S. 2218Senate108th Congress (2003-2005)In Committee

Reclamation Rural Water Supply Act of 2004

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Committee on Energy and Natural Resources Subcommittee on Water and Power. Hearings held. With printed Hearing: S.Hrg. 108-539.

Water and Power Subcommittee

March 25, 2004

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SenateIntro Referral

Introduced in Senate

March 22, 2004

SenateIntro Referral

Read twice and referred to the Committee on Energy and Natural Resources.

Energy and Natural Resources Committee

March 22, 2004

SenateCommittee

Committee on Energy and Natural Resources Subcommittee on Water and Power. Hearings held. With printed Hearing: S.Hrg. 108-539.

Water and Power Subcommittee

March 25, 2004

Floor Debate

6 members

What members said about S. 2218 on the floor

4 Republicans2 Democrats

Sen. Max BaucusD-MT · Mar 22, 2004

Mr. President, I rise today to introduce the Medicaid and CHIP Safety Net Preservation Act, a bill to clarify existing law and to preserve the core elements of Medicaid, the State Children's Health Insurance Program, (CHIP), and our health care safety net, which provide needed health services to more than sixty million Americans. These programs, which are so critical to the health of our children, our parents and grandparents, and to our communities, have been threatened in recent years by waivers that undermine the very foundations of these programs. I am introducing this bill with my colleague, good friend, and the Ranking Member of the Finance Committee's Subcommittee on Health, Senator Rockefeller.

I have long been concerned about the inappropriate use of the so- called ``Section 1115'' waiver authority with respect to Medicaid and CHIP. Section 1115 of the Social Security Act permits the Secretary of HHS to waive provisions of the Medicaid and CHIP statutes at the request of a state if the waiver is determined to ``promote the Objectives'' of the program, and if it meets certain other criteria established in statute. The waiver authority has existed since before Medicaid's inception, and it is designed to allow states before Medicaid's inception, and it is designed to allow states to experiment and engage in pilot and demonstration programs in a variety of Social Security Act programs. It has long been used to allow States to try innovative approaches to deliver or finance healthcare for some of our most vulnerable citizens--poor children, pregnant women and parents, individuals with disabilities, and the elderly, including many in nursing homes.

But in recent years, the waiver authority has been used increasingly aggressively and, in my view, irresponsibly. I first became concerned about these waivers when I learned that waiver programs, which now affect millions of people and tens of billions of dollars annually, were being negotiated and approved in the dark. In some cases, Medicaid enrollees literally could not find what the operative Medicaid rules were in their state, because laws and rules had been waived and the new program requirements were not published in a place accessible to the public. In 2001, I and my colleague, Chairman Chuck Grassley, wrote to Secretary Thompson with our concerns that the waiver process was not adequately transparent, and that there could be no accountability without transparency.

After many months and much correspondence with Secretary Thompson, I noticed some improvement in the posting of approved waiver applications. By that time, the General Accounting Office had reported that there were serious problems with 1115 waivers. Waivers were being approved without adequate public input; waivers were being approved that used funds set aside by Congress for children's health care on childless adults; and waiver applications were being negotiated and approved with different standards applied, depending on the identity of the state applicant. Finally, and most disturbing, the GAO noted that HHS was applying a condition to one type of waiver that imposed a hard cap on Federal spending for a state's elderly Medicaid enrollees over a five-year period.

Most recently, I was deeply disturbed to read press reports indicating that HHS was inviting states to prepare new more comprehensive waiver applications that would impose enforceable, global caps on state Medicaid programs. One of the crucial elements of the Medicaid program is its unique state-federal financing structure, which requires every state dollar expended on Medicaid to be matched by at least one Federal dollar. This guaranteed matching structure provides financial stability and an incentive for states to maintain levels of health care spending in good and bad economic times. The matching structure has, over time, allowed a swift response to economic recessions, high rates of uninsurance, epidemics, disasters like 9/11, and innovative treatment advances, like the advent of expensive protease inhibitors to threat AIDS. The law does not, and it should not, allow a Secretarial waiver of such a core element of Medicaid.

Another press report indicated that one governor intended to seek a waiver to the Medicaid entitlement in exchange for accepting a hard cap on Federal Medicaid spending. In the absence of the individual entitlement, a state could turn away eligible applicants; impose waiting lists; or terminate a health care benefit in the middle of treatment for a serious illness or a stay in a nursing home. For the poor, for children, for individuals with disabilities, such as ``innovation'' in Medicaid could be devastating.

I also heard reported an instance where HHS announced in court, for the very first time, that the Secretary has waived the essential ``EPSDT'' benefit for children in one state. Beneficiaries did not even know that they were no longer entitled to the comprehensive benefit for children until they were in litigation with the State over inadequacies in the state's Medicaid program.

And finally, I am concerned about efforts to undermine Medicaid financing for Community Health Clinics and Rural Health Clinics through the use of the 1115 waiver authority. These clinics provide desperately needed care for Medicaid and CHIP enrollees as well as millions of uninsured Americans. Without fair payment from Medicaid, CHCs and RHCs have reduced capacity to see the patients who rely on them for care.

There are some features of the Medicaid program that are so fundamental to the program that they should never be waived with the stroke of the pen of one person. And I am pleased to quote the new Administrator of the Centers on Medicare and Medicaid Services, Mark McClellan, who agreed at his nomination hearing that, and I quote from a news article citing his testimony, ``federally imposed caps on spending are not envisioned as part of Medicaid's structure.'' He also said that core Medicaid principles, such as the program's state and federal funding partnership and citizens' entitlement to benefits, should not be waived.

I am hopeful that, one day in the not too distant future, the Congress can have a meaningful debate on how to improve the Medicaid program that is now a healthcare lifeline for more than 50 million people, and how to improve CHIP and expand coverage to the uninsured. But in the meantime, we must ensure that efforts to innovate through waivers are made publicly and openly, with an opportunity for stakeholder

input at every level of decision making, and with a promise that innovation will ``do no harm'' to the foundational principles of these safety net programs. I urge my colleagues to cosponsor this bill, which will improve the integrity of Medicaid and CHIP and ensure that they remain available and responsive to the needs of so many Americans.

I ask unanimous consent that the bill be printed in the Record.

Sen. Mike DeWineR-OH · Mar 25, 2004

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on March 25, 2004, at 9:30 a.m., in open and closed session to…

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on March 25, 2004, at 9:30 a.m., in open and closed session to receive testimony on the role of U.S. Northern Command and U.S. Special Operations Command in defending the homeland and in the global war on terrorism, in review of the defense authorization request for fiscal year 2005.

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and

Urban Affairs be authorized to meet during the session of the Senate on March 25, 2004, at 2 p.m., to conduct a hearing on ``The Administration's Proposed Fiscal Year 2005 Budget for the Federal Transit Administration.''

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Thursday, March 25, 2004, at 9:30 a.m., on Cable Rates.

Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions, Subcommittee on Employment, Safety, and Training be authorized to meet for a hearing on Hazard Communication in the Workplace during the session of the Senate on Thursday, March 25, 2004 at 10 a.m. in SD-430.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, March 25, 2003 at 9:30 a.m. to hold a hearing on AGOA III: the United States Africa Partnership Act of 2003.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, March 25, 2004 at 2:30 p.m. to hold a hearing on Nominations.

Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet during the session of the Senate on Thursday, March 25, 2004, for a joint hearing with the House of Representatives' Committee on Veterans' Affairs, to hear the legislative presentations of the National Association of State Directors of Veterans Affairs, AMVETS, American Ex-Prisoners of War, the Vietnam Veterans of America, and the Military Officers Association of America.

The hearing will take place in room 345 of the Cannon House Office Building at 10 a.m.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on March 25, 2004 at 2:30 p.m. to hold a closed hearing on intelligence matters.

Mr. President, I ask unanimous consent that the Subcommittee on Economic Policy of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Thursday, March 25, 2004, at 10 a.m. to conduct a hearing on ``National Flood Insurance Repetitive Losses.''

Mr. President, I ask unanimous consent that the Subcommittee on Strategic Forces of the Committee on Armed Services be authorized to meet during the session of the Senate on March 25, 2004, at 2:30 p.m., in open session to receive testimony on National security space programs, and management, in review of the defense authorization request for fiscal year 2005.

Mr. President, I ask unanimous consent that the Subcommittee on Water and Power of the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Thursday, March 25 at 2:30 p.m. to receive testimony regarding the following bills: S. 1085, a bill to provide for a bureau of reclamation program to assist states and local communities in evaluating and developing rural and small community water supply systems, and for other purposes; S. 1732, a bill 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: S. 2218, a bill 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 and establish guidelines for projects and for other purposes; S. 1727, a bill to authorize additional appropriations for the Reclamation Safety of Dams Act of 1978; and S. 1791, a bill to amend the Lease Lot Conveyance Act of 2002 to provide that the amounts received by the United States under that act shall be deposited in the reclamation fund, and for other purposes.

Sen. John D. Rockefeller IVD-WV · Mar 22, 2004

Mr. President, I rise today to join the distinguished ranking member from Montana, Mr. Baucus, in introducing the Medicaid and CHIP Safety Net Preservation Act of 2004. Medicaid and the Children's…

Mr. President, I rise today to join the distinguished ranking member from Montana, Mr. Baucus, in introducing the Medicaid and CHIP Safety Net Preservation Act of 2004. Medicaid and the Children's Health Insurance Program (CHIP) provide health insurance coverage to more than 50 million vulnerable Americans, including pregnant women, kids, people with disabilities, and seniors in nursing homes. Preserving the integrity of each of these programs should be one of our top priorities. The bill that we are introducing today would ensure that Section 1115 of the Social Security Act--the so-called ``1115 waiver authority''--does not erode the core objectives of Medicaid and CHIP.

Medicaid and CHIP form the foundation of our Nation's health care safety net. Without them, many more Americans would be uninsured. Unfortunately, the central objectives of these entitlement programs have been threatened in recent years by short-sighted proposals to cap Federal funding, questionable administrative rules and regulations, and inappropriate waivers that essentially waive the requirements of Federal law. The Medicaid and CHIP Safety Net Preservation Act would address each of these issues by reaffirming the core requirements of Medicaid and SCHIP.

Congress created Medicaid in 1965 as Federal-State partnership to provide health insurance coverage to low-income families on welfare. Over the years, Medicaid has evolved into a multi-faceted health insurance program that serves working families, the disabled, and the elderly. Throughout the evolution of Medicaid, two aspects of the program have remained the same: Federal guidelines for program administration and shared Federal and State responsibility for financing. This structure has served the Medicaid program well. It maintains the national health care safety net, while also allowing Federal and State policymakers to tailor the program to meet local needs.

In 1997, I was joined by Senator Chafee in introducing the Children's Health Insurance Program as part of the Balanced Budget Act. The purpose of this program has always been to help the children of families that do not qualify for Medicaid. At the time that CHIP was enacted, 10 million children were uninsured. Today, over 5 million children have coverage through CHIP; this includes nearly 23,000 children in the State of West Virginia. While we still have a long way to go in order to provide every child with health insurance, I believe the families touched by the CHIP program thus far would agree it serves its purpose well.

The legislation that Senator Baucus and I are introducing today is designed to make it very clear that certain requirements under Medicaid and CHIP are central to the overall objectives of these programs and are not subject to waiver. Specifically, this legislation would ensure that 1115 waivers are not used to impose global caps on Federal payments to Medicaid. It would protect the Federal guarantee of Medicaid for any eligible individual. Children would continue to have access to comprehensive health benefits under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) program. Money intended for the care of children under CHIP would be used for that purpose. Finally, the process for reviewing and approving 1115 waivers would be more transparent, allowing greater opportunities for public notice and comment.

The Medicaid and CHIP Safety Net Preservation Act is a good first step toward preserving these critical health insurance programs. However, in order to strengthen Medicaid and CHIP for the future, we must also enact legislation that gives States the resources they need to cover eligible Medicaid beneficiaries, restores funding for the CHIP program, and allows states greater flexibility within the guidelines of the law. I urge my colleagues to support all of these important measures.

Sen. Kay Bailey HutchisonR-TX · Mar 22, 2004

Mr. President, today I am pleased to introduce the Community Savings and Investment Act of 2004. This will create jobs, expand economic activity, and help to revitalize distressed urban and rural…

Sen. Lisa MurkowskiR-AK · Mar 22, 2004

Mr. President, I would like to announce for the information of the Senate and the public that the following bills have been added to the agenda for the hearing scheduled for Subcommittee on Water and…

Show 1 more

Sen. Craig ThomasR-WY · Mar 22, 2004

Mr. President, I would like to announce for the information of the Senate and the public that a hearing has been scheduled before the Subcommittee on National Parks of the Committee on Energy and…

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Introduced in SenateIssued March 22, 2004

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2218 Introduced in Senate (IS)]

108th CONGRESS
2d Session
S. 2218

To direct the Secretary of the Interior to establish a rural water
supply program in the Reclamation States for the purpose of providing a
clean, safe, affordable, and reliable water supply to rural residents
and for other purposes, to authorize the Secretary to conduct appraisal
and feasibility studies for rural water projects, and to establish the
guidelines for any projects authorized under this program.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

March 22, 2004

Mr. Domenici introduced the following bill; which was read twice and
referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

A BILL

To direct the Secretary of the Interior to establish a rural water
supply program in the Reclamation States for the purpose of providing a
clean, safe, affordable, and reliable water supply to rural residents
and for other purposes, to authorize the Secretary to conduct appraisal
and feasibility studies for rural water projects, and to establish the
guidelines for any projects authorized under this program.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Reclamation Rural Water Supply Act
of 2004''.

SEC. 2. DEFINITIONS.

In this Act:
(1) Federal reclamation laws.--The term ``Federal
Reclamation laws'' means the Act of June 17, 1902, 43 U.S.C.
371 et seq., as amended and supplemented.
(2) Indian lands.--The term ``Indian lands'' means those
lands held by the United States in trust for a tribe or
individual member(s) of an Indian tribe or those lands owned by
a tribe or individual member(s) of an Indian tribe subject to a
Federal restriction on alienation.
(3) Indian tribe.--The term ``Indian tribe'' means a tribe
included on the list of recognized tribes which the Secretary
publishes under the Federally Recognized Indian Tribe List Act
of 1994 (25 U.S.C. 479a-1), and which are eligible for the
special programs and services provided by the United States to
Indians because of their status as Indians.
(4) Indian.--The term ``Indian'' means a person who is a
member of an Indian tribe.
(5) Non-federal project entity.--The term ``non-Federal
project entity'' means a State, regional, or other 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) Reclamation.--The term ``Reclamation'' means the Bureau
of Reclamation, an agency within the Department of the
Interior.
(7) Reclamation states.--The term ``Reclamation States''
means the States and areas referred to in section 1 of the
Reclamation Act of 1902 (Act of June 17, 1902, 43 U.S.C. 371 et
seq.), as amended.
(8) Rural water supply project.--The term ``rural water
supply project'' means a water supply project identified to
serve a group of communities, Indian tribes, tribal
organizations, dispersed homesites, or rural areas with
domestic, residential, and industrial water, and which can
include incidental livestock watering, but which does not
include commercial irrigation. The terms ``rural'' and ``rural
area'' mean any open country, or any place, town, village, or
city which is not part of or associated with a metropolitan
statistical area and shall be further clarified for the
purposes of this program in the criteria developed under
section 3(d). Rural water infrastructure includes pumps, pipes,
wells, water treatment facilities, and appurtenances, but does
not include major impoundment structures.
(9) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(10) Tribal organization.--The term ``tribal organization''
means the recognized governing body of any Indian tribe; any
legally established organization of Indians which is
controlled, sanctioned, or chartered by such governing body or
which is democratically elected by the adult members of the
Indian community to be served by such organization and which
includes the maximum participation of Indians in all phases of
its activities: Provided, That in any case where a contract is
let or grant made to an organization to perform services
benefiting more than one Indian tribe, the approval of each
such Indian tribe shall be a prerequisite to the letting or
making of such contract or grant.
(11) Construct.--The term ``construct'' means to install
new infrastructure and to upgrade or replace existing
facilities where they are associated with the new
infrastructure authorized under the Act.
(12) Operations, maintenance, and replacement costs.--The
term ``operations, maintenance, and replacement costs'' means
all costs for the operations of the project that are necessary
for the safe, efficient and continued functioning of the
project to produce the benefits set forth in the feasibility
study. This includes repairs of a routine nature that maintain
the project in a well kept condition, replacement of worn-out
project elements and rehabilitation activities necessary to
bring a deteriorated project back to its original condition.

SEC. 3. RURAL WATER SUPPLY PROGRAM.

(a) In General.--The Secretary is authorized to undertake a
competitive program based upon the criteria developed under subsection
(d) to plan, design and construct rural water supply projects in
cooperation with non-Federal project entities.
(b) Reclamation States.--The program established in this Act shall
be limited to the Reclamation States.
(c) Non-Federal Project Entity.--Each rural water supply project
under the program established in this Act shall be performed in
cooperation with a qualifying non-Federal project entity as defined in
section 2(e) of this Act.
(d) Eligibility Criteria.--The Secretary shall develop and publish
criteria for determining which projects are eligible for participation
under the program established in this Act. The Secretary, to the
maximum extent possible, shall consider--
(1) whether a rural water supply project--
(A) serves rural areas and communities or Indian
tribes;
(B) shows economic benefits;
(C) is cost-effective; and
(D) whether and to what extent the local project
sponsors can meet the cost-share and repayment criteria
described in section 3(e), section 4, and section 5;
(2) whether there is an urgent and compelling need for a
rural water supply project that would address current or future
water supply shortages, and/or improve the health and/or
aesthetic based quality of water in a manner that results in
continuous, measurable, and significant water quality benefits;
(3) whether a rural water supply project helps meet
existing legal requirements;
(4) whether a rural water supply project promotes and
applies a regional or watershed perspective to water resource
management or cross-boundary issues, implements an integrated
resources management approach, increases water management
flexibility, or forms a partnership with other entities;
(5) whether a rural water supply project provides benefits
outside the region in which the project occurs; and
(6) the availability of water rights to support project
development and actual water delivery.
(e) Limitation on Use of Federal Funds.--
(1) In general.--Notwithstanding any other provision of law
and except as provided in paragraph (2), the Federal share of
the costs of any individual project authorized by Congress
under the program established in this Act shall not exceed the
portion of those project costs in excess of the non-Federal
entities' capability-to-pay, as generally described in section
5(e). Except as provided in paragraph (2), the local
contribution shall be based upon the non-Federal entities'
capability to pay and shall be no less than 35 percent of the
projected total project costs.
(2) Reduced non-federal share.--The Secretary may increase
the Federal share of the cost of a project authorized under the
program established in this Act to an amount that is greater
than the amount specified in paragraph (1) of this subsection
if the Secretary determines that--
(A) the project is for the benefit of an Indian
tribe; and
(B) application of paragraph (1) would result in
economic hardship for such Indian tribe.

SEC. 4. APPRAISAL INVESTIGATIONS.

(a) In General.--Upon request of a non-Federal project entity and
consistent with section 3 (d) and (e) of this Act, the Secretary may
undertake, in cooperation with such non-Federal project entity,
appraisal investigations to identify and study opportunities for
construction of rural water supply projects to determine if they meet
the criteria to be promulgated under Section (3)(d). The appraisal
report shall include a determination of whether or not to recommend the
initiation of a feasibility study for a proposed rural water supply
project.
(b) Cooperation.--The Secretary shall consult and cooperate with
appropriate State, regional, tribal and local authorities during the
performance of each appraisal investigation conducted pursuant to this
Act.
(c) Costs.--The Federal obligations for costs of such appraisal
investigations shall conform with Reclamation policy (Reclamation
Manual number CMP-05-01).

SEC. 5. FEASIBILITY STUDIES, PROJECT DEVELOPMENT, AND COST SHARE.

(a)  In General.--The Secretary, in cooperation with a non-Federal
project entity, is authorized to undertake studies to determine the
feasibility of rural water supply systems recommended for such study
pursuant to section 4 of this Act. The feasibility report shall
document the Secretary's engineering, environmental, and economic
investigation of a proposed rural water supply project, taking into
consideration the range of potential solutions and the circumstances
and needs of the area to be served by the proposed project, the
potential benefits to the people of that area, and appropriate water
conservation measures. The highest priority in selecting alternatives
shall be determined by evaluating factors that include, but are not
limited to, the following: the level of net economic benefits; the
extent to which the project and alternatives take advantage of economic
incentives and the use of market-based mechanisms; whether a proposed
project is ``rural'' or in a ``rural area'', as defined in section 1(h)
and clarified in the eligibility criteria developed under section 3(d);
a benefit-cost analysis, containing an analysis comparing different
structural and non-structural options for meeting water needs; whether
non-Federal entities have adequate fiscal controls in place to manage
the project; the extent to which the project involves partnerships with
other State, local, tribal government, or Federal entities; and the
extent to which projects intended for Indian tribes and tribal
organizations address the need for economic self sufficiency. The
Secretary shall indicate in the Feasibility report whether the project
is recommended for implementation.
(b) Federal Cost Share.--The Federal share of the costs of such
feasibility studies shall not exceed 50 percent of the total study
costs, except that the Secretary may increase the Federal share of the
costs of such feasibility studies for an Indian tribe or tribal
organization if the Secretary determines that they would be unable to
contribute at least 50 percent of the costs of such study based on
criteria established by the Secretary in regulations. The Secretary may
accept as part of the non-Federal cost share, the contribution of such
in-kind services by the non-Federal project entity that the Secretary
determines will contribute toward the conduct and completion of the
study.
(c) Study Considerations.--In addition to the requirements of other
Federal laws, feasibility studies conducted under the program
established in this Act shall consider--
(1) the need for action;
(2) near- and long-term water demand and supplies in the
study area;
(3) an evaluation of resource capabilities within the study
area to provide a safe and reliable source of potable water to
the communities and rural areas to be served;
(4) all reasonable alternatives, including non-structural
alternatives, that satisfy the need for action, including an
alternative that is within the non-Federal entity's capability
to pay annual Operations, Maintenance, and Replacement costs;
(5) economic feasibility (measure of project benefits and
costs) and cost effectiveness (least cost method of attaining
desired result);
(6) impacts to the natural and human environment;
(7) appropriate water conservation and other demand
management measures;
(8) the financial capability of the non-Federal project
entity to fund its proportionate share of the project's capital
construction costs and 100 percent of the identified annual
operation, maintenance, and replacement costs associated with
the proposed project as established in section 5(e). Financial
capability shall be determined by evaluating factors for the
project area, relative to the regional average, that include,
but are not limited to, the following: per capita income,
median household income, poverty rate, the ability of the non-
Federal entity to raise tax revenues, the ``strength'' of the
non-Federal entity's balance sheet, and the existing cost of
water;
(9) whether the project sponsor has diligently pursued
other sources of Federal and non-Federal assistance to meet
their water needs, and can demonstrate that no other options
are viable for meeting the communities' water needs; and
(10) the soundness of any future growth projections being
used to justify either the need for the project, or the project
sponsor's ability to pay their cost-share or the operation,
maintenance, and replacement costs.
(d) Capability To Pay.--
(1) Construction costs.--In evaluating a project, the
Secretary shall consider the capability of the private sources
and State and local government and tribal sources to pay for
the capital construction costs and shall set forth the
Secretary's determination of the Federal and non-Federal cost
share.
(2) Allocation.--The Secretary shall determine, based on
the findings in the feasibility report, the Federal and non-
Federal costs for a rural water supply project recommended to
be constructed under the program established in this Act and
apportion those costs in accordance with the benefits received
and allocate the non-Federal costs to the project
beneficiaries. Grants from other Federal sources cannot be
credited toward the non-Federal cost share determined under
provisions of this Act, unless the other Federal source is used
by an Indian tribe or tribal organization to offset their
allocation of project costs.
(3) Tribes.--In determining the capability-to-pay of Indian
project beneficiaries, the Secretary shall consider non-tribal
users living or working on tribal lands as non-Indian
beneficiaries; The Secretary may defer the collection of all
non-Federal construction costs apportioned to Indian project
beneficiaries unless or until the Secretary determines that
such beneficiaries should pay the costs allocated to it or an
appropriate portion of such costs.

SEC. 6. OPERATION, MAINTENANCE, AND REPLACEMENT COSTS.

(a) In General.--Except as provided in subsection (b), non-Federal
entities must have the capability to pay all operation, maintenance,
and replacement costs of the project facilities.
(1) Operation, maintenance, and replacement costs plan.--
The non-Federal project entity, in consultation with the
Secretary, shall develop an operation, maintenance, and
replacement costs plan to provide the necessary framework to
establish rates and fees for beneficiaries of the project.
(2) Feasibility report.--The Secretary shall include in the
feasibility report a schedule identifying the annual operation,
maintenance, and replacement costs that should be allocated to
each non-Federal entity participating in the project, as well
as the current and expected financial capability of each non-
Federal entity to pay its allocated annual operation,
maintenance, and replacement costs.
(3) Replacement costs responsibility.--The non-Federal
project entity shall be responsible for all project replacement
costs.
(4) Oversight costs.--Federal oversight costs, as
determined by the Secretary, shall be considered project
operation, maintenance, and replacement costs.
(5) Operation, maintenance, and replacement costs for
indian project beneficiaries.--In the exercise of the
Secretary's discretion under this subsection, if there is a
difference between actual operation, maintenance and
replacement costs allocated to Indian project beneficiaries and
the revenues anticipated from Indian beneficiaries, and if the
Secretary determines that the Indian project beneficiaries do
not have the capability to pay operation, maintenance, and
replacement costs, in order to assist in payment of such
operation, maintenance, and replacement costs, the Secretary
may seek appropriations in amounts necessary to fulfill the
purposes of this subsection.

SEC. 7. FEDERAL RECLAMATION PROJECTS.

Nothing in this Act shall supersede or amend the provisions of
Federal Reclamation law or law associated with any project, or portion
of any project constructed under any authority of Federal Reclamation
law.

SEC. 8. GENERAL AUTHORITY.

(a) In General.--The Secretary is authorized to enter into
contracts, financial assistance agreements and other such agreements
and to promulgate such regulations as may be necessary to carry out the
purposes and provisions of this Act.
(b) Determinations.--All determinations, including modifications,
by the Secretary and the methodologies selected for making such
determinations shall be final and not subject to judicial review. Such
determinations shall include, but not be limited to, the following:
whether or not to recommend initiation of feasibility studies;
feasibility of a project, all project costs, including operation,
maintenance, and replacement costs; payment capability; payment terms
and conditions; allocation or apportionment of costs; allocation or
apportionment of water; and deferral of cost collection.

SEC. 9. REPORTS TO CONGRESS.

The Secretary is directed to submit to Congress feasibility reports
described in section 5 for those projects the Secretary recommends, and
to seek, as the Secretary deems appropriate, specific authority to
develop and construct such recommended projects. This report shall
include good faith letters of intent by the non-Federal project entity
or entities that they will share the allocated costs as determined by
the Secretary.

SEC. 10. COORDINATION WITH OTHER FEDERAL AND STATE RURAL WATER SUPPLY
PROGRAMS.

The Secretary shall coordinate with existing Federal and State
rural water and wastewater programs to determine the most appropriate
agency to undertake the project, and to otherwise facilitate the most
efficient and effective solution to meeting the water needs of the non-
Federal project sponsors.

SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

(a)  In General.--There is hereby authorized to be appropriated
$70,000,000 per year to carry out the appraisal and feasibility study
authorized pursuant to this Act and the construction activities to be
authorized consistent with this Act.
(b)  Construction Cost Indexing.--Appropriations to plan and
construct projects authorized under this Act shall include such sums as
are necessary to defray increases in development costs reflected in
appropriate engineering cost indices after the completion date of the
applicable feasibility report, and such sums shall remain available
until expended. The Federal and non-Federal share of cost increases due
to inflation will be allocated proportionate with the original cost
share split.

SEC. 12. PROHIBITION ON USE OF FUNDS FOR IRRIGATION PURPOSES.

None of the funds made available to the Secretary for planning or
construction of a rural water supply project developed under the
program established in this Act may be used to plan or construct
facilities used to supply water for the purpose of irrigation.

SEC. 13. PROJECT OWNERSHIP.

Title to the components of rural water supply projects planned,
designed, and constructed under the program established in this Act
shall be held by the non-Federal project entity.

SEC. 14. APPLICATION OF INDIAN SELF-DETERMINATION ACT.

Any pre-construction or construction activity for any project
authorized pursuant to this Act may be subject to the requirements of
title I or title IV of the Indian Self-Determination and Education
Assistance Act, as amended (Public Law 93-638; 25 U.S.C. 450 et seq.).
Notwithstanding subsections 105(b), 106(b) and 106(l) of the Indian
Self-Determination and Education Assistance Act, or any other provision
of law, in the case of amounts appropriated pursuant to this Act which
are made available to an Indian project beneficiary under a self-
determination contract or a self-governance agreement, all project
revenues, including any interest earned shall be--
(1) reported by the Indian project beneficiary to the
Secretary in a manner determined to be adequate by the
Secretary;
(2) expended by the Indian project beneficiary only for the
purposes for which they were originally appropriated or for the
purposes for which they were authorized pursuant to the
provisions of this Act; and
(3) considered by the Secretary in determining the amount
of funds otherwise obligated to the contract or agreement in
subsequent years.

SEC. 15. SAVINGS CLAUSE.

(a) Nothing in this Act shall be construed to--
(1) affect any Indian water rights or land claims of Indian
tribes or individual Indians, whether located inside or outside
the external boundaries of an Indian reservation or on Indian
lands; or
(2) affect or extinguish tribal sovereignty or the trust
status of Indian lands.
(b) Individual rural water projects constructed under the authority
of this Act may be used to satisfy, in part or in whole, the terms of
Indian Water Rights settlements, to the extent that such arrangements
are spelled out in settlement language.
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