Bureau of Reclamation

The federal government has spent nearly $22 billion to build 133 water projects in the west that provide water for various purposes, including irrigation. The beneficiaries of these projects are generally required to repay the federal government their allocated share of the construction costs. However, as a result of various forms of financial assistance provided by the federal government, some beneficiaries repay considerably less than their full share of these costs. Among the beneficiaries, irrigators generally receive the largest amount of such financial assistance. This report describes the (1) types of financial assistance received by irrigators participating in the federal water projects built by the Bureau of Reclamation or for which the Bureau has water marketing responsibilities and (2) amount of these water projects' construction costs allocated to irrigators and their repayment of these costs.

GAO found that: (1) since the start of the reclamation program in 1902, irrigators generally have had 40 years or more to repay without interest their share of water project construction costs; (2) if irrigators are unable to repay their share of project construction costs, the costs are repaid from other project revenues, primarily hydropower revenues; (3) if the federal government determines that special circumstances exist in the irrigated area, such as unproductive land, drought, or depressed economic conditions, it will relieve irrigators of portions of their repayment obligation; (4) the Bureau of Reclamation has determined that $16.9 billion of the $21.8-billion investment in water projects is reimbursable to the federal government; (5) while $7.1 billion in reimbursable costs have been allocated to irrigators, the irrigators are scheduled to repay only $3.4 billion, because their obligations have been adjusted by irrigation assistance and charge-offs; (6) $3.4 billion of the $7.1 billion of reimbursable costs owed by irrigators will be paid by other sources, primarily hydropower revenues; and (7) $373.1 million of the $7.1 billion of reimbursable costs owed by irrigators has been charged off.