Updated May 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
2. “State-led” storage projects, defined to be
the Nation Act (WIIN Act; P.L. 114-322) created a new
groundwater or surface water storage
authority for the Bureau of Reclamation (Reclamation, part
projects constructed, operated, and
of the Department of the Interior) to build water storage
maintained by states or political
projects in the western United States. From FY2017 to
subdivisions that are found to have a
FY2020, Congress appropriated $469 million for these
federal benefit in accordance with
projects, and Reclamation has allocated a portion of these
reclamation laws. The federal cost share
funds to progress on a number of water storage projects in
for these projects is limited to no more
its service area.
than 25%.
Background
For federal participation in the construction of a project
under either designation, the Secretary of the Interior must
In the early and mid-20th century, Reclamation built
find that the 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 Project Construction
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 (i.e., the “traditional” model for Reclamation projects),
nature (e.g., fish and wildlife enhancements, flood control,
Section 4007 essentially authorizes partial, up-front federal
recreation), as well as adjustments for irrigators’ ability to
funding, with the corresponding nonfederal share of
pay. Additionally, irrigation beneficiaries are not charged
funding also required up-front. Proponents of these changes
interest on their repayment obligations. As a result, the total
argue that they stretch scarce federal funds and provide
amount repaid to the federal government for these projects
increased incentive for local involvement in storage
is typically less than the full cost of construction.
projects. At the same time, in requiring a large initial cost
Section 4007 of the WIIN Act
share from nonfederal users, the new authority may not be
attractive for sponsors who cannot afford large, up-front
Section 4007 of the WIIN Act authorized a new structure
payments.
for Reclamation to support water storage infrastructure
projects, including both surface water and groundwater
The Section 4007 authority does not eliminate the
storage projects. The act authorized $335 million in
traditional Reclamation project approval and finance
discretionary appropriations for new and improved federal
process as a path to new project construction. However, any
and nonfederal water storage projects. Any appropriated
appropriations for the new authority could theoretically
funds are to be made available for qualifying water storage
detract from appropriations that might otherwise be made
projects approved for construction prior to January 1, 2021.
for projects under the traditional model. From FY2016 to
FY2020, budget requests for Reclamation’s construction
Funding for water storage project construction under
program averaged $110 million per year. The total budget
Section 4007 is available for two primary project types:
request for Reclamation over the same time period averaged
$1.093 billion per year.
1. “Federally-owned storage projects,”
defined to be any project to which the
Section 4007 also significantly altered the role of
United States holds title and which was
congressional authorizing and appropriations committees in
authorized to be constructed pursuant to
project development. It provided authority for Reclamation
Reclamation’s laws and regulations. The
to move forward with construction without direct legislative
federal cost share for these projects is
approval from congressional authorizing committees—the
limited to no more than 50%.
House Natural Resources Committee and the Senate Energy
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link to page 2 Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act
and Natural Resources Committee. By requiring
Project (State)
2018
2019
designation of Administration recommendations by name in
appropriations acts, Section 4007 effectively shifted project
Upper Yakima System Storage
$2.5 million
-
approval (i.e., authorization) decisions to the appropriations
Feasibility Study (WA)
process.
Del Puerto Water District
-
$1.5 million
Only projects approved prior to 2021 are eligible for federal
Feasibility Study (CA)
funding under Section 4007. Although it is technically a
Los Vaqueros Reservoir Phase 2 -
$2.16 million
“new” authority for construction projects, as a practical
Expansion (CA)
matter most of the projects likely to receive Section 4007
funds were already under study as of 2016.
Sources: Bureau of Reclamation, Reports to House and Senate
Committees on Appropriations, January 2018 and February 2019; and
Recent Funding and Project Allocations
enacted appropriations legislation for FY2018 (P.L. 115-141) and
Congress appropriated funding to Reclamation for Section
FY2020 (P.L. 116-94).
4007 projects in enacted Energy and Water Development
appropriations acts for FY2017 ($67 million), FY2018
Notes: For 2019, funding of $57 million was proposed, but not
($134 million), FY2019 ($134 million), and FY2020 ($134
approved, for the Shasta Dam and Reservoir Enlargement Project.
million). Overall, Congress has appropriated $469 million
for Section 4007 projects.
The project which has been recommended for the most
funding, the Shasta Dam and Reservoir Enlargement
A portion ($51 million) of the funds appropriated for
Project, is controversial and is opposed by the State of
Section 4007 projects have been allocated and released at
California. California state law prohibits any expansion of
the project level (Table 1). In the first two rounds of
storage at Lake Shasta that would inundate state-protected
allocations (finalized in FY2018 and FY2020
portions of the McCloud River, a tributary of the reservoir.
appropriations, respectively), Congress approved Section
The Shasta project would raise Shasta Dam and expand the
4007 funding allocations for nine projects in three states:
capacity of the largest storage reservoir in California—Lake
California (six projects), Idaho (one project), and
Shasta—a linchpin for the federal Central Valley Project
Washington (two projects). These approvals were based on
(CVP). The project would create an estimated additional
two rounds of project allocation proposals from
634,000 acre-feet of storage and 51,000 acre-feet of yield
Reclamation. First, in January 2018, Reclamation proposed
(i.e., additional water supplies) for CVP contractors.
project-level allocations for $33 million in previously
Issues for Congress
appropriated Section 4007 funds. Congress subsequently
approved these projects in the enacted Energy and Water
In the future, the Administration is likely to continue
Development appropriations bill for FY2018 (P.L. 115-141,
proposing funding allocations for Section 4007 projects for
enacted in March 2018). In February 2019, Reclamation
congressional approval. These decisions may have
proposed another $75 million in allocations for a second
implications for future water storage priorities throughout
round of Section 4007 projects. All but one of these
the West. The demand for additional funds pursuant to this
projects (Shasta Dam and Reservoir Enlargement, proposed
authority is likely to continue, thus Congress may also be
to receive $57 million of the $75 million) were approved in
asked to consider additional appropriations, as well
enacted appropriations for FY2020 (P.L. 116-94, enacted in
increases to and extension of Section 4007 authorities. For
December 2019), thus releasing $18 million in additional
instance, S. 1932 would extend the authority for five years
funding for individual projects.
(through FY2025) and authorize $670 million in additional
funding for these projects. Some may also propose
Table 1. Approved Funding Allocations for Section
alterations to the project approval process underlying
4007 Water Storage Projects
Section 4007 projects.
Project (State)
2018
2019
Supporters have advocated for continuing and increasing
funding for Section 4007 projects. They argue that new
Shasta Dam and Reservoir
$20 million
-
construction would increase water availability in the West
Enlargement Project (CA)
and help to address the effects of climate change on
Sites Reservoir Storage Project
$4.35 million
$4 million
availability of water resources, thus it warrants federal
(CA)
prioritization. They also note that more funding is required
to complete the projects that initially received these funds.
Upper San Joaquin River Basin
$1.5 million
-
Opponents of extending the Section 4007 authority believe
Storage Investigation (CA)
there should be little or no federal role in projects that
Friant-Kern Canal Subsidence
$2.2 million
$2.35 million
otherwise would be the responsibility of nonfederal entities.
Challenges Project (CA)
Some would also prefer that Congress focus on promoting
alternatives that are more environmentally friendly, such as
Boise River Basin Feasibility
$0.75 million
$1.75 million
water conservation and water reuse.
Study (ID)
Yakima River Basin Water
$2 million
$4 million
Charles V. Stern, Specialist in Natural Resources Policy
Enhancement Project—Cle
IF10626
Elum Pool Raise (WA)
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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 6 · UPDATED

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