A bill to direct the Secretary of the Interior to convey the Collbran Reclamation Project, Colorado, to the Ute Water Conservancy District and the Collbran Conservancy District, and for other purposes.

SECTION 1. DEFINITIONS.

    In this Act:
            (1) Districts.--The term ``Districts'' means the Ute Water 
        Conservancy District and the Collbran Conservancy District 
        (including their successors and assigns).
            (2) Federal reclamation laws.--The term ``Federal 
        reclamation laws'' means the Act of June 17, 1902 and Acts 
        amendatory thereof or supplementary thereto (32 Stat. 388, 
        chapter 1093; 43 U.S.C. 371 et seq.) (including regulations 
        adopted pursuant to those Acts).
            (3) Project.--The term ``Project'' means the Collbran 
        Reclamation Project, as constructed and operated under the Act 
        of July 3, 1952 (66 Stat. 325, chapter 565), including all 
        property, equipment, and assets of or relating to the Project 
        that are owned by the United States, including--
                    (A) Vega Dam and Reservoir (but not including 
                recreation facilities owned by the United States or the 
                State of Colorado);
                    (B) Leon-Park Dams and Feeder Canal;
                    (C) Southside Canal;
                    (D) East Fork Diversion Dam and Feeder Canal;
                    (E) Bonham-Cottonwood Pipeline;
                    (F) Snowcat Shed and Diesel Storage;
                    (G) Upper Molina Penstock and Powerplant;
                    (H) Lower Molina Penstock and Power Plant;
                    (I) the diversion structure in the tailrace of the 
                Lower Molina Powerplant;
                    (J) all substations and switchyards;
                    (K) all rights relating to access to and the use of 
                the storage reservoirs on the Grand Mesa;
                    (L) all easements relating to access to and use of 
                such property and assets on lands of the United States;
                    (M) all rights-of-way and other real property 
                interests;
                    (N) all permits and contract rights;
                    (O) all equipment, parts inventories, and tools;
                    (P) all additions, replacements, betterments, and 
                appurtenances to any of the above; and
                    (Q) a copy of all data, plans, designs, reports, 
                records, or other materials, whether in writing or in 
                any form of electronic storage relating specifically to 
                the Project.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 2. CONVEYANCE.

    (a) In General.--The Secretary shall convey to the Districts all 
right, title, and interest of the United States in and to the Project 
by quit claim deed and bill of sale, without warranties, on or before 
the date that is 90 days after the date of enactment of this Act, 
subject only to the requirements of this Act.
    (b) Payment.--
            (1) In general.--Before or simultaneously with conveyance 
        of the Project, the Districts shall pay to the United States 
        $11,147,000 ($8,747,000 of which represents the net present 
        value of the outstanding repayment obligations of the 
        Districts), of which--
                    (A) $10,747,000 shall be deposited in the general 
                fund of the United States Treasury; and
                    (B) $400,000 shall be deposited in a special 
                account in the United States Treasury and shall be 
                available to the United States Fish and Wildlife 
                Service, region 6, without further Act of 
                appropriation, for use in funding Colorado operations 
                and capital expenditures associated with the Recovery 
                Implementation Program for Endangered Fish Species in 
                the Upper Colorado River Basin.
            (2) Source of funds.--Funds for the payment to the extent 
        of the amount specified in paragraph (1)(A) shall not be 
        derived from the issuance or sale, prior to the conveyance, of 
        State or local bonds the interest on which is exempt from 
        taxation under section 103 of the Internal Revenue Code of 
        1986.
    (c) Operation of Project.--
            (1) In general.--The Project shall be operated and used by 
        the Districts for a period of 40 years after the date of 
        enactment of this Act for the purposes for which the Project 
        was authorized under the Act of July 3, 1952 (66 Stat. 325, 
        chapter 565).
            (2) Requirements.--During the 40-year period described in 
        paragraph (1)--
                    (A) the Districts shall annually submit to the 
                Secretary a plan for operation of the Project, which 
                plan shall--
                            (i) report on Project operations for the 
                        previous year;
                            (ii) provide a description of the manner of 
                        Project operations anticipated for the 
                        forthcoming year; and
                            (iii) certify that the Districts have 
                        operated and will operate and maintain the 
                        Project facilities in accordance with sound 
                        engineering practices; and
                    (B) subject to section 3, all electric power 
                generated by operation of the Project shall be provided 
                to and marketed by the Western Area Power 
                Administration (including its successors and assigns).
    (d) Agreements.--Conveyance of the Project shall be subject to the 
agreements between the United States and the State of Colorado dated 
August 22, 1994, and September 23, 1994, relating to the construction 
and operation of recreational facilities at Vega Reservoir, which 
agreements shall continue to be performed by the parties thereto 
according to the terms of the agreements.

SEC. 3. OPERATION.

    (a) Conformity to Historic Operations.--The power component and 
facilities of the Project shall be operated in substantial conformity 
with the historic operations of the power component and facilities 
(including recent operations in a peaking mode).
    (b) Power Marketing.--
            (1) Under existing agreements.--The Districts shall be 
        bound by the agreements between the Bureau of Reclamation and 
        the Western Area Power Administration in existence on the date 
        of enactment of this Act, which provide for the marketing of 
        power generated by the power component of the Project as part 
        of the output of the Salt Lake City Area Integrated Projects 
        under the Post 1989 Operating Criteria, until those agreements 
        expire or are terminated.
            (2) After expiration of existing agreements.--
                    (A)  In general.--After the agreements described in 
                paragraph (1) expire or are terminated, except as 
                provided in subparagraph (B), the Districts shall 
                provide all power produced by the power component of 
                the Project to the Western Area Power Administration at 
                a rate that--
                            (i) is sufficient to provide for the annual 
                        debt service, cost of capital, and operation 
                        (including maintenance and replacement) of the 
                        Project; and
                            (ii) is determined in a manner that is 
                        consistent with the principles and assumptions 
                        followed by the Western Area Power 
                        Administration as of the date of enactment of 
                        this Act in its annual power repayment study 
                        for the Project.
                    (B) Unacceptable rate.--If the Western Area Power 
                Administration declines to market the power at a rate 
                described in subparagraph (A), or if the rate at which 
                the power would be marketed by Western Area Power 
                Administration would not provide sufficient revenue to 
                enable the Districts to recoup their cost of capital 
                and operate, maintain, and replace the power component 
                of the Project in accordance with sound engineering 
                practices, the Districts may sell the power to entities 
                other than the Western Area Power Administration.
    (c) License.--The Districts are by this Act granted a license under 
the Federal Power Act (16 U.S.C. 791a et seq.) for the operation of the 
Project in accordance with the requirements of section 2(c), for a 
period of 40 years after the date of conveyance of the Project, after 
which period the license may be renewed in accordance with applicable 
law.

SEC. 4. INAPPLICABILITY OF NEPA.

    The conveyance of the Project does not constitute a major Federal 
action within the meaning of the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) (including regulations issued under that 
Act).

SEC. 5. INAPPLICABILITY OF PRIOR AGREEMENTS AND OF FEDERAL RECLAMATION 
              LAWS.

    On conveyance of the Project to the Districts--
            (1) the Repayment Contract dated May 27, 1957, as amended 
        April 12, 1962, between the Collbran Conservancy District and 
        the United States, and the Contract for Use of Project 
        Facilities for Diversion of Water dated January 11, 1962, as 
        amended November 10, 1977, between the Ute Water Conservancy 
        District and the United States, shall be terminated and of no 
        further force or effect; and
            (2) the Project shall no longer be subject to or governed 
        by the Federal reclamation laws.

SEC. 6. LIABILITY.

    (a) Districts.--The Districts shall be liable for all acts or 
omissions relating to the operation and use of the Project that occur 
subsequent to the conveyance.
    (b) United States.--The United States shall retain any liability 
that exists under any law for latent defects in the Project.

Summary: Directs the Secretary of the Interior, within 90 days after the enactment of this Act, to convey to the Ute Water Conservancy District and the Collbran Conservancy District (districts) all rights and interests of the United States in and to the Collbran Reclamation Project.  Provides for:  (1) payment to the United States by the districts of the net present value of outstanding repayment obligations of the districts; (2) deposit into the Treasury of such payment and authorized uses of such deposits; (3) Project operation and use by the districts for 40 years; (4) a required annual plan from the districts for operation of the Project during such period; and (5) conveyance subject to specified agreements between the United States and Colorado relating to the construction and operation of recreational facilities at Vega Reservoir, a Project area. 
Requires the Project's power component and facilities to be operated in substantial conformity with its past operation.  Provides for Project power marketing under existing agreements.  Requires the districts, after the expiration of such agreements, to provide all Project power produced to the Western Area Power Administration at a specified rate.  Grants a 40-year license to the districts for Project operation. 
Makes the "major Federal action" provisions of the National Environmental Policy Act of 1969 inapplicable to such conveyance. Terminates certain previous agreements upon such conveyance. 
Makes the districts liable for all acts or omissions relating to the operation and use of the Project subsequent to the conveyance. Holds the United States liable for latent Project defects.