I
107TH CONGRESS
2D SESSION
H. R. 3881
To authorize the Secretary of the Interior to engage in studies relating
to enlarging Pueblo Dam and Reservoir and Sugar Loaf Dam and
Turquoise Lake, Fryingpan-Arkansas Project, Colorado, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 6, 2002
Mr. HEFLEY (for himself, Mr. MCINNIS, Mr. SCHAFFER, and Mr. TANCREDO)
introduced the following bill; which was referred to the Committee on Re-
sources
A BILL
To authorize the Secretary of the Interior to engage in
studies relating to enlarging Pueblo Dam and Reservoir
and Sugar Loaf Dam and Turquoise Lake, Fryingpan-
Arkansas Project, Colorado, 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. PURPOSES.
(a) The purposes of this Act are the following:
(1) To authorize the Secretary of the Interior
to engage in studies relating to enlarging Pueblo
Dam and Reservoir and Sugar Loaf Dam and Tur-
quoise Lake, Fryingpan-Arkansas Project, Colorado,
as described in the Preferred Storage Options Plan
Report published September 21, 2000, by the South-
eastern Colorado Water and Storage Needs Assess-
ment Enterprise and the Final PSOP Implementa-
tion Committee Report dated April 19, 2001.
(2) To authorize the Secretary to enter into
contracts for the use of excess storage and convey-
ance capacity of certain east slope facilities of the
Fryingpan-Arkansas Project, Colorado, for munic-
ipal, water banking, and other purposes, as de-
scribed in the Preferred Storage Options Plan Re-
port published September 21, 2000, by the South-
eastern Colorado Water and Storage Needs Assess-
ment Enterprise and Final PSOP Implementation
Committee Report dated April 19, 2001, by amend-
ing the Act of August 16, 1962 (76 Stat. 389 et
seq.).
(3) To authorize the Secretary to enter into
temporary contracts with any agency or entity, pri-
vate or public, operating a water bank established
pursuant to Colorado law, for use of facilities for the
impounding, storage, and carriage of nonproject
water for irrigation, domestic, municipal, industrial,
and other beneficial purposes.
(4) To authorize the Secretary to enter into
contracts with the City of Aurora, Colorado, or an
enterprise of the City, for use of storage or carrying
capacity 
excess 
of 
the 
requirements 
of 
the
Fryingpan-Arkansas Project, Colorado, for the im-
pounding, storage, and carriage of nonproject water
for domestic, municipal, industrial, and other bene-
ficial purposes as provided herein.
(5) To authorize the Secretary to enter into
contracts with the Pueblo West Metropolitan Dis-
trict, Colorado, or an enterprise of the District, for
use of storage or carrying capacity excess of the re-
quirements of the Fryingpan-Arkansas Project, Col-
orado, for the impounding, storage, and carriage of
nonproject water for domestic, municipal, industrial,
and other beneficial purposes as provided herein.
(b) Nothing in this Act is intended to—
(1) impair or otherwise interfere with the
project’s authorized purposes or existing contractual
obligations of the Secretary or project beneficiaries,
including the renewal of any such contracts;
(2) increase diversions of project water from
the natural basin of the Colorado River;
(3) increase diversions of nonproject water from
the natural basin of the Colorado River within Colo-
rado into another river basin for delivery or storage,
except as provided in this Act;
(4) impair or otherwise interfere with Contract
Nos. 00XX6C0049 and 0009D6C0048 between the
Board of Water Works of Pueblo, Colorado, and the
United States, or the renewal of Contract Nos.
00XX6C0049 and 0009D6C0048 pursuant to the
authority that provides the legal basis therefor; or
(5) affect the interpretation or implementation
of existing law or legislation for any other congres-
sionally authorized water project.
SEC. 2. SECRETARY AUTHORIZED TO CONDUCT STUDIES
FOR THE ENLARGEMENT OF PUEBLO DAM
AND SUGAR LOAF DAM.
(a) The Secretary of the Interior is hereby authorized
to engage in storage space studies, up to and including
a feasibility study pursuant to section 8 of the Federal
Water Project Recreation Act (16 U.S.C. 4601–19) and
section 9(a) of the Act of August 4, 1939 (Chapter 418;
43 U.S.C. 485h(a)), as may be appropriate, relating to
enlarging Pueblo Dam and Reservoir and Sugar Loaf
Dam and Turquoise Lake, Fryingpan-Arkansas Project,
Colorado, including studies for the purpose of determining
the potential costs, benefits, and environmental and rec-
reational impacts of such enlargements and the use and
operation thereof, as described in the Preferred Storage
Options Plan Report published September 21, 2000, by
the Southeastern Colorado Water and Storage Needs As-
sessment Enterprise and Final PSOP Implementation
Committee Report dated April 19, 2001. Any report or
reports submitted to the President and Congress prepared
pursuant to this provision shall be considered to fulfill the
requirements of section 9(a) of the Act of August 4, 1939
(Chapter 418; 43 U.S.C. 485h(a)), to the extent that sec-
tion may be applicable.
(b) Before funds are expended for the studies author-
ized by this section, the Southeastern Colorado Water Ac-
tivity Enterprise shall agree to participate in the studies
and to fund the costs of the studies. The Southeastern
Colorado Water Activity Enterprise’s funding of the costs
may be provided partly or wholly in the form of services
directly related to the conduct of the studies.
SEC. 3. SECRETARY AUTHORIZED TO ENTER INTO CON-
TRACTS FOR THE USE OF EXCESS STORAGE
AND CONVEYANCE CAPACITY OF CERTAIN
EAST SLOPE FACILITIES OF THE FRYINGPAN-
ARKANSAS PROJECT, COLORADO.
The Act of August 16, 1962 (76 Stat. 389), is
amended by adding at the end the following:
‘‘SEC. 8. (a) The Secretary is authorized to enter into
contracts with any agency or entity, private or public, sup-
plying water for municipal and other purposes within the
project boundaries, for the use of excess water storage and
conveyance capacity for nonproject water in certain east
slope facilities, as described in the Preferred Storage Op-
tions Plan Report published September 21, 2000, by the
Southeastern Colorado Water and Storage Needs Assess-
ment Enterprise and Final PSOP Implementation Com-
mittee Report dated April 19, 2001, after consultation
with the Board of Directors of the Southeastern Colorado
Water Activity Enterprise: Provided, however, That such
contracts shall not impair or otherwise interfere with—
‘‘(1) the project’s authorized purposes,
‘‘(2) the ability of the project contractors to
meet existing Federal repayment obligations,
‘‘(3) the storage allocations and limitations pur-
suant to Contract No. 5–07–70–W0086, as amend-
ed, between the Southeastern Colorado Water Con-
servancy District and the United States, and the al-
location principles adopted by the Southeastern Col-
orado Water Conservancy District on November 29,
1979, and confirmed by the District Court of Pueblo
County in Civil Action No. 40487 by decree dated
December 18, 1979, including any subsequent modi-
fications made by the District that are confirmed by
the District Court,
‘‘(4) the yield of the project from its West Slope
and East Slope water rights, or
‘‘(5) the capacity in Reclamation project facili-
ties which is needed to satisfy project purposes and
contractual obligations with a term exceeding one
year existing at the time of the execution of a con-
tract under the authority of this subsection.
‘‘(b) The term of any contract executed pursuant to
this section shall not exceed the remaining term of Con-
tract No. 5–07–70–W0086, as amended, between the
Southeastern Colorado Water Conservancy District and
the United States. The Secretary shall renew any contract
executed pursuant to this section at the end of the con-
tract term on such conditions as the Secretary finds to
be just and equitable. The term of such contract renewal
shall be for a duration no less than the term granted the
Southeastern Colorado Water Conservancy District under
the contractual arrangement negotiated upon the expira-
tion of Contract No. 5–07–70–W0086.
‘‘(c) To the extent water stored under the project’s
winter water storage program spills from Pueblo Reservoir
due to execution of a contract executed pursuant to this
section, it will not be considered impairment or inter-
ference under subsection (a)(5) if the holders of such
stored water are compensated by a credit for purchase of
project water to replace such spilled water, such credit to
be financed by a surcharge as described in subsection
(d)(4) imposed on contracts executed pursuant to this sec-
tion.
‘‘(d) The Secretary shall not execute a contract pur-
suant to this section with any entity that has not signed
an agreement with the Southeastern Colorado Water Ac-
tivity Enterprise—
‘‘(1) agreeing to reimburse an appropriate
amount of the Southeastern Colorado Water Activity
Enterprise’s implementation and development costs,
including such costs reimbursed to the United
States, incurred in determining and making excess
storage or conveyance capacity available for such
storage of nonproject water by municipal water pro-
viders within the project boundaries,
‘‘(2) agreeing to cooperate in a flow manage-
ment program designed to maintain target minimum
flows of 100 c.f.s. on the Arkansas River just below
Pueblo Dam, as provided in the Implementation
Committee Report dated April 19, 2001,
‘‘(3) agreeing to participate in a long-term
water quality monitoring program as outlined in the
Implementation Committee Report dated April 19,
2001, and
‘‘(4) agreeing to pay any surcharges determined
appropriate and necessary by the Southeastern Colo-
rado Water Activity Enterprise Board of Directors,
as described in the Preferred Storage Options Plan
Report published September 21, 2000, by the South-
eastern Colorado Water and Storage Needs Assess-
ment Enterprise and the Final PSOP Implementa-
tion Committee Report dated April 19, 2001.
All such charges established by the Southeastern Colorado
Water Activity Enterprise shall be paid by the person or
by the agency or entity, private or public, which contracts
for the use of excess capacity, directly to the Southeastern
Colorado Water Activity Enterprise, not to the Secretary,
at such times and in such manner as the Southeastern
Colorado Water Activity Enterprise may direct.
‘‘SEC. 9. (a) The Secretary is authorized to enter into
temporary contracts with any agency or entity, private or
public, operating a water bank established pursuant to
Colorado law, for use of facilities of the Fryingpan-Arkan-
sas Project for the impounding, storage, and carriage of
nonproject water for irrigation, domestic, municipal, in-
dustrial, and other beneficial purposes.
‘‘(b) No contract executed under the authority of sub-
section (a) shall impair or otherwise interfere with—
‘‘(1) the project’s authorized purposes,
‘‘(2) the ability of the project contractors to
meet existing Federal repayment obligations,
‘‘(3) the storage allocations and limitations pur-
suant to contract No. 5–07–70–W0086, as amended,
between the Southeastern Colorado Water Conser-
vancy District and the United States, and the alloca-
tion principles adopted by the Southeastern Colorado
Water Conservancy District on November 29, 1979,
and confirmed by the District Court of Pueblo Coun-
ty in Civil Action No. 40487 by decree dated Decem-
ber 18, 1979, including any subsequent modifica-
tions made by the District that are confirmed by the
District Court,
‘‘(4) the yield of the project from its West Slope
and East Slope water rights, or
‘‘(5) the capacity in Reclamation project facili-
ties which is needed to satisfy project purposes and
contractual obligations existing at the time of the
execution of a contract under the authority of this
subsection.
‘‘(c) The Secretary shall not execute a contract pur-
suant to this section with any entity that has not signed
an agreement with the Southeastern Colorado Water Ac-
tivity Enterprise, unless the entity requesting the contract
is the Southeastern Colorado Water Activity Enterprise.
‘‘SEC. 10. All revenue generated pursuant to con-
tracts executed under sections 8, 9, 13, and 14, except
for those revenues generated pursuant to the surcharges
described in section 8(d)(4), shall be credited first to a
proportionate share of annual operations and maintenance
costs and then to repayment of the project in the year
the contract revenue is generated until such time as the
costs of the project have been repaid: Provided, however,
That the revenues so credited shall not be applied so as
to reduce the amount of the current annual payments due
to the Secretary from the project contractors or any other
parties that are responsible for paying outstanding reim-
bursable construction costs. Once the costs of the project
have been repaid, all revenue generated pursuant to con-
tracts executed under sections 8, 9, 13, and 14 except for
those revenues generated pursuant to the surcharges de-
scribed in sections 8(d)(4), shall be credited first to annual
operations and maintenance costs and then to the Rec-
lamation fund, to be used exclusively for the purpose of
financing extraordinary operations and maintenance, re-
habilitation, and replacements of project facilities.
‘‘SEC. 11. Nonproject water diverted, stored, im-
pounded, pumped, or conveyed under a contract entered
into pursuant to sections 8, 9, 13, and 14 shall be exempt
from any acreage limitation provisions of the Act of June
17, 1902 (32 Stat. 388), and Acts amendatory thereof and
supplementary thereto including, but not limited to, the
Reclamation Reform Act of 1982 (96 Stat. 1263; 43
U.S.C. 390aa–390zz–1) and from any farm unit size limi-
tations established pursuant to section 4(c)(5) of the Act
of August 11, 1939 (Chapter 717; 16 U.S.C. 590z–
2(c)(5)): Provided, however, That in the event such non-
project water is commingled with project water in Rec-
lamation project facilities, and the resulting commingled
supply is used to irrigate lands in a project contractor’s
service area, then such commingled water shall bear the
same acreage limitations or farm unit size limitations as
the project water unless—
‘‘(1) contract provisions are in effect which pro-
vide that project or nonproject water, or both, will
be accounted for on a quantitative basis, that project
water will not be delivered to ineligible land, and
that appropriate charges, as determined by the Sec-
retary, will be paid for the project water, and
‘‘(2) the charges for the use of the excess ca-
pacity include an appropriate interest component, as
determined by the Secretary.
‘‘SEC. 12. Excess water storage capacity in certain
east slope facilities to divert, store, impound, pump, or
convey nonproject water made available under contracts
executed pursuant to the provisions of section 8 and excess
water storage capacity for the impounding, storage, and
carriage of nonproject water made available under con-
tracts executed pursuant to the provisions of sections 13
and 14 shall not be utilized so as to increase diversion
of nonproject water from the natural basins of the Colo-
rado or Arkansas Rivers within Colorado into another
river basin for delivery or storage unless—
‘‘(1) the diversion is the subject of a decree en-
tered prior to the effective date of this section for
which no new infrastructure is necessary to divert
the water out of the natural basin, or
‘‘(2) the diversion is the subject of an agree-
ment in existence on the date of the enactment of
this section, contemplating additional diversions di-
verted through or stored in the facilities authorized
by this Act, between the beneficiary of such
transbasin diversion and either the water conserva-
tion district, as defined under Colorado law, from
within whose boundaries the waters are proposed for
diversion or, in the absence thereof, a water conser-
vancy district, as defined under Colorado law, that
is a project contractor and from within whose
boundaries the waters are proposed for diversion, or
‘‘(3) the diversion is the subject of an intergov-
ernmental agreement or other contractual arrange-
ment executed after the date of the enactment of
this section, between the beneficiary of such
transbasin diversion and either the water conserva-
tion district, as defined under Colorado law, from
within whose boundaries the waters are proposed for
diversion or, in the absence thereof, a water conser-
vancy district, as defined under Colorado law, that
is a project contractor and from within whose
boundaries the waters are proposed for diversion, or
‘‘(4) the beneficiary of such transbasin diver-
sion provides compensatory storage or alternate
water supply in an amount equal to the quantity di-
verted out of the basin for the benefit of either the
water conservation district, as defined under Colo-
rado law, from within whose boundaries the waters
are proposed for diversion or, in the absence thereof,
a water conservancy district, as defined under Colo-
rado law, that is a project contractor and from with-
in whose boundaries the waters are proposed for di-
version.
‘‘SEC. 13. (a) The Secretary of the Interior may enter
into contracts with the City of Aurora, Colorado, or an
enterprise of the City, for a term not to exceed the remain-
ing term of Contract No. 5–07–70–W0086, as amended,
between the Southeastern Colorado Water Conservancy
District and the United States, for use of storage or car-
rying capacity excess of the requirements of the
Fryingpan-Arkansas Project, Colorado, for the impound-
ing, storage, and carriage of nonproject water for domes-
tic, municipal, industrial, and other beneficial purposes:
Provided, That, as to Arkansas River water, the City or
an enterprise of the City has complied with section 12 by
execution of an intergovernmental agreement between the
City of Aurora, Colorado, or an enterprise of the City, with
the Southeastern Colorado Water Conservancy District.
‘‘(b) The Secretary of the Interior may enter or renew
contracts with the City of Aurora, Colorado, or an enter-
prise of the City, following the remaining term of Contract
No. 5–07–70–W0086, as amended, between the South-
eastern Colorado Water Conservancy District and the
United States, for individual terms not to exceed 25 years,
for use of storage or carrying capacity excess of the re-
quirements of the Fryingpan-Arkansas Project, Colorado,
for the impounding, storage, and carriage of nonproject
water for domestic, municipal, industrial, and other bene-
ficial purposes: Provided, That the term of any such con-
tracts entered shall not be for a duration that exceeds the
term of any contract entered with the Southeastern Colo-
rado Water Conservancy District upon the expiration of
Contract No. 5–07–70–W0086 or thereafter, and Provided
further, That, as to Arkansas River Water, the City or
an enterprise of the City has complied with section 12 by
execution of an intergovernmental agreement between the
City of Aurora, Colorado, or an enterprise of the City, with
the Southeastern Colorado Water Conservancy District, in
addition to the intergovernmental agreement provided in
subsection (a).
‘‘(c) No contract executed under the authority of sub-
section (a) or (b) shall impair or otherwise interfere
with—
‘‘(1) the project’s authorized purposes,
‘‘(2) the ability of the project contractors to
meet existing Federal repayment obligations,
‘‘(3) the storage allocations and limitations pur-
suant to Contract No. 5–07–70–W0086, as amend-
ed, between the Southeastern Colorado Water Con-
servancy District and the United States, and the al-
location principles adopted by the Southeastern Col-
orado Water Conservancy District on November 29,
1979, and confirmed by the District Court of Pueblo
County in Civil Action No. 40487 by decree dated
December 18, 1979, including any subsequent modi-
fications made by the District that are confirmed by
the District Court,
‘‘(4) the yield of the project from its West Slope
and East Slope water rights,
‘‘(5) the capacity in Reclamation project facili-
ties which is needed to satisfy project purposes and
contractual obligations existing at the time of the
execution of a contract under the authority of this
subsection, or
‘‘(6) the ability of qualified entities located
within the project service boundaries to enter into
contracts for the use of excess water storage and
conveyance capacity pursuant to section 8 or any
other authority under Reclamation law.
‘‘SEC. 14. (a) The Secretary of the Interior may enter
into contracts with the Pueblo West Metropolitan District,
Colorado, or an enterprise of the District, supplying water
for municipal and other purposes within the project
boundaries, for the use of excess water storage and con-
veyance capacity for nonproject water in certain east slope
facilities for use of storage or carrying capacity excess of
the requirements of the Fryingpan-Arkansas Project, Col-
orado, for the impounding, storage, and carriage of non-
project water for domestic, municipal, industrial, and
other beneficial purposes: Provided, however, That such
contracts shall not impair or otherwise interfere with—
‘‘(1) the project’s authorized purposes,
‘‘(2) the ability of the project contractors to
meet existing Federal repayment obligations,
‘‘(3) the storage allocations and limitations pur-
suant to Contract No. 5–07–70–W0086, as amend-
ed, between the Southeastern Colorado Water Con-
servancy District and the United States, and the al-
location principles adopted by the Southeastern Col-
orado Water Conservancy District on November 29,
1979, and confirmed by the District Court of Pueblo
County in Civil Action No. 40487 by decree dated
December 18, 1979, including any subsequent modi-
fications made by the District that are confirmed by
the District Court,
‘‘(4) the yield of the project from its West Slope
and East Slope water rights, or
‘‘(5) the capacity in Reclamation project facili-
ties which is needed to satisfy project purposes and
contractual obligations with a term exceeding one
year, not including any contract executed pursuant
to the authority in section 13, existing at the time
of the execution of a contract under the authority of
this subsection, or
‘‘(6) the ability of qualified entities located
within the project service boundaries to enter into
contracts for the use of excess water storage and
conveyance capacity pursuant to section 8.
‘‘(b) The term of any contract executed pursuant to
this section shall not exceed the remaining term of Con-
tract No. 5–07–70–W0086, as amended, between the
Southeastern Colorado Water Conservancy District and
the United States. The Secretary may enter or renew con-
tracts with the District, or an enterprise of the District,
pursuant to this section, following the remaining term of
Contract No. 5–07–70–W0086, as amended, between the
Southeastern Colorado Water Conservancy District and
the United States, for individual terms not to exceed 40
years: Provided, That the term of any such contracts en-
tered shall not be for a duration that exceeds the term
of any contract entered with the Southeastern Colorado
Water Conservancy District upon the expiration of Con-
tract No. 5–07–70–W0086 or thereafter.
‘‘(c) To the extent water stored under the project’s
winter water storage program spills from Pueblo Reservoir
due to execution of a contract executed pursuant to this
section, it will not be considered impairment or inter-
ference under subsection (a)(5) if the holders of such
stored water are compensated by a credit for purchase of
project water to replace such spilled water, such credit to
be financed by a surcharge as described in subsection
(d)(4) imposed on contracts executed pursuant to this sec-
tion.
‘‘(d) The Secretary shall not execute a contract pur-
suant to this section with Pueblo West Metropolitan Dis-
trict, or an enterprise of the District, until that entity has
signed an agreement with the Southeastern Colorado
Water Activity Enterprise—
‘‘(1) agreeing to reimburse an appropriate
amount of the Southeastern Colorado Water Activity
Enterprise’s implementation and development costs,
including such costs reimbursed to the United
States, incurred in determining and making excess
storage or conveyance capacity available for such
storage of nonproject water by municipal water pro-
viders within the project boundaries,
‘‘(2) agreeing to cooperate in a flow manage-
ment program designed to maintain target minimum
flows of 100 c.f.s. on the Arkansas River just below
Pueblo Dam, as provided in the Implementation
Committee Report dated April 19, 2001,
‘‘(3) agreeing to participate in a long-term
water quality monitoring program as outlined in the
Implementation Committee Report dated April 19,
2001, and
‘‘(4) agreeing to pay any surcharges determined
appropriate and necessary by the Southeastern Colo-
rado Water Activity Enterprise Board of Directors,
as described in the Preferred Storage Options Plan
Report published September 21, 2000, by the South-
eastern Colorado Water and Storage Needs Assess-
ment Enterprise and the Final PSOP Implementa-
tion Committee Report dated April 19, 2001.
All such charges established by the Southeastern Colorado
Water Activity Enterprise shall be paid by the person or
by the agency or entity, private or public, which contracts
for the use of excess capacity, directly to the Southeastern
Colorado Water Activity Enterprise, not to the Secretary,
at such times and in such manner as the Southeastern
Colorado Water Activity Enterprise may direct.’’.
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