A bill providing for the coordinated operation of the Central Valley project and the State water project in California.
PL 99-546 (H.R.3113), enacted 10/27/1986

100 STAT. 3050 
PUBLIC LAW 99-546—OCT. 27, 1986 
Public Law 99-546 
99th Congress 
An Act 
Oct. 27, 1986 
[H.R. 3113] 
Conservation. 
California. 
Water. 
California. 
To implement the Coordinated Operations Agreement, the Suisun Marsh Preserva-
tion Agreement, and to amend the Small Reclamation Projects Act of 1956, as 
amended, and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
ci Y &;>--. 
TITLE I—COORDINATED OPERATIONS 
PROJECT OPERATION POLICY 
SEC. 101. Section 2 of the Act of August 26, 1937 (50 Stat. 850) is 
amended by— 
(a) inserting at the beginning "(a)"; and 
(b) inserting the following new subsection: 
"(b)(1) Unless the Secretary of the Interior determines that oper-
ation of the Central Valley project in conformity with State water 
quality standards for the San Francisco Bay/Sacramento-San Joa-
quin Delta and Estuary is not consistent with the congressional 
directives applicable to the project, the Secretary is authorized and 
directed to operate the project, in conjunction with the State of 
California water project, in conformity with such standards. Should 
the Secretary of the Interior so determine, then the Secretary shall 
promptly request the Attorney General to bring an action in the 
court of proper jurisdiction for the purposes of determining the 
applicability of such standards to the project. 
"(2) The Secretary is further directed to operate the Central 
Valley project, in conjunction with the State water project, so that 
water supplied at the intake of the Contra Costa Canal is of a 
quality equal to the water quality standards contained in the Water 
Right Decision 1485 of the State of California Water Resources 
Control Board, dated August 16, 1978, except under drought emer-
gency water conditions pursuant to a declaration by the Governor of 
California. Nothing in the previous sentence shall authorize or 
require the relocation of the Contra Costa Canal intake.". 
REIMBURSABLE COSTS 
SEC. 102. Section 2 of the Act of August 26, 1937 (50 Stat. 850) is 
amended by inserting the following new subsection: 
"(c)(1) The costs associated with providing Central Valley project 
water supplies for the purpose of salinity control and for complying 
with State water quality standards identified in exhibit A of the 
'Agreement Between the United States of America and the Depart-
ment of Water Resources of the State of California for Coordinated 
Operation of the Central Valley Project and the State Water 
Project' dated May 20, 1985, shall be allocated among the project 
purposes and shall be reimbursed in accordance with existing Rec-
lamation law and policy. The costs of providing water for salinity 
PUBLIC LAW 99-546—OCT. 27, 1986 
100 STAT. 3051 
control and for complying with State water quality standards above 
those standards identified in the previous sentence shall be 
nonreimbursable. 
"(2) The Secretary of the Interior is authorized and directed to 
undertake a cost allocation study of the Central Valley project, 
including the provisions of this Act, and to implement such alloca-
tions no later than January 1,1988.". 
COORDINATED OPERATIONS AGREEMENT 
SEC. 103. Section 2 of the Act of August 26, 1937 (50 Stat. 850) is 
amended by inserting the following new subsection: 
"(d) The Secretary of the Interior is authorized and directed to 
execute and implement the 'Agreement Between the United States 
of America and the Department of Water Resources of the State of 
California for Coordinated Operation of the Central Valley Project 
and the State Water Project' dated May 20, 1985: Provided, T h a t -
'll) the contract with the State of California referred to in 
subarticle 10(h)(1) of the agreement referred to in this subsec-
tion for the conveyance and purchase of Central Valley project 
water shall become final only after an Act of Congress approv-
ing the execution of the contract by the Secretary of the 
Interior; and, 
"(2) the termination provisions of the agreement referred to 
in this subsection may only be exercised if the Secretary of the 
" :
^ Interior or the State of California submits a report to Congress 
and sixty calendar days have elapsed (which sixty days, how-
'' 
ever, shall not include days on which either the House of 
Representatives or the Senate is not in session because of an 
adjournment of more than three days to a day certain) from the 
date on which said report has been submitted to the Speaker of 
the House of Representatives and the President of the Senate 
''* 
for reference to the Committee on Interior and Insular Affairs 
^-'' of the House of Representatives and the Committee on Energy 
and Natural Resources of the Senate. The report must outline 
the reasons for terminating the agreement and, in the case of 
*' the report by the Secretary of the Interior, include the views 
of the Administrator of the Environmental Protection Agency 
' 
and the Governor of the State of California on the Secretary's 
" u decision.". 
Reports. 
REFUGE WATER SUPPLY INVESTIGATION 
SEC. 104. The Secretary of the Interior shall not contract for the 
delivery of more than 75 percent of the firm annual yield of the 
Central Valley project not currently committed under long-term 
contracts until one year after the Secretary has transmitted to the 
Congress a feasibility report, together with his recommendations, on 
the "Refuge Water Supply Investigations, Central Valley Basin, 
California. . 
Reports. 
Contracts. 
ADJUSTMENT OF RATES AND ABIUTY TO PAY 
SEC. 105. The Secretary of the Interior shall include in all new or 
amended contracts for the delivery of water from the Central Valley 
project a provision providing for the automatic adjustment of rates 
by the Secretary of the Interior if it is found that the rate in effect 
Contracts. 
Securities. 
100 STAT. 3052 
PUBLIC LAW 99-546—OCT. 27, 1986 
may not be adequate to recover the appropriate share of the existing 
Federal investment in the project by the year 2030. The contracts 
shall also include a provision authorizing the Secretary of the 
Interior to adjust determinations of ability to pay every five years. 
OPERATION AND MAINTENANCE DEFICITS 
Contracts. 
SEC. 106. The Secretary of the Interior shall include in each new 
or amended contract for the delivery of water from the Central 
Valley project provisions ensuring that any annual deficit (outstand-
ing or hereafter arising) incurred by a Central Valley project water 
contractor in the payment of operation and maintenance costs of the 
Central Valley project is repaid by such contractor under the terms 
of such new or amended contract, together with interest on any such 
deficit which arises on or after October 1, 1985, at a rate equal to the 
average market yields on outstanding marketable obligations of the 
United States with remaining periods to maturity comparable to 
the applicable reimbursement period of the project, adjusted to the 
nearest one-eighth of 1 percent. 
, TITLE II—SUISUN MARSH PRESERVATION AGREEMENT 
xJ 
AUTHORITY TO ENTER AGREEMENT 
SEC. 201. The Secretary of the Interior is authorized to execute 
and implement the agreement between the Department of the 
Interior, the State of California and the Suisun Resources Conserva-
tion District (dated November 1, 1985). 
;v 
COST-SHARING PROVISIONS 
SEC. 202. The costs of implementing the agreement provided in 
section 201 of this title shall be shared by the Bureau of Reclama-
tion and the California Department of Water Resources in strict 
accordance with article 12 of that agreement: Provided, That— 
(a) payments made by the Secretary of the Interior shall not 
exceed 40 percent of the construction costs incurred under 
articles 6, 7, and 8 of the agreement, or $50,000,000, whichever 
is less, plus or minus such amounts as are justified by reason of 
ordinary fluctuations in construction costs as indicated by 
engineering cost indices applicable to the types of construction 
involved therein; 
•'•' " 
- 
(b) the Federal share of continuing annual operation and 
' ' ' 
maintenance costs, including monitoring, shall not exceed 40 
• 
percent of the actual operation and maintenance costs; and, 
'3 
(c) the costs incurred by the United States for construction 
"
5 
and for annual operation and maintenance in connection with 
t' 
the implementation of said agreement shall constitute an 
integral part of the cost of the Central Valley project. The 
Secretary shall allocate such costs to the reimbursable and 
nonreimbursable purposes served by the project. 
COSTS INCURRED 
SEC. 203. Costs incurred both before and after the date of execu-
tion of the agreement herein authorized are to be included in the 
PUBLIC LAW 99-546—OCT. 27, 1986 
100 STAT. 3053 
total for determining the Federal share of construction, operation, 
and maintenance costs. 
AUTHORIZATION OF APPROPRIATIONS 
SEC. 204. There are authorized to be appropriated for the im-
plementation of the agreement referred to in Section 201 of this title 
$50,000,000 plus or minus such amounts, if any, as may be justified 
by reason of ordinary fluctuations in construction costs as indicated 
by engineering cost indices applicable to the types of construction 
involved therein and, in addition thereto, in accordance with subsec-
tion 201(b) of this title, such sums as may be required for operation 
and maintenance: Provided, That no Federal funds may be expended 
pursuant to this title in advance of appropriations therefor: Pro-
vided further, 
That appropriations pursuant to this title shall 
remain available until expended without any fiscal year limitation. 
TITLE III—SMALL RECLAMATION PROJECTS ACT 
REFERENCE TO SMALL PROJECTS ACT 
SEC. 301. As used in this title, the term "the Act" means the Small 
Reclamation Projects Act of 1956, as amended (43 U.S.C. 422a et 
seq.). 
REHABILITATION AND BETTERMENT 
SEC. 302. Section 1 of the Act is amended by inserting after the 
word "laws" ", with emphasis on rehabilitation and betterment of 
existing projects for purposes of significant conservation of water, 
energy and the environment and for purpose of water quality 
control,". 
FILING F E E 
SEC. 303. The second sentence of section 3 of the Act is amended 
by striking "$1,000" and inserting in lieu thereof "$5,000". 
Energy. 
Environmental 
protection. 
43 u s e 422a. 
43 u s e 422c. 
COST SHARING 
SEC. 304. (a) Section 4(b) of the Act is amended by inserting "(1)" 
after (h) and by striking "by loan and grant under this Act" and 
inserting in lieu thereof "by loan and grant of Federal funds". 
(b) Section 4(b) of the Act is amended by adding the following new 
paragraph at the end thereof: 
"(2) The Secretary shall require each organization to contribute 
toward the cost of the project (other than by loan and/or grant of 
Federal funds) an amount equal to 25 percent or more of the 
allowable estimated cost of the project: Provided, That the Secretary, 
at his discretion, may reduce the amount of such contribution to the 
extent that he determines that the organization is unable to secure 
financing from other sources under reasonable terms and condi-
tions, and shall include letters from lenders or other written evi-
dence in support of any funding of an applicant's inability to secure 
such financing in any project proposal transmitted to the Congress: 
Provided further. That under no circumstances shall the Secretary 
reduce the amount of such contribution to less than 10 percent of 
the allowable estimated total project costs. In determining the 
amount of the contribution as required by this paragraph, the 
Loans. 
Grants. 
43 u s e 422d. 
Gifts and 
property. 
100 STAT. 3054 
PUBLIC LAW 99-546—OCT. 27, 1986 
Ante, p. 3053. 
Infra. 
Secretary shall credit toward that amount the cost of investigations, 
surveys, engineering, and other services necessary to the prepara-
tion of proposals and plans for the project as required by the 
Secretary, and the costs of lands and rights-of-way required for the 
project, and the $5,000 fee described in section 3 of this Act. In 
determining the allowable estimated cost of the project, the Sec-
retary shall not include the amount of grants accorded to the 
organization under section SO?).". 
Agriculture and 
agricultural 
commodities. 
43 u s e 422d. 
SOIL SURVEY 
= 
V. 
, V, 
SEC. 305. Section 4(c) of the Act is amended by inserting the 
following after the first sentence: "Each project proposal transmit-
ted by the Secretary to the Congress shall include a certification by 
the Secretary that an adequate soil survey and land classification 
has been made, or that the successful irrigability of those lands and 
their susceptibility to sustained production of agricultural crops by 
means of irrigation has been demonstrated in practice. Such pro-
posal shall also include an investigation of soil characteristics which 
might result in toxic or heizardous irrigation return flows.". 
Fish and fishing. 
Wildlife. 
Flood control. 
43 u s e 422e. 
"^H'; ^'•• 
U-
COMPATIBILITY WITH CROPS PROJECTS 
SEC. 306. Section 50^) of the Act is amended by striking everything 
after the words "joint use facilities properly allocable to fish and 
wildlife enhancement or public recreation;" and substituting the 
following in lieu thereof: 
"(5) that portion of the estimated cost of constructing the 
'••'_ project which, if it were constructed as a Federal reclamation 
>' project, would be properly allocable to functions, other than 
recreation and fish and wildlife enhancement and flood control, 
which are nonreimbursable under general provisions of law 
applicable to such projects; and (6) that portion of the estimated 
hyi cost of constructing the project which is allocable to flood 
control and which would be nonreimbursable under general 
provisions of law applicable to projects constructed by the 
Secretary of the Army.". 
43 u s e 422e. 
Loans, 
eontracts. 
43 u s e 390bb. 
Energy. 
Fish and fishing. 
Wildlife. 
REPAYMENT AND INTEREST 
SEC. 307. (a) Section 5(cXl) of the Act is amended by striking 
"fifty" and inserting in lieu thereof "forty". 
(b) Section 5(c)(2) of the Act is amended to read as follows: 
"interest, as determined by the Secretary of the Treasury, as of the 
beginning of the fiscal year in which the contract is executed, on the 
bsisis of the average market yields on outstanding marketable 
obligations of the United States with remaining periods of maturity 
comparable to the applicable reimbursement period of the project, 
adjusted to the nearest one-eighth of 1 percent on the unamortized 
balance of any portion of the loan— 
-i> 
"(A) which is attributable to furnishing irrigation benefits in 
"""' each particular year to land held in private ownership by a 
qualified recipient or by a limited recipient, as such terms are 
defined in section 202 of the Reclamation Reform Act of 1982, in 
excess of three hundred and twenty irrigable acres; or, 
"(B) which is allocated to domestic, industrial, or municipal 
water supply, commercial power, fish and wildlife enhance-
PUBLIC LAW 99-546-OCT. 27, 1986 
100 STAT. 3055 
ment, or public recreation except that portion of such allocation 
attributable to furnishing benefits to a facility operated by an 
agency of the United States, which portion shall bear no 
interest.", 
(c) The remainder of section 5(c) of the Act is stricken in its 
entirety. 
FISH AND WILDUFE FUNDING 
"SEC. 308. Section 8 of the Act is amended by adding at the end 
thereof the following sentence: "The Secretary shall transfer to the 
Fish and Wildlife Service or to the National Marine Fisheries 
Service, out of appropriations or other funds made available under 
this Act, such funds as may be necessary to conduct the investiga-
tions required to carry out the purposes of this section.". 
43 u s e 422h. 
., 
, 
AUTHORIZATION AND UMITATION 
SEC. 309. (a) Section 10 of the Act is amended in the, first sentence 
by inserting before ": Provided" "and, effective October 1, 1986, not 
to exceed an additional $600,000,000". 
(b) Section 10 of the Act is further amended by adding at the end 
thereof the following: "Not more than 20 percent of the total 
amount of additional funds authorized to be appropriated effective 
October 1, 1986, for loans and grants pursuant to this Act shall be 
for projects in any single State: Provided, That beginning five years 
after the date of enactment of this Act, the Secretary is authorized 
to waive the 20 percent limitation for loans and grants which meet 
the purposes set forth in section 1 of this Act: Provided further, That 
the decision of the Secretary to waive the limitation shall be submit-
ted to the Congress together with the project proposal pursuant to 
section 4(c) of this Act and shall become effective only if the 
Congress has not, within 60 legislative days, passed a joint resolu-
tion of disapproval for such a waiver.". 
Effective date. 
43 u s e 422j. 
Loans. 
Grants. 
Ante, p. 3053. 
Ante, p. 3054. 
,, 
,/ 
TRANSITION RULES 
SEC. 310, The provisions of Sections 303 and 308 of this title shall 
take effect upon enactment of this title. The provisions of sections 
304(a) and 305 of this title shall be applicable to all proposals for 
which final applications are received by the Secretary after Janu-
ary 1, 1986. The provisions of Sections 302, 304(b), 306, and 307 shall 
be applicable to all proposals for which draft applications are re-
ceived by the Secretary after Auguest 15,1986. 
Effective date. 
43 u s e 422a 
note. 
SURPLUS CROPS REPORT 
SEC. 311. The Secretary of the Interior and the Secretary of 
Agriculture shall review the effect of the Small Reclamation 
Projects Act of 1956, as amended, on the operation and objectives of 
the programs of the Department of Agriculture dealing with the 
production of surplus commodities as determined by the Secretary 
of Agriculture pursuant to the Agriculture Act of 1949, as amended, 
and shall jointly submit a report of their findings to the Committee 
on Energy and Natural Resources and the Committee on Agri-
culture, Nutrition and Forestry of the Senate and the Committee on 
Interior and Insular Affairs and the Committee on Agriculture of 
the House of Representatives no later than 120 days from the date of 
43 u s e 422a et 
seq. 
7 u s e 1421 note. 
ifc'~'*'8s^ 
> . 
100 STAT. 3056 
PUBLIC LAW 99-546—OCT. 27, 1986 
enactment of this Act together with their recommendations, if any, 
for any changes to either or both programs to better achieve the 
objectives of such programs. 
m 
TITLE IV—VALIDATION OF CONTRACTS 
; . 
-
Dams. 
SEC. 401. The Federal Power Act (Act of June 10, 1920, 41 Stat. 
1063; 16 U.S.C. 791a et seq., and Acts amendatory thereof and 
supplementary thereto) is amended in section 10(e) (16 U.S.C. 803(e)) 
by deleting "Commission." and inserting in lieu thereof: "Commis-
sion: Provided however, That no charge shall be assessed for the use 
of any Government dam or structure by any licensee if, before 
January 1, 1985, the Secretary of the Interior has entered into a 
contract with such licensee that meets each of the following require-
ments: 
"(A) The contract covers one or more projects for which a 
license was issued by the Commission before January 1, 1985. 
Energy. 
"(B) The contract contains provisions specifically providing 
each of the following: 
4 
"(i) A powerplant may be built by the licensee utilizing 
* . ' 
irrigation facilities constructed by the United States. 
"(ii) The powerplant shall remain in the exclusive con-
i 
trol, possession, and ownership of the licensee concerned. 
•»!« 
"(iii) All revenue from the powerplant and from the use, 
sale, or disposal of electric energy from the powerplant 
shall be, and remain, the property of such licensee. 
' 
' 
"(C) The contract is an amendatory, supplemental and 
replacement contract between the United States and: (i) the 
Quincy-Columbia Basin Irrigation District (Contract No. 14-06-
100-6418); (ii) the East Columbia Basin Irrigation District (Con-
tract No. 14-06-100-6419); or, (iii) the South Columbia Basin 
Irrigation District (Contract No. 14-06-100-6420). 
This paragraph shall apply to any project covered by a contract 
referred to in this paragraph only during the term of such contract 
, ,„ 
unless otherwise provided by subsequent Act of Congress.". 
, 
Approved October 27, 1986. 
LEGISLATIVE HISTORY—H.R. 3113: 
HOUSE REPORTS: No. 99-257 (Comm. on Interior and Insular Affairs) and No. 
99-991 (Comm. of Conference). 
SENATE REPORTS: No. 99-265 (Comm. on Energy and Natural Resources). 
CONGRESSIONAL RECORD: 
Vol. 131 (1985): Sept. 9, considered and passed House. 
Vol. 132 (1986): July 16, considered and passed Senate, amended. 
Oct. 14, House agreed to conference report. 
Oct. 15, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 22 (1986): 
Oct. 27, Presidential statement.