I 
109TH CONGRESS 
1ST SESSION H. R. 3691 
To amend the Central Valley Project Improvement Act to provide for 
improved water management and conservation, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 7, 2005 
Mr. NUNES introduced the following bill; which was referred to the Committee 
on Resources, and in addition to the Committee on Ways and Means, 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 
A BILL 
To amend the Central Valley Project Improvement Act to 
provide for improved water management and conserva-
tion, 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. SHORT TITLE. 
This title may be cited as the ‘‘Central Valley Project 
Reform Act of 2005’’.
SEC. 2. PURPOSES. 
Section 3402 of the Central Valley Project Improve-
ment Act (106 Stat. 4706) is amended by adding sub-
section (g) to read as follows: 
‘‘(g) to ensure that water dedicated to fish and wild-
life purposes by this title is replaced and provided to Cen-
tral Valley Project water contractors by 2012 at the lowest 
cost reasonably achievable.’’. 
SEC. 3. DEFINITIONS. 
Section 3403(a) of the Central Valley Project Im-
provement Act (106 Stat. 4707) is amended to read as 
follows: 
‘‘(a) The term ‘anadromous fish’ means those stocks 
of Salmon (including steelhead) that ascend, as of the date 
this title was originally enacted, the Sacramento and San 
Joaquin rivers and their tributaries and the Sacramento- 
San Joaquin Delta and its tributaries to reproduce after 
maturing in San Francisco Bay or the Pacific Ocean.’’. 
SEC. 4. LIMITATION ON CONTRACTING AND CONTRACT RE-
FORM. 
The Central Valley Project Improvement Act (106 
Stat. 4710) is amended as follows: 
(1) The matter preceding paragraph (1) in sec-
tion 3404(c) is amended to read as follows: 
‘‘(c) RENEWAL
OF EXISTING LONG-TERM CON-
TRACTS.—Notwithstanding the provisions of the Act of
July 2, 1956, (70 Stat. 483), the Secretary shall, upon 
request, renew any existing long-term repayment or water 
service contracts which provide for the delivery of water 
from the Central Valley Project for a period of twenty- 
five years and shall, subject to paragraphs (1) and (2) of 
this subsection, renew such contracts for successive peri-
ods of 25 years each.’’. 
(2) Section 3404(c)(1) is amended to read as 
follows: 
‘‘(1) No such renewals shall be authorized until 
environmental review as required by law has been 
completed, and until the preparation of the environ-
mental impact statement required in section 3409 of 
this title has been completed. Contracts which expire 
prior to the completion of such environmental review 
shall, upon request of the other contracting party, be 
renewed for an interim period ending on the date on 
which the long-term renewal with respect to each 
such contract becomes effective or the date which is 
three years after completion of the applicable envi-
ronmental review, whichever is earlier. An interim 
contract shall automatically be extended beyond that 
three-year date for successive periods of two years 
each until the long-term renewal contract for that 
contractor has been executed by the Secretary.’’.
(3) Section 3404 is amended by adding at the 
end the following new subsection: 
‘‘(d) Contracts entered into or renewed pursuant to 
this section shall include a provision which requires the 
Secretary to charge such party only for water actually de-
livered by the Secretary.’’. 
SEC. 5. WATER TRANSFERS, IMPROVED WATER MANAGE-
MENT AND CONSERVATION. 
(a) FACILITATION OF TRANSFERS.—Congress recon-
firms that the original intent of the Central Valley Project 
Improvement Act (106 Stat. 4712) was to facilitate and 
expedite water transfers. Accordingly, Congress hereby di-
rects the Secretary to take all necessary actions to facili-
tate and expedite transfers of Central Valley Project water 
in accordance with the Central Valley Project Improve-
ment Act (106 Stat. 4712) or any other provision of law. 
(b) AMENDMENTS.—The Central Valley Project Im-
provement Act (106 Stat. 4710) is amended as follows: 
(1) In section 3405(a)(1)(A), by striking ‘‘to 
combination’’ and inserting ‘‘or combination’’. 
(2) In section 3405(a)(2)(D), by adding the fol-
lowing at the end the following: ‘‘The contractor or 
the Secretary shall determine if a written proposal 
is complete within 45 days of its submission and, if 
it determines an application is incomplete, shall im-
mediately state with specificity what must be added 
to or revised in the application in order for it to be 
complete. Except as provided in this section, the 
Secretary shall not impose mitigation or other re-
quirements on a proposed transfer, but the con-
tractor shall retain all authority under state law to 
approve or condition a proposed transfer.’’ 
(3) In section 3405(a), by adding the following 
new paragraph: 
‘‘(4) Notwithstanding any other provision of 
law, the authority to make transfers, exchanges, and 
banking arrangements of Central Valley Project 
water which could have been conducted prior to the 
enactment of this title is continued hereby, and such 
transfers, exchanges, and banking arrangements 
shall not be subject to, limited, or conditioned by 
this title. This title shall not supersede or revoke any 
authority to transfer, exchange, or bank Central Val-
ley Project water that existed prior to the date of 
the enactment of this paragraph.’’. 
(4) In section 3405(b)— 
(A) in the heading, by striking ‘‘Metering’’ 
and inserting ‘‘Measurement’’; and 
(B) by inserting after the first sentence 
the following: ‘‘The contracting district or agen-
cy, not including contracting districts serving 
multiple agencies with separate governing 
boards, shall ensure that all water delivery sys-
tems within its boundaries measure surface 
water at the agency’s facilities up to the point 
the surface water is commingled with other 
water supplies.’’. 
(5) In section 3405— 
(A) by striking subsection (d); 
(B) by redesignating subsections (e) and 
(f) as subsections (d) and (e); and 
(C) by amending subsection (e) (as redes-
ignated by subparagraph (B)) to read as fol-
lows: 
‘‘(e) All increased revenues received by the Secretary 
that exceed the cost of service rate applicable to the deliv-
ery of water transferred from irrigation use to municipal 
and industrial use under subsection (a) shall be covered 
to the Restoration Fund.’’. 
SEC. 6. FISH, WILDLIFE AND HABITAT RESTORATION. 
The Central Valley Project Improvement Act (106 
Stat. 4714) is amended as follows: 
(1) In section 3406, by adding at the end the 
following new subsection:
‘‘(i) SATISFACTION OF PURPOSES.—By pursuing the 
programs and activities authorized by this section, the 
Secretary shall be deemed to have met the mitigation, pro-
tection, restoration, and enhancement purposes of section 
2 of the Act of August 26, 1937 (ch. 832, 50 Stat. 850), 
as amended.’’. 
(2) Subparagraph (B) of section 3406(b)(1) is 
amended to read as follows: 
‘‘(B) As needed to achieve the goals of this 
program, the Secretary is authorized and di-
rected to modify Central Valley Project oper-
ations to provide reasonable flows of suitable 
quality, quantity, and timing to protect all life 
stages of anadromous fish, except that such 
flows shall be provided from the quantity of 
water dedicated for fish, wildlife, and habitat 
restoration purposes under paragraph (2) of 
this subsection; from the water supplies ac-
quired pursuant to paragraph (3) of this sub-
section; and from other sources which do not 
conflict with fulfillment of the Secretary’s re-
maining contractual obligations to provide Cen-
tral Valley Project water for other authorized 
purposes. Reasonable instream flow needs for 
all Central Valley Project controlled streams
and rivers, except the San Joaquin River which 
is governed by section 3406(c)(1) of this title, 
shall be determined by the Secretary based on 
recommendations of the United States Fish and 
Wildlife Service after consultation with the Cali-
fornia Department of Fish and Game.’’. 
(3) The matter preceding paragraph (A) in sec-
tion 3406(b)(2) is amended to read as follows: 
‘‘(2) Upon enactment of this title, dedicate and 
manage annually 800,000 acre-feet of Central Valley 
Project water for the purposes of (A) implementing 
the fish, wildlife, and habitat restoration purposes 
and measures authorized by this title; (B) assisting 
the State of California in its efforts to protect the 
waters of the San Francisco Bay/Sacramento-San 
Joaquin Delta Estuary; and (C) helping to meet 
such obligations as may be legally imposed upon the 
Central Valley Project under State or Federal law 
following the date of enactment of this title, includ-
ing (but not limited to) additional obligations under 
the Endangered Species Act of 1973. All Central 
Valley Project water used for the purposes specified 
in this paragraph shall be credited to the amount of 
Central Valley Project water so dedicated under this 
paragraph. Any Central Valley Project water re-
quired to fulfill the purposes specified in this para-
graph shall be provided pursuant to subsections 
(b)(1) and (b)(3). To the fullest extent possible and 
in accordance with section 3411 of this title, after 
using a quantity of such 800,000 acre-feet of water 
for fish and wildlife purposes pursuant to this para-
graph, the Secretary shall reuse or divert such quan-
tity of water for agricultural or municipal and indus-
trial purposes.’’. 
(4) Section 3406(c)(1) is amended to read as 
follows: 
‘‘(1)(A) Congress hereby confirms that it is and 
has been its intent to prohibit all releases of water 
directly from Friant Dam into the San Joaquin 
River other than for bona fide purposes of— 
‘‘(i) flood control; 
‘‘(ii) satisfying the requirements of that 
certain Contract for Exchange of Waters dated 
July 27, 1939, between the United States of 
America, the San Joaquin and Kings River 
Canal and Irrigation Company, Incorporated, et 
al., the Columbia Canal Company, the San Luis 
Canal Company and the Firebaugh Canal Com-
pany, as amended from time to time; or
‘‘(iii) satisfying those contractual obliga-
tions of the Secretary which existed on the date 
of enactment of this title to provide water to 
landowners located between Friant Dam and 
Gravelly Ford. 
‘‘(B) Notwithstanding any State or other Fed-
eral law, water shall not be released directly from 
Friant Dam into the San Joaquin River except for 
the purposes enumerated in clauses (i), (ii), and (iii) 
of subparagraph (A). In lieu of releasing water di-
rectly from Friant Dam into the San Joaquin River 
for any purposes other than those enumerated in 
this paragraph, entities receiving Central Valley 
Project water from the Friant Division of the Cen-
tral Valley Project shall be assessed, in addition to 
all other applicable charges, a surcharge for all Class 
1 and Class 2 water delivered in the amount of $7 
per acre-foot. Such surcharge shall not apply to 
Class 2 water delivered in excess of 50 percent of 
the amount of Class 2 water to which a contracting 
party is contractually entitled or to any water deliv-
ered pursuant to section 215 of the Reclamation Re-
form Act of 1982 (96 Stat. 1270).’’.
SEC. 7. RESTORATION FUND. 
The Central Valley Project Improvement Act (106 
Stat. 4714) is amended as follows: 
(1) Section 3407(a) is amended to read as fol-
lows: 
‘‘(a) RESTORATION FUND ESTABLISHED.— 
‘‘(1) There is hereby established in the Treas-
ury of the United States the ‘Central Valley Project 
Restoration Fund’ (hereafter ‘Restoration Fund’) 
which shall be available for deposit of donations 
from any source and revenues provided under sec-
tions 3404(c), 3405(e), 3406(c)(1), and 3407(d) of 
this title. Amounts deposited shall be credited as off-
setting collections. Monies donated to the Restora-
tion Fund by non-Federal entities for specific pur-
poses shall be expended for those purposes only and 
shall not be subject to appropriation. Notwith-
standing any other provision of this title, the Sec-
retary may not directly or indirectly require a dona-
tion, or any other payment, to the Restoration 
Fund, or environmental restoration or mitigation 
fees not otherwise provided by law, as a condition to 
providing for the storage or conveyance of non-Cen-
tral Valley Project water pursuant to reclamation 
laws, or as a condition to the delivery of water pur-
suant to section 215 of the Reclamation Reform Act 
of 1982 (96 Stat. 1270). 
‘‘(2) The Secretary shall utilize amounts col-
lected pursuant to section 3406(c)(1) to assist in im-
proving water quality and riparian values in the San 
Joaquin River, or to support other projects bene-
fiting land within the Friant Division. 
‘‘(3) Notwithstanding any other provision of 
this title, funds deposited in the Restoration Fund 
may be appropriated for the acquisition of water 
supplies and the construction of facilities used to im-
plement projects or programs undertaken pursuant 
to section 3408(j) of this title. 
‘‘(4) Any amounts paid by a repayment or 
water service contractor under sections 3404(c), 
3405(e), 3406(c)(1), and 3407(d) after the date of 
enactment of Public Law 102–575 shall be a credit 
to the obligations of that contractor to repay the 
construction costs of the Central Valley Project.’’. 
(2) Section 3407(c)(1) is amended to read as 
follows: 
‘‘(1) PAYMENTS BY WATER AND POWER BENE-
FICIARIES.—To the extent required in appropriation 
Acts, the Secretary shall assess and collect addi-
tional annual payments, in addition to the charges
provided for or collected under sections 3404(c)(3), 
3405(a)(1)(C), 3405(f), and 3406(c)(1) of this title, 
consisting of charges to direct beneficiaries of the 
Central Valley Project under subsection (d) of this 
section in order to recover a portion or all of the 
costs of carrying out programs, projects, plans, and 
habitat restoration, improvement, and acquisition 
provisions of this title.’’. 
(3) Section 3407 is amended by adding at the 
end the following new subsection (g): 
‘‘(g) Each year the Secretary shall submit to Con-
gress a proposed plan to expend all of the funds deposited 
in the Restoration Fund during the preceding year that 
describes why the expenditure of those funds produces the 
optimum benefit from those expenditures.’’. 
SEC. 8. ADDITIONAL AUTHORITIES. 
(a) EXCLUSION OF NONPROFIT.—Section 3408(c) of 
the Central Valley Project Improvement Act (106 Stat. 
4728.) is amended by striking ‘‘nonprofit’’. 
(b) AUTHORITY FOR CERTAIN ACTIVITIES; RATES.— 
The Secretary shall use the authority granted by section 
3408(c) of the Central Valley Project Improvement Act 
(106 Stat. 4728.) rather than other authorities whenever 
possible in connection with requests to exchange, impound, 
store, carry or deliver non-project water using Central Val-
ley Project facilities for any beneficial purpose. The Sec-
retary shall develop rates to be charged to parties using 
Central Valley Project facilities for any of such purposes 
that recover the reasonable costs incurred by the Secretary 
in connection therewith, which costs shall not include any 
donation or other payment to the Restoration Fund. Pay-
ments received in connection with the use of Central Val-
ley Project facilities shall be applied to reduce the current 
year operations and maintenance expenses otherwise pay-
able by Project contractors for the Central Valley Project 
facilities used. 
(c) REPORTING REQUIREMENTS.—Section 3408(f) of 
the Central Valley Project Improvement Act (106 stat. 
4729) is amended— 
(1) by striking out ‘‘Interior and Insular Affairs 
and Merchant Marine and Fisheries’’ and inserting 
in lieu thereof ‘‘Resources’’; 
(2) in the second sentence, by inserting before 
the period at the end the following: ‘‘, including (but 
not limited to) progress on the plan required by sub-
section (j)’’; and 
(3) by adding the following sentence at the end: 
‘‘The filing and adequacy of such report shall be 
personally certified to the Committees referenced
above by the Regional Director of the Mid-Pacific 
Region of the Bureau of Reclamation.’’. 
(d) PROJECT YIELD INCREASE.—Section 3408(j) of 
the Central Valley Project Improvement Act (106 Stat. 
4730) is amended to read as follows: 
‘‘(j) PROJECT YIELD INCREASE.— 
‘‘(1) PLAN REQUIRED.—In order to minimize 
adverse effects upon existing Central Valley Project 
water contractors resulting from the water dedicated 
for fish and wildlife under this title, and to assist 
the State of California in meeting its future water 
needs, the Secretary shall, on a priority basis, not 
later than September 30, 2007, submit to Congress 
a least-cost plan to increase, as soon as possible but 
not later than September 30, 2012 (except for the 
construction of new facilities which shall not be lim-
ited by that deadline), the yield of the Central Valley 
Project by the amount dedicated and managed for 
fish and wildlife purposes under this title and other-
wise required to meet the purposes of the Central 
Valley Project including, without limitation, satis-
fying contractual obligations. The plan shall be de-
veloped in a manner consistent with all applicable 
State and Federal laws.
‘‘(2) CONTENTS OF PLAN.—The plan author-
ized by this subsection shall include, at a minimum, 
recommendations on appropriate cost-sharing ar-
rangements and for authorizing legislation or other 
measures, if any, needed to implement the intent, 
purposes, and provisions of this subsection, and a 
description of how the Secretary intends to use the 
following options: 
‘‘(A) Improvements in, modification of, or 
additions to the facilities and operations of the 
project and construction of new water storage 
facilities. 
‘‘(B) Conservation. 
‘‘(C) Transfers. 
‘‘(D) Conjunctive use. 
‘‘(E) Purchase of water. 
‘‘(F) Purchase and idling of agricultural 
land. 
‘‘(G) Direct purchase of water rights. 
‘‘(3) IMPLEMENTATION OF PLAN.—Subject to 
appropriation of required funds, such plan shall be 
implemented by the Secretary commencing on Octo-
ber 1, 2007. In order to carry out this subsection, 
the Secretary is authorized and directed to coordi-
nate with the State of California in implementing
measures for the long-term resolution of problems in 
the San Francisco Bay/Sacramento-San Joaquin 
Delta Estuary.’’. 
(e) Section 3408(h)(2) of the Central Valley Project 
Improvement Act (106 Stat. 4729) is amended by striking 
‘‘(h)(i)’’ and inserting ‘‘(h)(1)’’. 
SEC. 9. REPORTING BY SECRETARY OF THE TREASURY RE-
GARDING 
ILLEGAL 
FEDERAL 
IRRIGATION 
SUBSIDIES. 
Section 90 of the Internal Revenue Code of 1986 (re-
lating to illegal Federal irrigation subsidies) is amended 
by adding at the end the following new subsection: 
‘‘(d) REPORTING TO BUREAU OF RECLAMATION.— 
Not later than September 30 of each year, the Secretary 
shall submit a written report to the Commissioner of the 
Bureau of Reclamation which states the number of tax-
payers who included an amount in gross income under this 
section by reason of receiving an illegal Federal irrigation 
subsidy during the preceding calendar year.’’. 
SEC. 10. ALL-AMERICAN CANAL, CALIFORNIA; LAGUNA 
DAM, ARIZONA. 
(a) PROJECT AUTHORIZATION.—The Secretary of 
the Interior, acting through the Commissioner of the Bu-
reau of Reclamation, is authorized to construct new off- 
stream regulatory storage near the All-American Canal in
California and to remove sediment behind Laguna Dam, 
Arizona. 
(b) COST SHARING.—The Federal share of the cost 
of activities authorized under this section shall be 100 per-
cent. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated such sums as may be nec-
essary to carry out this section. 
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