To amend the Small Reclamation Projects Act of 1956, and for other purposes.

May 5, 2003

Mr. SMITH introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources

To amend the Small Reclamation Projects Act of 1956, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCES.

(a) SHORT TITLE- This Act may be cited as the `Small Reclamation Water Resources Project Act of 2003.'

(b) REFERENCES- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Small Reclamation Projects Act of 1956 (43422 et seq.).

SEC. 2. AMENDMENTS TO THE SMALL RECLAMATION PROJECTS ACT OF 1956.

(a) PURPOSE- The first section (43 U.S.C. 422a) is amended--

(1) by striking `under the' and inserting `under this Act and other'; and

(2) by adding the following at the end: `Such projects may include, but shall not be limited to, irrigation projects. Irrigation shall not be a required purpose for projects receiving assistance under this Act. In providing assistance, the Secretary shall give priority to recommended proposals that are related to a project that is otherwise authorized under the Federal reclamation laws and that will benefit from assistance under this Act.'.

(b) DEFINITIONS- Section 2 (43 U.S.C. 422b) is amended--

(1) in paragraph (c), by striking `a State' and inserting `an Indian Tribe, a State';

(2) by striking paragraph (d) and inserting the following:

`(d) The term `project' means any of the following:

`(1) A multipurpose water resource development carried out by a non-Federal organization involving significant conservation of water, energy, and the environment.

`(2) The rehabilitation, betterment, or retrofit of any existing Federal or non-Federal water infrastructure for purposes of complying with law and regulations.

`(3) An activity described in paragraph (1) or (2) that--

`(A) is carried out by a non-Federal organization under the Federal reclamation laws in one or more of the 17 western reclamation States, Hawaii, Alaska, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, and the Trust Territory of the Pacific Islands; and

`(B) in the case of an activity proposed for any project that is authorized under the reclamation laws immediately before the enactment of the Small Reclamation Water Resources Project Act of 2003, is determined by the Secretary to be consistent with the purposes of that project before that date of enactment.'; and

(3) by striking paragraph (f) and inserting the following:

`(f) The term `water quality improvements' means operational measures and physical features associated with--

`(1) the reclamation and reuse of irrigation drainage or municipal and industrial return flows, including wastewater flows; or

`(2) the reclamation, or control, of brackish, toxic, or impaired waters for beneficial reuse or protection of other related water, land, or environmental resources.

`(g) The term `economically disadvantaged community' means the service area of a public district that meets affordability criteria [established under section 2041].'.

(c) MODIFICATION OF LOAN AND GRANT PROGRAMS- The Small Reclamation Projects Act of 1956 is amended--

(1) by striking sections 3 through 8 (43 U.S.C. 422c-422h); and

(2) by inserting after section 2 (43 U.S.C. 422b) the following:

`TITLE I--STATE AND LOCAL PARTICIPATION IN RECLAMATION PROJECTS

`SEC. 101. LOAN, GRANT, AND LOAN GUARANTEE PROGRAM.

There is hereby established a program within the Bureau of Reclamation, under which the Secretary may make loans, grants, and loan guarantees to any organization to carry out a project.

`SEC. 102. PROPOSAL CONTENTS AND REQUIREMENTS.

`(a) IN GENERAL- Any organization seeking assistance under this title shall submit a proposal to the Secretary in such form and manner as the Secretary may prescribe. Any proposal for a project submitted under this title shall set forth a plan and estimated cost in detail comparable to those included in preauthorization reports required for a project under the Federal reclamation laws.

`(b) LANDS AND WATERS- Each proposal submitted under this title shall include a statement of financial capability and legal authority, and a resolution from the governing board of the organization showing that the organization seeking assistance--

`(1) holds or can acquire all lands and interests in land (except public and other lands and interests in land owned by the United States that are within the administrative jurisdiction of the Secretary and subject to disposition by the Secretary) to complete the project;

`(2) holds or can acquire all rights, pursuant to applicable State law, to the use of water necessary for the successful construction, operation, and maintenance of the project;

`(3) is willing to finance, and capable of financing, the non-Federal portion of the costs of the project, including all costs of acquiring lands, interests in land, and rights to the use of water except as provided in [section 105(b)(2)]; and

`(4) has the legal authority and responsibility under State law to carry out the project.

`SEC. 103. FEDERAL SHARE AND PROJECT SPONSOR SHARE OF COSTS.

`(a) IN GENERAL- The Secretary shall require each organization receiving assistance under this title to contribute toward the cost of the project (other than by loan or grant of Federal funds) not less than 25 percent of the costs of the project. The Secretary shall credit toward the non-Federal cost share the amount--

`(1) the costs paid by the organization for investigations, surveys, engineering, administration, and other services necessary for the preparation of proposals and plans for the proposed project that are required by the Secretary;

`(2) the value of lands, rights-of-way, and water rights acquisition required for the proposed project that are provided by the organization.

`(3) amounts spent by the organization for construction or acquisition of facilities for the proposed project prior to project approval; and

`(4) the fee required by section 403.

`(b) PREVENTION OF LOSS AND DAMAGE TO FISH AND WILDLIFE- The costs of measures to prevent loss of, and damage to, existing fish and wildlife resources as the result of a project for which assistance is provided under this title shall be considered project costs and, for purposes of reimbursement, shall be allocated as may be appropriated among project functions.

`(c) MAXIMUM ALLOWANCE FEDERAL SHARE- The maximum allowable Federal share per project shall be $50,000,000 (January 2001 dollars).

`(d) INCREASE IN AMOUNT- To compensate for increases in construction costs due to price escalation, and subject to subsection (c), the Secretary may increase the amount of a loan or grant, or both, under this title for a project at any time prior to the completion of construction of the project, using the Bureau of Reclamation's composite construction costs trends index.

`SEC. 104. APPROVAL OR DISAPPROVAL OF PROJECTS.

`(a) IN GENERAL- The Secretary shall determine whether a proposal under this title is financially feasible and constitutes a reasonable risk, and either approve or disapprove the proposal, by not later than the later of--

`(1) one year after the date the proposal is submitted to the Secretary; or

`(2) the date of the completion of the appropriate documentation under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

`(b) Transmittal to Congress-

`(1) IN GENERAL- Subject to paragraph (2), the Secretary shall promptly transmit any approved proposals to the Congress with a brief statement of the project purposes and funding requirements.

`(2) COMPLETION OF DOCUMENTATION- The documentation required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) for a proposed project must be completed before the Secretary transmits the proposal to the Congress.

`SEC. 105. CONTRACT TERMS AND CONDITIONS.

`(a) IN GENERAL- Upon approval of any project proposal submitted under this title by an organization, the Secretary shall negotiate with the organization a contract establishing the terms under which assistance shall be provided under this title.

`(b) CONTRACT TERMS- The contract shall include the following:

`(1) The maximum amount of any grant, which shall not exceed 50 percent of the maximum allowable Federal share of the costs of the project under section 103.

`(2) The time and method of making any grant or loan available to the organization.

`(3) Such terms and conditions as the Secretary considers necessary or proper to provide assurance of, and security for, prompt repayment of any loan and to ensure achievement of the purposes for which the loan was made.

`(4) A plan for repayment by the organization of any loan within 25 years, except that the organization shall have the right to prepay the loan or any component thereof without penalty.

`(5) For any loan, payment of interest at a rate established by the Secretary of the Treasury at the beginning of the fiscal year in which the contract is executed, that shall be based on the average market yield on outstanding marketable obligations of the United States with periods of maturity comparable to the applicable repayment period of the loan.

`(c) Loan Projects By Indian Tribes-

`(1) IN GENERAL- For any project undertaken by an Indian tribe with assistance under this title, the Secretary shall--

`(A) determine, based on the findings in the proposal under section 102, the reimbursable and nonreimbursable costs for the project constructed under this Act;

`(B) apportion those costs in accordance with the benefits received; and

`(C) allocate the reimbursable costs to the project beneficiaries.

`(2) LEAVITT ACT- The Act of July 1, 1932 (chapter 369; 25 U.S.C. 386a), popularly known as the `Leavitt Act', shall not apply to loans made under this Act.

`TITLE II--PARTNERSHIP PROGRAM

`SEC. 201. ESTABLISHMENT OF PARTNERSHIP PROGRAM.

`(a) PROGRAM- There is hereby established within the Bureau of Reclamation a small grant and loan program to be known as the Small Reclamation Water Resources Management Partnership Program, to be carried out under this title. The purpose of this program shall be to implement projects that can be performed--

`(1) by the recipient organization's workforce or contractors,

`(2) with streamlined documentation, and

`(3) in a period of 18 months or less.

`(b) GRANTS- Grants under this title shall not exceed $5,000,000 for any one project under such program. The Secretary shall require the recipient organization to provide matching funds in an amount equal to 50 percent of the amount of the grant.

`(c) LOANS- Loans under this title shall not exceed $5,000,000 per project, and shall be subject to cost sharing in the same manner as provided in title I. The contract for each loan under this title shall require payment of interest at a rate established by the Secretary of the Treasury in the same manner as provided in section 105(b)(5) for loans under title II.

`SEC. 202. REPAYMENT OF LOANS.

`Each loan made under this title shall be repaid within the 5-year period beginning on the date the Secretary certifies that work to be carried out with the loan is completed.

`SEC. 203. ELIGIBLE ACTIVITIES.

`(a) IN GENERAL- The following types of activities shall be eligible for grants or loans under this title:

`(1) Water conservation.

`(2) Water quality improvement projects.

`(3) Water management for urban landscapes.

`(4) Drought assistance.

`(5) Fish and wildlife improvements.

`(6) Public safety improvements.

`(7) Water supply, including water production, conveyance, conservation, and management.

`(8) Watershed planning.

`(b) ADDITIONAL ACTIVITIES- The Secretary may add to the list of eligible activities under subsection (a) as the Secretary considers appropriate, except that any such addition shall not take effect until 60 days after the Secretary publishes a notice of the proposed addition in the Federal Register, and has notified the Committee on Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate in writing of the proposed addition and the reasons therefore.

`SEC. 204. APPLICATION PROCESS.

`(a) NOTICE OF INTENT- Each organization seeking a grant or loan under this title shall submit a notice of intent to the Secretary by April 1 of each year outlining the proposed project and the public benefits thereof. Within two months, the Secretary shall provide a written response to the organization, expressing either the Bureau of Reclamation's interest or disinterest in participating in the project.

`(b) APPLICATION- Within 30 days after receipt of a response under subsection (a) expressing the Bureau of Reclamation's interest in participating in a project, the organization may submit to the Secretary an appropriate loan or grant application, giving details of the project and the anticipated public benefits.

`(c) CONTENTS- The application for any project proposal under this title shall include each of the following:

`(1) A resolution by the board of directors of the organization stating--

`(A) the total estimated project cost;

`(B) the amount of the grant or loan requested;

`(C) the amount of non-Federal contribution for any grant;

`(D) the organization's ability to finance and construct the project; and

`(E) the project objectives.

`(2) A summary of the proposal.

`(3) A brief description of the anticipated effects of the project on the environment.

`(4) Evidence that the organization has all lands and water rights needed for the project, or can obtain them and has legal authority and responsibility under State law to carry out the proposed project.

`(5) A project plan, including a general map showing the location of proposed physical features, conceptual engineering drawings of major and typical structures, and general standards for design.

`(6) A construction schedule, with dates and a schedule of funding requirements under this title, in sufficient detail to provide an analysis of the proposed construction program.

`(7) A description of the proposed Federal funding for the project and of the non-Federal funding for the project.

`(d) COSTS- The cost of any investigations and preparation of any environmental documentation for a project carried out with assistance under this title shall be borne by the project applicant, and shall be credited against the non-Federal cost share.

`(e) ANNUAL LISTING- The Secretary shall include in the annual budget justification for the Bureau of Reclamation a listing of the activities and total funding required for work committed to under this title.

`SEC. 205. TERMS AND CONDITIONS OF PROJECT WORK.

`The Secretary shall examine each project proposal submitted under this title to determine if the project can reasonably be expected to accomplish its purpose, and approve or disapprove such proposal by September 1 of the year in which the application for assistance under this title is submitted. If the Secretary approves the proposal, and subject to the availability of appropriations, the Secretary shall provide funding within 60 days after such approval for work scheduled for the next fiscal year.

`SEC. 206. LIMITATION ON PROJECT PROPOSALS.

`Only one proposal may be submitted under this title by an applicant in any 5-year period.

`TITLE III--LOAN GUARANTEES

`SEC. 301. ESTABLISHMENT OF LOAN GUARANTEE PROGRAM.

`There is hereby established with the Bureau of Reclamation a demonstration program to guarantee loans for projects receiving, or eligible to receive, loans or grants under title I or II of this Act.

`SEC. 302. PROGRAM REQUIREMENTS.

`(a) IN GENERAL- The Secretary may provide support under the demonstration program to organizations through the provision of loan guarantees for the purposes for which assistance is authorized under titles I and II, under such terms and conditions as are specified in this section. Any proposal for a project submitted under this title shall set forth a plan and estimated costs, in detail, comparable to those required to be included in preauthorization reports required for a project under the Federal reclamation laws.

`(b) SELECTION OF RECIPIENTS- The Secretary shall adopt and use competitive procedures in the selection of organizations to receive loan guarantees under this section. In selecting any organization to receive a loan guarantee under this section, the Secretary shall consider, at a minimum, the following:

`(1) The extent to which the loan guarantee would support new water supplies or more efficient use of existing supplies.

`(2) The repayment period of the guaranteed loan.

`(3) The extent to which the loan guarantee would provide for a project of wide public purpose.

`(4) Whether the loan guarantee would help the organization comply with a Federal or State environmental statute or regulation.

`(5) The extent to which the loan guarantee would enable the organization to meet the needs of other local water purveyors.

`(6) The extent to which the guaranteed loan would support a program that would supplement, rather than duplicate, other available water resource programs.

`(7) The fiscal impact of the loan guarantee program as a whole on other reclamation programs.

`(c) APPORTIONMENT- The total amount made available to the Secretary for a fiscal year to cover the costs of loan guarantees under this section shall be divided

between projects receiving or eligible to receive loans under titles I and II, with title I projects receiving 75 percent and title II projects receiving 25 percent.

`(d) MAXIMUM- The maximum amount of a loan guaranteed under this section may not exceed 75 percent of the total cost of the project carried out with the loan.

`(e) LIMITATION ON USE OF LOAN- No loan guaranteed under this title shall be used to cover the organization's local cost share for any project assisted under this Act.

`(f) REPORTING- Reporting and documentation requirements under titles I and II shall similarly apply to loan guarantees under this title.

`(g) STATE LAW- For purposes of this Act, when any bonds are issued by an organization to help finance a project for which the organization is also receiving a loan guarantee under this section, such bonds shall not be treated as affecting the tax-exempt status of such bonds under applicable State law.

`(h) FULL FAITH AND CREDIT- Any loan guarantee issued pursuant to this section shall constitute an obligation, in accordance with the terms of such guarantee, of the United States Government, and the full faith and credit of the United States is hereby pledged to the full performance of the obligations.

`(i) REPORT- At the end of the third fiscal year after the enactment of this subsection, the Secretary shall submit a report to the Congress on the beneficial use and suggested improvements for use of loan guarantees under this title as a mechanism for project construction.

`SEC. 303. SUNSET.

`No loan guarantee may be issued under this title in any fiscal year after the expiration of 10 full fiscal years after initial funding of projects under the amendments made by the Small Reclamation Water Resources Project Act of 2003.

`TITLE IV--GENERAL PROVISIONS

`SEC. 401. PROPOSAL FEE.

`The Secretary shall assess and collect a fee to defray the cost of examining each proposal for a loan, grant, or loan guarantee under this Act. The amount of the fee shall be equal to $5,000 or 1/10 of 1 percent of the Federal share of the costs of the proposed project, whichever is greater. The Secretary shall require that 50 percent of the fee shall accompany the application and the remainder shall be due only upon approval of the project by the Secretary.

`SEC. 402. MISCELLANEOUS PROVISIONS.

`(a) TITLE- Title to all project works and facilities constructed with assistance under this Act shall remain in the name of the organization.

`(b) COMBINED LOANS, GRANTS, AND LOAN GUARANTEES- A project sponsor shall be eligible for a loan, grant, loan guarantee, or combination thereof for a project proposal under this Act. An applicant may submit one proposal to be carried out with assistance under more than one title under this Act. No organization shall be eligible for an additional loan, grant, loan guarantee, or any combination thereof for the same project that has previously received approval for a loan, grant, or loan guarantee under this Act within the prior five fiscal years.

`(c) PLANNING, CONSTRUCTION, OPERATION, AND MAINTENANCE- The United States shall not be required to provide planning, construction, operation, and maintenance of any project receiving a loan, grant or loan guarantee under this Act.

`(d) STATE WATER LAW- Any project assisted under this Act shall be carried out in accordance with applicable State water law.'.

`(d) Conforming Amendments-

(1) Sections 9 through 13 of the Small Reclamation Projects Act of 1956 (43 U.S.C. 422i-422k-1) are redesignated as sections 403 through 407, respectively.

(2) Section 404 of such Act, as redesignated by paragraph (1) of this subsection, is amended as follows:

(A) By striking `section 3' and inserting `title I'.

(B) By striking `effective October 1, 1986.' and inserting `for any fiscal year'.

(C) By striking `for loans and grants pursuant to this Act' and inserting `for loans and grants pursuant to title I'.

(D) By striking `five years after the date of enactment of this Act' and inserting `ten years after the date of enactment of the Small Reclamation Water Resources Project Act of 2003'.

(E) By striking `section 4(c)' and inserting `title I'.

SEC. 3. ADDITIONAL APPROPRIATIONS.

Section 404 of the Small Reclamation Projects Act of 1956 (43 U.S.C. 422j), as redesignated by section 2(d)(1) of this Act, is further amended--

(1) by striking `such sums' and all that follows through `That the Secretary' and inserting `to carry out this Act $1,300,000,000 for fiscal years after fiscal year 2001, of which $900,000,000 may be appropriated to carry out title I and to complete ongoing projects under Public Law 84-984, $300,000,000 may be appropriated to carry out title II, and $100,000,000 may be appropriated to carry out title III. Of funds authorized under this Act, not more than 20 percent shall be used for projects to be carried out by Indian tribes or in economically disadvantaged communities. The Secretary'; and

(2) by striking `any single State' and all that follows through `the Secretary is authorized to waive' and inserting `in any single State. Funds obligated or expended for projects by Indian tribes shall not be considered for purposes of the preceding sentence. The Secretary may waive'.

SEC. 4. GUIDELINES.

Within 180 days after the date of enactment of this Act, the Secretary of the Interior shall complete and publish such administrative guidelines as may be necessary to carry out the amendments made by this title.

SEC. 5. EFFECTIVE DATE.

The amendments made by this title shall take effect on the date of enactment of this Act. Nothing in this title or in any amendment made by this title shall affect any loan or grant that has been approved before the date of enactment of this Act.

SEC. 6. LIMITATION.

Activities funded under this title shall not be considered a supplemental or additional benefit under the Act of June 17, 1902 (82 Stat. 388), and all Acts amendatory thereof or supplementary thereto.

END