[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 895 Enrolled Bill (ENR)]
S.895
One Hundred Ninth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the third day of January, two thousand and six
An Act
To authorize the Secretary of the Interior to carry out 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 2006''.
(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 2006
Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Rural water supply program.
Sec. 104. Rural water programs assessment.
Sec. 105. Appraisal investigations.
Sec. 106. Feasibility studies.
Sec. 107. Miscellaneous.
Sec. 108. Reports.
Sec. 109. Authorization of appropriations.
Sec. 110. Termination of authority.
TITLE II--TWENTY-FIRST CENTURY WATER WORKS ACT
Sec. 201. Short title.
Sec. 202. Definitions.
Sec. 203. Project eligibility.
Sec. 204. Loan guarantees.
Sec. 205. Defaults.
Sec. 206. Operations, maintenance, and replacement costs.
Sec. 207. Title to newly constructed facilities.
Sec. 208. Water rights.
Sec. 209. Interagency coordination and cooperation.
Sec. 210. Records; audits.
Sec. 211. Full faith and credit.
Sec. 212. Report.
Sec. 213. Effect on the reclamation laws.
Sec. 214. Authorization of appropriations.
Sec. 215. Termination of authority.
TITLE III--REPORT ON TRANSFER OF RECLAMATION FACILITIES
Sec. 301. Report.
TITLE I--RECLAMATION RURAL WATER SUPPLY ACT OF 2006
SEC. 101. SHORT TITLE.
This title may be cited as the ``Reclamation Rural Water Supply Act
of 2006''.
SEC. 102. DEFINITIONS.
In this title:
(1) Construction.--The term ``construction'' means the
installation of 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 carried out 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
(V) appurtenances.
(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, may 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--
(A) serves--
(i) rural areas and small communities; or
(ii) Indian tribes; 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 pre-existing 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--
(1) considers--
(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).
(d) Appraisal Criteria.--
(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.
(g) Costs.--
(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.
(2) Non-federal share.--
(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)(A) 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--
(i) the non-Federal entity is qualified to complete the
feasibility study in accordance with the criteria promulgated
under subsection (d); and
(ii) using the non-Federal project entity to conduct the
feasibility study is a cost-effective alternative for
completing the appraisal investigation; or
(B) if the Secretary determines not to provide a grant to, or
enter into a cooperative agreement with, a non-Federal project
entity under subparagraph (A), provide to the non-Federal project
entity notice of the determination, including an explanation of the
reason for the determination.
(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.
(e) Feasibility Report.--
(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.
(f) Capability-To-Pay.--
(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--
(A) per capita income;
(B) median household income;
(C) the poverty rate;
(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. REPORTS.
Beginning in fiscal year 2007, and each fiscal year thereafter
through fiscal year 2012, 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 an annual report that
describes the number and type of full-time equivalent positions in the
Department of the Interior and the amount of overhead costs of the
Department of the Interior that are allocated to carrying out this
title for the applicable fiscal year.
SEC. 109. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated to carry
out this title $15,000,000 for each of fiscal years 2007 through 2016,
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 2007 and 2008.
(c) Construction Costs.--No amounts made available under this
section shall be used to pay construction costs associated with any
rural water supply project.
SEC. 110. TERMINATION OF AUTHORITY.
The authority of the Secretary to carry out this title terminates
on September 30, 2016.
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.
In this title:
(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--
(A) a 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.)); or
(B) a clean renewable energy bond lender (as defined in
section 54(j)(2) of the Internal Revenue Code of 1986 (as in
effect on the date of enactment of this Act)).
(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));
(B) an extraordinary operation and maintenance activity
for, or the rehabilitation or replacement 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; or
(C) an improvement to water infrastructure directly
associated with a reclamation project that, based on a
determination of the Secretary--
(i) improves water management; and
(ii) fulfills other Federal goals.
(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.
(b) Subrogation.--
(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
(notwithstanding 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 borrower 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 shall 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. REPORT.
Not later than 1 year after the date on which the eligibility
criteria are published in the Federal Register under section 203(a),
and every 2 years thereafter, 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 report that
describes the implementation of the loan guarantee program under
section 204.
SEC. 213. EFFECT ON THE RECLAMATION LAWS.
(a) Reclamation Projects.--Nothing in this title supersedes or
amends any Federal law associated with a project, or a portion of a
project, constructed under the reclamation laws.
(b) No New or Supplemental Benefits.--Any assistance provided under
this title shall not--
(1) be considered to be a new or supplemental benefit for
purposes of the Reclamation Reform Act of 1982 (43 U.S.C. 390aa et
seq.); or
(2) affect any contract in existence on the date of enactment
of this Act that is executed under the reclamation laws.
SEC. 214. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are necessary
to carry out this title, to remain available until expended.
SEC. 215. TERMINATION OF AUTHORITY.
(a) In General.--Subject to subsection (b), the authority of the
Secretary to carry out this title terminates on the date that is 10
years after the date of enactment of this Act.
(b) Exception.--The termination of authority under subsection (a)
shall have no effect on--
(1) any loans guaranteed by the United States under this title;
or
(2) the administration of any loan guaranteed under this title
before the effective date of the termination of authority.
TITLE III--REPORT ON TRANSFER OF RECLAMATION FACILITIES
SEC. 301. REPORT.
(a) In General.--Not later than 180 days 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 report that describes any
impediments and activities that significantly delay the ability of the
Secretary to complete timely transfers of title to reclamation
facilities to qualified non-Federal entities under laws authorizing the
transfers.
(b) Consultation.--In preparing the report under subsection (a),
the Secretary shall consult with any appropriate non-Federal parties,
including reclamation water and power customers.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.