To authorize the Secretary of the Interior to construct facilities to provide water for irrigation, municipal, domestic, military, and other uses from the Santa Margarita River, California, and for other purposes.

SECTION 1. DEFINITIONS.

    For the purposes of this Act, the following definitions apply:
            (1) District.--The term ``District'' means the Fallbrook 
        Public Utility District, San Diego County, California.
            (2) Project.--The term ``Project'' means the impoundment, 
        recharge, treatment, and other facilities the construction, 
        operation, watershed management, and maintenance of which is 
        authorized under section 2.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior, unless otherwise stated.

SEC. 2. AUTHORIZATION FOR CONSTRUCTION OF SANTA MARGARITA RIVER 
              PROJECT.

    (a) Authorization.--The Secretary, acting pursuant to the Federal 
reclamation laws (Act of June 17, 1902; 32 Stat. 388), and Acts 
amendatory thereof or supplementary thereto, as far as those laws are 
not inconsistent with the provisions of this Act, is authorized to 
construct, operate, and maintain the Project substantially in 
accordance with the final feasibility report and this Act.
    (b) Conditions.--The Secretary may construct the Project only after 
the Secretary determines that the following conditions have occurred:
            (1) The District has entered into a contract under section 
        9(d) of the Reclamation Project Act of 1939 to repay to the 
        United States appropriate portions, as determined by the 
        Secretary, of the actual costs of constructing, operating, and 
        maintaining the Project, together with interest as hereinafter 
        provided.
            (2) The officer or agency of the State of California 
        authorized by law to grant permits for the appropriation of 
        water has granted such permits to the Bureau of Reclamation for 
        the benefit of the Department of the Navy and the District as 
        permittees for rights to the use of water for storage and 
        diversion as provided in this Act, including approval of all 
        requisite changes in points of diversion and storage, and 
        purposes and places of use.
            (3) The District has agreed that it will not assert against 
        the United States any prior appropriative right the District 
        may have to water in excess of the quantity deliverable to it 
        under this Act, and will share in the use of the waters 
        impounded by the Project on the basis of equal priority and in 
        accordance with the ratio prescribed in section 4(b). This 
        agreement and waiver and the changes in points of diversion and 
        storage under paragraph (2), shall become effective and binding 
        only when the Project has been completed and put into 
        operation.
            (4) The Secretary has determined that the Project has 
        economic, environmental, and engineering feasibility.

SEC. 3. COSTS.

    The Department of the Navy shall not be responsible for any costs 
in connection with the Project, except upon completion and then shall 
be charged in reasonable proportion to its use of the Project under 
regulations agreed upon by the Secretary of the Navy and Secretary of 
the Interior.

SEC. 4. OPERATION; YIELD ALLOTMENT; DELIVERY.

    (a) Operation.--The operation of the Project, subject to a 
memorandum of agreement between the Secretary, the Navy, and the 
District and under regulations satisfactory to the Secretary of the 
Navy with respect to the Navy's share of the project, may be by the 
Secretary, the District, or a third party consistent with section 6.
    (b) Yield Allotment.--Except as otherwise agreed between the 
parties, the Department of the Navy and the District shall participate 
in the Project yield on the basis of equal priority and in accordance 
with the following ratio:
            (1) 60 percent of the Project's yield is allotted to the 
        Secretary of the Navy.
            (2) 40 percent of the Project's yield is allotted to the 
        District.
    (c) Contracts for Delivery of Excess Water.--
            (1) Excess water available to other persons.--If the 
        Secretary of the Navy certifies to the official agreed upon to 
        administer the Project that the Department of the Navy does not 
        have immediate need for any portion of the 60 percent of the 
        Project's yield allotted to the Secretary of the Navy under 
        subsection (b), the official may enter into temporary contracts 
        for the sale and delivery of the excess water.
            (2) First right for excess water.--The first right to 
        excess water to be made available under paragraph (1) shall be 
        given the District, if otherwise consistent with the laws of 
        the State of California.
            (3) Condition of contracts.--Each contract entered into 
        under paragraph (1) for the sale and delivery of excess water 
        shall include a condition that the Secretary of the Navy has 
        the right to demand that water, without charge and without 
        obligation on the part of the United States, after 30 days 
        notice.
            (4) Modification of rights and obligations related to water 
        yield.--The rights and obligations of the United States and the 
        District regarding the ratio or amounts of Project yield 
        delivered may be modified by an agreement between the parties.
    (d) Consideration.--
            (1) Deposit of funds.--Moneys paid to the United States 
        under a contract entered into under subsection (c) shall be 
        deposited in the special account established for the Department 
        of the Navy under paragraph (1) of section 2667(d) of title 10, 
        United States Code, and shall be available for the purposes 
        specified in subparagraph (C) of such paragraph. Subparagraph 
        (D) of such paragraph shall not apply to moneys deposited in 
        the special account pursuant to this subsection.
            (2) In-kind consideration.--In lieu of monetary 
        consideration under paragraph (1), or in addition to such 
        consideration, the Secretary of the Navy may accept in-kind 
        consideration in a form and quantity that is acceptable to the 
        Secretary of the Navy, including the following forms of in-kind 
        consideration:
                    (A) Maintenance, protection, alteration, repair, 
                improvement, or restoration (including environmental 
                restoration) of property or facilities of the 
                Department of the Navy.
                    (B) Construction of new facilities for the 
                Department of the Navy.
                    (C) Provision of facilities for use by the 
                Department of the Navy.
                    (D) Facilities operation support for the Department 
                of the Navy.
                    (E) Provision of such other services as the 
                Secretary of the Navy considers appropriate.
            (3) Relation to other laws.--Sections 2662 and 2802 of 
        title 10, United States Code, shall not apply to any new 
        facilities whose construction is accepted as in-kind 
        consideration under this subsection.
            (4) Congressional notification.--If the in-kind 
        consideration proposed to be provided under a contract to be 
        entered into under subsection (c) has a value in excess of 
        $500,000, the contract may not be entered into until the 
        earlier of the following:
                    (A) The end of the 30-day period beginning on the 
                date on which a report describing the contract and the 
                form and quantity of the in-kind consideration is 
                submitted by the Secretary of the Navy to the Committee 
                on Armed Services of the Senate and the Committee on 
                Armed Services of the House of Representatives.
                    (B) The end of the 14-day period beginning on the 
                date on which a copy of the report referred to in 
                subparagraph (A) is provided in an electronic medium 
                pursuant to section 480 of title 10, United States 
                Code.

SEC. 5. REPAYMENT OBLIGATION OF THE DISTRICT.

    (a) In General.--The general repayment obligation of the District 
shall be determined by the Secretary of the Interior consistent with 
the Water Supply Act of 1958; provided, however, that for the purposes 
of calculating interest and determining the time when the District's 
repayment obligation to the United States commences, the pumping and 
treatment of groundwater from the Project shall be deemed equivalent to 
the first use of water from a water storage project. There shall be no 
repayment obligation under this section for water delivered to the 
District under a contract as provided in section 4(c).
    (b) Modification of Rights and Obligation by Agreement.--The rights 
and obligations of the United States and the District regarding the 
repayment obligation of the District may be modified by an agreement 
between the parties.

SEC. 6. TRANSFER OF CARE, OPERATION, AND MAINTENANCE.

    The Secretary may transfer to the District, or a mutually agreed 
upon third party, the care, operation, and maintenance of the Project 
under conditions satisfactory to the Secretary and the District, and 
with respect to the portion of the Project that is located within the 
boundaries of Camp Pendleton, satisfactory also to the Secretary of the 
Navy. If such a transfer takes place, the District shall be entitled to 
an equitable credit for the costs associated with the Secretary's 
proportionate share of the operation and maintenance of the Project. 
The amount of such costs shall be applied against the indebtedness of 
the District to the United States.

SEC. 7. SCOPE OF ACT.

    For the purpose of this Act, the basis, measure, and limit of all 
rights of the United States pertaining to the use of water shall be the 
laws of the State of California. That nothing in this Act shall be 
construed--
            (1) as a grant or a relinquishment by the United States of 
        any rights to the use of water that it acquired according to 
        the laws of the State of California, either as a result of its 
        acquisition of the lands comprising Camp Joseph H. Pendleton 
        and adjoining naval installations, and the rights to the use of 
        water as a part of that acquisition, or through actual use or 
        prescription or both since the date of that acquisition, if 
        any;
            (2) to create any legal obligation to store any water in 
        the Project, to the use of which the United States has such 
        rights;
            (3) to constitute a recognition of, or an admission that, 
        the District has any rights to the use of water in the Santa 
        Margarita River, which rights, if any, exist only by virtue of 
        the laws of the State of California; or
            (4) to require the division under this Act of water to 
        which the United States has such rights.

SEC. 8. LIMITATIONS ON OPERATION AND ADMINISTRATION.

    Unless otherwise agreed by the Secretary of the Navy, the Project--
            (1) shall be operated in a manner which allows the free 
        passage of all of the water to the use of which the United 
        States is entitled according to the laws of the State of 
        California either as a result of its acquisition of the lands 
        comprising Camp Joseph H. Pendleton and adjoining naval 
        installations, and the rights to the use of water as a part of 
        those acquisitions, or through actual use or prescription, or 
        both, since the date of that acquisition, if any; and
            (2) shall not be administered or operated in any way which 
        will impair or deplete the quantities of water the use of which 
        the United States would be entitled under the laws of the State 
        of California had the Project not been built.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated, out of any money in the 
Treasury of the United States not otherwise appropriated, the 
following--
            (1) $60,000,000 (the current estimated construction cost of 
        the Project, plus or minus such amounts as may be indicated by 
        the engineering cost indices for this type of construction); 
        and
            (2) such sums as may be required to operate and maintain 
        the said project.

SEC. 10. REPORTS TO CONGRESS.

    Not later than 1 year after the date of the enactment of this Act 
and periodically thereafter, the Secretary and the Secretary of the 
Navy shall each report to the Congress regarding if the conditions 
specified in section 2(b) have been met and if so, the details of how 
they were met.

SEC. 11. SUNSET.

    The authority of the Secretary to complete construction of the 
Project shall terminate 10 years after the date of enactment of this 
Act.

            Passed the House of Representatives December 13, 2005.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: (Sec. 2) Authorizes the Secretary of the Interior (the Secretary) to construct, operate, and maintain the Santa Margarita River Project in accordance with the final feasibility report and this Act.

Authorizes Project construction only after the Secretary determines that: (1) the Fallbrook Public Utility District, San Diego County (District), has entered into a contract to repay to the United States appropriate portions of the costs of constructing, operating, and maintaining the Project, with interest; (2) the authorized California officer or agency has granted water use permits to the Bureau of Reclamation for the benefit of the Department of the Navy and the District; (3) the District has agreed that it will not assert against the United States any prior right to water in excess of the quantity deliverable under this Act and will share water based on equal priority and a specified ratio; and (4) the Secretary has determined that the Project has economic, environmental, and engineering feasibility.

(Sec. 3) Shields the Department of the Navy (the Department) from responsibility for any costs in connection with the Project, except upon completion and then in reasonable proportion to its use of the Project under regulations agreed upon by the Secretary and the Secretary of the Navy.

(Sec. 4) Permits operation of the Project by the Secretary, the District, or a third party consistent with this Act.

Requires the Department and the District to participate in the Project yield on the basis of equal priority, with 60% of the Project's yield allotted to the Navy Secretary and 40% allotted to the District. Provides that if the Navy Secretary certifies that the Department does not have immediate need for its portion, the administering official may enter into temporary contracts for the sale and delivery of excess water. Allows the rights and obligations of the United States and the District regarding the ratio or amounts of Project yield delivered to be modified by agreement between the parties. Requires moneys paid to the United States under such a contract to be deposited in the special account established for the Department.

(Sec. 5) Requires the District's general repayment obligation to be determined by the Secretary consistent with the Water Supply Act of 1958. Provides that there shall be no repayment obligation for water delivered to the District under a contract for delivery of excess water.

(Sec. 6) Authorizes the Secretary to transfer to the District or a mutually agreed upon third party the care, operation, and maintenance of the Project under conditions satisfactory to the Secretary and the District (and the Navy Secretary with respect to the portion located within the boundaries of Camp Pendleton). Entitles the District, if such a transfer takes place, to an equitable credit for the costs associated with the Secretary's proportionate share of the Project's operation and maintenance.

(Sec. 7) Provides that the basis, measure, and limit of all U.S. rights pertaining to the use of water shall be California law.

(Sec. 8) Requires, unless otherwise agreed by the Navy Secretary, that the Project be operated in a manner which: (1) allows the free passage of all of the water the United States is entitled to use under California law either as a result of its acquisition of the lands comprising Camp Joseph H. Pendleton and adjoining naval installations or through actual use or prescription; and (2) does not impair or deplete the quantities of water the United States would be entitled to use had the Project not been built.

(Sec. 9) Authorizes appropriations to construct, operate, and maintain the Project.

(Sec. 10) Directs the Secretary and the Navy Secretary to each report to Congress periodically regarding if and how the conditions for Project construction have been met.

(Sec. 11) Terminates the Secretary's authority to complete Project construction 10 years after this Act's enactment.