Updated April 3, 2019
Reclamation Water Storage Projects: Section 4007 of the Water
Infrastructure Improvements for the Nation Act

Section 4007 of the Water Infrastructure Improvements for
Funding for water storage project construction under
the Nation Act (WIIN Act; P.L. 114-322), enacted in
Section 4007 is available for two primary project types:
December 2016, created a new authority for the Bureau of
Reclamation (Reclamation, part of the Department of the
1. “Federally-owned storage projects,”
Interior) to build water storage projects in the western
defined to be any project to which the
United States. Reclamation has used this authority to
United States holds title and which was
further progress on a number of water storage projects.
authorized to be constructed pursuant to
From FY2017 to FY2019, Congress appropriated the full
Reclamation’s laws and regulations. The
$335 million in available budget authority for these
federal cost share for these projects is
projects. A portion of these funds has been allocated at the
limited to no more than 50%.
project level by Reclamation.
2. “State-led” storage projects, defined to be
groundwater or surface water storage
Some federal and state decisionmakers, local stakeholders,
projects constructed, operated, and
and advocacy groups are interested in extending the
maintained by states or political
authority to make additional headway on water storage
subdivisions that are found to have a
projects in the West. Others oppose federal funding for new
federal benefit in accordance with
water storage projects, in particular those to be located in
reclamation laws. The federal cost share
environmentally sensitive areas. This In Focus discusses the
for these projects is limited to no more
Section 4007 authority and its status.
than 25%.
Background
For federal participation in a project under either
designation, the Secretary of the Interior must find that the
In the early and mid-20th century, Reclamation built
project is feasible and provides federal benefits
hundreds of large dams and water diversion structures
proportionate to the federal government’s cost share (e.g., a
throughout the West. Traditionally, Reclamation’s role in
project providing 50% federal support appears to require
water project development has been limited to
that 50% of its benefits be federal in nature, whereas a
geographically specific projects authorized in federal
project providing 25% must have 25% federal benefits).
statute. Typically, the federal government, through
Project sponsors also must agree to pay their portion of
discretionary appropriations to Reclamation, has provided
project costs up front (i.e., at the time of construction).
full, up-front funding for the construction costs of these
After the Secretary’s recommended projects have been
facilities. Project beneficiaries, which are irrigators,
transmitted to Congress, the project must be designated by
municipal water suppliers, and hydropower contractors,
name in an enacted appropriations act.
repay their portion of project construction or development
costs over a 40-50 year term. The amount recouped by the
Differences from Traditional Reclamation Water
federal government typically depends on several factors,
Storage Construction Process
including the portion of project benefits that are
Instead of full, up-front federal financing to be repaid over
nonreimbursable because they are considered federal in
time, Section 4007 authorizes partial, up-front federal
nature (e.g., fish and wildlife enhancements, flood control,
funding. Proponents of these changes argue they will
recreation), as well as adjustments for irrigation
stretch scarce federal funds and provide increased incentive
contractors’ ability to pay. Additionally, irrigation
for local involvement in storage projects. At the same time,
beneficiaries are not charged interest on their repayment
in requiring a large initial cost share from nonfederal users,
obligations. As a result, the total amount repaid to the
those who cannot afford up-front, lump-sum payments may
federal government for these projects is typically less than
be deterred from pursuing new projects. Thus, the Section
the full cost of construction.
4007 authority appears to be most attractive to those with
Process Under Section 4007 of the WIIN access to the requisite capital.
Act
The Section 4007 authority does not eliminate the
Section 4007 of the WIIN Act authorized a new structure
“traditional” Reclamation project approval and finance
for Reclamation to support water storage infrastructure
process as a path to new project construction. However, any
projects. The act authorized $335 million in discretionary
appropriations for the new authority could theoretically
appropriations for new and improved federal and
detract from appropriations that might otherwise be made
nonfederal water storage projects. Any appropriated funds
for projects under the traditional approval and finance
are to be made available for qualifying water storage
model.
projects approved for construction prior to January 1, 2021.
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link to page 2 link to page 2 Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
Section 4007 significantly alters the role of congressional
Table 1. Proposed and Approved Section 4007 Water
authorizing and appropriations committees in project
Storage Projects and Funding Allocations
development. It provides authority for Reclamation to move
forward with construction without direct legislative
2018
2019
approval from congressional authorizing committees—the
Project (State)
Allocated
Proposed
House Natural Resources Committee and the Senate Energy
Shasta Dam and Reservoir
$20 mil ion
$57 mil ion
and Natural Resources Committee. Instead, in requiring
Enlargement Project (CA)
designation of Administration recommendations by name in
appropriations acts, Section 4007 requires the final decision
Sites Reservoir Storage Project
$4.35 mil ion
$4 mil ion
on federal funding to be made in the appropriations process.
(CA)
Thus, although Section 4007 bypasses the authorizing
Upper San Joaquin River Basin
$1.5 mil ion
-
committees on some decisions related to new project
Storage Investigation (CA)
construction (theoretically removing one hurdle of project
development), it also adds a new requirement that must be
Friant-Kern Canal Subsidence
$2.2 mil ion
$2.35 mil ion
met before a project can receive federal appropriations.
Challenges Project (CA)
Boise River Basin Feasibility
$0.75 mil ion
$1.75 mil ion
Only projects approved prior to 2021 are eligible for federal
Study (ID)
funding under Section 4007. Although it has been
characterized as new authority for construction projects, as
Yakima River Basin Water
$2 mil ion
$4 mil ion
a practical matter most of the projects likely to receive
Enhancement Project—Cle
Section 4007 funds were already under study as of 2016.
Elum Pool Raise (WA)
Recent Funding Allocations and
Upper Yakima System Storage
$2.5 mil ion
-
Proposals
Feasibility Study (WA)
Reclamation received funding for Section 4007 projects in
Del Puerto Water District
-
$1.5 mil ion
enacted Energy and Water Development appropriations acts
Feasibility Study
for FY2017 ($67 million), FY2018 ($134 million), and
FY2019 ($134 million). Thus, as of the enactment of the
Los Vaqueros Reservoir Phase 2 -
$2.16 mil ion
FY2019 Energy and Water appropriations bill, the full $335
Expansion
million in authorized funding for Section 4007 had been
Source: Bureau of Reclamation, Reports to House and Senate
appropriated. In January 2018, Reclamation proposed
Committees on Appropriations, January 2018 and February 2019.
project-level allocations for $33 million of FY2017
appropriated funding for Section 4007 projects (Table 1).
The project which has been recommended for the most
Congress subsequently approved these projects in the
funding, the Shasta Dam and Reservoir Enlargement
enacted Energy and Water Development appropriations bill
Project, is controversial and has been opposed by the State
for FY2018 (P.L. 115-141).
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
As of the enactment of FY2019 Energy and Water
Central Valley Project (CVP). The project would create an
appropriations, the full $335 million in authorized
additional 634,000 acre-feet of storage (51,000 acre-feet of
funding for Section 4007 had been appropriated: $33
yield, or additional water supplies) for CVP contractors.
million of these funds had been allocated at the
California state law prohibits any expansion of storage at
project level and approved by Congress.
Lake Shasta that would inundate state-protected portions of
the McCloud River, a tributary of the reservoir.

Issues for Congress
In February 2019, Reclamation proposed $75 million in
In the future, Congress will be asked to approve or
allocations for a second round of Section 4007 projects
disapprove Administration recommendations for Section
(Table 1); some of these projects were previously approved
4007 projects. These decisions will have important
for funding by Congress in 2018. Similar to 2018, these
implications for future water storage priorities throughout
projects must be mentioned by name in enacted
the West.
appropriations acts in order for Reclamation to expend the
proposed funds.
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.
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 4 · UPDATED