Updated April 3, 2019May 28, 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), 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.
United States. 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
FY2020, Congress appropriated $469 million for these
projects, and Reclamation has allocated a portion of these
funds to progress on a number of water storage projects in
its service area.
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
contractorsirrigators’ 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 WIIN
Act
Section 4007 of the WIIN Act authorized a new structure
for Reclamation to support water storage infrastructure
projects, including both surface water and groundwater
storage projects. The act authorized $335 million in discretionary
discretionary appropriations for new and improved federal and
and nonfederal water storage projects. Any appropriated funds
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 the construction of 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 ProcessProject Construction
Instead of full, up-front federal financing to be repaid over
time, Section 4007 (i.e., the “traditional” model for Reclamation projects),
Section 4007 essentially authorizes partial, up-front federal
funding, with the corresponding nonfederal share of
funding also required up-front. Proponents of these changes argue they will
argue that they 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
share from nonfederal users, the new authority may not be
attractive for sponsors who cannot afford large, up-front
payments.
The Section 4007 authority does not eliminate the
“traditional”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://crsreports.congress.gov
Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
Section 4007 significantly alters the role of congressional
authorizing and appropriations committees in project
development. It provides authority for Reclamation to move
model. From FY2016 to
FY2020, budget requests for Reclamation’s construction
program averaged $110 million per year. The total budget
request for Reclamation over the same time period averaged
$1.093 billion per year.
Section 4007 also significantly altered the role of
congressional authorizing and appropriations committees in
project development. It provided authority for Reclamation
to move forward with construction without direct legislative
approval from congressional authorizing committees—the
House Natural Resources Committee and the Senate Energy
https://crsreports.congress.gov
Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
and Natural Resources Committee. Instead, inBy requiring
designation of Administration recommendations by name in
appropriations acts, Section 4007 requires the final decision
on federal funding to be made ineffectively shifted project
approval (i.e., authorization) decisions to the appropriations process.
Thus, although Section 4007 bypasses the authorizing
committees on some decisions related to new project
construction (theoretically removing one hurdle of project
development), it also adds a new requirement that must be
met before a project can receive federal appropriations.
Table 1. Proposed and Approved Section 4007 Water
Storage Projects and Funding Allocations
2018
Allocated
Project (State)
2019
Proposed
Shasta Dam and Reservoir
Enlargement Project (CA)
$20 million
$57 million
Sites Reservoir Storage Project
(CA)
$4.35 million
$4 million
Upper San Joaquin River Basin
Storage Investigation (CA)
$1.5 million
-
Friant-Kern Canal Subsidence
Challenges Project (CA)
$2.2 million
$2.35 million
Boise River Basin Feasibility
Study (ID)
$0.75 million
$1.75 million
Yakima River Basin Water
Enhancement Project—Cle
Elum Pool Raise (WA)
$2 million
$4 million
Recent Funding Allocations and
Proposals
Upper Yakima System Storage
Feasibility Study (WA)
$2.5 million
-
Reclamation received funding for Section 4007 projects in
enacted Energy and Water Development appropriations acts
for FY2017 ($67 million), FY2018 ($134 million), and
FY2019 ($134 million). Thus, as of the enactment of the
FY2019 Energy and Water appropriations bill, the full $335
million in authorized funding for Section 4007 had been
appropriated. In January 2018, Reclamation proposed
project-level allocations for $33 million of FY2017
appropriated funding for Section 4007 projects (Table 1).
Congress subsequently approved these projects in the
enacted Energy and Water Development appropriations bill
for FY2018 (P.L. 115-141).
Del Puerto Water District
Feasibility Study
-
$1.5 million
Los Vaqueros Reservoir Phase 2
Expansion
-
$2.16 million
Only projects approved prior to 2021 are eligible for federal
funding under Section 4007. Although it has been
characterized as new authority for construction projects, as
a practical matter most of the projects likely to receive
Section 4007 funds were already under study as of 2016.
As of the enactment of FY2019 Energy and Water
appropriations, the full $335 million in authorized
funding for Section 4007 had been appropriated: $33
million of these funds had been allocated at the
project level and approved by Congress.
In February 2019, Reclamation proposed $75 million in
allocations for a second round of Section 4007 projects
(Table 1); some of these projects were previously approved
for funding by Congress in 2018. Similar to 2018, these
projects must be mentioned by name in enacted
appropriations acts in order for Reclamation to expend the
proposed funds.
Source: Bureau of Reclamation, Reports to House and Senate
Committees on Appropriations, January 2018 and February 2019.
The project which has been recommended for the most
funding, the Shasta Dam and Reservoir Enlargement
Project, is controversial and has been opposed by the State
of California. The Shasta project would raise Shasta Dam
and expand capacity of the largest storage reservoir in
California— Lake Shasta— a linchpin for the federal
Central Valley Project (CVP). The project would create an
additional 634,000 acre-feet of storage (51,000 acre-feet of
yield, or additional water supplies) for CVP contractors.
California state law prohibits any expansion of storage at
Lake Shasta that would inundate state-protected portions of
the McCloud River, a tributary of the reservoir.
Issues for Congress
In the future, Congress will be asked to approve or
disapprove Administration recommendations for Section
4007 projects. These decisions will have important
implications for future water storage priorities throughout
the West.
The demand for Section 4007 funds is likely to significantly
exceed remaining available funds. In any case, projects that
benefit from the $335 million available under the Section
4007 authority are unlikely to be completed absent the
authorization and appropriation of additional federal funds.
Thus, Congress may also be asked to consider increase and
extension of this authority.
process.
Only projects approved prior to 2021 are eligible for federal
funding under Section 4007. Although it is technically a
“new” authority for construction projects, as a practical
matter most of the projects likely to receive Section 4007
funds were already under study as of 2016.
Recent Funding and Project Allocations
Congress appropriated funding to Reclamation for Section
4007 projects in enacted Energy and Water Development
appropriations acts for FY2017 ($67 million), FY2018
($134 million), FY2019 ($134 million), and FY2020 ($134
million). Overall, Congress has appropriated $469 million
for Section 4007 projects.
A portion ($51 million) of the funds appropriated for
Section 4007 projects have been allocated and released at
the project level (Table 1). In the first two rounds of
allocations (finalized in FY2018 and FY2020
appropriations, respectively), Congress approved Section
4007 funding allocations for nine projects in three states:
California (six projects), Idaho (one project), and
Washington (two projects). These approvals were based on
two rounds of project allocation proposals from
Reclamation. First, in January 2018, Reclamation proposed
project-level allocations for $33 million in previously
appropriated Section 4007 funds. Congress subsequently
approved these projects in the enacted Energy and Water
Development appropriations bill for FY2018 (P.L. 115-141,
enacted in March 2018). In February 2019, Reclamation
proposed another $75 million in allocations for a second
round of Section 4007 projects. All but one of these
projects (Shasta Dam and Reservoir Enlargement, proposed
to receive $57 million of the $75 million) were approved in
enacted appropriations for FY2020 (P.L. 116-94, enacted in
December 2019), thus releasing $18 million in additional
funding for individual projects.
Table 1. Approved Funding Allocations for Section
4007 Water Storage Projects
Project (State)
2018
2019
Project (State)
2018
2019
Upper Yakima System Storage
Feasibility Study (WA)
$2.5 million
-
Del Puerto Water District
Feasibility Study (CA)
-
$1.5 million
Los Vaqueros Reservoir Phase 2
Expansion (CA)
-
$2.16 million
Sources: Bureau of Reclamation, Reports to House and Senate
Committees on Appropriations, January 2018 and February 2019; and
enacted appropriations legislation for FY2018 (P.L. 115-141) and
FY2020 (P.L. 116-94).
Notes: For 2019, funding of $57 million was proposed, but not
approved, for the Shasta Dam and Reservoir Enlargement Project.
The project which has been recommended for the most
funding, the Shasta Dam and Reservoir Enlargement
Project, is controversial and is opposed by the State of
California. California state law prohibits any expansion of
storage at Lake Shasta that would inundate state-protected
portions of the McCloud River, a tributary of the reservoir.
The Shasta project would raise Shasta Dam and expand the
capacity of the largest storage reservoir in California—Lake
Shasta—a linchpin for the federal Central Valley Project
(CVP). The project would create an estimated additional
634,000 acre-feet of storage and 51,000 acre-feet of yield
(i.e., additional water supplies) for CVP contractors.
Issues for Congress
In the future, the Administration is likely to continue
proposing funding allocations for Section 4007 projects for
congressional approval. These decisions may have
implications for future water storage priorities throughout
the West. The demand for additional funds pursuant to this
authority is likely to continue, thus Congress may also be
asked to consider additional appropriations, as well
increases to and extension of Section 4007 authorities. For
instance, S. 1932 would extend the authority for five years
(through FY2025) and authorize $670 million in additional
funding for these projects. Some may also propose
alterations to the project approval process underlying
Section 4007 projects.
Shasta Dam and Reservoir
Enlargement Project (CA)
$20 million
-
Sites Reservoir Storage Project
(CA)
$4.35 million
$4 million
Upper San Joaquin River Basin
Storage Investigation (CA)
$1.5 million
-
Friant-Kern Canal Subsidence
Challenges Project (CA)
$2.2 million
$2.35 million
Boise River Basin Feasibility
Study (ID)
$0.75 million
$1.75 million
Supporters have advocated for continuing and increasing
funding for Section 4007 projects. They argue that new
construction would increase water availability in the West
and help to address the effects of climate change on
availability of water resources, thus it warrants federal
prioritization. They also note that more funding is required
to complete the projects that initially received these funds.
Opponents of extending the Section 4007 authority believe
there should be little or no federal role in projects that
otherwise would be the responsibility of nonfederal entities.
Some would also prefer that Congress focus on promoting
alternatives that are more environmentally friendly, such as
water conservation and water reuse.
Yakima River Basin Water
Enhancement Project—Cle
Elum Pool Raise (WA)
$2 million
$4 million
Charles V. Stern, Specialist in Natural Resources Policy
IF10626
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Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
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https://crsreports.congress.gov | IF10626 · VERSION 46 · UPDATED