HR 7487 — Rural Jobs and Hydropower Expansion Act

changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 RECLAMATION PROJECT ACT OF 1939

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 Sec. 9. (a) No expenditures for the construction of any new 
project, new division of a project, or new supplemental works 
on a project shall be made, nor shall estimates be submitted 
therefor, by the Secretary until after he has made an 
investigation thereof and has submitted to the President and to 
the Congress his report and findings on--
 (1) the engineering feasibility of the proposed construction;
 (2) the estimated cost of the proposed construction;
 (3) the part of the estimated cost which can properly be 
allocated to irrigation and probably be repaid by the water 
users;
 (4) the part of the estimated cost which can properly be 
allocated to power and probably be returned to the United 
States in net power revenues;
 (5) the part of the estimated cost which can properly be 
allocated to municipal water supply or other miscellaneous 
purposes and probably be returned to the United States.
If the proposed construction is found by the Secretary to have 
engineering feasibility and if the repayable and returnable 
allocations to irrigation, power, and municipal water supply or 
other miscellaneous purposes found by the Secretary to be 
proper, together with any allocation to flood control or 
navigation made under subsection (b) of this section, equal the 
total estimated cost of construction as determined by the 
Secretary, then the new project, new division of a project, or 
supplemental works on a project, covered by his findings, shall 
be deemed authorized and may be undertaken by the Secretary. If 
all such allocations do not equal said total estimated cost, 
then said new project, new division, or new supplemental works 
may be undertaken by the Secretary only after provision 
therefor has been made by Act of Congress enacted after the 
Secretary has submitted to the President and the Congress the 
report and findings involved.
 (b) In connection with any new project, new division of a 
project, or supplemental works on a project there may be 
allocated to flood control or navigation the part of said total 
estimated cost which the Secretary may find to be proper. Items 
for any such allocations made in connection with projects which 
may be undertaken pursuant to subsection (a) of this section 
shall be included in the estimates of appropriations submitted 
by the Secretary for said projects, and funds for such portions 
of the projects shall not become available except as directly 
appropriated or allotted to the Department of the Interior. In 
connection with the making of such an allocation, the Secretary 
shall consult with the Chief of Engineers and the Secretary of 
the Army, and may perform any of the necessary investigations 
or studies under a cooperative agreement with the Secretary of 
the Army. In the event of such an allocation the Secretary of 
the Interior shall operate the project for purposes of flood 
control or navigation, to the extent justified by said 
allocation therefor.
 (c) Furnishing Water to Municipalities; Sale of Electric 
Power; Lease of Power Privileges._
 (1) The Secretary is authorized to enter into 
 contracts to furnish water for municipal water supply 
 or miscellaneous purposes: Provided, That any such 
 contract either (A) shall require repayment to the 
 United States, over a period of not to exceed forty 
 years from the year in which water is first delivered 
 for the use of the contracting party, with interest not 
 exceeding the rate of 3\1/2\ per centum per annum if 
 the Secretary determines an interest charge to be 
 proper, of an appropriate share as determined by the 
 Secretary of that part of the construction costs 
 allocated by him to municipal water supply or other 
 miscellaneous purposes; or (B) shall be for such 
 periods, not to exceed forty years, and at such rates 
 as in the Secretary's judgment will produce revenues at 
 least sufficient to cover an appropriate share of the 
 annual operation and maintenance cost and an 
 appropriate share of such fixed charges as the 
 Secretary deems proper, and shall require the payment 
 of said rates each year in advance of delivery of water 
 for said year. Any sale of electric power or lease of 
 power privileges, made by the Secretary in connection 
 with the operation of any project or division of a 
 project, shall be for such periods, not to exceed forty 
 years, and at such rates as in his judgment will 
 produce power revenues at least sufficient to cover an 
 appropriate share of the annual operation and 
 maintenance cost, interest on an appropriate share of 
 the construction investment at not less than 3 per 
 centum per annum, and such other fixed charges as the 
 Secretary deems proper: Provided further, That in said 
 sales or leases preference shall be given to 
 municipalities and other public corporations or 
 agencies; and also to cooperatives and other nonprofit 
 organizations financed in whole or in part by loans 
 made pursuant to the Rural Electrification Act of 1936 
 and any amendments thereof. Nothing in this subsection 
 shall be applicable to provisions in existing 
 contracts, made pursuant to law, for the use of power 
 and miscellaneous revenues of a project for the benefit 
 of users of water from such project. The provisions of 
 this subsection respecting the sales of electric power 
 and leases of power privileges shall be an 
 authorization in addition to and alternative to any 
 authority in existing laws related to particular 
 projectsand reserve to the Secretary the exclusive 
 authority to develop [small conduit hydropower using 
 Bureau of Reclamation facilities and pumped storage 
 hydropower exclusively using Bureau of Reclamation 
 reservoirs] hydropower using all Bureau of Reclamation 
 facilities. No contract relating to municipal water 
 supply or miscellaneous purposes or to electric power 
 or power privileges shall be made unless, in the 
 judgment of the Secretary, it will not impair the 
 efficiency of the project for irrigation purposes.
 (2)(A) When carrying out this subsection, the 
 Secretary shall first offer the lease of power 
 privilege to an irrigation district or water 
 users association operating the [applicable 
 transferred conduit] applicable transferred 
 works facility, or to the irrigation district 
 or water users association receiving water from 
 the [applicable reserved conduit] applicable 
 reserved works facility. The Secretary shall 
 determine a reasonable time frame for the 
 irrigation district or water users association 
 to accept or reject a lease of [power privilege 
 offer for a small conduit] power privilege 
 offer for the hydropower project.
 (B) If the irrigation district or 
 water users association elects not 
 accept a lease of power privilege offer 
 under subparagraph (A), the Secretary 
 shall offer the lease of power 
 privilege to other parties in 
 accordance with this subsection.
 (3) The Bureau of Reclamation shall apply its 
 categorical exclusion process under the 
 National Environmental Policy Act of 1969 (42 
 U.S.C. 4321 et seq.) to [small conduit] 
 applicable hydropower development under this 
 subsection, excluding siting of associated 
 transmission facilities on Federal lands.
 (4) The Power Resources Office of the Bureau 
 of Reclamation shall be the lead office of 
 [small conduit hydropower] policy and 
 procedure-setting activities conducted under 
 this subsection.
 (5) Nothing in this subsection shall obligate 
 the Western Area Power Administration, the 
 Bonneville Power Administration, or the 
 Southwestern Power Administration to purchase 
 or market any of the power produced by the 
 facilities covered under this subsection and 
 none of the costs associated with production or 
 delivery of such power shall be assigned to 
 project purposes for inclusion in project 
 rates.
 (6) Nothing in this subsection shall alter or 
 impede the delivery and management of water by 
 Bureau of Reclamation facilities, or the 
 management of Bureau of Reclamation facilities 
 specially authorized for hydropower generation, 
 as water used for [conduit] hydropower 
 generation [shall be deemed incidental to] 
 shall be deemed secondary to use of water for 
 the original project purposes. Lease of power 
 privilege shall be made only when, in the 
 judgment of the Secretary, the exercise of the 
 lease will not be incompatible with the 
 purposes of the project or division involved, 
 nor shall it create any unmitigated financial 
 or physical impacts to the project or division 
 involved. The Secretary shall notify and 
 consult with the irrigation district or water 
 users association operating the [transferred 
 conduit] transferred works facility before 
 offering the lease of power privilege and shall 
 prescribe terms and conditions that will 
 adequately protect the planning, design, 
 construction, operation, maintenance, and other 
 interests of the United States and the project 
 or division involved.
 (7) Nothing in this subsection shall alter or 
 affect any existing agreements for the 
 development of [conduit] hydropower projects or 
 disposition of revenues.
 (8) Nothing in this subsection shall alter or 
 affect any existing preliminary permit, 
 license, or exemption (referred to in this 
 section as an ``authorization'') issued by the 
 Federal Energy Regulatory Commission under Part 
 I of the Federal Power Act (16 U.S.C. 792 et 
 seq.) or any project for which an application 
 was filed with the Federal Energy Regulatory 
 Commission before [August 9, 2013,] the date of 
 the enactment of the Rural Jobs and Hydropower 
 Expansion Act and is still pending. Any 
 authorization issued by the Federal Energy 
 Regulatory Commission with respect to a project 
 shall remain in place until such authorization 
 becomes inactive. As allowed by the Federal 
 Energy Regulatory Commission, an authorization 
 may be renewed and remain active. Once the 
 authorization becomes inactive, project site 
 jurisdiction shall shift to the Bureau of 
 Reclamation exclusively.
 (9) Nothing in this section shall expand or 
 otherwise amend the Bureau of Reclamation lease 
 of power privilege authorities outside the 
 project boundary.
 [(9)] (10) In this subsection:
 [(A) Conduit.--The term ``conduit'' 
 means any Bureau of Reclamation tunnel, 
 canal, pipeline, aqueduct, flume, 
 ditch, or similar manmade water 
 conveyance that is operated for the 
 distribution of water for agricultural, 
 municipal, or industrial consumption 
 and not primarily for the generation of 
 electricity.]
 [(B)] (A) Irrigation district.--The 
 term ``irrigation district'' means any 
 irrigation, water conservation or 
 conservancy, multicounty water 
 conservation or conservancy district, 
 or any separate public entity composed 
 of two or more such districts and 
 jointly exercising powers of its member 
 districts.
 [(C) Reserved conduit.--The term 
 ``reserved conduit'' means any conduit 
 that is included in project works the 
 care, operation, and maintenance of 
 which has been reserved by the 
 Secretary, through the Commissioner of 
 the Bureau of Reclamation.
 [(D) Transferred conduit.--The term 
 ``transferred conduit'' means any 
 conduit that is included in project 
 works the care, operation, and 
 maintenance of which has been 
 transferred to a legally organized 
 water users association or irrigation 
 district.
 [(E) Small conduit hydropower.--The 
 term ``small conduit hydropower'' means 
 a facility capable of producing 5 
 megawatts or less of electric 
 capacity.]
 (B) Reserved works facility.--The 
 term ``reserved works facility'' means 
 those facilities owned by the Bureau of 
 Reclamation where the Bureau of 
 Reclamation has retained responsibility 
 for carrying out operation and 
 maintenance activities.
 (C) Transferred works facility.--The 
 term ``transferred works facility'' 
 means a project facility where the 
 operations and maintenance of that 
 facility is carried out by a non-
 Federal entity under the provisions of 
 a formal operations and maintenance 
 transfer contract.
 (d) No water may be delivered for irrigation of lands in 
connection with any new project, new division of a project, or 
supplemental works on a project until an organization, 
satisfactory in form and powers to the Secretary, has entered 
into a repayment contract with the United States, in a form 
satisfactory to the Secretary, providing among other things--
 (1) That the Secretary may fix a development period 
 for each irrigation block, if any, of not to exceed ten 
 years from and including the first calendar year in 
 which water is delivered for the lands in said block; 
 and that during the development period water shall be 
 delivered to the lands in the irrigation block involved 
 at a charge per annum per acre-foot, or other charge, 
 to be fixed by the Secretary each year and to be paid 
 in advance of delivery of water: Provided, That where 
 the lands included in an irrigation block are for the 
 most part lands owned by the United States, the 
 Secretary, prior to execution of a repayment contract, 
 may fix a development period, but in such case 
 execution of such a contract shall be a condition 
 precedent to delivery of water after the close of the 
 development period: Provided further, That when the 
 Secretary, by contract or by notice given thereunder, 
 shall have fixed a development period of less than ten 
 years, and at any time thereafter but before 
 commencement of the repayment period conditions arise 
 which in the judgment of the Secretary would have 
 justified the fixing of a longer period, he may amend 
 such contract or notice to extend such development 
 period to a date not to exceed ten years from its 
 commencement, and in a case where no development period 
 was provided, he may amend such contract within the 
 same limits: Provided further, That when the Secretary 
 shall have deferred the payment of all or any part of 
 any installments of construction charges under any 
 repayment contract pursuant to the authority of the Act 
 of September 21, 1959 (73 Stat. 584), he may, at any 
 time prior to the due date prescribed for the first 
 installment not reduced by such deferment, and by 
 agreement with the contracting organization, terminate 
 the supplemental contract by which such deferment was 
 effected, credit the construction payments made, and 
 exercise the authority granted in this section. After 
 the close of the development period, any such charges 
 collected and which the Secretary determines to be in 
 excess of the cost of the operation and maintenance 
 during the development period shall be credited to the 
 construction cost of the project in the manner 
 determined by the Secretary.
 (2) That the part of the construction costs allocated 
 by the Secretary to irrigation shall be included in a 
 general repayment obligation of the organization; and 
 that the organization may vary its distribution of 
 construction charges in a manner that takes into 
 account the productivity of the various classes of 
 lands and the benefits accruing to the lands by reason 
 of the construction: Provided, That no distribution of 
 construction charges over the lands included in the 
 organization shall in any manner be deemed to relieve 
 the organization or any party or any land therein of 
 the organization's general obligation to the United 
 States.
 (3) That the general repayment obligation of the 
 organization shall be spread in annual installments, of 
 the number and amounts fixed by the Secretary, over a 
 period of not more than 40 years, exclusive of any 
 development period fixed under paragraph (1) of this 
 subsection, for any project contract unit or, if the 
 project contract unit be divided into two or more 
 irrigation blocks, for any such block, or as near to 
 said period of not more than forty years as is 
 consistent with the adoption and operation of a 
 variable payment formula which, being based on full 
 repayment within such period under average conditions, 
 permits variance in the required annual payments in the 
 light of economic factors pertinent to the ability of 
 the organization to pay.
 (4) That the first annual installment for any project 
 contract unit, or for any irrigation block, as the case 
 may be, shall accrue, on the date fixed by the 
 Secretary, in the year after the last year of the 
 development period or, if there be not development 
 period, in the calendar year after the Secretary 
 announces that the construction contemplated in the 
 repayment contract is substantially completed or is 
 advanced to a point where delivery of water can be made 
 to substantially all of the lands in said unit or block 
 to be irrigated; and if there be no development period 
 fixed, that prior to and including the year in which 
 the Secretary makes said announcement water shall be 
 delivered only on the toll charge basis hereinbefore 
 provided for development periods.
 (e) In lieu of entering into a repayment contract pursuant to 
the provisions of subsection (d) of this section to cover that 
part of the cost of the construction of works connected with 
water supply and allocated to irrigation, the Secretary, in his 
discretion, may enter into either short- or long-term contracts 
to furnish water for irrigation purposes. Each such contract 
shall be for such period, not to exceed forty years, and at 
such rates as in the Secretary's judgment will produce revenues 
at least sufficient to cover an appropriate share of the annual 
operation and maintenance cost and an appropriate share of such 
fixed charges as the Secretary deems proper, due consideration 
being given to that part of the cost of construction of works 
connected with water supply and allocated to irrigation; and 
shall require payment of said rates each year in advance of 
delivery of water for said year. In the event such contracts 
are made for furnishing water for irrigation purposes, the 
costs of any irrigation water distribution works constructed by 
the United States in connection with the new project, new 
division of a project, or supplemental works on a project, 
shall be covered by a repayment contract entered into pursuant 
to said subsection (d).
 (f) No less than sixty days before entering into or amending 
any repayment contract or any contract for the delivery of 
irrigation water (except any contract for the delivery of 
surplus or interim irrigation water whose duration is for one 
year or less) the Secretary shall--
 (1) publish notice of the proposed contract or 
 amendment in newspapers of general circulation in the 
 affected area and shall make reasonable efforts to 
 otherwise notify interested parties which may be 
 affected by such contract or amendment, together with 
 information indicating to whom comments or inquiries 
 concerning the proposed actions can be addressed; and
 (2) provide an opportunity for submission of written 
 data, views and arguments, and shall consider all 
 substantive comments so received.