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1 1 (April 3, 2019)

handle is hein.crs/govzag0001 and id is 1 raw text is: Conresoa Reeac Seric Updated April 3, 2019 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), enacted in December 2016, 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. Reclamation has used this authority to further progress on a number of water storage projects. From FY2017 to FY2019, Congress appropriated the full $335 million in available budget authority for these projects. A portion of these funds has been allocated at the project level by Reclamation. Some federal and state decisionmakers, local stakeholders, and advocacy groups are interested in extending the authority to make additional headway on water storage projects in the West. Others oppose federal funding for new water storage projects, in particular those to be located in environmentally sensitive areas. This In Focus discusses the Section 4007 authority and its status. Background In the early and mid-20th century, Reclamation built hundreds of large dams and water diversion structures throughout the West. 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, 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 portion of project benefits that are nonreimbursable because they are considered federal in nature (e.g., fish and wildlife enhancements, flood control, recreation), as well as adjustments for irrigation contractors' ability to pay. Additionally, irrigation beneficiaries are not charged interest on their repayment obligations. As a result, the total amount repaid to the federal government for these projects is typically less than the full cost of construction. Process Under Section 4007 of the WIN Act Section 4007 of the WIIN Act authorized a new structure for Reclamation to support water storage infrastructure 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 construction prior to January 1, 2021. Funding for water storage project construction under Section 4007 is available for two primary project types: 1. Federally-owned storage projects, defined to be any project to which the United States holds title and which was authorized to be constructed pursuant to Reclamation's laws and regulations. The federal cost share for these projects is limited to no more than 50%. 2. State-led storage projects, defined to be groundwater or surface water storage projects constructed, operated, and maintained by states or political subdivisions that are found to have a federal benefit in accordance with reclamation laws. The federal cost share for these projects is limited to no more than 25%. For federal participation in a project under either designation, the Secretary of the Interior must find that the project is feasible and provides federal benefits proportionate to the federal government's cost share (e.g., a project providing 50% federal support appears to require that 50% of its benefits be federal in nature, whereas a project providing 25% must have 25% federal benefits). Project sponsors also must agree to pay their portion of project costs up front (i.e., at the time of construction). After the 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 Construction Process Instead of full, up-front federal financing to be repaid over time, Section 4007 authorizes partial, up-front federal funding. Proponents of these changes argue they will 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 from nonfederal users, those who cannot afford up-front, lump-sum payments may be deterred from pursuing new projects. Thus, the Section 4007 authority appears to be most attractive to those with access to the requisite capital. The Section 4007 authority does not eliminate the traditional Reclamation project approval and finance process as a path to new project construction. However, any appropriations for the new authority could theoretically detract from appropriations that might otherwise be made for projects under the traditional approval and finance model. https:I/crsreports.conc -- -q 0

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