[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 895 Referred in House (RFH)]
109th CONGRESS
1st Session
S. 895
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 17, 2005
Referred to the Committee on Resources
_______________________________________________________________________
AN ACT
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. 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. Authorization of appropriations.
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. 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.
In this title:
(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
(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, 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--
(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 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--
(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) 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.
(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. 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.
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 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.
(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 (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 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 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.
Passed the Senate November 16, 2005.
Attest:
EMILY J. REYNOLDS,
Secretary.