109th CONGRESS
1st Session
H. R. 4418
To direct the Secretary of the Interior to establish a rural water
supply program in the Reclamation States to provide a clean, safe, affordable,
and reliable water supply to rural residents.
IN THE HOUSE OF REPRESENTATIVES
November 18, 2005
Mr. PEARCE introduced the following bill; which was referred to the Committee
on Resources
A BILL
To direct the Secretary of the Interior to establish a rural water
supply program in the Reclamation States to provide a clean, safe, affordable,
and reliable water supply to rural residents.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Rural Water Supply Act of
2005'.
(b) Table of Contents- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--RECLAMATION RURAL WATER SUPPLY ACT OF 2005
Sec. 103. Rural water supply program.
Sec. 104. Rural water programs assessment.
Sec. 105. Appraisal investigations.
Sec. 106. Feasibility studies.
Sec. 108. Authorization of appropriations.
TITLE II--TWENTY-FIRST CENTURY WATER WORKS ACT
Sec. 203. Project eligibility.
Sec. 204. Loan guarantees.
Sec. 205. Operations, maintenance, and replacement costs.
Sec. 206. Title to newly constructed facilities.
Sec. 208. Interagency coordination and cooperation.
Sec. 209. Authorization of appropriations.
TITLE I--RECLAMATION RURAL WATER SUPPLY ACT OF 2005
SEC. 101. SHORT TITLE.
This title may be cited as the `Reclamation Rural Water Supply Act of 2005'.
SEC. 102. DEFINITIONS.
(1) CONSTRUCTION- The term `construction' means the installation of new
infrastructure and the upgrading of existing facilities in locations in
which the infrastructure or facilities are associated with the new infrastructure
of a rural water project recommended by the Secretary pursuant to this
title.
(2) FEDERAL RECLAMATION LAW- The term `Federal reclamation law' means
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.).
(3) INDIAN- The term `Indian' means an individual who is a member of an
Indian tribe.
(4) INDIAN TRIBE- The term `Indian tribe' has the meaning given the term
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
(5) NON-FEDERAL PROJECT ENTITY- The term `non-Federal project entity'
means a State, regional, or local authority, Indian tribe or tribal organization,
or other qualifying entity, such as a water conservation district, water
conservancy district, or rural water district or association.
(6) OPERATIONS, MAINTENANCE, AND REPLACEMENT COSTS-
(A) IN GENERAL- The term `operations, maintenance, and replacement costs'
means all costs for the operation of a rural water supply project that
are necessary for the safe, efficient, and continued functioning of
the project to produce the benefits described in a feasibility study.
(B) INCLUSIONS- The term `operations, maintenance, and replacement costs'
includes--
(i) repairs of a routine nature that maintain a rural water supply
project in a well kept condition;
(ii) replacement of worn-out project elements; and
(iii) rehabilitation activities necessary to bring a deteriorated
project back to the original condition of the project.
(C) EXCLUSION- The term `operations, maintenance, and replacement costs'
does not include construction costs.
(7) PROGRAM- The term `Program' means the rural water supply program established
under section 103.
(8) RECLAMATION STATES- The term `Reclamation States' means the States
and areas referred to in the first section of the Act of June 17, 1902
(43 U.S.C. 391).
(9) RURAL WATER SUPPLY PROJECT-
(A) IN GENERAL- The term `rural water supply project' means a project
that is designed to serve a community or group of communities, each
of which has a population of not more than 50,000 inhabitants, which
may include Indian tribes and tribal organizations, dispersed homesites,
or rural areas with domestic, industrial, municipal, and residential
water.
(B) INCLUSION- The term `rural water supply project' includes--
(i) incidental noncommercial livestock watering and noncommercial
irrigation of vegetation and small gardens of less than 1 acre; and
(ii) a project to improve rural water infrastructure, including--
(I) pumps, pipes, wells, and other diversions;
(II) storage tanks and small impoundments;
(III) water treatment facilities for potable water supplies, including
desalination facilities;
(IV) equipment and management tools for water conservation, groundwater
recovery, and water recycling; and
(C) EXCLUSION- The term `rural water supply project' does not include--
(i) commercial irrigation; or
(ii) major impoundment structures.
(10) SECRETARY- The term `Secretary' means the Secretary of the Interior.
(11) TRIBAL ORGANIZATION- The term `tribal organization' means--
(A) the recognized governing body of an Indian tribe; and
(B) any legally established organization of Indians that is controlled,
sanctioned, or chartered by the governing body or democratically elected
by the adult members of the Indian community to be served by the organization.
SEC. 103. RURAL WATER SUPPLY PROGRAM.
(a) In General- The Secretary, in cooperation with non-Federal project entities
and consistent with this title, shall establish and carry out a rural water
supply program in Reclamation States to--
(1) investigate and identify opportunities to ensure safe and adequate
rural water supply projects for domestic, municipal, and industrial use
in small communities and rural areas of the Reclamation States;
(2) plan the design and construction, through the conduct of appraisal
investigations and feasibility studies, of rural water supply projects
in Reclamation States; and
(3) oversee, as appropriate, the construction of rural water supply projects
in Reclamation States that are recommended by the Secretary in a feasibility
report developed pursuant to section 106 and subsequently authorized by
Congress.
(b) Non-Federal Project Entity- Any activity carried out under this title
shall be carried out in cooperation with a qualifying non-Federal project
entity, consistent with this title.
(c) Eligibility Criteria- Not later than 1 year after the date of enactment
of this Act, the Secretary shall, consistent with this title, develop and
publish in the Federal Register criteria for--
(1) determining the eligibility of a rural community for assistance under
the Program; and
(2) prioritizing requests for assistance under the Program.
(d) Factors- The criteria developed under subsection (c) shall take into
account such factors as whether--
(1) a rural water supply project--
(i) rural areas and small communities; or
(B) promotes and applies a regional or watershed perspective to water
resources management;
(2) there is an urgent and compelling need for a rural water supply project
that would--
(A) improve the health or aesthetic quality of water;
(B) result in continuous, measurable, and significant water quality
benefits; or
(C) address current or future water supply needs;
(3) a rural water supply project helps meet applicable requirements established
by law; and
(4) a rural water supply project is cost effective.
(e) Inclusions- The Secretary may include--
(1) to the extent that connection provides a reliable water supply, a
connection to preexisting infrastructure (including impoundments and conveyance
channels) as part of a rural water supply project; and
(2) notwithstanding the limitation on population under section 102(9)(A),
a town or community with a population in excess of 50,000 inhabitants
in an area served by a rural water supply project if, at the discretion
of the Secretary, the town or community is considered to be a critical
partner in the rural supply project.
SEC. 104. RURAL WATER PROGRAMS ASSESSMENT.
(a) In General- In consultation with the Secretary of Agriculture, the Administrator
of the Environmental Protection Agency, the Director of the Indian Health
Service, the Secretary of Housing and Urban Development, and the Secretary
of the Army, the Secretary shall develop an assessment of--
(1) the status of all rural water supply projects under the jurisdiction
of the Secretary authorized but not completed prior to the date of enactment
of this Act, including appropriation amounts, the phase of development,
total anticipated costs, and obstacles to completion;
(2) the current plan (including projected financial and workforce requirements)
for the completion of the projects identified in paragraph (1) within
the time frames established under the provisions of law authorizing the
projects or the final engineering reports for the projects;
(3) the demand for new rural water supply projects;
(4) rural water programs within other agencies and a description of the
extent to which those programs provide support for rural water supply
projects and water treatment programs in Reclamation States, including
an assessment of the requirements, funding levels, and conditions of eligibility
for the programs assessed;
(5) the extent of the demand that the Secretary can meet with the Program;
(6) how the Program will complement authorities already within the jurisdiction
of the Secretary and the heads of the agencies with whom the Secretary
consults; and
(7) improvements that can be made to coordinate and integrate the authorities
of the agencies with programs evaluated under paragraph (4), including
any recommendations to consolidate some or all of the activities of the
agencies with respect to rural water supply.
(b) Consultation With States- Before finalizing the assessment developed
under subsection (a), the Secretary shall solicit comments from States with
identified rural water needs.
(c) Report- Not later than 2 years after the date of enactment of this Act,
the Secretary shall submit to the Committee on Energy and Natural Resources
of the Senate and the Committee on Resources of the House of Representatives
a detailed report on the assessment conducted under subsection (a).
SEC. 105. APPRAISAL INVESTIGATIONS.
(a) In General- On request of a non-Federal project entity with respect
to a proposed rural water supply project that meets the eligibility criteria
published under section 103(c) and subject to the availability of appropriations,
the Secretary may--
(1) receive and review an appraisal investigation that is--
(A) developed by the non-Federal project entity, with or without support
from the Secretary; and
(B) submitted to the Secretary by the non-Federal project entity;
(2) conduct an appraisal investigation; or
(3) provide a grant to, or enter into a cooperative agreement with, the
non-Federal project entity to conduct an appraisal investigation, if the
Secretary determines that--
(A) the non-Federal project entity is qualified to complete the appraisal
investigation in accordance with the criteria published under section
103(c); and
(B) using the non-Federal project entity to conduct the appraisal investigation
is a cost-effective alternative for completing the appraisal investigation.
(b) Deadline- An appraisal investigation conducted under subsection (a)
shall be scheduled for completion not later than 2 years after the date
on which the appraisal investigation is initiated.
(c) Appraisal Report- In accordance with subsection (f), after an appraisal
investigation is submitted to the Secretary under subsection (a)(1) or completed
under paragraph (2) or (3) of subsection (a), the Secretary shall prepare
an appraisal report that--
(A) whether the project meets--
(i) the appraisal criteria developed under subsection (d); and
(ii) the eligibility criteria developed under section 103(c);
(B) whether viable water supplies and water rights exist to supply the
project, including all practicable water sources such as lower quality
waters, nonpotable waters, and water reuse-based water supplies;
(C) whether the project has a positive effect on public health and safety;
(D) whether the project will meet water demand, including projected
future needs;
(E) the extent to which the project provides environmental benefits,
including source water protection;
(F) whether the project applies a regional or watershed perspective
and promotes benefits in the region in which the project is carried
out;
(G) whether the project--
(i)(I) implements an integrated resources management approach; or
(II) enhances water management flexibility, including providing for--
(aa) local control to manage water supplies under varying water
supply conditions; and
(bb) participation in water banking and markets for domestic and
environmental purposes; and
(ii) promotes long-term protection of water supplies;
(H) preliminary cost estimates for the project; and
(I) whether the non-Federal project entity has the capability to pay
100 percent of the costs associated with the operations, maintenance,
and replacement of the facilities constructed or developed as part of
the rural water supply project; and
(2) provides recommendations on whether a feasibility study should be
initiated under section 106(a).
(1) IN GENERAL- Not later than 1 year after the date of enactment of this
Act, the Secretary shall promulgate criteria (including appraisal factors
listed under subsection (c)) against which the appraisal investigations
shall be assessed for completeness and appropriateness for a feasibility
study.
(2) INCLUSIONS- To minimize the cost of a rural water supply project to
a non-Federal project entity, the Secretary shall include in the criteria
methods to scale the level of effort needed to complete the appraisal
investigation relative to the total size and cost of the proposed rural
water supply project.
(e) Review of Appraisal Investigation-
(1) IN GENERAL- Not later than 90 days after the date of submission of
an appraisal investigation under paragraph (1) or (3) of subsection (a),
the Secretary shall provide to the non-Federal entity that conducted the
investigation a determination of whether the investigation has included
the information necessary to determine whether the proposed rural water
supply project satisfies the criteria promulgated under subsection (d).
(2) NO SATISFACTION OF CRITERIA- If the Secretary determines that the
appraisal investigation submitted by a non-Federal entity does not satisfy
the criteria promulgated under subsection (d), the Secretary shall inform
the non-Federal entity of the reasons why the appraisal investigation
is deficient.
(3) RESPONSIBILITY OF SECRETARY- If an appraisal investigation as first
submitted by a non-Federal entity does not provide all necessary information,
as defined by the Secretary, the Secretary shall have no obligation to
conduct further analysis until the non-Federal project entity submitting
the appraisal study conducts additional investigation and resubmits the
appraisal investigation under this subsection.
(f) Appraisal Report- Once the Secretary has determined that an investigation
provides the information necessary under subsection (e), the Secretary shall--
(1) complete the appraisal report required under subsection (c);
(2) make available to the public, on request, the appraisal report prepared
under this title; and
(3) promptly publish in the Federal Register a notice of the availability
of the results.
(1) FEDERAL SHARE- The Federal share of an appraisal investigation conducted
under subsection (a) shall be 100 percent of the total cost of the appraisal
investigation, up to $200,000.
(A) IN GENERAL- Except as provided in subparagraph (B), if the cost
of conducting an appraisal investigation is more than $200,000, the
non-Federal share of the costs in excess of $200,000 shall be 50 percent.
(B) EXCEPTION- The Secretary may reduce the non-Federal share required
under subparagraph (A) if the Secretary determines that there is an
overwhelming Federal interest in the appraisal investigation.
(C) FORM- The non-Federal share under subparagraph (A) may be in the
form of any in-kind services that the Secretary determines would contribute
substantially toward the conduct and completion of the appraisal investigation.
(h) Consultation; Identification of Funding Sources- In conducting an appraisal
investigation under subsection (a)(2), the Secretary shall--
(1) consult and cooperate with the non-Federal project entity and appropriate
State, tribal, regional, and local authorities;
(2) consult with the heads of appropriate Federal agencies to--
(A) ensure that the proposed rural water supply project does not duplicate
a project carried out under the authority of the agency head; and
(B) if a duplicate project is being carried out, identify the authority
under which the duplicate project is being carried out; and
(3) identify what funding sources are available for the proposed rural
water supply project.
SEC. 106. FEASIBILITY STUDIES.
(a) In General- On completion of an appraisal report under section 105(c)
that recommends undertaking a feasibility study and subject to the availability
of appropriations, the Secretary shall--
(1) in cooperation with a non-Federal project entity, carry out a study
to determine the feasibility of the proposed rural water supply project;
(2) receive and review a feasibility study that is--
(A) developed by the non-Federal project entity, with or without support
from the Secretary; and
(B) submitted to the Secretary by the non-Federal project entity; or
(3) provide a grant to, or enter into a cooperative agreement with, a
non-Federal project entity to conduct a feasibility study, for submission
to the Secretary, if the Secretary determines that--
(A) the non-Federal entity is qualified to complete the feasibility
study in accordance with the criteria promulgated under subsection (d);
and
(B) using the non-Federal project entity to conduct the feasibility
study is a cost-effective alternative for completing the appraisal investigation.
(b) Review of Non-Federal Feasibility Studies-
(1) IN GENERAL- In conducting a review of a feasibility study submitted
under paragraph (2) or (3) of subsection (a), the Secretary shall--
(A) in accordance with the feasibility factors described in subsection
(c) and the criteria promulgated under subsection (d), assess the completeness
of the feasibility study; and
(B) if the Secretary determines that a feasibility study is not complete,
notify the non-Federal entity of the determination.
(2) REVISIONS- If the Secretary determines under paragraph (1)(B) that
a feasibility study is not complete, the non-Federal entity shall pay
any costs associated with revising the feasibility study.
(c) Feasibility Factors- Feasibility studies authorized or reviewed under
this title shall include an assessment of--
(1) near- and long-term water demand in the area to be served by the rural
water supply project;
(2) advancement of public health and safety of any existing rural water
supply project and other benefits of the proposed rural water supply project;
(3) alternative new water supplies in the study area, including any opportunities
to treat and use low-quality water, nonpotable water, water reuse-based
supplies, and brackish and saline waters through innovative and economically
viable treatment technologies;
(4) environmental quality and source water protection issues related to
the rural water supply project;
(5) innovative opportunities for water conservation in the study area
to reduce water use and water system costs, including--
(A) nonstructural approaches to reduce the need for the project; and
(B) demonstration technologies;
(6) the extent to which the project and alternatives take advantage of
economic incentives and the use of market-based mechanisms;
(7)(A) the construction costs and projected operations, maintenance, and
replacement costs of all alternatives; and
(B) the economic feasibility and lowest cost method of obtaining the desired
results of each alternative, taking into account the Federal cost-share;
(8) the availability of guaranteed loans for a proposed rural water supply
project;
(9) the financial capability of the non-Federal project entity to pay
the non-Federal project entity's proportionate share of the design and
construction costs and 100 percent of operations, maintenance, and replacement
costs, including the allocation of costs to each non-Federal project entity
in the case of multiple entities;
(10) whether the non-Federal project entity has developed an operations,
management, and replacement plan to assist the non-Federal project entity
in establishing rates and fees for beneficiaries of the rural water supply
project that includes a schedule identifying the annual operations, maintenance,
and replacement costs that should be allocated to each non-Federal entity
participating in the project;
(11)(A) the non-Federal project entity administrative organization that
would implement construction, operations, maintenance, and replacement
activities; and
(B) the fiscal, administrative, and operational controls to be implemented
to manage the project;
(12) the extent to which assistance for rural water supply is available
under other Federal authorities;
(13) the engineering, environmental, and economic activities to be undertaken
to carry out the proposed rural water supply project;
(14) the extent to which the project involves partnerships with other
State, local, or tribal governments or Federal entities; and
(15) in the case of a project intended for Indian tribes and tribal organizations,
the extent to which the project addresses the goal of economic self-sufficiency.
(d) Feasibility Study Criteria-
(1) IN GENERAL- Not later than 18 months after the date of enactment of
this Act, the Secretary shall promulgate criteria (including the feasibility
factors listed under subsection (c)) under which the feasibility studies
shall be assessed for completeness and appropriateness.
(2) INCLUSIONS- The Secretary shall include in the criteria promulgated
under paragraph (1) methods to scale the level of effort needed to complete
the feasibility assessment relative to the total size and cost of the
proposed rural water supply project and reduce total costs to non-Federal
entities.
(1) IN GENERAL- After completion of appropriate feasibility studies for
rural water supply projects that address the factors described in subsection
(c) and the criteria promulgated under subsection (d), the Secretary shall--
(A) develop a feasibility report that includes--
(i) a recommendation of the Secretary on--
(I) whether the rural water supply project should be authorized
for construction; and
(II) the appropriate non-Federal share of construction costs, which
shall be--
(aa) at least 25 percent of the total construction costs; and
(bb) determined based on an analysis of the capability-to-pay
information considered under subsections (c)(9) and (f); and
(ii) if the Secretary recommends that the project should be authorized
for construction--
(I) what amount of grants, loan guarantees, or combination of grants
and loan guarantees should be used to provide the Federal cost share;
(II) a schedule that identifies the annual operations, maintenance,
and replacement costs that should be allocated to each non-Federal
entity participating in the rural water supply project; and
(III) an assessment of the financial capability of each non-Federal
entity participating in the rural water supply project to pay the
allocated annual operation, maintenance, and replacement costs for
the rural water supply project;
(B) submit the report to the Committee on Energy and Natural Resources
of the Senate and the Committee on Resources of the House of Representatives;
(C) make the report publicly available, along with associated study
documents; and
(D) publish in the Federal Register a notice of the availability of
the results.
(1) IN GENERAL- In evaluating a proposed rural water supply project under
this section, the Secretary shall--
(A) consider the financial capability of any non-Federal project entities
participating in the rural water supply project to pay 25 percent or
more of the capital construction costs of the rural water supply project;
and
(B) recommend an appropriate Federal share and non-Federal share of
the capital construction costs, as determined by the Secretary.
(2) FACTORS- In determining the financial capability of non-Federal project
entities to pay for a rural water supply project under paragraph (1),
the Secretary shall evaluate factors for the project area, relative to
the State average, including--
(B) median household income;
(D) the ability of the non-Federal project entity to raise tax revenues
or assess fees;
(E) the strength of the balance sheet of the non-Federal project entity;
and
(F) the existing cost of water in the region.
(3) INDIAN TRIBES- In determining the capability-to-pay of Indian tribe
project beneficiaries, the Secretary may consider deferring the collection
of all or part of the non-Federal construction costs apportioned to Indian
tribe project beneficiaries unless or until the Secretary determines that
the Indian tribe project beneficiaries should pay--
(A) the costs allocated to the beneficiaries; or
(B) an appropriate portion of the costs.
(g) Cost-Sharing Requirement-
(1) IN GENERAL- Except as otherwise provided in this subsection, the Federal
share of the cost of a feasibility study carried out under this section
shall not exceed 50 percent of the study costs.
(2) FORM- The non-Federal share under paragraph (1) may be in the form
of any in-kind services that the Secretary determines would contribute
substantially toward the conduct and completion of the study.
(3) FINANCIAL HARDSHIP- The Secretary may increase the Federal share of
the costs of a feasibility study if the Secretary determines, based on
a demonstration of financial hardship, that the non-Federal participant
is unable to contribute at least 50 percent of the costs of the study.
(4) LARGER COMMUNITIES- In conducting a feasibility study of a rural water
supply system that includes a community with a population in excess of
50,000 inhabitants, the Secretary may require the non-Federal project
entity to pay more than 50 percent of the costs of the study.
(h) Consultation and Cooperation- In addition to the non-Federal project
entity, the Secretary shall consult and cooperate with appropriate Federal,
State, tribal, regional, and local authorities during the conduct of each
feasibility assessment and development of the feasibility report conducted
under this title.
SEC. 107. MISCELLANEOUS.
(a) Authority of Secretary- The Secretary may enter into contracts, financial
assistance agreements, and such other agreements, and promulgate such regulations,
as are necessary to carry out this title.
(b) Transfer of Projects- Nothing in this title authorizes the transfer
of pre-existing facilities or pre-existing components of any water system
from Federal to private ownership or from private to Federal ownership.
(c) Federal Reclamation Law- Nothing in this title supersedes or amends
any Federal law associated with a project, or portion of a project, constructed
under Federal reclamation law.
(d) Interagency Coordination- The Secretary shall coordinate the Program
carried out under this title with existing Federal and State rural water
and wastewater programs to facilitate the most efficient and effective solution
to meeting the water needs of the non-Federal project sponsors.
(e) Multiple Indian Tribes- In any case in which a contract is entered into
with, or a grant is made, to an organization to perform services benefitting
more than 1 Indian tribe under this title, the approval of each such Indian
tribe shall be a prerequisite to entering into the contract or making the
grant.
(f) Ownership of Facilities- Title to any facility planned, designed, and
recommended for construction under this title shall be held by the non-Federal
project entity.
(g) Expedited Procedures- If the Secretary determines that a community to
be served by a proposed rural water supply project has urgent and compelling
water needs, the Secretary shall, to the maximum extent practicable, expedite
appraisal investigations and reports conducted under section 105 and feasibility
studies and reports conducted under section 106.
(h) Effect on State Water Law-
(1) IN GENERAL- Nothing in this title preempts or affects State water
law or an interstate compact governing water.
(2) COMPLIANCE REQUIRED- The Secretary shall comply with State water laws
in carrying out this title.
(i) No Additional Requirements- Nothing in this title requires a feasibility
study for, or imposes any other additional requirements with respect to,
rural water supply projects or programs that are authorized before the date
of enactment of this Act.
SEC. 108. AUTHORIZATION OF APPROPRIATIONS.
(a) In General- There is authorized to be appropriated to carry out this
title $20,000,000 for the period of fiscal years 2006 through 2015, to remain
available until expended.
(b) Rural Water Programs Assessment- Of the amounts made available under
subsection (a), not more than $1,000,000 may be made available to carry
out section 104 for each of fiscal years 2006 and 2007.
(c) Limitation- No amounts made available under this section shall be used
to pay construction costs associated with any rural water supply project.
TITLE II--TWENTY-FIRST CENTURY WATER WORKS ACT
SEC. 201. SHORT TITLE.
This title may be cited as the `Twenty-First Century Water Works Act'.
SEC. 202. DEFINITIONS.
(1) INDIAN TRIBE- The term `Indian tribe' has the meaning given the term
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
(2) LENDER- The term `lender' means any non-Federal qualified institutional
buyer (as defined in section 230.144A(a) of title 17, Code of Federal
Regulation (or any successor regulation), known as Rule 144A(a) of the
Securities and Exchange Commission and issued under the Securities Act
of 1933 (15 U.S.C. 77a et seq.)).
(3) LOAN GUARANTEE- The term `loan guarantee' has the meaning given the
term `loan guarantee' in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a).
(4) NON-FEDERAL BORROWER- The term `non-Federal borrower' means--
(A) a State (including a department, agency, or political subdivision
of a State); or
(B) a conservancy district, irrigation district, canal company, water
users' association, Indian tribe, an agency created by interstate compact,
or any other entity that has the capacity to contract with the United
States under Federal reclamation law.
(5) OBLIGATION- The term `obligation' means a loan or other debt obligation
that is guaranteed under this section.
(6) PROJECT- The term `project' means--
(A) a rural water supply project (as defined in section 102(9)); or
(B) an extraordinary operation and maintenance activity for, or the
rehabilitation of, a facility--
(i) that is authorized by Federal reclamation law and constructed
by the United States under such law; or
(ii) in connection with which there is a repayment or water service
contract executed by the United States under Federal reclamation law.
(7) SECRETARY- The term `Secretary' means the Secretary of the Interior.
SEC. 203. PROJECT ELIGIBILITY.
(a) Eligibility Criteria-
(1) IN GENERAL- The Secretary shall develop and publish in the Federal
Register criteria for determining the eligibility of a project for financial
assistance under section 204.
(2) INCLUSIONS- Eligibility criteria shall include--
(A) submission of an application by the lender to the Secretary;
(B) demonstration of the creditworthiness of the project, including
a determination by the Secretary that any financing for the project
has appropriate security features to ensure repayment;
(C) demonstration by the non-Federal borrower, to the satisfaction of
the Secretary, of the ability of the non-Federal borrower to repay the
project financing from user fees or other dedicated revenue sources;
(D) demonstration by the non-Federal borrower, to the satisfaction of
the Secretary, of the ability of the non-Federal borrower to pay all
operations, maintenance, and replacement costs of the project facilities;
and
(E) such other criteria as the Secretary determines to be appropriate.
(b) Waiver- The Secretary may waive any of the criteria in subsection (a)(2)
that the Secretary determines to be duplicative or rendered unnecessary
because of an action already taken by the United States.
(c) Projects Previously Authorized- A project that was authorized for construction
under Federal reclamation laws prior to the date of enactment of this Act
shall be eligible for assistance under this title, subject to the criteria
established by the Secretary under subsection (a).
(d) Criteria for Rural Water Supply Projects- A rural water supply project
that is determined to be feasible under section 106 is eligible for a loan
guarantee under section 204.
SEC. 204. LOAN GUARANTEES.
(a) Authority- Subject to the availability of appropriations, the Secretary
may make available to lenders for a project meeting the eligibility criteria
established in section 203 loan guarantees to supplement private-sector
or lender financing for the project.
(b) Terms and Limitations-
(1) IN GENERAL- Loan guarantees under this section for a project shall
be on such terms and conditions and contain such covenants, representations,
warranties, and requirements as the Secretary determines to be appropriate
to protect the financial interests of the United States.
(2) AMOUNT- Loan guarantees by the Secretary shall not exceed an amount
equal to 90 percent of the cost of the project that is the subject of
the loan guarantee, as estimated at the time at which the loan guarantee
is issued.
(3) INTEREST RATE- An obligation shall bear interest at a rate that does
not exceed a level that the Secretary determines to be appropriate, taking
into account the prevailing rate of interest in the private sector for
similar loans and risks.
(4) AMORTIZATION- A loan guarantee under this section shall provide for
complete amortization of the loan guarantee within not more than 40 years.
(5) NONSUBORDINATION- An obligation shall be subject to the condition
that the obligation is not subordinate to other financing.
(c) Prepayment and Refinancing- Any prepayment or refinancing terms on a
loan guarantee shall be negotiated between the non-Federal borrower and
the lender with the consent of the Secretary.
SEC. 205. DEFAULTS.
(a) Payments by Secretary-
(1) IN GENERAL- If a borrower defaults on the obligation, the holder of
the loan guarantee shall have the right to demand payment of the unpaid
amount from the Secretary.
(2) PAYMENT REQUIRED- By such date as may be specified in the loan guarantee
or related agreements, the Secretary shall pay to the holder of the loan
guarantee the unpaid interest on, and unpaid principal of, the obligation
with respect to which the borrower has defaulted, unless the Secretary
finds that there was not default by the borrower in the payment of interest
or principal or that the default has been remedied.
(3) FORBEARANCE- Nothing in this subsection precludes any forbearance
by the holder of the obligation for the benefit of the non-Federal borrower
that may be agreed on by the parties to the obligation and approved by
the Secretary.
(1) IN GENERAL- If the Secretary makes a payment under subsection (a),
the Secretary shall be subrogated to the rights of the recipient of the
payment as specified in the loan guarantee or related agreements, including,
as appropriate, the authority (nothwithstanding any other provision of
law) to--
(A) complete, maintain, operate, lease, or otherwise dispose of any
property acquired pursuant to the loan guarantee or related agreements;
or
(B) permit the non-Federal borrower, pursuant to an agreement with the
Secretary, to continue to pursue the purposes of the project if the
Secretary determines the purposes to be in the public interest.
(2) SUPERIORITY OF RIGHTS- The rights of the Secretary, with respect to
any property acquired pursuant to a loan guarantee or related agreement,
shall be superior to the rights of any other person with respect to the
property.
(c) Payment of Principal and Interest by Secretary- With respect to any
obligation guaranteed under this section, the Secretary may enter into a
contract to pay, and pay, holders of the obligation, for and on behalf of
the non-Federal borrower, from funds appropriated for that purpose, the
principal and interest payments that become due and payable on the unpaid
balance of the obligation if the Secretary finds that--
(1)(A) the non-Federal borrower is unable to meet the payments and is
not in default;
(B) it is in the public interest to permit the non-Federal borrower to
continue to pursue the purposes of the project; and
(C) the probable net benefit to the Federal Government in paying the principal
and interest will be greater than that which would result in the event
of a default;
(2) the amount of the payment that the Secretary is authorized to pay
shall be no greater than the amount of principal and interest that the
non-Federal borrower is obligated to pay under the agreement being guaranteed;
and
(3) the borrrower agrees to reimburse the Secretary for the payment (including
interest) on terms and conditions that are satisfactory to the Secretary.
(d) Action by Attorney General-
(1) NOTIFICATION- If the non-Federal borrower defaults on an obligation,
the Secretary shall notify the Attorney General of the default.
(2) RECOVERY- On notification, the Attorney General shall take such action
as is appropriate to recover the unpaid principal and interest due from--
(A) such assets of the defaulting non-Federal borrower as are associated
with the obligation; or
(B) any other security pledged to secure the obligation.
SEC. 206. OPERATIONS, MAINTENANCE, AND REPLACEMENT COSTS.
(a) In General- The non-Federal share of operations, maintenance, and replacement
costs for a project receiving Federal assistance under this title shall
be 100 percent.
(b) Plan- On request of the non-Federal borrower, the Secretary may assist
in the development of an operation, maintenance, and replacement plan to
provide the necessary framework to assist the non-Federal borrower in establishing
rates and fees for project beneficiaries.
SEC. 207. TITLE TO NEWLY CONSTRUCTED FACILITIES.
(a) New Projects and Facilities- All new projects or facilities constructed
in accordance with this title shall remain under the jurisdiction and control
of the non-Federal borrower subject to the terms of the repayment agreement.
(b) Existing Projects and Facilities- Nothing in this title affects the
title of--
(1) reclamation projects authorized prior to the date of enactment of
this Act;
(2) works supplemental to existing reclamation projects; or
(3) works constructed to rehabilitate existing reclamation projects.
SEC. 208. WATER RIGHTS.
(a) In General- Nothing in this title preempts or affects State water law
or an interstate compact governing water.
(b) Compliance Required- The Secretary shall comply with State water laws
in carrying out this title. Nothing in this title affects or preempts State
water law or an interstate compact governing water.
SEC. 209. INTERAGENCY COORDINATION AND COOPERATION.
(a) Consultation- The Secretary shall consult with the Secretary of Agriculture
before promulgating criteria with respect to financial appraisal functions
and loan guarantee administration for activities carried out under this
title.
(b) Memorandum of Agreement- The Secretary and the Secretary of Agriculture
may enter into a memorandum of agreement providing for Department of Agriculture
financial appraisal functions and loan guarantee administration for activities
carried out under this title.
SEC. 210. RECORDS; AUDITS.
(a) In General- A recipient of a loan guarantee shall keep such records
and other pertinent documents as the Secretary shall prescribe by regulation,
including such records as the Secretary may require to facilitate an effective
audit.
(b) Access- The Secretary and the Comptroller General of the United States,
or their duly authorized representatives, shall have access, for the purpose
of audit, to the records and other pertinent documents.
SEC. 211. FULL FAITH AND CREDIT.
The full faith and credit of the United States is pledged to the payment
of all guarantees issued under this section with respect to principal and
interest.
SEC. 212. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are necessary to carry
out this title, to remain available until expended.
END
