§485h–1 Administration of repayment contracts and long-term contracts to furnish water; renewal and conversion; credit for payments; right to available water supply; rates; construction component

Summary

Require the Secretary of the Interior to follow rules when making or running long-term water contracts and repayment contracts. If a party asks, the Secretary must put a renewal option in long-term contracts with terms both sides agree on, and those terms can change charges to reflect changes in construction, operation, maintenance costs, or the party’s ability to pay. If an organization asks, the Secretary must allow converting a long-term contract to a repayment contract when, after counting credits the organization has toward return of construction costs, the remaining repayable amount can probably be paid off within the repayment contract term. Each year the Secretary must credit any payments made on time that are more than the party’s share of operation and maintenance costs, and must set up credits for past payments as soon after July 2, 1956 as feasible. Once those credits equal the amount that would have been repaid under a repayment contract, the construction charge is dropped and charges reduced. Contracts must give the party a first right to a stated share of the project’s water during the contract and a permanent right after full payment. Contracts may require advance payment of rates on an annual, semiannual, bimonthly, or monthly basis. Before the party’s share of construction cost is amortized, rates must include a reasonable construction component.