I
109th CONGRESS
1st Session
H. R. 4418
IN THE HOUSE OF REPRESENTATIVES
November 18, 2005
Mr. Pearce introduced the following bill; which was referred to the Committee on Resources
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.
Short title; table of contents
Short title
This Act may be cited as the Rural Water Supply Act of 2005
.
Table of contents
The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Reclamation Rural Water Supply Act of 2005
Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Rural water supply program.
Sec. 104. Rural water programs assessment.
Sec. 105. Appraisal investigations.
Sec. 106. Feasibility studies.
Sec. 107. Miscellaneous.
Sec. 108. Authorization of appropriations.
Title II—Twenty-First Century Water Works Act
Sec. 201. Short title.
Sec. 202. Definitions.
Sec. 203. Project eligibility.
Sec. 204. Loan guarantees.
Sec. 205. Operations, maintenance, and replacement costs.
Sec. 206. Title to newly constructed facilities.
Sec. 207. Water rights.
Sec. 208. Interagency coordination and cooperation.
Sec. 209. Authorization of appropriations.
Reclamation Rural Water Supply Act of 2005
Short title
This title may be cited as the Reclamation Rural Water Supply Act of 2005
.
Definitions
In this title:
Construction
The term construction means the installation of new infrastructure and the upgrading of existing facilities in locations in which the infrastructure or facilities are associated with the new infrastructure of a rural water project recommended by the Secretary pursuant to this title.
Federal reclamation law
The term Federal reclamation law means the Act of June 17, 1902 (32 Stat. 388, chapter 1093), and Acts supplemental to and amendatory of that Act (43 U.S.C. 371 et seq.).
Indian
The term Indian means an individual who is a member of an Indian tribe.
Indian Tribe
The term Indian tribe has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).
Non-Federal project entity
The term non-Federal project entity means a State, regional, or 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.
Operations, maintenance, and replacement costs
In general
The term operations, maintenance, and replacement costs means all costs for the operation of a rural water supply project that are necessary for the safe, efficient, and continued functioning of the project to produce the benefits described in a feasibility study.
Inclusions
The term operations, maintenance, and replacement costs includes—
repairs of a routine nature that maintain a rural water supply project in a well kept condition;
replacement of worn-out project elements; and
rehabilitation activities necessary to bring a deteriorated project back to the original condition of the project.
Exclusion
The term operations, maintenance, and replacement costs
does not include construction costs.
Program
The term Program means the rural water supply program established under section 103.
Reclamation states
The term Reclamation States means the States and areas referred to in the first section of the Act of June 17, 1902 (43 U.S.C. 391).
Rural water supply project
In general
The term rural water supply project means a project that is designed to serve a community or group of communities, each of which has a population of not more than 50,000 inhabitants, which may include Indian tribes and tribal organizations, dispersed homesites, or rural areas with domestic, industrial, municipal, and residential water.
Inclusion
The term rural water supply project includes—
incidental noncommercial livestock watering and noncommercial irrigation of vegetation and small gardens of less than 1 acre; and
a project to improve rural water infrastructure, including—
pumps, pipes, wells, and other diversions;
storage tanks and small impoundments;
water treatment facilities for potable water supplies, including desalination facilities;
equipment and management tools for water conservation, groundwater recovery, and water recycling; and
appurtenances.
Exclusion
The term rural water supply project does not include—
commercial irrigation; or
major impoundment structures.
Secretary
The term Secretary means the Secretary of the Interior.
Tribal organization
The term tribal organization means—
the recognized governing body of an Indian tribe; and
any legally established organization of Indians that is controlled, sanctioned, or chartered by the governing body or democratically elected by the adult members of the Indian community to be served by the organization.
Rural water supply program
In general
The Secretary, in cooperation with non-Federal project entities and consistent with this title, shall establish and carry out a rural water supply program in Reclamation States to—
investigate and identify opportunities to ensure safe and adequate rural water supply projects for domestic, municipal, and industrial use in small communities and rural areas of the Reclamation States;
plan the design and construction, through the conduct of appraisal investigations and feasibility studies, of rural water supply projects in Reclamation States; and
oversee, as appropriate, the construction of rural water supply projects in Reclamation States that are recommended by the Secretary in a feasibility report developed pursuant to section 106 and subsequently authorized by Congress.
Non-Federal project entity
Any activity carried out under this title shall be carried out in cooperation with a qualifying non-Federal project entity, consistent with this title.
Eligibility criteria
Not later than 1 year after the date of enactment of this Act, the Secretary shall, consistent with this title, develop and publish in the Federal Register criteria for—
determining the eligibility of a rural community for assistance under the Program; and
prioritizing requests for assistance under the Program.
Factors
The criteria developed under subsection (c) shall take into account such factors as whether—
a rural water supply project—
serves—
rural areas and small communities; or
Indian tribes; or
promotes and applies a regional or watershed perspective to water resources management;
there is an urgent and compelling need for a rural water supply project that would—
improve the health or aesthetic quality of water;
result in continuous, measurable, and significant water quality benefits; or
address current or future water supply needs;
a rural water supply project helps meet applicable requirements established by law; and
a rural water supply project is cost effective.
Inclusions
The Secretary may include—
to the extent that connection provides a reliable water supply, a connection to preexisting infrastructure (including impoundments and conveyance channels) as part of a rural water supply project; and
notwithstanding the limitation on population under section 102(9)(A), a town or community with a population in excess of 50,000 inhabitants in an area served by a rural water supply project if, at the discretion of the Secretary, the town or community is considered to be a critical partner in the rural supply project.
Rural water programs assessment
In general
In consultation with the Secretary of Agriculture, the Administrator of the Environmental Protection Agency, the Director of the Indian Health Service, the Secretary of Housing and Urban Development, and the Secretary of the Army, the Secretary shall develop an assessment of—
the status of all rural water supply projects under the jurisdiction of the Secretary authorized but not completed prior to the date of enactment of this Act, including appropriation amounts, the phase of development, total anticipated costs, and obstacles to completion;
the current plan (including projected financial and workforce requirements) for the completion of the projects identified in paragraph (1) within the time frames established under the provisions of law authorizing the projects or the final engineering reports for the projects;
the demand for new rural water supply projects;
rural water programs within other agencies and a description of the extent to which those programs provide support for rural water supply projects and water treatment programs in Reclamation States, including an assessment of the requirements, funding levels, and conditions of eligibility for the programs assessed;
the extent of the demand that the Secretary can meet with the Program;
how the Program will complement authorities already within the jurisdiction of the Secretary and the heads of the agencies with whom the Secretary consults; and
improvements that can be made to coordinate and integrate the authorities of the agencies with programs evaluated under paragraph (4), including any recommendations to consolidate some or all of the activities of the agencies with respect to rural water supply.
Consultation with states
Before finalizing the assessment developed under subsection (a), the Secretary shall solicit comments from States with identified rural water needs.
Report
Not later than 2 years after the date of enactment of this Act, the Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives a detailed report on the assessment conducted under subsection (a).
Appraisal investigations
In general
On request of a non-Federal project entity with respect to a proposed rural water supply project that meets the eligibility criteria published under section 103(c) and subject to the availability of appropriations, the Secretary may—
receive and review an appraisal investigation that is—
developed by the non-Federal project entity, with or without support from the Secretary; and
submitted to the Secretary by the non-Federal project entity;
conduct an appraisal investigation; or
provide a grant to, or enter into a cooperative agreement with, the non-Federal project entity to conduct an appraisal investigation, if the Secretary determines that—
the non-Federal project entity is qualified to complete the appraisal investigation in accordance with the criteria published under section 103(c); and
using the non-Federal project entity to conduct the appraisal investigation is a cost-effective alternative for completing the appraisal investigation.
Deadline
An appraisal investigation conducted under subsection (a) shall be scheduled for completion not later than 2 years after the date on which the appraisal investigation is initiated.
Appraisal report
In accordance with subsection (f), after an appraisal investigation is submitted to the Secretary under subsection (a)(1) or completed under paragraph (2) or (3) of subsection (a), the Secretary shall prepare an appraisal report that—
considers—
whether the project meets—
the appraisal criteria developed under subsection (d); and
the eligibility criteria developed under section 103(c);
whether viable water supplies and water rights exist to supply the project, including all practicable water sources such as lower quality waters, nonpotable waters, and water reuse-based water supplies;
whether the project has a positive effect on public health and safety;
whether the project will meet water demand, including projected future needs;
the extent to which the project provides environmental benefits, including source water protection;
whether the project applies a regional or watershed perspective and promotes benefits in the region in which the project is carried out;
whether the project—
implements an integrated resources management approach; or
enhances water management flexibility, including providing for—
local control to manage water supplies under varying water supply conditions; and
participation in water banking and markets for domestic and environmental purposes; and
promotes long-term protection of water supplies;
preliminary cost estimates for the project; and
whether the non-Federal project entity has the capability to pay 100 percent of the costs associated with the operations, maintenance, and replacement of the facilities constructed or developed as part of the rural water supply project; and
provides recommendations on whether a feasibility study should be initiated under section 106(a).
Appraisal criteria
In general
Not later than 1 year after the date of enactment of this Act, the Secretary shall promulgate criteria (including appraisal factors listed under subsection (c)) against which the appraisal investigations shall be assessed for completeness and appropriateness for a feasibility study.
Inclusions
To minimize the cost of a rural water supply project to a non-Federal project entity, the Secretary shall include in the criteria methods to scale the level of effort needed to complete the appraisal investigation relative to the total size and cost of the proposed rural water supply project.
Review of appraisal investigation
In general
Not later than 90 days after the date of submission of an appraisal investigation under paragraph (1) or (3) of subsection (a), the Secretary shall provide to the non-Federal entity that conducted the investigation a determination of whether the investigation has included the information necessary to determine whether the proposed rural water supply project satisfies the criteria promulgated under subsection (d).
No satisfaction of criteria
If the Secretary determines that the appraisal investigation submitted by a non-Federal entity does not satisfy the criteria promulgated under subsection (d), the Secretary shall inform the non-Federal entity of the reasons why the appraisal investigation is deficient.
Responsibility of secretary
If an appraisal investigation as first submitted by a non-Federal entity does not provide all necessary information, as defined by the Secretary, the Secretary shall have no obligation to conduct further analysis until the non-Federal project entity submitting the appraisal study conducts additional investigation and resubmits the appraisal investigation under this subsection.
Appraisal report
Once the Secretary has determined that an investigation provides the information necessary under subsection (e), the Secretary shall—
complete the appraisal report required under subsection (c);
make available to the public, on request, the appraisal report prepared under this title; and
promptly publish in the Federal Register a notice of the availability of the results.
Costs
Federal share
The Federal share of an appraisal investigation conducted under subsection (a) shall be 100 percent of the total cost of the appraisal investigation, up to $200,000.
Non-federal share
In general
Except as provided in subparagraph (B), if the cost of conducting an appraisal investigation is more than $200,000, the non-Federal share of the costs in excess of $200,000 shall be 50 percent.
Exception
The Secretary may reduce the non-Federal share required under subparagraph (A) if the Secretary determines that there is an overwhelming Federal interest in the appraisal investigation.
Form
The non-Federal share under subparagraph (A) may be in the form of any in-kind services that the Secretary determines would contribute substantially toward the conduct and completion of the appraisal investigation.
Consultation; Identification of Funding Sources
In conducting an appraisal investigation under subsection (a)(2), the Secretary shall—
consult and cooperate with the non-Federal project entity and appropriate State, tribal, regional, and local authorities;
consult with the heads of appropriate Federal agencies to—
ensure that the proposed rural water supply project does not duplicate a project carried out under the authority of the agency head; and
if a duplicate project is being carried out, identify the authority under which the duplicate project is being carried out; and
identify what funding sources are available for the proposed rural water supply project.
Feasibility studies
In general
On completion of an appraisal report under section 105(c) that recommends undertaking a feasibility study and subject to the availability of appropriations, the Secretary shall—
in cooperation with a non-Federal project entity, carry out a study to determine the feasibility of the proposed rural water supply project;
receive and review a feasibility study that is—
developed by the non-Federal project entity, with or without support from the Secretary; and
submitted to the Secretary by the non-Federal project entity; or
provide a grant to, or enter into a cooperative agreement with, a non-Federal project entity to conduct a feasibility study, for submission to the Secretary, if the Secretary determines that—
the non-Federal entity is qualified to complete the feasibility study in accordance with the criteria promulgated under subsection (d); and
using the non-Federal project entity to conduct the feasibility study is a cost-effective alternative for completing the appraisal investigation.
Review of non-Federal feasibility studies
In general
In conducting a review of a feasibility study submitted under paragraph (2) or (3) of subsection (a), the Secretary shall—
in accordance with the feasibility factors described in subsection (c) and the criteria promulgated under subsection (d), assess the completeness of the feasibility study; and
if the Secretary determines that a feasibility study is not complete, notify the non-Federal entity of the determination.
Revisions
If the Secretary determines under paragraph (1)(B) that a feasibility study is not complete, the non-Federal entity shall pay any costs associated with revising the feasibility study.
Feasibility factors
Feasibility studies authorized or reviewed under this title shall include an assessment of—
near- and long-term water demand in the area to be served by the rural water supply project;
advancement of public health and safety of any existing rural water supply project and other benefits of the proposed rural water supply project;
alternative new water supplies in the study area, including any opportunities to treat and use low-quality water, nonpotable water, water reuse-based supplies, and brackish and saline waters through innovative and economically viable treatment technologies;
environmental quality and source water protection issues related to the rural water supply project;
innovative opportunities for water conservation in the study area to reduce water use and water system costs, including—
nonstructural approaches to reduce the need for the project; and
demonstration technologies;
the extent to which the project and alternatives take advantage of economic incentives and the use of market-based mechanisms;
the construction costs and projected operations, maintenance, and replacement costs of all alternatives; and
the economic feasibility and lowest cost method of obtaining the desired results of each alternative, taking into account the Federal cost-share;
the availability of guaranteed loans for a proposed rural water supply project;
the financial capability of the non-Federal project entity to pay the non-Federal project entity's proportionate share of the design and construction costs and 100 percent of operations, maintenance, and replacement costs, including the allocation of costs to each non-Federal project entity in the case of multiple entities;
whether the non-Federal project entity has developed an operations, management, and replacement plan to assist the non-Federal project entity in establishing rates and fees for beneficiaries of the rural water supply project that includes a schedule identifying the annual operations, maintenance, and replacement costs that should be allocated to each non-Federal entity participating in the project;
the non-Federal project entity administrative organization that would implement construction, operations, maintenance, and replacement activities; and
the fiscal, administrative, and operational controls to be implemented to manage the project;
the extent to which assistance for rural water supply is available under other Federal authorities;
the engineering, environmental, and economic activities to be undertaken to carry out the proposed rural water supply project;
the extent to which the project involves partnerships with other State, local, or tribal governments or Federal entities; and
in the case of a project intended for Indian tribes and tribal organizations, the extent to which the project addresses the goal of economic self-sufficiency.
Feasibility study criteria
In general
Not later than 18 months after the date of enactment of this Act, the Secretary shall promulgate criteria (including the feasibility factors listed under subsection (c)) under which the feasibility studies shall be assessed for completeness and appropriateness.
Inclusions
The Secretary shall include in the criteria promulgated under paragraph (1) methods to scale the level of effort needed to complete the feasibility assessment relative to the total size and cost of the proposed rural water supply project and reduce total costs to non-Federal entities.
Feasibility report
In general
After completion of appropriate feasibility studies for rural water supply projects that address the factors described in subsection (c) and the criteria promulgated under subsection (d), the Secretary shall—
develop a feasibility report that includes—
a recommendation of the Secretary on—
whether the rural water supply project should be authorized for construction; and
the appropriate non-Federal share of construction costs, which shall be—
at least 25 percent of the total construction costs; and
determined based on an analysis of the capability-to-pay information considered under subsections (c)(9) and (f); and
if the Secretary recommends that the project should be authorized for construction—
what amount of grants, loan guarantees, or combination of grants and loan guarantees should be used to provide the Federal cost share;
a schedule that identifies the annual operations, maintenance, and replacement costs that should be allocated to each non-Federal entity participating in the rural water supply project; and
an assessment of the financial capability of each non-Federal entity participating in the rural water supply project to pay the allocated annual operation, maintenance, and replacement costs for the rural water supply project;
submit the report to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives;
make the report publicly available, along with associated study documents; and
publish in the Federal Register a notice of the availability of the results.
Capability-To-Pay
In general
In evaluating a proposed rural water supply project under this section, the Secretary shall—
consider the financial capability of any non-Federal project entities participating in the rural water supply project to pay 25 percent or more of the capital construction costs of the rural water supply project; and
recommend an appropriate Federal share and non-Federal share of the capital construction costs, as determined by the Secretary.
Factors
In determining the financial capability of non-Federal project entities to pay for a rural water supply project under paragraph (1), the Secretary shall evaluate factors for the project area, relative to the State average, including—
per capita income;
median household income;
the poverty rate;
the ability of the non-Federal project entity to raise tax revenues or assess fees;
the strength of the balance sheet of the non-Federal project entity; and
the existing cost of water in the region.
Indian tribes
In determining the capability-to-pay of Indian tribe project beneficiaries, the Secretary may consider deferring the collection of all or part of the non-Federal construction costs apportioned to Indian tribe project beneficiaries unless or until the Secretary determines that the Indian tribe project beneficiaries should pay—
the costs allocated to the beneficiaries; or
an appropriate portion of the costs.
Cost-Sharing requirement
In general
Except as otherwise provided in this subsection, the Federal share of the cost of a feasibility study carried out under this section shall not exceed 50 percent of the study costs.
Form
The non-Federal share under paragraph (1) may be in the form of any in-kind services that the Secretary determines would contribute substantially toward the conduct and completion of the study.
Financial hardship
The Secretary may increase the Federal share of the costs of a feasibility study if the Secretary determines, based on a demonstration of financial hardship, that the non-Federal participant is unable to contribute at least 50 percent of the costs of the study.
Larger communities
In conducting a feasibility study of a rural water supply system that includes a community with a population in excess of 50,000 inhabitants, the Secretary may require the non-Federal project entity to pay more than 50 percent of the costs of the study.
Consultation and cooperation
In addition to the non-Federal project entity, the Secretary shall consult and cooperate with appropriate Federal, State, tribal, regional, and local authorities during the conduct of each feasibility assessment and development of the feasibility report conducted under this title.
Miscellaneous
Authority of Secretary
The Secretary may enter into contracts, financial assistance agreements, and such other agreements, and promulgate such regulations, as are necessary to carry out this title.
Transfer of projects
Nothing in this title authorizes the transfer of pre-existing facilities or pre-existing components of any water system from Federal to private ownership or from private to Federal ownership.
Federal reclamation law
Nothing in this title supersedes or amends any Federal law associated with a project, or portion of a project, constructed under Federal reclamation law.
Interagency coordination
The Secretary shall coordinate the Program carried out under this title with existing Federal and State rural water and wastewater programs to facilitate the most efficient and effective solution to meeting the water needs of the non-Federal project sponsors.
Multiple Indian tribes
In any case in which a contract is entered into with, or a grant is made, to an organization to perform services benefitting more than 1 Indian tribe under this title, the approval of each such Indian tribe shall be a prerequisite to entering into the contract or making the grant.
Ownership of facilities
Title to any facility planned, designed, and recommended for construction under this title shall be held by the non-Federal project entity.
Expedited procedures
If the Secretary determines that a community to be served by a proposed rural water supply project has urgent and compelling water needs, the Secretary shall, to the maximum extent practicable, expedite appraisal investigations and reports conducted under section 105 and feasibility studies and reports conducted under section 106.
Effect on State water law
In general
Nothing in this title preempts or affects State water law or an interstate compact governing water.
Compliance required
The Secretary shall comply with State water laws in carrying out this title.
No additional requirements
Nothing in this title requires a feasibility study for, or imposes any other additional requirements with respect to, rural water supply projects or programs that are authorized before the date of enactment of this Act.
Authorization of appropriations
In general
There is authorized to be appropriated to carry out this title $20,000,000 for the period of fiscal years 2006 through 2015, to remain available until expended.
Rural water programs assessment
Of the amounts made available under subsection (a), not more than $1,000,000 may be made available to carry out section 104 for each of fiscal years 2006 and 2007.
Limitation
No amounts made available under this section shall be used to pay construction costs associated with any rural water supply project.
Twenty-First Century Water Works Act
Short title
This title may be cited as the Twenty-First Century Water Works Act
.
Definitions
In this title:
Indian Tribe
The term Indian tribe has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).
Lender
The term lender means any non-Federal qualified institutional buyer (as defined in section 230.144A(a) of title 17, Code of Federal Regulation (or any successor regulation), known as Rule 144A(a) of the Securities and Exchange Commission and issued under the Securities Act of 1933 (15 U.S.C. 77a et seq.)).
Loan guarantee
The term loan guarantee has the meaning given the term loan guarantee
in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a).
Non-federal borrower
The term non-Federal borrower means—
a State (including a department, agency, or political subdivision of a State); or
a conservancy district, irrigation district, canal company, water users’ association, Indian tribe, an agency created by interstate compact, or any other entity that has the capacity to contract with the United States under Federal reclamation law.
Obligation
The term obligation means a loan or other debt obligation that is guaranteed under this section.
Project
The term project means—
a rural water supply project (as defined in section 102(9)); or
an extraordinary operation and maintenance activity for, or the rehabilitation of, a facility—
that is authorized by Federal reclamation law and constructed by the United States under such law; or
in connection with which there is a repayment or water service contract executed by the United States under Federal reclamation law.
Secretary
The term Secretary means the Secretary of the Interior.
Project eligibility
Eligibility criteria
In general
The Secretary shall develop and publish in the Federal Register criteria for determining the eligibility of a project for financial assistance under section 204.
Inclusions
Eligibility criteria shall include—
submission of an application by the lender to the Secretary;
demonstration of the creditworthiness of the project, including a determination by the Secretary that any financing for the project has appropriate security features to ensure repayment;
demonstration by the non-Federal borrower, to the satisfaction of the Secretary, of the ability of the non-Federal borrower to repay the project financing from user fees or other dedicated revenue sources;
demonstration by the non-Federal borrower, to the satisfaction of the Secretary, of the ability of the non-Federal borrower to pay all operations, maintenance, and replacement costs of the project facilities; and
such other criteria as the Secretary determines to be appropriate.
Waiver
The Secretary may waive any of the criteria in subsection (a)(2) that the Secretary determines to be duplicative or rendered unnecessary because of an action already taken by the United States.
Projects previously authorized
A project that was authorized for construction under Federal reclamation laws prior to the date of enactment of this Act shall be eligible for assistance under this title, subject to the criteria established by the Secretary under subsection (a).
Criteria for rural water supply projects
A rural water supply project that is determined to be feasible under section 106 is eligible for a loan guarantee under section 204.
Loan guarantees
Authority
Subject to the availability of appropriations, the Secretary may make available to lenders for a project meeting the eligibility criteria established in section 203 loan guarantees to supplement private-sector or lender financing for the project.
Terms and limitations
In general
Loan guarantees under this section for a project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements as the Secretary determines to be appropriate to protect the financial interests of the United States.
Amount
Loan guarantees by the Secretary shall not exceed an amount equal to 90 percent of the cost of the project that is the subject of the loan guarantee, as estimated at the time at which the loan guarantee is issued.
Interest rate
An obligation shall bear interest at a rate that does not exceed a level that the Secretary determines to be appropriate, taking into account the prevailing rate of interest in the private sector for similar loans and risks.
Amortization
A loan guarantee under this section shall provide for complete amortization of the loan guarantee within not more than 40 years.
Nonsubordination
An obligation shall be subject to the condition that the obligation is not subordinate to other financing.
Prepayment and refinancing
Any prepayment or refinancing terms on a loan guarantee shall be negotiated between the non-Federal borrower and the lender with the consent of the Secretary.
Defaults
Payments by secretary
In general
If a borrower defaults on the obligation, the holder of the loan guarantee shall have the right to demand payment of the unpaid amount from the Secretary.
Payment required
By such date as may be specified in the loan guarantee or related agreements, the Secretary shall pay to the holder of the loan guarantee the unpaid interest on, and unpaid principal of, the obligation with respect to which the borrower has defaulted, unless the Secretary finds that there was not default by the borrower in the payment of interest or principal or that the default has been remedied.
Forbearance
Nothing in this subsection precludes any forbearance by the holder of the obligation for the benefit of the non-Federal borrower that may be agreed on by the parties to the obligation and approved by the Secretary.
Subrogation
In general
If the Secretary makes a payment under subsection (a), the Secretary shall be subrogated to the rights of the recipient of the payment as specified in the loan guarantee or related agreements, including, as appropriate, the authority (nothwithstanding any other provision of law) to—
complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to the loan guarantee or related agreements; or
permit the non-Federal borrower, pursuant to an agreement with the Secretary, to continue to pursue the purposes of the project if the Secretary determines the purposes to be in the public interest.
Superiority of rights
The rights of the Secretary, with respect to any property acquired pursuant to a loan guarantee or related agreement, shall be superior to the rights of any other person with respect to the property.
Payment of principal and interest by secretary
With respect to any obligation guaranteed under this section, the Secretary may enter into a contract to pay, and pay, holders of the obligation, for and on behalf of the non-Federal borrower, from funds appropriated for that purpose, the principal and interest payments that become due and payable on the unpaid balance of the obligation if the Secretary finds that—
the non-Federal borrower is unable to meet the payments and is not in default;
it is in the public interest to permit the non-Federal borrower to continue to pursue the purposes of the project; and
the probable net benefit to the Federal Government in paying the principal and interest will be greater than that which would result in the event of a default;
the amount of the payment that the Secretary is authorized to pay shall be no greater than the amount of principal and interest that the non-Federal borrower is obligated to pay under the agreement being guaranteed; and
the borrrower agrees to reimburse the Secretary for the payment (including interest) on terms and conditions that are satisfactory to the Secretary.
Action by attorney general
Notification
If the non-Federal borrower defaults on an obligation, the Secretary shall notify the Attorney General of the default.
Recovery
On notification, the Attorney General shall take such action as is appropriate to recover the unpaid principal and interest due from—
such assets of the defaulting non-Federal borrower as are associated with the obligation; or
any other security pledged to secure the obligation.
Operations, maintenance, and replacement costs
In general
The non-Federal share of operations, maintenance, and replacement costs for a project receiving Federal assistance under this title shall be 100 percent.
Plan
On request of the non-Federal borrower, the Secretary may assist in the development of an operation, maintenance, and replacement plan to provide the necessary framework to assist the non-Federal borrower in establishing rates and fees for project beneficiaries.
Title to newly constructed facilities
New projects and facilities
All new projects or facilities constructed in accordance with this title shall remain under the jurisdiction and control of the non-Federal borrower subject to the terms of the repayment agreement.
Existing projects and facilities
Nothing in this title affects the title of—
reclamation projects authorized prior to the date of enactment of this Act;
works supplemental to existing reclamation projects; or
works constructed to rehabilitate existing reclamation projects.
Water rights
In general
Nothing in this title preempts or affects State water law or an interstate compact governing water.
Compliance required
The Secretary shall comply with State water laws in carrying out this title. Nothing in this title affects or preempts State water law or an interstate compact governing water.
Interagency coordination and cooperation
Consultation
The Secretary shall consult with the Secretary of Agriculture before promulgating criteria with respect to financial appraisal functions and loan guarantee administration for activities carried out under this title.
Memorandum of agreement
The Secretary and the Secretary of Agriculture may enter into a memorandum of agreement providing for Department of Agriculture financial appraisal functions and loan guarantee administration for activities carried out under this title.
Records; audits
In general
A recipient of a loan guarantee shall keep such records and other pertinent documents as the Secretary shall prescribe by regulation, including such records as the Secretary may require to facilitate an effective audit.
Access
The Secretary and the Comptroller General of the United States, or their duly authorized representatives, shall have access, for the purpose of audit, to the records and other pertinent documents.
Full faith and credit
The full faith and credit of the United States is pledged to the payment of all guarantees issued under this section with respect to principal and interest.
Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to carry out this title, to remain available until expended.