I 113th CONGRESS 2d Session H. R. 3981 IN THE HOUSE OF REPRESENTATIVES January 31, 2014 Mr. Hastings of Washington introduced the following bill; which was referred to the Committee on Natural Resources A BILL To direct the Secretary of the Interior to allow for prepayment of repayment contracts between the United States and water users, to provide surface water storage enhancement, and for other purposes.

1. Short title This Act may be cited as the Accelerated Revenue, Repayment, and Surface Water Storage Enhancement Act . 2. Prepayment of certain repayment contracts between the United States and contractors of federally developed water supplies (a) Conversion and prepayment of contracts (1) Conversion Upon request of the contractor, the Secretary of the Interior shall convert any water service contract in effect on the date of enactment of this Act and between the United States and a water users’ association to allow for prepayment of the repayment contract pursuant to paragraph (2) under mutually agreeable terms and conditions. The manner of conversion under this paragraph shall be as follows: (A) Water service contracts that were entered into under section 9(e) of the Act of August 4, 1939 (53 Stat. 1196), to be converted under this section shall be converted to repayment contracts under section 9(d) of that Act (53 Stat. 1195). (B) Water service contracts that were entered under subsection (c)(2) of section 9 of the Act of August 4, 1939 (53 Stat. 1194), to be converted under this section shall be converted to a contract under subsection (c)(1) of section 9 of that Act (53 Stat. 1195). (2) Prepayment All contracts converted pursuant to paragraph (1)(A) shall— (A) upon request of the contractor, provide for the repayment, either in lump sum or by accelerated prepayment, of the remaining net present value of the construction costs identified in water project specific irrigation rate repayment schedules, as adjusted to reflect payment not reflected in such schedule, and properly assignable for ultimate return by the contractor, or if made in approximately equal installments, no later than 3 years after the effective date of the repayment contract; such amount to be discounted by 1/2 the Treasury rate. An estimate of the remaining net present value of construction costs, as adjusted, shall be provided by the Secretary to the contractor no later than 30 days following receipt of request of the contractor; (B) require that construction costs or other capitalized costs incurred after the effective date of the contract or not reflected in the rate schedule referenced in subparagraph (A), and properly assignable to such contractor shall be repaid in not more than 5 years after notification of the allocation if such amount is a result of a collective annual allocation of capital costs to the contractors exercising contract conversation under this subsection of less than $5,000,000. If such amount is $5,000,000 or greater, such cost shall be repaid as provided by applicable reclamation law; (C) provide that power revenues will not be available to aid in repayment of construction costs allocated to irrigation under the contract; and (D) continue so long as the contractor pays applicable charges, consistent with section 9(c)(1) of the Act of August 4, 1939 (53 Stat. 1195), and applicable law. (3) Contract requirements The following shall apply with regard to all contracts converted pursuant to paragraph (1)(B): (A) Upon request of the contractor, provide for the repayment in lump sum of the remaining net present value of construction costs identified in water project specific municipal and industrial rate repayment schedules, as adjusted to reflect payments not reflected in such schedule, and properly assignable for ultimate return by the contractor. An estimate of the remaining net present value of construction costs, as adjusted, shall be provided by the Secretary to the contractor no later than 30 days after receipt of request of contractor. (B) The contract shall require that construction costs or other capitalized costs incurred after the effective date of the contract or not reflected in the rate schedule referenced in subparagraph (A), and properly assignable to such contractor, shall be repaid in not more than 5 years after notification of the allocation if such amount is a result of a collective annual allocation of capital costs to the contractors exercising contract conversation under this subsection of less than $5,000,000. If such amount is $5,000,000 or greater, such cost shall be repaid as provided by applicable reclamation law; and (C) Continue so long as the contractor pays applicable charges, consistent with section 9(c)(1) of the Act of August 4, 1939 (53 Stat. 1195), and applicable law. (4) Conditions All contracts entered into pursuant to paragraphs (1), (2), and (3) shall— (A) not be adjusted on the basis of the type of prepayment financing used by the water users’ association; (B) conform to any other agreements, such as applicable settlement agreements and new constructed appurtenant facilities; and (C) not modify other water service, repayment, exchange and transfer contractual rights between the water users’ association, and the Bureau of Reclamation, or any rights, obligations, or relationships of the water users’ association and their landowners as provided under State law. (b) Accounting The amounts paid pursuant to subsection (a) shall be subject to adjustment following a final cost allocation by the Secretary of the Interior. In the event that the final cost allocation indicates that the costs properly assignable to the contractor are greater than what has been paid by the contractor, the contractor shall be obligated to pay the remaining allocated costs. The term of such additional repayment contract shall be not less than one year and not more than 10 years, however, mutually agreeable provisions regarding the rate of repayment of such amount may be developed by the parties. In the event that the final cost allocation indicates that the costs properly assignable to the contractor are less than what the contractor has paid, the Secretary shall credit such overpayment as an offset against any outstanding or future obligation of the contractor. (c) Applicability of certain provisions (1) Effect of existing law Upon a contractor’s compliance with and discharge of the obligation of repayment of the construction costs pursuant to a contract entered into pursuant to subsection (a)(2)(A), sections 213 (a) and (b) of the Reclamation Reform Act of 1982 (96 Stat. 1269) shall apply to affected lands. (2) Effect of other obligations The obligation of a contractor to repay construction costs or other capitalized costs described in subsections (a)(2)(B), (a)(3)(B) or (b) shall not affect a contractor’s status as having repaid all of the construction costs assignable to the contractor or the applicability of sections 213 (a) and (b) of the Reclamation Reform Act of 1982 (96 Stat. 1269) once the amount required to be paid by the contractor under the repayment contract entered into pursuant to subsection (a)(2)(A) have been paid. (d) Effect on existing law not altered Implementation of the provisions of this Act shall not alter the repayment obligation of any water service or repayment contractor receiving water from the same water project, or shift any costs that would otherwise have been properly assignable to the water users’ association identified in subsections (a)(1), (a)(2), and (a)(3) absent this section, including operation and maintenance costs, construction costs, or other capitalized costs incurred after the date of the enactment of this Act, or to other contractors. (e) Surface water storage enhancement program (1) In general Three years following the date of enactment of this Act, all receipts generated from prepayment of contracts under this section beyond amounts necessary to cover the amount of receipts forgone from scheduled payments under current law for the 10-year period following the date of enactment of this Act shall be directed to the Reclamation Surface Water Storage Account under paragraph (2). (2) Surface storage account The Secretary shall allocate amounts collected under paragraph (1) into the Reclamation Surface Storage Account to fund or provide loans for the construction of surface water storage. The Secretary may also enter into cooperative agreements with water users’ associations for the construction of surface water storage and amounts within the Surface Storage Account may be used to fund such construction. Surface water storage projects that are otherwise not federally authorized shall not be considered Federal facilities as a result of any amounts allocated from the Surface Storage Account for part or all of such facilities. (3) Repayment Amounts used for surface water storage construction from the Account shall be fully reimbursed to the Account consistent with the requirements under Federal reclamation law (the law (the Act of June 17, 1902 (32 Stat. 388, chapter 1093))), and Acts supplemental to and amendatory of that Act ( 43 U.S.C. 371 et seq. ) except that all funds reimbursed shall be deposited in the Account established under paragraph (1). (4) Availability of amounts Amounts deposited in the Account under this subsection shall— (A) be made available in accordance with this section, without further appropriation; and (B) be in addition to amounts appropriated for such purposes under any other provision of law. (5) Purposes of surface water storage Construction of surface water storage under this section shall be made for the following purposes: (A) Increased municipal and industrial water supply. (B) Agricultural floodwater, erosion, and sedimentation reduction. (C) Agricultural drainage improvements. (D) Agricultural irrigation. (E) Increased recreation opportunities. (F) Reduced adverse impacts to fish and wildlife from water storage or diversion projects within watersheds associated with water storage projects funded under this section. (G) Any other purposes consistent with reclamation laws or other Federal law. (f) Definitions For the purposes of this Act, the following definitions apply: (1) Account The term Account means the Reclamation Surface Water Storage Account established under subsection (e)(2). (2) Construction The term construction means the designing, materials engineering and testing, surveying, and building of surface water storage including additions to existing surface water storage and construction of new surface water storage facilities, exclusive of any Federal statutory or regulatory obligations relating to any permit, review, approval, or other such requirement. (3) Surface water storage The term surface water storage means any federally owned facility under the jurisdiction of the Bureau of Reclamation or any non-Federal facility used for the surface storage and supply of water resources. (4) Treasury rate The term Treasury rate means the 20-year Constant Maturity Treasury (CMT) rate published by the United States Department of the Treasury existing on the effective date of the contract. (5) Water users’ association The term water users’ association means— (A) an entity organized and recognized under State laws that is eligible to enter into contracts with reclamation to receive contract water for delivery to and users of the water and to pay applicable charges; and (B) includes a variety of entities with different names and differing functions, such as associations, conservatory district, irrigation district, municipality, and water project contract unit.