Updated May 28July 2, 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) 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. From FY2017 to
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 irrigators’ 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 costcos t of construction.
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 appropriations for new and improved federal
and nonfederal water storage projects. Any appropriated
funds are to be made available for qualifying water storage
projects approved for construction prior to January 1, 2021.
Funding for water storage project construction under
Section 4007 is available for two primary project types:
1. .
“Federally-owned storage projects,”
defined to be any
project to which the
United States holds title and which was
authorized to be constructed pursuant to
Reclamation’s
laws and regulations. The
federal cost share for these projects is
limited to, may be no more than 50%.
2 federally
funded. “State-led” storage projects, defined to be
groundwater or surface water storage
projects constructed,
operated, and
maintained by states or political
subdivisions 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%
reclamation laws, may be no more than 25% federally
funded.
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% federal support 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 Project Construction
Instead of full, up-front federal financing to be repaid over
time (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 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, 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 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 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 allows 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. By requiring
. By
requiring designation of Administration recommendations
by name in
appropriations acts, Section 4007 effectively
shifted project
approval (i.e., authorization) decisions to the appropriations
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
approval (i.e., authorization) decisions to the
appropriations process.
Recent Funding, Project Allocations
Congress appropriated $469 million for Section 4007
projects as of mid-2020, including funding in enacted
Energy and Water Development appropriations acts for
FY2017 ($67 million), FY2018 ($134 million), FY2019
($134 million), and FY2020 ($134 million). For its part,
Reclamation has issued three rounds of funding allocations
for Section 4007 that, once approved by Congress, release
portions of this funding to individual projects.
Reclamation’s recommendations in January 2018 and
February 2019 have been approved by Congress, and the
latest recommendations (from June 2020) are awaiting
congressional action as of the date of this report (Table 1).
https://crsreports.congress.gov
Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
Table 1. Approved and Proposed Allocations for Section 4007 Water Storage Projects
($ in millions)
Jan 2018
(approved)
Feb 2019
(approved)
June 2020
(proposed)
Shasta Dam and Reservoir Enlargement Project (CA)
$20.0
-*
$15.0
Sites Reservoir Storage Project (CA)
$4.35
$4.0
$4.0
Upper San Joaquin River Basin Storage Investigation (CA)
$1.5
-
-
Friant-Kern Canal Subsidence Challenges Project (CA)
$2.2
$2.35
$71.0
Boise River Basin Feasibility Study (ID)
$0.75
$1.75
$2.88
Yakima River Basin Water Enhancement Project—Cle Elum
Pool Raise (WA)
$2.0
$4.0
$1.0
Upper Yakima System Storage Feasibility Study (WA)
$2.5
-
-
Del Puerto Water District Feasibility Study (CA)
-
$1.5
$1.5
Los Vaqueros Reservoir Phase 2 Expansion (CA)
-
$2.16
$7.85
Delta Mendota Canal Subsidence Correction (CA)
-
-
$3.0
San Luis Low Point Improvement Project (CA)
-
-
$1.7
Sacramento Regional Water Bank (CA)
-
-
$0.87
$33.30
$15.76
$108.79
Project (State)
Total
Sources: Bureau of Reclamation Reports to House and Senate Committees on Appropriations, January 2018, February 2019, and June 2020;
and enacted appropriations legislation for FY2018 (P.L. 115-141) and FY2020 (P.L. 116-94).
Notes: *In 2019, Reclamation proposed $57 million for the Shasta Dam and Reservoir Enlargement Project, but Congress did not agree to this
allocation.
In the first two allocations (finalized in FY2018 and
FY2020 appropriations, respectively), Congress approved
Reclamation recommendations for nine projects in three
states. In June 2020, Reclamation recommended an
additional $108.8 million for 10 projects. If this funding
were approved, approximately $160 million of the $469
million will have been allocated to individual projects.
The project which has been recommended for the most
funding as of 2020, 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. To date, this project is the only project
that has been recommended for funding by the
Administration (in 2019) but not approved by Congress in
enacted appropriations language.
Legislation and 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 water storage priorities throughout the
West. Demand for additional funds under this authority is
likely to continue, thus Congress may also be asked to
consider additional appropriations, as well as increases to
and extension of Section 4007. S. 1932 would extend the
authority for these projects through FY2025 and authorize
$670 million in additional funding. H.R. 2 includes an
authorization for $750 million in additional funding for
these projects through FY2026, as well as alterations to
eligibility requirements and the approval process for
Section 4007 projects.
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 areseen as 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
https://crsreports.congress.gov
IF10626
Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
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