H.R. 1769, San Luis Unit Drainage Resolution Act

H.R. 1769 would ratify a settlement agreement negotiated in 2015 between the United States and the Westlands Water District (district) in California and would amend current law in accordance with provisions of that agreement. Specifically, the bill would:

• Eliminate the statutory requirement for the United States to provide drainage services for farmland irrigated within the district’s boundaries;
• Direct the Bureau of Reclamation (BOR) to enter into a water contract with the district consistent with the terms of the settlement agreement;
• Cancel the district’s obligation to repay the federal government for its share of constructing the Central Valley Project (CVP) and the costs allocated to the district to plan and design drainage infrastructure; and
• Require BOR to apply a credit against the district’s CVP operating costs equal to payments the district made for its capital obligations between the date of the settlement agreement (September 2015) and enactment of the legislation.

CBO estimates that enacting the legislation would reduce offsetting receipts (which has the effect of increasing direct spending) by $309 million over the 2017-2027 period. Because enacting H.R. 1769 would affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues.

CBO also estimates that implementing the legislation would reduce the need for discretionary appropriations to construct the drainage facilities in the district. CBO expects that those facilities will take more than a decade to complete under current law. According to estimates from BOR, completing the part of the project that will provide drainage for the district will cost about $2.5 billion. By relieving the federal government of those obligations, CBO estimates that implementing H.R. 1769 would reduce spending subject to appropriation for the project by about $1.5 billion over the next ten years (and by $1 billion in later years). Under current law, the district water users are required to repay those costs in the decades following the project’s completion (that is, after 2027).

Under the 2015 settlement agreement that would be ratified by H.R. 1769, the district would cooperate with the federal government to resolve pending litigation stemming from the government’s failure to provide drainage services to the district. The outcome, timing, and amount of judgments or settlements, if any, that would resolve the litigation under current law are highly speculative. Consequently, this cost estimate does not reflect any potential savings to the federal government from avoiding such litigation. However, on the basis of information from the Department of Justice (DOJ), BOR, and other stakeholders, CBO estimates that the cost of such judgments or settlements to resolve ongoing litigation under current law could range from $0 to $2 billion.

Further information about the potential costs of the pending litigation against the federal government is included under the heading “Additional Information” in the attached document.

CBO estimates that enacting the bill would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.

H.R. 1769 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.