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<br />. <br /> <br />. <br /> <br />. <br /> <br />Explanation and justification of the amendments. <br /> <br />This provision would assure that surplus revenues are used to offset operation and <br />maintenance expenses and construction costs. Revenues derived from Warren Act contracts <br />and the sale of surplus water (e.g. Section 215 water) in which Bureau of Reclamation <br />facilities are utilized are not applied in a consistent manner by the Secretary of the Interior <br />in accordance with the Warren Act and subsection J of the Factfinder's Act. <br /> <br />This misapplication of revenues is only a recent occurrence for projects such as the Central <br />Valley Projects in Califomia. Prior to 1993, the Bureau of Reclamation had applied these <br />revenues to project operation, maintenance and repayment for the CVP. Since 1993, the <br />revenues have not been credited to the project, but rather have been credited to the <br />Reclamation Fund (returned to the Federal Treasury). <br /> <br />Central Valley Project water contractors were not notified ofthe change in the application <br />of these revenues, but instead were left to discover the modification when the final <br />accounting reports were published several years later: Thus, millions of dollars were shifted <br />away from the payment of CVP operation and maintenance expenses along with a further <br />deferral of capital repayment that had occurred prior to 1993. <br /> <br />Applying surplus revenues to the credit of the project is fair and sound fiscal practice <br />supportable by the law. Clarification of the law would allow for consistent application by <br />the Secretary to assure that revenues from the sale of surplus water are credited equitably to <br />the construction and operation and maintenance charges of the project utilized in the <br />generation of surplus revenues. <br /> <br />Issue No.2: Operating and Repayment Organizations deserve the right to meaningful participation <br />in determining whether a Warren Act contract is appropriate. <br /> <br />Amendments addressing this issue. <br /> <br />Amend 43 use. S 521 as follows. <br /> <br />After addition of new definitions seetion (a): <br /> <br />(b) The Secretary of the Interior in connection with the operations under the reclamation law <br />and the Water Conservation and Utilization Aet is hereby authorized to enter into contracts <br /> <br />-2- <br />