Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act



Updated July 8, 2020
Reclamation Water Storage Projects: Section 4007 of the Water
Infrastructure Improvements for the Nation Act

Section 4007 of the Water Infrastructure Improvements for
subdivisions that are found to have a federal benefit in
the Nation Act (WIIN Act; P.L. 114-322) created a new
accordance with reclamation law) may be no more than
authority for the Bureau of Reclamation (Reclamation, part
25% federally funded.
of the Department of the Interior) to build water storage
projects in the western United States. From FY2017 to
For federal participation in the construction of a project
FY2020, Congress appropriated $469 million for these
under either designation, the Secretary of the Interior must
projects, and Reclamation has allocated a portion of these
find that the project is feasible and provides federal benefits
funds to progress on a number of water storage projects in
proportionate to the federal government’s cost share (e.g., a
its service area.
project providing 50% federal support requires that at least
50% of its benefits be federal in nature). Project sponsors
Background
also must agree to pay their portion of project costs up
In the early and mid-20th century, Reclamation built
front. After the Secretary’s recommended projects have
hundreds of large dams and water diversion structures
been transmitted to Congress, the project must be
throughout the West. Traditionally, Reclamation’s role in
designated by name in an enacted appropriations act before
water project development has been limited to
it can receive funding.
geographically specific projects authorized in federal
statute. Typically the federal government, through
Differences from Traditional Reclamation Water
discretionary appropriations to Reclamation, has provided
Storage Project Model
full, up-front funding for the construction costs of these
Instead of full, up-front federal financing, with
facilities. Project beneficiaries, which are irrigators,
reimbursable funding to be repaid by beneficiaries over
municipal water suppliers, and hydropower contractors,
time (i.e., the “traditional” model for Reclamation projects),
repay their portion of “reimbursable” project construction
Section 4007 has been interpreted to authorize partial, up-
or development costs over a 40-50 year term. The amount
front federal funding (i.e., funding for both reimbursable
recouped by the federal government typically depends on
and nonreimbursable costs), with the corresponding
several factors, including the portion of project benefits that
nonfederal share of funding also required up-front.
are classified as “nonreimbursable” under federal law
Proponents of these changes argue that they stretch scarce
because they are considered federal in nature (e.g., fish and
federal funds and provide increased incentive for local
wildlife enhancements, flood control, recreation), as well as
involvement in storage projects. At the same time, in
adjustments for irrigators’ ability to pay. Additionally,
requiring a large initial cost share from nonfederal users,
irrigation beneficiaries are not charged interest on their
the new authority may not be attractive for sponsors who
repayment obligations. As a result, the total amount repaid
cannot afford large, up-front payments.
to the federal government for these projects is typically less
than the full cost of construction.
Section 4007 also significantly altered the role of
congressional authorizing and appropriations committees in
Section 4007 of the WIIN Act
project development. It allows Reclamation to move
Section 4007 of the WIIN Act authorized a new structure
forward with construction without direct legislative
for Reclamation to support water storage infrastructure
approval from congressional authorizing committees. By
projects, including both surface water and groundwater
requiring designation of Administration recommendations
storage projects. The act authorized $335 million in
by name in appropriations acts, Section 4007 effectively
discretionary appropriations for new and improved federal
shifted project approval (i.e., authorization) decisions to the
and nonfederal water storage projects. Any appropriated
appropriations process.
funds are to be made available for qualifying water storage
projects approved for construction prior to January 1, 2021.
Recent Funding, Project Allocations
Congress has appropriated $469 million for Section 4007
Funding for water storage project construction under
projects as of mid-2020, including funding in enacted
Section 4007 is available for two primary project types.
Energy and Water Development appropriations acts for
“Federally owned storage projects” ( surface or
FY2017 ($67 million), FY2018 ($134 million), FY2019
groundwater storage projects to which the United States
($134 million), and FY2020 ($134 million). For its part,
holds title and which were authorized to be constructed
Reclamation has issued three rounds of funding allocations
pursuant to reclamation law and regulations) may be no
for Section 4007 that, once approved by Congress, release
more than 50% federally funded. “State-led” storage
portions of this funding to individual projects.
projects (surface water or groundwater storage projects
Reclamation’s recommendations in January 2018 and
constructed, operated, and maintained by states or political
February 2019 were approved by Congress, and the latest
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recommendations (from June 2020) are awaiting
congressional action as of the date of this report (Table 1).
Table 1. Approved and Proposed Allocations for Section 4007 Water Storage Projects
($ in millions)
Jan 2018
Feb 2019
June 2020
Project (State)
(approved)
(approved)
(proposed)
Shasta Dam and Reservoir Enlargement Project (CA)
$20.00
—a
$15.00
Sites Reservoir Storage Project (CA)
$4.35
$4.00
$4.00
Upper San Joaquin River Basin Storage Investigation (CA)
$1.50


Friant-Kern Canal Subsidence Chal enges Project (CA)
$2.20
$2.35
$71.00
Boise River Basin Feasibility Study (ID)
$0.75
$1.75
$2.88
Yakima River Basin Water Enhancement Project—Cle Elum
$2.00
$4.00
$1.00
Pool Raise (WA)
Upper Yakima System Storage Feasibility Study (WA)
$2.50


Del Puerto Water District Feasibility Study (CA)

$1.50
$1.50
Los Vaqueros Reservoir Phase 2 Expansion (CA)

$2.16
$7.85
Delta Mendota Canal Subsidence Correction (CA)


$3.00
San Luis Low Point Improvement Project (CA)


$1.70
Sacramento Regional Water Bank (CA)


$0.87
Total
$33.30
$15.76
$108.80
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).
a.
In 2019, Reclamation proposed $57 mil ion for the Shasta Dam and Reservoir Enlargement Project, but Congress did not agree to this
al ocation.
In the first two allocations (finalized in FY2018 and
congressional approval. These decisions may have
FY2020 appropriations, respectively), Congress approved
implications for water storage priorities throughout the
Reclamation recommendations for a total of nine projects in
West. Demand for additional funds under this authority is
three states. In June 2020, Reclamation recommended an
likely to continue, and thus Congress may also be asked to
additional $108.8 million for 10 projects. If this funding
consider additional appropriations, as well as increases to
were approved, approximately $160 million of the $469
and extension of Section 4007. S. 1932 would extend the
million will have been allocated to individual projects.
authority for these projects through FY2025 and authorize
$670 million in additional funding. H.R. 2 includes an
The project that has been approved for the most funding as
authorization for $750 million in additional funding for
of 2020, the Shasta Dam and Reservoir Enlargement
these projects through FY2026, as well as alterations to
Project, is controversial. California state law prohibits any
eligibility requirements and the approval process for
expansion of storage at Lake Shasta that would inundate
Section 4007 projects.
state-protected portions of the McCloud River, a tributary
of the reservoir. The Shasta project would raise Shasta Dam
Supporters have advocated for continuing and increasing
and expand the capacity of Lake Shasta, a linchpin for the
funding for Section 4007 projects. They argue that new
federal Central Valley Project (for more information, see
construction would increase water availability in the West
CRS Report R45342, Central Valley Project: Issues and
and help to address the effects of climate change on
Legislation). The project would create an estimated
availability of water resources, and thus it warrants federal
additional 634,000 acre-feet of storage and 51,000 acre-feet
prioritization. They also note that more funding is required
of yield (i.e., additional water supplies) for CVP
to complete the projects that initially received these funds.
contractors. To date, this project is the only project that has
Opponents of extending the Section 4007 authority believe
been recommended for funding by the Administration (in
there should be little or no federal role in projects that
2019) but not approved by Congress in enacted
otherwise would be the responsibility of nonfederal entities.
appropriations language.
Some would also prefer that Congress focus on promoting
alternatives seen as more environmentally friendly, such as
Legislation and Issues for Congress
water conservation and water reuse.
In the future, the Administration is likely to continue
proposing funding allocations for Section 4007 projects for
Charles V. Stern, Specialist in Natural Resources Policy
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Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act

IF10626


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