Subject: Periodic District Reviews of Water Deliveries with Respect to Contract Terms - Process for Resolving Unauthorized Use
Purpose: Establishes a course of action for correcting unauthorized use found during district reviews
Authority: The Reclamation Act of 1902, as amended and supplemented (Act of June 17, 1902, 32 Stat. 388); and the Reclamation Project Act of 1939, as amended and supplemented (Act of August 4, 1939, 53 Stat. 1187)
Contact: Office of Program and Policy Services, Contract Services Office, D-5600
1. Introduction. Reclamation conducts periodic district reviews to ensure water is delivered in accordance with a project’s congressionally authorized purpose(s) and contract terms. If, in the course of performing the district reviews, unauthorized water deliveries are found, they will be documented. The purpose of this directive and standard (D&S) is to describe the course of action for correcting unauthorized use found during the district reviews.
2. Goal. Reclamation is committed to identifying unauthorized use associated with water deliveries from Reclamation projects, collecting all monies owed to the U.S. Treasury, and, in the process, working cooperatively with our customers and the Western States to bring instances of unauthorized use into compliance.
A. Regional Director. The Regional Director is responsible for ensuring district reviews are conducted and, when necessary, for following the course of action for correcting unauthorized use found during the district reviews as described in this D&S.
B. Delegation. Unless otherwise noted in this D&S, the Regional Director may further delegate these responsibilities.
C. Solicitor’s Opinion. Regional Directors will consult with their Regional Solicitor’s Office for opinions on a case-by-case basis. This may include determining a reasonable timeframe for action, developing actions or alternatives for bringing a contracting entity into compliance, or determining if a contract is consistent with the project’s congressionally authorized purpose.
4. Definitions of Unauthorized Use. The term “unauthorized use” refers to the delivery of Reclamation project water in ways, in amounts, or in locations that are not authorized by Federal law and Reclamation contract, or where there is a failure to account for water according to its ultimate use.
A. Application to Unauthorized Lands. Unauthorized use occurs when applying project water to lands outside the boundaries, service area, or place of use defined by the project’s authorizing legislation, a contract, or a state permit.
B. Unauthorized Change of Use. Unauthorized use includes use of project water for purposes not authorized by statute, State law, judicial decision, or a contract between an entity and the United States.
C. Inconsistent with Project Purpose. Unauthorized use occurs when applying project water in a manner that is inconsistent with a project’s authorized purpose.
D. Irrigating More Acreage than Allowed. Unauthorized use occurs when irrigating more acreage than allowed by law or contract.
E. Failure to Account for Type of Water Use. Unauthorized use occurs when there is a failure to account for project water according to its ultimate use and thus the proper water rate for the type of use is not charged or received.
5. Documentation of Unauthorized Use. If unauthorized use is discovered as part of the district review process, it will be documented in the “Checklist for Review and Verification of Contractor Water Use.”
A. Informal Action. Latitude should be exercised in working with the contracting entity to bring them into compliance, and that latitude should recognize the complexity of the issue. Every effort should be made by Reclamation staff to resolve violations with the contracting entity on an informal basis.
(1) If a violation is found, a letter will be sent to the contracting entity that includes:
(a) the checklist documenting the unauthorized use;
(b) documentation of the specific violation(s) discovered;
(c) a request for a meeting with the contracting entity, if necessary;
(d) discussion of options available or alternative actions (including timeframe) necessary for correcting the violation;
(e) discussion of potential penalties that could be assessed or actions that could be taken if the violation continues; and
(f) a provision for the contractor to respond within 60-calendar days from the date of the letter.
(2) The next course of action will be determined based on the response from the contracting entity.
(a) If the contracting entity responds that the unauthorized use has ceased, another district review will be conducted within 60-calendar days to confirm and document actions taken to resolve the violation. If the contracting entity has ceased deliveries for the year, a district review should be scheduled at the beginning of the next irrigation season, including a meeting with the contracting entity to review the past violation and confirm the resolution of the violation.
(b) If the contracting entity denies the unauthorized use is occurring, formal action will begin as described in 5.B. below.
(c) If the contracting entity does not respond within 60-calendar days, formal action will begin as described in 5.B. below.
(d) If the contracting entity responds with an option or alternative action(s) for correcting the violation, and it is determined that the option or alternative action(s) is sufficient to correct the violation, a letter will be sent to the contracting entity agreeing to the proposed option or alternative action(s). A follow-up district review will be performed as described in 5.A.(2)(a).
(e) If the contracting entity responds with an option or alternative action(s) for correcting the violation that is determined to be insufficient, a letter will be sent to the contracting entity stating such conclusion with a reasonable amount of time for the contracting entity to make progress towards compliance. After a reasonable amount of time, without response or action from the contracting entity, a formal response will be prepared as described in 5.B.
B. Formal Action. In situations where resolution of a violation cannot be informally obtained within 60-calendar days of notification, a final written determination will be prepared for signature by the Regional Director.
(1) If the second district review (conducted pursuant to 5.A.(2)(a)) indicates that the unauthorized use has been resolved, the contracting entity will be formally notified, in writing, of this determination.
(2) If the second district review indicates the unauthorized use is still occurring, the contracting entity will be formally notified of the continued violation. The written notification will include:
(a) Reclamation’s reasons for determining the continued existence of the unauthorized use,
(b) potential penalties that can be assessed or actions that can be taken if the violation continues,
(c) the contracting entity’s right to appeal (see paragraph 6. below)
(3) If appropriate, the Regional Finance Officer should be notified to issue a bill for the interest, administrative, and penalty charges due as a result of the continued violation.
6. Right to Appeal. A contracting entity whose rights and interests are directly affected by a Regional Director’s final determination can submit a written notice of appeal to the Commissioner within 30-calendar days from the date of the Regional Director’s final determination. No extension of time to the 30-day requirement for providing the formal written notice of appeal will be granted.
7. Supporting Brief. The contracting entity will have an additional 60-calendar days after the initial 30-calendar days of the final determination to submit a supporting brief to the Commissioner. The contracting entity may be granted a 30-day extension by the Commissioner for submittal of the brief.
A. Request for Extension. The contracting entity can submit a request for an extension prior to the 90-calendar day deadline.
B. Reasons for Additional Time. The request must also include the reason(s) why additional time is needed.
C. Good Cause. The Commissioner will determine if the contracting entity has shown good cause for such an extension, based on 7.A. and 7.B., above.
8. Commissioner’s Determination. The Commissioner will determine whether to affirm or reverse the Regional Director’s final determination after receiving a properly filed appeal from the contracting entity.
9. Effective Date of Decision. The Commissioner will send the contracting entity formal written notification of the agency’s final decision. Decisions, or portions of a decision, which are affirmed, and any outstanding obligations will become effective the upon date of the written notification.
10. Delinquent Payments. In the absence of an appeal by the contracting entity, payments delinquent for more than 180-calendar days will be referred, in writing, to the U.S. Treasury as required by the Debt Collection Improvement Act of 1996 (Public Law 104-134, Section 31001, 31 U.S.C. 3711(g)).
11. Documentation. A copy of all correspondence should be provided to the Office of Program and Policy Services, Contract Services Office, D-5600. The Contract Services Office shall be notified by the regional and/or area office, in writing, of the initial violation, continued violation, resolution of the violation, appeals, delinquent payments, or any other actions related to this process. This information will be conveyed to the Assistant Secretary for Water and Science in an annual summary report. The annual summary report will also include a status of all outstanding unauthorized use issues.