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1 1 (July 2, 2020)

handle is hein.crs/govebaw0001 and id is 1 raw text is: $ ii I ft Service no mnuth V~iLI t Th an e1414 9 Updated July 2, 2020 Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act Section 4007 of the Water Infrastructure Improvements for the Nation Act (WIIN Act; P.L. 114-322) created a new authority for the Bureau of Reclamation (Reclamation, part of the Department of the Interior) to build water storage projects in the western United States. FromFY2017 to FY2020, Congress appropriated$469million forthese projects, and Reclamationhas allocated a portion of these funds to progress on a number of waterstorageprojects in its service area. Background In the early and mid-2th century, Reclamation built hundreds of large dams and water diversion s tructures throughout the West. Traditionally, Reclamation's role in water project developmenthas beenlimited 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, municipal water suppliers, and hydropower contractors, repay their portion of project construction or development costs over a 40-50 year term. The amount recouped by the federal government typically depends on several factors, including the portionofprojectbenefits that are nonreimbursable 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 theirrepaymentobligations. As aresult, thetotal amount rep aid to the federal government for theseprojects is typically less than the full cost ofconstruction. Section 4007 of the W N A ct Section 4007 ofthe WIINAct authorized anewstructure for Reclamation to support water storage infrastructure projects, including both surface water and groundwater storageprojects. The act authorized $335 million in discretionary appropriations for new and improved federal and nonfederalwater storage projects. Any appropriated funds are to be made available for qualifying water storage projects approved for construction prior 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, defined to be any project to which the United States holds title and which was authorized to be constructedpursuant to Reclamation's laws and regulations, may be no more than 50% federally funded. State-led storage projects, defined to be groundwater or surface waters torage projects constructed, operated, and maintainedby states orpolitical subdivisions that are found tohave a federal benefit in accordance with reclamation laws, may be no more than 25% federally funded. For federalp articip ation 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% federalsupport appears to require that 50% of its benefits be federalin nature, whereas a project providing 25% federalsupport musthave25% federal benefits). Project sponsors also must agree to pay theirportion of project costs up front (i.e., at the time of construction). Afterthe Secretary's recommended projects have been transmitted to Congress, the project must be designated by name in an enacted appropriations act. Differences from Traditional Reclamation Water Storage Project Construction Instead of full, up-front federalfmancing to be repaid over time (i.e., the traditional model for Reclamation projects), Section 4007 essentially authorizes partial, up-frontfederal funding, with the corresponding nonfederal share of funding also required up-front. Proponents of these changes argue that they stretch scarce federal funds andprovide increased incentive for local involvement in storage projects. At the s ame time, in requiring a large initial cost share fromnonfederalusers, the new authority may not be 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, Section4007 effectively shifted project approval (i.e., authorization) decisions to the appropriations process. Recent Funding, Project Allocations Congress appropriated $469 million for Section 4007 projects as ofmid-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 of funding 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 have been approved by Congress, and the latest recommendations (fromJune 2020) are awaiting congressionalaction as of the date of this report (Table 1). https://crsrepc

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