protection of other related water, land, or environ-
mental 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, an agency of the
Department of the Interior, pursuant to which the Sec-
retary may make grants and loans 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, and other services necessary for the prepa-
ration of proposals and plans for the proposed
project as required by the Secretary;
‘‘(2) the costs 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
$30,000,000, as of January 2000. 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 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.
‘‘TITLE II—PARTNERSHIP
PROGRAM
‘‘SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.
‘‘(a) PROGRAM.—There is hereby established within
the Bureau of Reclamation, an agency of the Department
of the Interior, a small grant and loan program to be
known as the Small Reclamation Water Resources Man-
agement Partnership Program, to be carried out under
this title. The purpose of this program shall be to imple-
ment 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 $2,500,000 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
$2,500,000 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