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Updated July 8,2020
Reclamation Water Storage Projects: Section 4007 of the Water
Infrastructure Improvements for the Nation Act
Section 4007 of the Water Infrastructure hIprovements for
the Nation Act (WIIN Act; P.L. 114-322) created anew
authority for the Bureau ofReclamation (Reclamation, part
of the Department of the Interior) to build water storage
projects in the western United States. FromFY2017 to
FY2020, Congress appropriated $469 million for these
projects, and Reclamationhas allocated a portion of these
funds to progress on anumber of waterstorageprojects in
its service area.
In the early and mid-20t century, Reclamation built
hundreds of large dams and water diversion structures
throughout theWest. Traditionally, Reclamation's role in
water project development has been limited to
geographically specific projects authorized in federal
statute. Typically the federal government, through
discretionary appropriations to Reclamation, has provided
full, up-front funding for the construction costs of these
facilities. Project beneficiaries, which are irrigators,
lmunicipal water suppliers, and hydropower contractors,
repay their portion of reimburs able project construction
or development costs over a40-50 year term. The amount
recouped by the federal govennnt typically depends on
several factors, including the portion of project benefits that
are classified as nonreimbursable under federal law
because they are considered federal in nature (e.g., fish and
wildlife enhancements, flood control, recreation), as well as
adjustments for irrigators' ability to pay. Additionally,
irrigation beneficiaries are not charged interest on their
repayment obligations. As a result, the total amount repaid
to the federalgovernment for these projects is typically less
than the fallcost of construction.
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Section 4007 of the WIIN Act authorized anew structure
for Reclamation to support water storage infrastructure
projects, includingboth surface water and groundwater
storage projects. The act authorized $335 million in
discretionary appropriations for new and improved federal
and nonfederal water storage projects. Any appropriated
funds are to be made available for qualifying water storage
projects approved for constructionprior to January 1, 2021.
Funding for water s torage project construction under
Section 4007 is available for two primary project types.
Federally owned storage projects ( surface or
groundwater storage projects to which the United States
holds title and which were authorized to be constructed
pursuant to reclamation law and regulations) may be no
more than 50% federally funded. State-led storage
projects (surface water or groundwater storage projects
constructed, operated, and maintainedby states orpolitical
subdivisions that are foundto have a federalbenefit in
accordance with reclamation law) may be no more than
25% federally funded.
For federalparticipation in the construction of a project
under either designation, the Secretary of the Interior must
find that the projectis feasible andprovides federalbenefits
proportionateto the federal government's cost share (e.g., a
project providing 50% federal support requires that at least
50% of its benefits be federal in nature). Project sponsors
also must agree to pay their portionofproject costs up
front. Afterthe Secretary's recommended projects have
been transmittedto Congress, the project lmustbe
designated byname in an enacted appropriations actbefore
it can receive funding.
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Instead of full, up-front federal financing, with
reimburs able funding to be repaid bybeneficiaries over
time (i.e., the traditional model for Reclamation projects),
Section 4007 has beeninterpreted to authorize partial, up-
front federal funding (i.e., funding for both reimbursable
and nonreimbursable costs), with the corresponding
nonfederal share of funding also required up-front.
Proponents of these changes argue that they stretch scarce
federal funds and provide increased incentive for local
involvement in storage projects. At the same time, in
requiring a large initial cost share fromnonfederalusers,
the new authority may notbe attractive for sponsors who
cannot afford large, up-front payments.
Section 4007 also significantly altered the role of
congressional authorizing and appropriations committees in
project development. It allows Reclamation to move
forward with construction without direct legislative
approval fromcongressional authorizing committees. By
requiring designation of Administration recommendations
by name in appropriations acts, Section 4007 effectively
shifted project approval (i.e., authorization) decisions to the
appropriations process.
Congress has appropriated $469 million for Section 4007
projects as of mid-2020, including funding in enacted
Energy and Water Development appropriations acts for
FY2017 ($67 million), FY2018 ($134 million), FY2019
($134 million), and FY2020 ($134 million). For its part,
Reclamation has is sued three rounds offunding allocations
for Section 4007 that, once approved by Congress, release
portions of this funding to individual projects.
Reclamation's recommendations in January 2018 and
February 2019 were approvedby Congress, and thelatest
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