on the State of the Union and ordered to be printed 
A BILL 
To authorize the Secretary of the Interior to construct facili-
ties to provide water for irrigation, municipal, domestic,
military, and other uses from the Santa Margarita River, 
California, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. DEFINITIONS. 
For the purposes of this section, the following defini-
tions apply: 
(1) DISTRICT.—The term ‘‘District’’ means the 
Fallbrook Public Utility District, San Diego County, 
California. 
(2) PROJECT.—The term ‘‘Project’’ means the 
impoundment, recharge, treatment, and other facili-
ties the construction, operation, and maintenance of 
which is authorized under subsection (b). 
SEC. 2. AUTHORIZATION FOR CONSTRUCTION OF LOWER 
SANTA 
MARGARITA 
CONJUNCTIVE 
USE 
PROJECT. 
(a) AUTHORIZATION.—The Secretary, acting pursu-
ant to the Federal reclamation laws (Act of June 17, 
1902; 32 Stat. 388), and Acts amendatory thereof or sup-
plementary thereto, as far as those laws are not incon-
sistent with the provisions of this Act, is authorized to 
construct, operate, and maintain to make the yield of the 
Lower Santa Margarita Conjunctive Use Project to be lo-
cated below the confluence of De Luz Creek with the 
Santa Margarita River on Camp Joseph H. Pendleton, the
Fallbrook Annex of the Naval Weapons Station, and sur-
rounding lands within the service area of the District 
available for irrigation, municipal, domestic, military, and 
other uses for the District and such other users as herein 
provided. 
(b) CONDITIONS.—The Secretary of the Interior may 
construct the Project only after the Secretary of the Inte-
rior determines that the following conditions have oc-
curred: 
(1) The District has entered into a contract 
under section 9(d) of the Reclamation Project Act of 
1939 to repay to the United States appropriate por-
tions, as determined by the Secretary, of the actual 
costs of constructing, operating, and maintaining the 
Project, together with interest as hereinafter pro-
vided. 
(2) The officer or agency of the State of Cali-
fornia authorized by law to grant permits for the ap-
propriation of water has granted such permits to the 
Bureau of Reclamation for the benefit of the De-
partment of the Navy and the District as permitees 
for rights to the use of water for storage and diver-
sion as provided in this Act, including approval of all 
requisite changes in points of diversion and storage, 
and purposes and places of use.
(3) The District has agreed that it will not as-
sert against the United States any prior appropria-
tive right the District may have to water in excess 
of the quantity deliverable to it under this Act, and 
will share in the use of the waters impounded by the 
Project on the basis of equal priority and in accord-
ance with the ratio prescribed in section 4(b). This 
agreement and waiver and the changes in points of 
diversion and storage under paragraph (2), shall be-
come effective and binding only when the Project 
has been completed and put into operation. 
(4) The Secretary of the Interior has deter-
mined that the Project has economic and engineer-
ing feasibility. 
SEC. 3. COSTS. 
The Department of the Navy shall not be responsible 
for any costs in connection with the Project, except upon 
completion and then shall be charged in reasonable pro-
portion to its use of the Project under regulations agreed 
upon by the Secretary of the Navy and Secretary of the 
Interior. 
SEC. 4. OPERATION; YIELD ALLOTMENT; DELIVERY. 
(a) OPERATION.—The operation of the Project may 
be by the Secretary of the Interior or otherwise as agreed 
upon by the Secretaries of the Interior and the Navy and
the District, under regulations satisfactory to the Sec-
retary of the Navy with respect to the Navy’s share of 
the impounded water and national security. 
(b) YIELD ALLOTMENT.—Except as otherwise agreed 
between the parties, the Department of the Navy and the 
District shall participate in the water impounded by the 
Project on the basis of equal priority and in accordance 
with the following ratio: 
(1) 60 percent of the Project’s yield is allotted 
to the Secretary of the Navy. 
(2) 40 percent of the Project’s yield is allotted 
to the District. 
(c) CONTRACTS FOR DELIVERY OF WATER.— 
(1) IN GENERAL.—If the Secretary of the Navy 
certifies that the Secretary does not have immediate 
need for any portion of the 60 percent yield allotted 
under subsection (b), the official agreed upon to ad-
minister the Project may enter into temporary con-
tracts for the delivery of the excess water. 
(2) FIRST
RIGHT
FOR
EXCESS
WATER.—The 
first right of the Secretary of the Navy to demand 
that water without charge and without obligation on 
the part of the United States after 30 days notice 
shall be included as a condition of contracts entered 
into under this subsection. The first right to water
available under paragraph (1) shall be given the Dis-
trict, if otherwise consistent with the laws of the 
State of California. 
(3) DISPOSITION OF FUNDS.—Moneys paid in 
to the United States under a contract under this 
subsection shall be covered into the general Treasury 
or to the Secretary of the Navy, as services in lieu 
of payment for operation and maintenance of the 
Project, and shall not be applied against the indebt-
edness of the District to the United States. 
(4) MODIFICATION
OF
RIGHTS
AND
OBLIGA-
TIONS RELATED TO WATER YIELD.—The rights and 
obligations of the United States and the District re-
garding the ratio or amounts of Project yield deliv-
ered may be modified by an agreement between the 
parties. 
SEC. 5. REPAYMENT OBLIGATION OF THE DISTRICT. 
(a) IN GENERAL.—The general repayment obligation 
of the District (which shall include interest on the 
unamortized balance of construction costs of the Project 
allocated to municipal and domestic waters at a rate equal 
to the average rate, which rate shall be certified by the 
Secretary of the Treasury, on the long-term loans of the 
United States outstanding on the date of this Act) to be 
undertaken pursuant to section 2 shall be spread in an-
nual installments, which need not be equal, over a period 
of not more than 56 years, exclusive of the development 
period, or as near thereto as is consistent with the oper-
ation of a formula, mutually agreeable to the parties, 
under which the payments are varied in the light of factors 
pertinent to the irrigators’ ability to pay. 
(b) DEVELOPMENT PERIOD.—The development pe-
riod shall begin in the year in which water for use by the 
District is first available, as announced by the Secretary 
of the Interior or the Treasury, and shall end in the year 
in which the Project’s yield to the District exceeds 6,000 
acre-feet per annum. During the development period water 
shall be delivered to the District under annual water rental 
notices at rates fixed by the Secretary of the Interior or 
the Treasury and payable in advance, and any moneys col-
lected in excess of operation and maintenance costs shall 
be credited to repayment of the capital costs chargeable 
to the District and the repayment period fixed herein shall 
be reduced proportionately. 
(c) MODIFICATION OF RIGHTS AND OBLIGATION BY 
AGREEMENT.—The rights and obligations of the United 
States and the District regarding the repayment obliga-
tion of the District may be modified by an agreement be-
tween the parties.
SEC. 6. TRANSFER OF CARE, OPERATION, AND MAINTE-
NANCE. 
The Secretary may transfer to the District, or a mu-
tually agreed upon third party, the care, operation, and 
maintenance of the Project under conditions satisfactory 
to that Secretary and the District, and with respect to 
the portion of the Project that is located within the bound-
aries of Camp Pendleton, satisfactory also to the Secretary 
of the Navy. If such a transfer takes place, the District 
shall be entitled to an equitable credit for the costs associ-
ated with the Secretary’s proportionate share of the oper-
ation and maintenance of the Project. The amount of such 
costs shall be applied against the indebtedness of the Dis-
trict to the United States. 
SEC. 7. SCOPE OF ACT. 
For the purpose of this Act, the basis, measure, and 
limit of all rights of the United States pertaining to the 
use of water shall be the laws of the State of California. 
That nothing in this Act shall be construed— 
(1) as a grant or a relinquishment by the 
United States of any rights to the use of water that 
it acquired according to the laws of the State of 
California, either as a result of its acquisition of the 
lands comprising Camp Joseph H. Pendleton and 
adjoining naval installations, and the rights to the 
use of water as a part of that acquisition, or through
actual use or prescription or both since the date of 
that acquisition, if any; 
(2) to create any legal obligation to store any 
water in the Project, to the use of which the United 
States has such rights; 
(3) to constitute a recognition of, or an admis-
sion that, the District has any rights to the use of 
water in the Santa Margarita River, which rights, if 
any, exist only by virtue of the laws of the State of 
California; or 
(4) to require the division under this Act of 
water to which the United States has such rights. 
SEC. 8. LIMITATIONS ON OPERATION AND ADMINISTRA-
TION. 
Unless otherwise agreed by the Secretary of the 
Navy, the Project— 
(1) shall be operated in a manner which allows 
the free passage of all of the water to the use of 
which the United States is entitled according to the 
laws of the State of California either as a result of 
its acquisition of the lands comprising Camp Joseph 
H. Pendleton and adjoining naval installations, and 
the rights to the use of water as a part of those ac-
quisitions, or through actual use or prescription, or 
both, since the date of that acquisition, if any; and
(2) shall not be administered or operated in any 
way which will impair or deplete the quantities of 
water the use of which the United States would be 
entitled under the laws of the State of California 
had the Project not been built. 
SEC. 9. AUTHORIZATION OF APPROPRIATIONS. 
There is authorized to be appropriated, out of any 
money in the Treasury of the United States not otherwise 
appropriated, the following: 
(1) $60,000,000 (the current estimated con-
struction cost of the Project, plus or minus such 
amounts as may be indicated by the engineering cost 
indices for this type of construction); and 
(2) such sums as may be required to operate 
and maintain the said project. 
SEC. 10. REPORTS TO CONGRESS. 
Not later than 1 year after the date of the enactment 
of this Act and periodically thereafter, the Attorney Gen-
eral, the Secretary of the Interior, and the Secretary of 
the Navy shall each report to the Congress regarding if 
the conditions specified in section 2(b) have been met and 
if so, the details of how they were met.