(a) Flood control

(1) General rule
The non-Federal interests for a project with costs assigned to flood control (other than a nonstructural project) shall—

(A) pay 5 percent of the cost of the project assigned to flood control during construction of the project;

(B) provide all lands, easements, rights-of-way, and dredged material disposal areas required only for flood control and perform all related necessary relocations; and

(C) provide that portion of the joint costs of lands, easements, rights-of-way, dredged material disposal areas, and relocations which is assigned to flood control.

(2) 35 percent minimum contribution
If the value of the contributions required under paragraph (1) of this subsection is less than 35 percent of the cost of the project assigned to flood control, the non-Federal interest shall pay during construction of the project such additional amounts as are necessary so that the total contribution of the non-Federal interests under this subsection is equal to 35 percent of the cost of the project assigned to flood control.

(3) 50 percent maximum
The non-Federal share under paragraph (1) shall not exceed 50 percent of the cost of the project assigned to flood control. The preceding sentence does not modify the requirement of paragraph (1)(A) of this subsection.

(4) Deferred payment of amount exceeding 30 percent
If the total amount of the contribution required under paragraph (1) of this subsection exceeds 30 percent of the cost of the project assigned to flood control, the non-Federal interests may pay the amount of the excess to the Secretary over a 15-year period (or such shorter period as may be agreed to by the Secretary and the non-Federal interests) beginning on the date construction of the project or separable element is completed, at an interest rate determined pursuant to section 2216 of this title. The preceding sentence does not modify the requirement of paragraph (1)(A) of this subsection.

(b) Projects using nonstructural, natural, or nature-based features

(1) In general
The non-Federal share of the cost of a flood risk management or hurricane and storm damage risk reduction measure using a nonstructural feature, or a natural feature or nature-based feature (as those terms are defined in section 2289a(a) of this title), shall be 35 percent of the cost of such measures. The non-Federal interests for any such measures shall be required to provide all lands, easements, rights-of-way, dredged material disposal areas, and relocations necessary for the project, but shall not be required to contribute any amount in cash during construction for a nonstructural feature if the costs of land, easements, rights-of-way, dredged material disposal areas, and relocations for such feature are estimated to exceed 35 percent.

(2) Non-Federal contribution in excess of 35 percent
At any time during construction of a project, if the Secretary determines that the costs of land, easements, rights-of-way, dredged material disposal areas, and relocations for the project, in combination with other costs contributed by the non-Federal interests, will exceed 35 percent, any additional costs for the project (not to exceed 65 percent of the total costs of the project) shall be a Federal responsibility and shall be contributed during construction as part of the Federal share.

(c) Other purposes
The non-Federal share of the cost assigned to other project purposes shall be as follows:

(1) hydroelectric power: 100 percent, except that the marketing of such power and the recovery of costs of constructing, operating, maintaining, and rehabilitating such projects shall be in accordance with existing law: Provided, That after November 17, 1986, the Secretary shall not submit to Congress any proposal for the authorization of any water resources project that has a hydroelectric power component unless such proposal contains the comments of the appropriate Power Marketing Administrator designated pursuant to section 7152 of title 42 concerning the appropriate Power Marketing Administration's ability to market the hydroelectric power expected to be generated and not required in the operation of the project under the applicable Federal power marketing law, so that, 100 percent of operation, maintenance and replacement costs, 100 percent of the capital investment allocated to the purpose of hydroelectric power (with interest at rates established pursuant to or prescribed by applicable law), and any other costs assigned in accordance with law for return from power revenues can be returned within the period set for the return of such costs by or pursuant to such applicable Federal power marketing law;

(2) municipal and industrial water supply: 100 percent;

(3) agricultural water supply: 35 percent;

(4) recreation, including recreational navigation: 50 percent of separable costs and, in the case of any harbor or inland harbor or channel project, 50 percent of joint and separable costs allocated to recreational navigation;

(5) hurricane and storm damage reduction: 35 percent;

(6) aquatic plant control: 50 percent of control operations; and

(7) environmental protection and restoration: 35 percent; except that nothing in this paragraph shall affect or limit the applicability of section 2283 of this title.

(d) Certain other costs assigned to project purposes

(1) Construction
Costs of constructing projects or measures for beach erosion control and water quality enhancement shall be assigned to appropriate project purposes listed in subsections (a), (b), and (c) and shall be shared in the same percentage as the purposes to which the costs are assigned, except that all costs assigned to benefits to privately owned shores (where use of such shores is limited to private interests) or to prevention of losses of private lands shall be borne by non-Federal interests and all costs assigned to the protection of federally owned shores shall be borne by the United States.

(2) Periodic nourishment

(A) In general
In the case of a project authorized for construction after December 31, 1999, except for a project for which a District Engineer's Report is completed by that date, the non-Federal cost of the periodic nourishment of the project, or any measure for shore protection or beach erosion control for the project, that is carried out—

(i) after January 1, 2001, shall be 40 percent;

(ii) after January 1, 2002, shall be 45 percent; and

(iii) after January 1, 2003, shall be 50 percent.

(B) Benefits to privately owned shores
All costs assigned to benefits of periodic nourishment projects or measures to privately owned shores (where use of such shores is limited to private interests) or to prevention of losses of private land shall be borne by the non-Federal interest.

(C) Benefits to federally owned shores
All costs assigned to the protection of federally owned shores for periodic nourishment measures shall be borne by the United States.

(e) Applicability

(1) In general
This section applies to any project (including any small project which is not specifically authorized by Congress and for which the Secretary has not approved funding before November 17, 1986), or separable element thereof, on which physical construction is initiated after April 30, 1986, as determined by the Secretary, except as provided in paragraph (2). For the purpose of the preceding sentence, physical construction shall be considered to be initiated on the date of the award of a construction contract.

(2) Exceptions
This section shall not apply to the Yazoo Basin, Mississippi, Demonstration Erosion Control Program, authorized by Public Law 98–8, or to the Harlan, Kentucky, or Barbourville, Kentucky, elements of the project authorized by section 202 of Public Law 96–367.

(f) "Separable element" defined
For purposes of this Act, the term "separable element" means a portion of a project—

(1) which is physically separable from other portions of the project; and

(2) which—

(A) achieves hydrologic effects, or

(B) produces physical or economic benefits,

which are separately identifiable from those produced by other portions of the project.

(g) Deferral of payment

(1) With respect to the projects listed in paragraph (2), no amount of the non-Federal share required under this section shall be required to be paid during the three-year period beginning on November 17, 1986.

(2) The projects referred to in paragraph (1) are the following:

(A) Boeuf and Tensas Rivers, Tensas Basin, Louisiana and Arkansas, authorized by the Flood Control Act of 1946;

(B) Eight Mile Creek, Arkansas, authorized by Public Law 99–88; and

(C) Rocky Bayou Area, Yazoo Backwater Area, Yazoo Basin, Mississippi, authorized by the Flood Control Act approved August 18, 1941.

(h) Assigned joint and separable costs
The share of the costs specified under this section for each project purpose shall apply to the joint and separable costs of construction of each project assigned to that purpose, except as otherwise specified in this Act.

(i) Lands, easements, rights-of-way, dredged material disposal areas, and relocations
Except as provided under section 2283(c) of this title, the non-Federal interests for a project to which this section applies shall provide all lands, easements, rights-of-way, and dredged material disposal areas required for the project and perform all necessary relocations, except to the extent limited by any provision of this section. The value of any contribution under the preceding sentence shall be included in the non-Federal share of the project specified in this section.

(j) Agreement

(1) Requirement for agreement

(A) In general
Any project to which this section applies (other than a project for hydroelectric power) shall be initiated only after non-Federal interests have entered into binding agreements with the Secretary to pay 100 percent of the operation, maintenance, and replacement and rehabilitation costs of the project, to pay the non-Federal share of the costs of construction required by this section, and to hold and save the United States free from damages due to the construction or operation and maintenance of the project, except for damages due to the fault or negligence of the United States or its contractors.

(B) Inclusion
An agreement under subparagraph (A) shall include a brief description and estimation of the anticipated operations, maintenance, and replacement and rehabilitation costs of the non-Federal interest for the project.

(2) Elements of agreement
The agreement required pursuant to paragraph (1) shall be in accordance with the requirements of section 1962d–5b of title 42 and shall provide for the rights and duties of the United States and the non-Federal interest with respect to the construction, operation, and maintenance of the project, including, but not limited to, provisions specifying that, in the event the non-Federal interest fails to provide the required non-Federal share of costs for such work, the Secretary—

(A) shall terminate or suspend work on the project unless the Secretary determines that continuation of the work is in the interest of the United States or is necessary in order to satisfy agreements with other non-Federal interests in connection with the project; and

(B) may terminate or adjust the rights and privileges of the non-Federal interest to project outputs under the terms of the agreement.

(k) Payment options

(1) In general
Except as otherwise provided in this section, the Secretary may permit the full non-Federal contribution to be made without interest during construction of the project or separable element, or with interest at a rate determined pursuant to section 2216 of this title over a period of not more than thirty years from the date of completion of the project or separable element. Repayment contracts shall provide for recalculation of the interest rate at five-year intervals.

(2) Renegotiation of terms

(A) In general
At the request of a non-Federal interest, the Secretary and the non-Federal interest may renegotiate the terms and conditions of an eligible deferred payment, including—

(i) permitting the non-Federal contribution to be made without interest, pursuant to paragraph (1);

(ii) recalculation of the interest rate;

(iii) full or partial forgiveness of interest accrued during the period of construction; and

(iv) a credit against construction interest for a non-Federal investment that benefits the completion or performance of the project or separable element.

(B) Eligible deferred payment
An eligible deferred payment agreement under subparagraph (A) is an agreement for which—

(i) the non-Federal contribution was made with interest;

(ii) the period of project construction exceeds 10 years from the execution of a project partnership agreement or appropriation of funds; and

(iii) the construction interest exceeds $45,000,000.

(3) Credit for non-Federal contribution

(A) In general
The Secretary is authorized to credit any costs incurred by the non-Federal interest (including in-kind contributions) to remedy a design or construction deficiency of a covered project or separable element toward the non-Federal share of the cost of the covered project, if the Secretary determines the remedy to be integral to the completion or performance of the covered project.

(B) Credit of costs
If the non-Federal interest incurs costs or in-kind contributions for a project to remedy a design or construction deficiency of a project or separable element which has a 100 percent Federal cost share, and the Secretary determines the remedy to be integral to the completion or performance of the project, the Secretary is authorized to credit such costs to any interest accrued on a deferred non-Federal contribution.

(4) Treatment of pre-payment

(A) In general
Notwithstanding a deferred payment agreement with a non-Federal interest, the Secretary shall accept, without interest of any type, the repayment of a non-Federal contribution for any eligible deferred payment described in paragraph (2)(B) for which—

(i) the non-Federal interest makes a payment of at least $200,000,000 for that eligible deferred payment agreement on or before September 30, 2021;

(ii) the non-Federal interest repays an amount equal to 2/3 of the remaining principal by September 30, 2023; and

(iii) the non-Federal interest repays the balance of remaining principal by June 1, 2032.

(B) Repayment options
Repayment of a non-Federal contribution under subparagraph (A)(iii) may be satisfied through the provision by the non-Federal interest of fish and wildlife mitigation for one or more projects or separable elements, if the Secretary determines that—

(i) the non-Federal interest has incurred costs for the provision of mitigation that—

(I) equal or exceed the amount of the required repayment; and

(II) are in excess of any required non-Federal contribution for the project or separable element for which the mitigation is provided; and

(ii) the mitigation is integral to the project for which it is provided.

(l) Delay of payment

(1) Initial payment
At the request of any non-Federal interest the Secretary may permit such non-Federal interest to delay the initial payment of any non-Federal contribution under this section or section 2211 of this title for up to one year after the date when construction is begun on the project for which such contribution is to be made. Any such delay in initial payment shall be subject to interest charges for up to six months at a rate determined pursuant to section 2216 of this title.

(2) Interest

(A) In general
At the request of any non-Federal interest, the Secretary may waive the accrual of interest on any non-Federal cash contribution under this section or section 2211 of this title for a project for a period of not more than 1 year if the Secretary determines that—

(i) the waiver will contribute to the ability of the non-Federal interest to make future contributions; and

(ii) the non-Federal interest is in good standing under terms agreed to under subsection (k)(1).

(B) Limitations
The Secretary may grant not more than 1 waiver under subparagraph (A) for the same project.

(m) Ability to pay

(1) In general
Any cost-sharing agreement under this section for a feasibility study, or for construction of an environmental protection and restoration project, a flood control project, a project for navigation, storm damage protection, shoreline erosion, hurricane protection, or recreation, or an agricultural water supply project, shall be subject to the ability of the non-Federal interest to pay.

(2) Criteria and procedures
The ability of a non-Federal interest to pay shall be determined by the Secretary in accordance with criteria and procedures in effect under paragraph (3) on the day before December 11, 2000; except that such criteria and procedures shall be revised, and new criteria and procedures shall be developed, not later than December 31, 2007, to reflect the requirements of such paragraph (3).

(3) Revision of criteria and procedures
In revising criteria and procedures pursuant to paragraph (2), the Secretary—

(A) shall consider—

(i) per capita income data for the county or counties in which the project is to be located; and

(ii) the per capita non-Federal cost of construction of the project for the county or counties in which the project is to be located; and

(B) may consider additional criteria relating to the non-Federal interest's financial ability to carry out its cost-sharing responsibilities, to the extent that the application of such criteria does not eliminate areas from eligibility for a reduction in the non-Federal share as determined under subparagraph (A).

(4) Non-Federal share
Notwithstanding subsection (a), the Secretary may reduce the requirement that a non-Federal interest make a cash contribution for any project that is determined to be eligible for a reduction in the non-Federal share under criteria and procedures in effect under paragraphs (1), (2), and (3).

(n) Non-Federal contributions

(1) Prohibition on solicitation of excess contributions
The Secretary may not—

(A) solicit contributions from non-Federal interests for costs of constructing authorized water resources projects or measures in excess of the non-Federal share assigned to the appropriate project purposes listed in subsections (a), (b), and (c); or

(B) condition Federal participation in such projects or measures on the receipt of such contributions.

(2) Limitation on statutory construction
Nothing in this subsection shall be construed to affect the Secretary's authority under section 903(c).¹