As ordered reported by the House Committee on Natural Resources on July 9, 2015
H.R. 2898 would direct the Bureau of Reclamation (BOR) to convert water service contracts with water districts in 17 western states to repayment contracts if a contractor requests it. Water users that choose to convert their contracts would be required to accelerate repayment of their share of the capital costs of constructing the affected projects. Under the bill, existing repayment contractors would have the option to repay their share of capital costs on an accelerated schedule.
Based on information from the BOR, CBO estimates that enacting the bill would reduce direct spending by a total of $883 million over the 2016-2025 period. Under the bill, offsetting receipts, which are treated as reductions in direct spending, would increase by $721 million over the next 10 years from accelerated repayments (net of annual payments that would otherwise occur under current law). H.R. 2898 also would repeal the authority to implement the San Joaquin River Restoration Settlement Act (SJRRSA) which CBO estimates would reduce federal costs by $162 million over the next several years. Additionally, because the staff of the Joint Committee on Taxation (JCT) expects nonfederal contractors would finance accelerated payments with bonds exempt from federal taxation, they estimate that enacting the legislation would lead to a decrease in revenues of $89 million over the 2016-2025 period. In total, CBO estimates that those changes in direct spending and revenues would decrease budget deficits over that 10-year period by $794 million. Because the legislation would affect direct spending and revenues, pay-as-you-go procedures apply.
H.R. 2898 also would allow the BOR, the US Fish and Wildlife Service (USFWS), and the National Oceanic and Atmospheric Administration (NOAA) to respond to drought conditions in western states by authorizing appropriations for projects to store water and by accelerating reviews of permit applications and environmental studies for new water projects. The bill also would decrease amounts authorized to be appropriated by repealing the SJRRSA. Based on information from those agencies, and assuming the appropriation of the necessary amounts, CBO estimates that enacting the bill would increase discretionary spending by $398 million over the 2016-2020 period and by $784 million over the next ten years.
H.R. 2898 would impose intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) by preempting the ability of the State of California to enforce its own water management and wildlife preservation laws. The bill would establish that ensuring the safety of fish required by state laws would be deemed satisfied by the existence of a warm water fishery in the San Joaquin River. The bill also would require two water districts to participate in a program to reduce non-native fish species in the Stanislaus River. Based on information from state and local agencies about the preemption and other requirements, CBO estimates that the aggregate cost for state and local governments to comply with those mandates would not exceed the annual threshold established in UMRA for intergovernmental mandates ($76 million in 2014, adjusted annually for inflation). The bill contains no private-sector mandates as defined in UMRA.