I
107TH CONGRESS
1ST SESSION
H. R. 1985
To authorize funding through the Secretary of the Interior for the implemen-
tation of a comprehensive program in California to achieve increased
water yield and environmental benefits, as well as improved water system
reliability, water quality, water use efficiency, watershed management,
water transfers, and levee protection.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 2001
Mr. CALVERT (for himself, Mr. CONDIT, Mr. RADANOVICH, Mrs. NAPOLITANO,
Mr. OSE, Mr. DOOLEY of California, Mr. THOMAS, Mr. SCHIFF, Mr.
DREIER, Ms. MILLENDER-MCDONALD, Mr. DOOLITTLE, Ms. SANCHEZ,
Mr. GALLEGLY, Mrs. DAVIS of California, Mr. MCKEON, Mr. FILNER,
Mr. HORN, Mr. ROYCE, Mr. LEWIS of California, Mr. BACA, Mr. GARY
G. MILLER of California, Mrs. BONO, Mr. ISSA, Mr. HUNTER, Mr. COX,
Mr. ROHRABACHER, and Mr. POMBO) introduced the following bill; which
was referred to the Committee on Resources, and in addition to the Com-
mittee on Transportation and Infrastructure, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To authorize funding through the Secretary of the Interior
for the implementation of a comprehensive program in
California to achieve increased water yield and environ-
mental benefits, as well as improved water system reli-
ability, water quality, water use efficiency, watershed
management, water transfers, and levee protection.
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 Act may be cited as the ‘‘Western Water En-
hancement Security Act’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Purposes.
Sec. 4. Definitions.
TITLE I—SHORT-TERM AND LONG-TERM CALIFORNIA WATER
SECURITY
Sec. 101. Short-term governance under interim governance structure.
Sec. 102. Long-term governance and monitoring.
Sec. 103. California water supply security.
Sec. 104. Implementation of record of decision.
Sec. 105. Requirement of specific congressional authorization of new CALFED
projects.
Sec. 106. Reports.
Sec. 107. Treatment of funds.
TITLE II—SMALL RECLAMATION PROJECTS
Sec. 201. Short title.
Sec. 202. Amendments to the Small Reclamation Projects Act of 1956.
Sec. 203. Additional appropriations.
Sec. 204. Guidelines.
Sec. 205. Effective date.
Sec. 206. Limitation.
SEC. 3. PURPOSES.
The purposes of this Act are the following:
(1) To authorize funding, through the Secretary
of the Interior, for the implementation of a com-
prehensive program to achieve increased water yield
and environmental benefits as well as improved
water system reliability, water quality, water use ef-
ficiency, watershed management, water transfers,
and levee protection for California.
(2) To ensure that the Secretary of the Interior
and the State of California, through a State and
congressionally authorized Governance Board, con-
tinue the implementation of ecosystem protection
programs, and development of water supply enhance-
ment projects, as described in the CALFED record
of decision, and other programs authorized under
this Act.
SEC. 4. DEFINITIONS.
As used in this Act:
(1) BAY-DELTA
SOLUTION
AREA.—The term
‘‘Bay-Delta solution area’’ means the Bay-Delta wa-
tershed and the San Francisco Bay/Sacramento-San
Joaquin Delta Estuary, California, and the areas in
which diverted/exported water is used.
(2) BAY-DELTA WATERSHED.—The term ‘‘Bay-
Delta watershed’’ means the Sacramento Valley-San
Joaquin River Delta, California, and the rivers and
watersheds that are tributary to that Delta.
(3) 
CALFED 
AGENCIES.—The 
term
‘‘CALFED agencies’’ means both the Federal agen-
cies and the State agencies.
(4) CALFED PROGRAM.—The term ‘‘CALFED
program’’ means the cooperative, interagency effort
of 18 State and Federal agencies with management
or regulatory responsibilities for the Bay-Delta solu-
tion area as set forth in the record of decision, in-
cluding complementary actions (as that term is de-
fined in the record of decision).
(5) CONGRESSIONAL APPROPRIATIONS COMMIT-
TEES.—The term ‘‘congressional appropriations
committees’’ means the Subcommittee on Energy
and Water Development of the Committee on Appro-
priations of the Senate and the Subcommittee on
Energy and Water Development of the Committee
on Appropriations of the House of Representatives.
(6) CONGRESSIONAL
AUTHORIZING
COMMIT-
TEES.—The term ‘‘congressional authorizing com-
mittees’’ means the Committee on Energy and Nat-
ural Resources of the Senate and the Committee on
Resources of the House of Representatives.
(7) ECOSYSTEM RESTORATION PROGRAM.—The
term ‘‘Ecosystem Restoration Program’’ means such
program under the record of decision.
(8) ENVIRONMENTAL
WATER
ACCOUNT.—The
term ‘‘Environmental Water Account’’ means the
water account established by the CALFED agencies
to provide water for the protection and recovery of
species of fish listed under section 4(c) of the En-
dangered Species Act of 1973 (16 U.S.C. 1533(c))
at no direct cost and no indirect cost to the water
users, in the Bay-Delta watershed and export areas.
(9) FEDERAL AGENCIES.—The term ‘‘Federal
agencies’’ means the Federal agencies as identified
in the record of decision.
(10) GOVERNANCE
BOARD.—The term ‘‘Gov-
ernance Board’’ means the joint structure estab-
lished under section 102(a)(1).
(11) RECORD OF DECISION.—The term ‘‘record
of decision’’ means the Federal record of decision
issued August 28, 2000, pursuant to the National
Environmental Policy Act of 1969 for the CALFED
Bay-Delta Program Final Programmatic Environ-
mental Impact Statement.
(12) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of the Interior.
(13) STATE AGENCIES.—The term ‘‘State agen-
cies’’ means the State agencies as identified in the
record of decision.
(14) YIELD.—The term ‘‘yield’’ means a quan-
tity of water supply derived from—
(A) recycling existing sources;
(B) reservoirs; or
(C) other water management tools that—
(i) generate additional or new water
supplies by means that are readily avail-
able in critically dry years;
(ii) improve system capacity;
(iii) improve operational flexibility; or
(iv) improve water quality.
TITLE 
I—SHORT-TERM 
AND
LONG-TERM 
CALIFORNIA
WATER SECURITY
SEC. 101. SHORT-TERM GOVERNANCE UNDER INTERIM
GOVERNANCE STRUCTURE.
(a) IN GENERAL.—The Federal agencies and State
agencies shall continue to operate under the interim gov-
ernance structure as described in Attachment 3 of the
record of decision, and in accordance with section 103 of
this Act, until July 1, 2002.
(b) SHORT-TERM PROGRAM FUNDING.—
(1) AUTHORIZATION OF APPROPRIATIONS.—For
studies, environmental review, design, and other
preconstruction or preacquisition activities for all
CALFED program elements, including complemen-
tary actions, there is authorized to be appropriated
to the Secretary under this section $100,000,000 for
fiscal year 2002. Funds appropriated pursuant to
this section may remain available until expended.
(2) EQUAL FUNDING.—In meeting the need for
balance, the Interim Governance Board shall ensure
that equal funding is provided for funding for in-
creased yield and for environmental benefits in fiscal
year 2002, and adequate progress is made in im-
proving water system reliability, water quality, water
use efficiency, watershed management, water trans-
fers, and levee protection.
(c) WATER SUPPLY STUDIES.—
(1) 
IN
GENERAL.—The 
Secretary, 
acting
through the Bureau of Reclamation, shall conduct a
study of available water supplies and existing
demand—
(A) within the units of the Central Valley
Project; and
(B) within the area served by Central Val-
ley Project agricultural water service contrac-
tors.
(2) REPORT.—The Secretary shall submit a re-
port to the congressional authorizing committees by
not later than May 31, 2002, describing the findings
of the studies. The report shall describe—
(A) water supply improvements, if any, for
Central Valley Project agricultural water service
contractors that would result from projects de-
scribed in the record of decision; and
(B) all feasible water management actions
or supply projects that, if taken or constructed,
respectively, would balance available water sup-
plies and existing demand for those contractors.
(3) FEASIBLE
DEFINED.—For purposes of
paragraph (2), the term ‘‘feasible’’ means capable of
being accomplished in a successful manner within a
reasonable period of time, taking into account eco-
nomic, environmental, social, and technological fac-
tors.
SEC. 102. LONG-TERM GOVERNANCE AND MONITORING.
(a) ESTABLISHMENT OF GOVERNANCE BOARD.—
(1) IN GENERAL.—The Secretary and the State
of California shall develop a joint structure, to be
known as the ‘‘Governance Board’’, for managing
CALFED program operations and a competitive
water grant program in accordance with section 104.
(2) DEVELOPMENT AND SUBMITTAL OF PRO-
POSAL.—For purposes of paragraph (1)—
(A) the Federal agencies shall participate
with the State agencies to develop a proposed
joint structure to be authorized by the Congress
and the California Legislature before becoming
effective; and
(B) the Secretary shall submit a proposal
to establish such a joint structure to the Con-
gress and the California Legislature by July 1,
2002.
(3) 
PUBLIC
PARTICIPATION.—The 
Federal
agencies shall take steps that will encourage broad
public, tribal, and local government involvement in
developing the proposal. Whenever feasible, meetings
of multiple State agencies and Federal agencies to
develop program goals or determine operational cri-
teria shall be open to the public.
(4) LIMITATION
ON
APPROPRIATIONS.—No
amounts may be appropriated for any fiscal year
after fiscal year 2003 to implement the record of de-
cision, including for grants under section 104(b) and
other activities to carry out the CALFED program,
if there has not been enacted by the Congress a law
establishing the Governance Board.
(b) PROGRAM RESPONSIBILITIES.—The joint struc-
ture proposed under this section shall provide the fol-
lowing:
(1) The Governance Board shall direct the im-
plementation of the record of decision and the com-
petitive grant program under section 104(b).
(2) The Governance Board shall ensure that all
relevant Federal programs authorized under this Act
and other preexisting authorities, including pro-
grams authorized by the Central Valley Project Im-
provement Act (106 Stat. 4706 et seq.), coordinate
and integrate goalsetting, funding, and implementa-
tion with CALFED programs so as to ensure the
most biologically effective and cost-effective expendi-
ture of Federal funds and resources for CALFED
program-related activities. The United States shall
continue coordinated consultations and negotiations
with the State of California pursuant to the cost
sharing agreement required by section 78684.10 of
California Senate Bill 900, Chapter 135, Statutes of
1996, signed by the Governor of California on July
11, 1996.
(c) PROMOTION
OF
PARTNERSHIPS.—The joint
structure proposed under this section shall provide the fol-
lowing:
(1) The Governance Board shall seek out and
promote partnerships with local interests and pro-
grams that seek to integrate various management
options so as to maximize the final resource benefits.
(2) The Governance Board shall cooperate and
undertake joint activities with local public agencies,
Indian tribes, private water users, and landowners
pursuant to the record of decision. Such activities
shall include, but not be limited to, planning, design,
technical assistance, construction projects, and the
development of an independent peer review science
program.
(d) MONITORING.—The joint structure proposed
under this section shall provide that the Governance
Board shall—
(1) provide ecological monitoring plans and pro-
tocols to be used for gauging cost-effective perform-
ance of projects funded under this title relative to
the stated ecological goals; and
(2) ensure that monitoring data collected for
projects funded by the Central Valley Project Im-
provement Act Restoration Fund and other relevant
authorities are compatible and designed to measure
overall trends in ecosystem health in the Bay-Delta
solution area.
(e) OBJECTIVE REVIEW AND ANALYSIS.—The joint
structure proposed under this section shall provide that
the Governance Board shall ensure that—
(1) all aspects of the CALFED program com-
ponents, including the competitive grants program
under section 104(b), use credible and objective sci-
entific review and economic analysis; and
(2) recommendations of the Governance Board
are based on the best available, independent peer-re-
viewed information.
(f) PRELIMINARY REQUIREMENTS.—The joint struc-
ture proposed under this section shall provide that—
(1) before acquiring land as part of the
CALFED program, the Governance Board shall first
determine that existing Federal land is not available
to achieve identified CALFED program objectives;
and
(2) in determining whether to acquire addi-
tional lands for the CALFED program, the Govern-
ance Board, through the Secretary, shall—
(A) consider the cumulative impact on the
local government and communities of transfer-
ring the property into government ownership;
and
(B) mitigate such impacts.
(g) ACHIEVEMENT OF GOALS OF RECORD OF DECI-
SION.—The joint structure proposed under this section
shall provide that the Governance Board shall partner
with landowners and local agencies to develop cooperating
landowner commitments that will meet coequal objectives
of achieving local economic and social goals and to imple-
ment the ecosystem restoration goals in the record of deci-
sion.
(h) COMPLIANCE WITH STATE LAW.—The joint
structure proposed under this section shall provide that
in carrying out this Act the Governance Board shall oper-
ate in compliance with California water law. Nothing in
this Act shall be construed to invalidate or preempt State
environmental, land use, or water law.
SEC. 103. CALIFORNIA WATER SUPPLY SECURITY.
(a) WATER SYSTEM IMPROVEMENTS.—
(1) IN GENERAL.—The Federal agencies, acting
through the CALFED program, shall develop a bal-
anced and timely program to achieve increased yield
and environmental benefits as well as improved
water system reliability, water quality, water use ef-
ficiency, watershed management, water transfers,
and levee protection.
(2) WATER
SYSTEM
IMPROVEMENTS.—The
Federal agencies shall ensure that Federal participa-
tion in the CALFED program results in continuous,
measurable, and significant benefits to achieve in-
creased yield and environmental benefits as well as
improved water system reliability, water quality,
water use efficiency, watershed management, water
transfers, and levee protection for agricultural and
urban uses throughout the Bay-Delta solution area.
In developing water supply options the Federal
agencies and State agencies shall consider all poten-
tial storage alternatives and utilize a cost/benefit
analysis in conjunction with environmental criteria
to ensure that proposals are selected that address
environmental issues and are economically viable.
(3) WATER DELIVERIES.—In accordance with
the record of decision, the Secretary shall operate
the Central Valley Project in a manner that will in
a normal year make available to south-of-Delta Cen-
tral Valley Project agricultural water service con-
tractors at least 70 percent of their existing con-
tract. In years that are other than normal, the Cen-
tral Valley Project shall be operated to accomplish
water supply improvements to south-of-Delta Cen-
tral Valley Project agricultural water service con-
tractors that are comparable to the targeted normal-
year supply improvements. The increased supply for
south-of-Delta Central Valley Project agricultural
water service contractors shall be accomplished with-
out reducing deliveries to other water agencies that
rely on water diverted from the Bay-Delta watershed
or degrading the quality of water diverted from the
Bay-Delta watershed for municipal and industrial
uses. For purposes of application of this section to
the 2002 water year, the term ‘‘normal-year’’ means
a water year in which the Sacramento Valley Index
is within 5 percent of 7.8 million acre feet as defined
by the State Water Resource Control Board Water
Quality Control Plan 95–1WR. The Secretary shall
develop, in consultation with affected interests, a
definition of a ‘‘normal year’’ for use in water years
after the 2002 water year. The Secretary shall also
develop, by no later than July 1, 2002, and in con-
sultation with affected interests, an operations plan
(with associated protocols) describing the manner in
which the requirements of this section will be
achieved.
(4) BANKS
PUMPING
PLANT.—In accordance
with the record of decision, the Federal agencies
shall—
(A) cooperate with the State to increase
pumping limits at the Banks Pumping Plant in
accordance with the schedule established in the
record of decision, or earlier if feasible; and
(B) manage the Environmental Water Ac-
count and the Ecosystem Restoration Program
to maximize the water supply benefits to be
provided by the increased pumping capability.
(b) ENVIRONMENTAL WATER MANAGEMENT.—
(1) MANAGEMENT OF ENVIRONMENTAL WATER
ACCOUNT.—The Federal agencies and State agencies
shall manage the Environmental Water Account and
the Ecosystem Restoration Program under the
record of decision as part of a comprehensive plan
to provide assurances that actions taken to protect
species listed under section 4(c) of the Endangered
Species Act of 1973 (16 U.S.C. 1533(c)), pursuant
to biological opinions and incidental take permits
under that Act, will be carried out in a manner
that—
(A) avoids water supply and water quality
impacts to the Central Valley Project and the
State Water Project; and
(B) avoids effects on the water right hold-
ers in the Bay-Delta solution area.
(2) ENVIRONMENTAL WATER ACCOUNT PRIOR-
ITIES
AND
OPERATION.—The Secretary shall give
first priority in the allocation and use of Environ-
mental Water Account and the Ecosystem Restora-
tion Program assets actually obtained or developed
to meeting the water supply assurances set forth in
paragraph (1). If, by December 31 of any year, the
Environmental Water Account water purchase tar-
gets, or their functional equivalents, have not been
met, the Federal agencies shall continue their efforts
to meet the water purchase targets and shall make
use of the available Environmental Water Account
assets to avoid jeopardizing the continued existence
of any species listed under section 4(c) of the En-
dangered Species Act of 1973 (16 U.S.C. 1533(c))
in a manner consistent with minimizing water supply
and water quality impacts. If the efforts to meet the
water purchase targets are unsuccessful, the max-
imum responsibility of water service contractors of
the State Water Project and the Central Valley
Project to provide water for Environmental Water
Account ‘‘Tier 2’’ purposes (as that term is defined
in the record of decision) shall be the difference be-
tween the Environmental Water Account purchase
targets and the amount of water actually acquired.
(c) LAND ACQUISITION; MANAGEMENT PLAN RE-
QUIRED FOR EXISTING LANDS.—The State agencies and
the Federal agencies may not, under the interim govern-
ance structure described in Attachment 3 of the record
of decision, acquire any additional lands for ecosystem res-
toration unless such agencies, through the Secretary and
by not later than January 1, 2003, develop a management
plan for all lands acquired by such agencies under such
structure before the date of the enactment of this Act.
SEC. 104. IMPLEMENTATION OF RECORD OF DECISION.
(a) IN GENERAL.—
(1) IMPLEMENTATION OF THE RECORD OF DE-
CISION.—The Federal agencies, in carrying out their
regulatory responsibilities under any Federal law,
shall not—
(A) treat one CALFED program element
as an alternative to another CALFED program
element; or
(B) consider, as an alternative to one ele-
ment of the CALFED program, implementation
of any other element of the CALFED program
beyond the levels described in the record of de-
cision.
(2) REGULATORY
COORDINATION.—The Sec-
retary, working with the Governor of the State of
California, shall develop a regulatory coordination
and streamlining process for the issuance of permits
and approvals required under State and Federal law
for projects under the CALFED program, to ensure
that all Federal agencies’ and State agencies’ respec-
tive regulatory programs will be coordinated in a
manner that reduces or eliminates duplicative proc-
esses or decisionmaking, thereby reducing costs and
time that would otherwise be required. Nothing in
this paragraph is intended nor shall be construed to
affect the requirements for the issuance of such per-
mits and approvals.
(b) COMPETITIVE GRANT PROGRAM.—
(1) GENERAL
AUTHORITY.—The Governance
Board shall undertake a competitive grant program
to—
(A) investigate and identify opportunities
for the design and construction of demonstra-
tion and permanent facilities to increase yield
and improve water quality, including—
(i) reclamation and reuse of munic-
ipal, industrial, domestic, and agricultural
wastewater and impaired ground and sur-
face waters;
(ii) new treatment technologies; and
(iii) source control programs;
(B) carry out design and construction of
facilities identified pursuant to subparagraph
(A); and
(C) conduct research, including desalina-
tion, regarding the reclamation of wastewater
and impaired ground and surface waters.
(2) LIMITED
TO
STATE
OF
CALIFORNIA.—
Grants under the program may only be made for
projects carried out in the State of California.
(3) EVALUATION
CRITERIA.—The Governance
Board shall consider the following criteria in deter-
mining the projects eligible for funding under this
subsection:
(A) Whether a project—
(i) increases yield; or
(ii) reduces or stabilizes demand on
existing Federal and State water supply fa-
cilities.
(B) Whether a project improves surface or
ground water quality, or quality of effluent dis-
charges to receiving water bodies, except that
those projects whose main purpose is the spon-
sor’s compliance with the Federal Water Pollu-
tion Control Act shall not be counted as achiev-
ing a Federal benefit.
(C) Whether a project—
(i) serves a small, rural, or economi-
cally disadvantaged community or Indian
tribes;
(ii) shows economic benefits; and
(iii) is cost-effective.
(D) Whether a project restores or enhances
habitats, including those affected by or affect-
ing project operation or provide water for feder-
ally listed threatened or endangered species.
(E) Whether a project meets existing legal
and contractual water supply obligations, in-
cluding Indian trust responsibilities, water
rights settlements, regional water quality con-
trol boards, department of health, Federal and
State environmental laws, the Federal Water
Pollution Control Act, or other obligations.
(F) Whether a project promotes and ap-
plies a regional or watershed perspective to
water resource management or cross-boundary
issues, implements an integrated resources
management approach or forms a collaborative
partnership with other entities.
(G) Whether a project improves health and
safety of the general public.
cost of a project carried out with a grant under this
subsection shall not exceed the lesser of $50,000,000
(June 2000 prices) or 35 percent of the total cost
of the project.
(c) AUTHORIZATION OF APPROPRIATIONS.—
(1) 
COMPETITIVE
GRANT
PROGRAM.—For
grants under subsection (b), there are authorized to
be appropriated to the Secretary—
(A) $50,000,000 for fiscal year 2002; and
(B) $328,000,000 for each fiscal year
thereafter.
(2) IMPLEMENTATION OF CALFED.—In addition
to the other amounts authorized by this Act, there
are authorized to be appropriated for activities that
implement CALFED programs—
(A) for each of fiscal years 2003 through
2007—
(i) $100,000,000; and
(ii) such sums as may be necessary
for construction; and
(B) for each of fiscal years 2008 through
2032—
(i) $20,000,000 for ecosystem restora-
tion projects; and
(ii) such sums as may be necessary
for construction projects to increase yield,
including improving water quality.
(3) CONTINUING AVAILABILITY.—Funds appro-
priated pursuant to this subsection may remain
available until expended.
SEC. 105. REQUIREMENT OF SPECIFIC CONGRESSIONAL
AUTHORIZATION OF NEW CALFED PROJECTS.
(a) IN GENERAL.—No amounts may be appropriated
for a new CALFED project (including for grants under
section 104(b)) unless the project has been specifically in-
cluded in a report approved by all of the congressional au-
thorizing committees in accordance with this section.
(b) SUBMISSION OF FUNDING REPORTS.—
(1) IN GENERAL.—The Governance Board, act-
ing through the Secretary and in cooperation with
the State of California, shall submit to the congres-
sional authorizing committees with annual reports
under section 106(a) a separate report containing
recommendations of new CALFED projects for Fed-
eral funding, including projects for funding with
grants under section 104(b).
(2) CONTENTS, GENERALLY.—For each project
recommended under paragraph (1), the annual re-
port shall include—
(A) a project description;
(B) feasibility and operational studies;
(C) final environmental impact studies;
(D) finding of consistency with the record
of decision;
(E) cost-benefit analysis;
(F) identification of project benefits and
beneficiaries;
(G) cost allocation plan; and
(H) financing and repayment plans.
(3) NEW
PROJECTS
REQUIRED
TO
BE
IN-
CLUDED.—The Governance Board, through the Sec-
retary, shall include in reports under this subsection
each of the following new CALFED projects, as
identified in the record of decision, by the dates indi-
cated:
(A) A project to raise the height of Shasta
Dam; by January 1, 2004.
(B) In-Delta storage; by January 1, 2002.
(C) Enlarged Los Vaqueros Reservoir; by
January 1, 2003.
(D) Sites Reservoir; by January 2005.
(E) San Joaquin River Storage; by Janu-
ary 2005.
(F) San Luis Bypass; by January 2004.
(c) CONGRESSIONAL APPROVAL.—
(1) IN GENERAL.—Each congressional author-
izing committee shall consider and approve or dis-
approve each report under subsection (b).
(2) CHANGES.—A congressional authorizing
committee may strike specific projects from such a
report.
(3) REPORTS
DEEMED
APPROVED.—A report
under subsection (b) shall be considered approved
unless disapproved by all of the congressional au-
thorizing committees within 60 days after the date
of submittal of the report.
SEC. 106. REPORTS.
(a) ANNUAL REPORT BY GOVERNANCE BOARD.—Not
later than February 1 of each year, the Governance Board
shall submit to the Congress an annual report that in-
cludes the following:
(1) STATE CALFED PROGRAM RECEIPTS.—An
accounting of all Federal funds received (or to be re-
ceived) by the State of California in the current fis-
cal year under the CALFED program, including—
(A) a description of all projects and activi-
ties carried out with such funds; and
(B) amounts received by the State that
have not yet been expended by the State.
(2) FEDERAL EXPENDITURES.—An accounting
of all funds expended (or to be expended) by the
Secretary in the current fiscal year under the
CALFED program (in addition to the funds ac-
counted for under paragraph (1)), including—
(A) a description of all projects and activi-
ties carried out with such funds; and
(B) amounts that were appropriated for
the fiscal year but not expended.
(3) ASSESSMENT
OF
ACHIEVEMENTS.—A de-
scription and assessment of expenditures and
achievements under the CALFED program in the
current fiscal year, including accomplishments in
achieving—
(A) increased water yield;
(B) environmental benefits; and
(C) improved water system reliability,
water quality, water use efficiency, watershed
management, water transfers, and levee protec-
tion.
(4) PERFORMANCE MEASURES.—A clear state-
ment of goals to achieve, under the CALFED
program—
(A) increased water yield;
(B) environmental benefits; and
(C) improved water system reliability,
water quality, water use efficiency, watershed
management, water transfers, and levee protec-
tion.
(b) ANNUAL
BUDGET
CROSSCUT
REPORT.—Not
later than February 1 of each year, the Director of the
Office of Management and Budget shall submit to the
Congress an interagency budget crosscut report that de-
scribes in detail—
(1) all proposed and planned Federal expendi-
tures in the next fiscal year on ecosystem restoration
and other purposes in the Bay-Delta solution area;
and
(2) all proposed and planned State of California
and Federal expenditures in the next fiscal year to
achieve the objectives identified within the CALFED
record of decision.
(c) SUMMARY OF EXPENDITURES TO DATE.—The
Director of the Office of Management and Budget shall
submit to the Congress, by not later than January 1,
2002, a report describing all Federal and State expendi-
tures made before such date under the CALFED pro-
gram.
SEC. 107. TREATMENT OF FUNDS.
Funds authorized to be appropriated by this title to
those Federal agencies that are currently or subsequently
become participants in the CALFED program shall be in
addition to the baseline funding levels established for cur-
rently authorized projects and programs under the Central
Valley Project Improvement Act (title XXXIV of Public
Law 102–575) and other currently authorized Federal
programs for the purposes of Bay-Delta ecosystem protec-
tion and restoration and water system and water quality
improvement.
TITLE II—SMALL RECLAMATION
PROJECTS
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Small Reclamation
Water Resources Project Act of 2001’’.
SEC. 202. AMENDMENTS TO THE SMALL RECLAMATION
PROJECTS ACT OF 1956.
(a) PURPOSE.—The first section of the Small Rec-
lamation Projects Act of 1956 (43 U.S.C. 422a) is amend-
ed by striking ‘‘under the’’ and inserting ‘‘under this act
and other’’ and by adding the following at the end thereof:
‘‘Such projects may include, but shall not be limited to,
irrigation projects. Irrigation shall not be a required pur-
pose for projects receiving assistance under this Act. In
providing assistance, the Secretary shall give priority to
recommended proposals which are related to presently au-
thorized Reclamation projects that will benefit from the
work carried out under this Act.’’.
(b) DEFINITIONS.—Section 2 of the Small Reclama-
tion Projects Act of 1956 (43 U.S.C. 422b) is amended—
(1) in subsection (c), by striking ‘‘a State’’ and
inserting ‘‘an Indian Tribe, a State’’;
(2) by striking subsection (d) and inserting the
following new subsection (d):
‘‘(d) The term ‘project’ means one of the following:
‘‘(1) A multi-purpose water resource develop-
ment carried out by a non-Federal organization in-
volving significant conservation of water, energy and
the environment.
‘‘(2) The rehabilitation, betterment, or retrofit
of any existing Federal or non-Federal water infra-
structure for purposes of complying with law and
regulations.
‘‘(3) An activity described in paragraph (1) or
(2) that is carried out by a non-Federal organization
under the Federal reclamation laws in one or more
of the 17 western reclamation States, Hawaii, Alas-
ka, the Commonwealth of Puerto Rico, Guam,
American Samoa, the Commonwealth of the North-
ern Mariana Islands, the Virgin Islands, and the
Trust Territory of the Pacific Islands. Where such
work is proposed for any existing Reclamation
project, such work shall be consistent with the au-
thorized purpose as determined by the Secretary.’’;
and
(3) by striking subsection (f) and inserting the
following new subsection (f):
‘‘(f) The term ‘water quality improvements’ shall
mean and involve those operational measures and physical
features associated with—
‘‘(1) the reclamation and reuse of irrigation
drainage or municipal and industrial return flows,
including wastewater flows; or
‘‘(2) the reclamation, or control, of brackish,
toxic, or impaired waters for beneficial reuse or pro-
tection of other related water, land, or environmental
resources.’’
(c) MODIFICATION
OF LOAN
AND GRANT PRO-
GRAMS.—The Small Reclamation Projects Act of 1956 is
amended—
(1) by striking sections 3 through 8 (43 U.S.C.
422c–422h); and
(2) by inserting after section 2 (43 U.S.C.
422b) the following:
‘‘TITLE 
I—STATE 
AND 
LOCAL
PARTICIPATION IN RECLAMA-
TION PROJECTS
‘‘SEC. 101. ESTABLISHMENT OF GRANT AND LOAN PRO-
GRAM.
‘‘There is hereby established under this title a pro-
gram within the Bureau of Reclamation, pursuant to
which the Secretary may make grants and loan guarantees
to organizations to carry out projects.
‘‘SEC. 102. PROPOSAL CONTENTS AND REQUIREMENTS.
‘‘(a) IN GENERAL.—Any organization seeking assist-
ance under this title shall submit a proposal to the Sec-
retary in such form and manner as the Secretary may pre-
scribe. Any proposal for a project submitted under this
title shall set forth a plan and estimated cost in detail
comparable to those included in preauthorization reports
required for a Federal reclamation project.
‘‘(b) LANDS
AND WATERS.—Each proposal sub-
mitted under this title shall include a statement of finan-
cial capability and legal authority, and a resolution from
the governing board of the organization showing that the
organization seeking assistance—
‘‘(1) holds or can acquire all lands and interests
in land (except public and other lands and interest
in land owned by the United States which are within
the administrative jurisdiction of the Secretary and
subject to disposition by the Secretary) to complete
the project;
‘‘(2) holds or can acquire all rights, pursuant to
applicable State law, to the use of water necessary
for the successful construction, operation, and main-
tenance of the project;
‘‘(3) is willing to finance, and capable of financ-
ing, the non-Federal portion of the costs of the
project, which portion shall include all costs of ac-
quiring lands, interests in land, and rights to the use
of water, except as provided in section 105(b)(2);
and
‘‘(4) has the legal authority and responsibility
under State law to carry out such work.
‘‘SEC. 103. FEDERAL SHARE AND PROJECT SPONSOR SHARE
OF COSTS.
‘‘(a) IN GENERAL.—The Secretary shall require each
organization receiving assistance under this title to con-
tribute toward the cost of the project (other than by loan
or grant of Federal funds) not less than 25 percent of
the allowable estimated costs of the project. In deter-
mining the amount of such non-Federal contribution for
the proposed project, the Secretary shall credit toward
that amount—
‘‘(1) the cost of investigations, surveys, engi-
neering, administration, and other services necessary
for the preparation of proposals and plans for the
proposed project as required by the Secretary;
‘‘(2) the value of lands and rights-of-way acqui-
sition required for the proposed project;
‘‘(3) amounts spent by the organization for con-
struction or acquisition of facilities for the proposed
project prior to project approval; and
‘‘(4) the filing fee required by this Act.
‘‘(b) PREVENTION OF LOSS AND DAMAGE TO FISH
AND WILDLIFE.—The costs of measures to prevent loss
of, and damage to, existing fish and wildlife resources
shall be considered project costs and allocated as may be
appropriate among project functions.
‘‘(c) MAXIMUM ALLOWABLE FEDERAL SHARE.—The
maximum allowable Federal share per project shall be
$50,000,000, as of January 2001. The Secretary shall ad-
just such amount each year using the Bureau of Reclama-
tion’s composite construction cost trends index.
‘‘(d) INCREASE IN AMOUNT.—To compensate for in-
creases in construction costs due to price escalation, sub-
ject to the limitations allowed by subsection (c), the Sec-
retary may increase the amount of the requested loan or
grant, or both, at any time prior to the completion of con-
struction of the project, using the Bureau of Reclama-
tion’s composite construction cost trends index.
‘‘SEC. 104. APPROVAL OR DISAPPROVAL OF PROJECTS.
‘‘Not later than one year after the date an initial
project proposal is submitted to the Secretary under this
title, the Secretary shall make a determination whether
the proposal is financially feasible and constitutes a rea-
sonable risk under the provisions of this title and either
approve or disapprove the proposal. The Secretary shall
promptly transmit any approved proposals to the Con-
gress. The appropriate documentation under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.) for the project shall be completed prior to Secretarial
transmittal of the proposal to Congress.
‘‘SEC. 105. CONTRACT TERMS AND CONDITIONS.
‘‘(a) MAXIMUM
AMOUNTS
AND
AVAILABILITY.—
Upon approval of any project proposal submitted under
this title, the Secretary shall negotiate a contract setting
out the maximum amount of any grant, which shall not
exceed 50 percent of the maximum allowable Federal
share per grant or loan to be made to the organization,
and the time and method of making such grant or loan
available to the organization.
‘‘(b) LOANS.—
‘‘(1) The contract for each loan under this title
shall contain such terms and conditions as the Sec-
retary deems necessary or proper to provide assur-
ance of, and security for, prompt repayment and to
ensure achievement of the purposes for which the
loan was made. The contract shall include a plan for
repayment by the organization within 25 years, ex-
cept that the organization shall have the right to
prepay the loan or any component thereof without
penalty.
‘‘(2) The contract for each loan under this title
shall require payment of interest and the repayment
of the principal of each loan. The Secretary shall fix
the interest at a rate determined as of the beginning
of the fiscal year in which the contract is executed.
The rate shall be based on the average market yield
on outstanding marketable obligations of the United
States with periods of maturity comparable to the
applicable repayment period of the loan.
‘‘(c) LOANS PROJECTS BY INDIAN TRIBES.—
‘‘(1) IN GENERAL.—For projects undertaken by
Indian tribes, the Secretary shall—
‘‘(A) determine, based on the findings in
the proposal under section 102, the reimburs-
able and nonreimbursable costs for projects
constructed under this Act;
‘‘(B) apportion those costs in accordance
with the benefits received; and
‘‘(C) allocate the reimbursable costs to the
project beneficiaries.
‘‘(2) TREATMENT OF COSTS IN EXCESS OF RE-
PAYMENT CAPABILITY.—Such costs that are deter-
mined by the Secretary to be in excess of the repay-
ment capability of an Indian tribe shall be non-
reimbursable.
‘‘TITLE II—PARTNERSHIP
PROGRAM
‘‘SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.
‘‘(a) PROGRAM.—There is hereby established within
the Bureau of Reclamation a small grant and loan pro-
gram to be known as the Small Reclamation Water Re-
sources Management Partnership Program, to be carried
out under this title. The purpose of this program shall
be to implement projects that can be performed—
‘‘(1) by the recipient organization’s workforce
or contractors,
‘‘(2) with streamlined documentation, and
‘‘(3) in a period of 18 months or less.
‘‘(b) GRANTS.—Grants under this title shall not ex-
ceed $5,000,000 for any one project under such program,
and shall be matched on a 50-percent basis of total eligible
cost by the organization.
‘‘(c) LOANS.—Loans under this title shall not exceed
$5,000,000 per project, and shall be subject to cost shar-
ing in the same manner as provided in title I. The contract
for each loan under this title shall require payment of in-
terest and repayment of the principal. The Secretary shall
fix the interest rate in the same manner as provided in
section 105(c)(2) for loans under title I.
‘‘(d) LIMITATION.—The Secretary is authorized to
use up to $50,000,000 of the amount available under this
Act for the purposes of this title.
‘‘SEC. 202. REPAYMENT OF LOANS.
‘‘Once work is certified complete by the Secretary,
each loan made under this title shall be repaid within a
5-year period.
‘‘SEC. 203. ACTIVITIES ELIGIBLE UNDER THE SMALL REC-
LAMATION WATER RESOURCES PARTNER-
SHIP.
‘‘(a) IN GENERAL.—The following types of activities
shall be eligible for grants or loans under this title:
‘‘(1) Water conservation.
‘‘(2) Water quality improvement projects.
‘‘(3) Water management for urban landscapes.
‘‘(4) Drought assistance.
‘‘(5) Fish and wildlife improvements.
‘‘(6) Public safety improvements.
‘‘(7) Water supply, including but not limited to,
production, conveyance, conservation, and manage-
ment.
‘‘(b) ADDITIONAL ACTIVITIES.—The Secretary may
add to the list referred to in subsection (a) as he deems
appropriate, except that any such addition shall not take
effect until 60 days after the Secretary publishes a notice
of the proposed addition in the Federal Register, and has
notified the Committee on Resources of the House of Rep-
resentatives and the Committee on Energy and Natural
Resources of the United States Senate in writing of the
proposed addition and the reasons therefore.
‘‘SEC. 204. APPLICATION PROCESS.
‘‘(a) NOTICE OF INTENT.—Each organization seek-
ing a grant or loan under this title shall submit a Notice
of Intent to the Secretary by April 1 of each year outlining
the proposed project and the public benefits thereof. With-
in two months, the Secretary shall provide a written re-
sponse to the applicant, either affirming or rejecting the
Bureau of Reclamation’s interest in participating in the
project.
‘‘(b) NOTICE OF FEDERAL INTEREST.—Upon notifi-
cation of the Bureau of Reclamation’s interest, the organi-
zation seeking assistance under this title shall have the
option of proceeding with an appropriate loan or grant ap-
plication giving details of the project and the anticipated
public benefits.
‘‘(c) CONTENTS.—The contents of any project pro-
posal under this title shall include, but need not be limited
to, each of the following:
‘‘(1) A resolution by the board of directors of
the qualifying organization stating—
‘‘(A) the total estimated project cost;
‘‘(B) the amount of the grant or loan re-
quested;
‘‘(C) the amount of the non-Federal con-
tribution for the grant;
‘‘(D) the organization’s ability to finance
and construct the project; and
‘‘(E) the project objectives.
‘‘(2) A summary of the proposal.
‘‘(3) A brief description of the anticipated ef-
fects of the project on the environment.
‘‘(4) Evidence that the organization seeking as-
sistance under this title has all lands and water
rights needed for the project, or can obtain them
and has legal authority and responsibility under
state law to carry out such work in the project plan.
‘‘(5) A description of the project plan, including
a general map showing the location of proposed
physical features, conceptual engineering drawings
of major and typical structures, and general stand-
ards for design.
‘‘(6) A construction schedule, with dates and
schedule of funding requirements under this title, in
sufficient detail to provide an analysis of the pro-
posed construction program.
‘‘(7) An identification of those portions of the
project costs which constitute the Federal grant or
loan amounts and the applicant’s local contribution.
‘‘(d) COSTS.—The cost of any investigations and
preparation of any environmental documentation shall be
borne by the project applicant and any such costs shall
be credited as part of the local cost share for grant fund-
ing.
‘‘(e) ANNUAL LISTING.—The Secretary shall include
in the annual budget justification for the Bureau of Rec-
lamation, a listing of the activities and total funding re-
quired for work committed under this title.