Charles V. Stern penned this CRS Report (1 April 2024 - but not an April Fools' joke): 'Bureau of Reclamation Support for Water Storage Projects'.
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The entire report if not repeated here. Click on the graphics to enlarge them.
Summary
The Bureau of Reclamation (Reclamation, part of the Department of the Interior) has for more than a century been involved in the construction and operations of water storage projects in the 17 arid and semiarid western states. In the past, Congress generally provided full, up-front funding for the construction of these projects through discretionary and supplemental appropriations to Reclamation, and project beneficiaries (e.g., irrigators, municipal water suppliers, and hydropower contractors) generally repaid their portion of project costs over a 40- to 50-year term.
Since the 1970s, Reclamation has built few new projects under its traditional authorities, but in recent years, Congress has added new authorities for Reclamation to support water storage construction. In Section 4007 of the Water Infrastructure Improvements for the Nation Act (WIIN Act; P.L. 114-322), Congress enacted a new authority for Reclamation to fund the study and/or construction of new surface and groundwater storage projects. Under Section 4007, funding for water storage projects may be used for two primary project types:
Federally owned storage projects are surface water or groundwater storage projects to which the United States holds title and that were authorized for construction pursuant to reclamation law and regulations. The federal government may fund up to 50% of the cost for these projects.
State-led storage projects are surface water or groundwater storage projects to be constructed, operated, and maintained by states or political subdivisions. The federal government may fund up to 25% of the costs of these projects.
To receive study or construction funding under this authority, the Secretary of the Interior first, among other requirements, recommends specific projects and funding levels to Congress, and Congress in turn decides whether to designate those projects by name in an enacted appropriations act. From 2018 to 2020, 13 projects received funding under the WIIN Act. Since January 2021, only projects that were recommended for construction prior to that date have been eligible for ongoing Administration construction funding allocations under Section 4007. In the Infrastructure Investment and Jobs Act (IIJA, also referred to as the Bipartisan Infrastructure Law; P.L. 117-58), Congress expanded these authorities and provided Reclamation with additional funding of $1.05 billion for these projects.
Congress also enacted new authorities in the IIJA for Reclamation to provide grants that support the construction of “small” (i.e., less than 30,000 acre-feet), nonfederally owned surface and groundwater storage projects. Reclamation may also support small water storage and conveyance projects that increase drought resiliency using grant authorities enacted in 2010 under P.L. 111-11. These drought resiliency projects are funded through Reclamation’s Drought Response Program. While the two programs target similar project types, their eligible recipients, maximum project costs, and federal cost share requirements differ.
Issues for Congress related to Reclamation water storage projects may include whether to extend and/or amend expiring authorities, such as those enacted under the WIIN Act and/or IIJA, or whether to enact new authorities, as well as whether to increase regular and/or supplemental funding for these projects. Congress may consider what levels of funding, if any, are adequate for these projects and what financing mechanisms to employ (e.g., appropriate cost shares, repayment). In the 118th Congress, H.R. 215 would reauthorize the WIIN Act’s storage authorities through the end of FY2028, while S. 2162 would make significant changes to these authorities.
Issues for Congress
Section 4007 Reauthorization
Congress has typically engaged with the Administration’s recommendations for Section 4007 water storage construction projects in appropriations action. As previously noted, appropriations under the authority of Section 4007 of the WIIN Act may not be allocated to individual projects until they are approved by name in enacted legislation. While Congress has approved most prior WIIN Act project allocation recommendations, the 116th Congress did not approve several recommended allocations for one project (the Shasta Dam and Reservoir Enlargement Project) during the Trump Administration; this effectively blocked its construction. Since 2021, Reclamation has continued to recommend funding allocations for construction projects that met the WIIN Act’s feasibility determination deadline of January 1, 2021.Some Members of Congress have proposed reauthorization and/or amendment of the Section 4007 authority. In the 118th Congress, H.R. 215 would reauthorize the WIIN Act’s Section 4007 storage authorities through the end of FY2028. It would also make the Shasta Dam and Reservoir Enlargement project eligible for unallocated Section 4007 funding.15 Another bill, S. 2162, would also reauthorize Section 4007 (including the authorization of $750 million through FY2029) but would make major changes to the authority. Among other things, it would make certain “public benefits” for these projects nonreimbursable16 and would add a new project category for “naturalwater retention and release projects.” It would also cap federal support for nonfederal projects under the authority at $250 million and would create a formal reporting process for recommending individual projects to Congress for construction authorization.17 In the future, Congress may continue to weigh in on recommended storage projects under the Section 4007 authority through the appropriations process or to alter the current process with required annual reporting or other mechanisms that involve the authorization committees in these decisions.
Authorities for Smaller Water Storage Projects
Apart from Section 4007 authorities for larger projects, Congress may also consider the status of the temporary (FY2022-FY2026) authority and funding for the Small Water Storage Project grant program authorized in the IIJA and whether to extend this authority beyond the time horizon currently authorized. It may also consider the status and mechanism for supporting drought resiliency projects (technically authorized under the Bureau’s WaterSMART authorities)18 and the status of temporary cost share authorities under the IRA. Demand for both programs, and reconciling differences between the authorities (e.g., eligible entities, potential for cost share waivers, project caps), could be a driver for future legislative interest in one or both programs.Funding and Implementation
Funding for Reclamation to study and construct water storage projects has increased significantly over the past decade. As construction on surface and groundwater storage projects continues across the West and recent influxes of supplemental funding (i.e., IIJA funding) are expended, stakeholders may ask Congress to enact new funding to complete these projects and start others. How and whether to make this funding available, and what (if any) changes and other requirements (e.g., reporting) should accompany this funding, are likely to be of interest to Congress.
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