---
kind: "section"
citation: "16 U.S.C. § 590z–2"
title: "16"
title_heading: "Conservation"
number: "590z–2"
heading: "Repayment contracts"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/16/590z-2"
units:
  - "Chapter 3C — Water Conservation"
  - "Subchapter II — Conservation and Utilization Projects"
---

# §590z–2. Repayment contracts

- (a) **Necessity—** No water for irrigation may be delivered from the works of any [project](/usc/16/410r–5.md?p=c-4) constructed under the authority of this subchapter until after the repayment contract or contracts required by this section have been executed. Where practicable in the judgment of the [Secretary](/usc/16/410r–5.md?p=c-1), the repayment contract shall be with a water users’ organization or organizations satisfactory in form and powers to the [Secretary](/usc/16/410r–5.md?p=c-1); and otherwise the repayment contract shall be with the individual landowners. The contract or contracts shall contain such provisions as the [Secretary](/usc/16/410r–5.md?p=c-1) deems necessary to carry out the purposes of this subchapter and to protect the interests of the United States.
- (b) **“Reimbursable construction costs” defined—** The term “reimbursable construction costs” as used in this subchapter means that part of the costs of investigating, constructing, and operating and maintaining the [project](/usc/16/410r–5.md?p=c-4), which are allocated by the [Secretary](/usc/16/410r–5.md?p=c-1) to irrigation, and which are met by expenditures of moneys therefor appropriated under the authority of [section 590z–10(1) of this title](/usc/16/590z–10.md), plus such amounts as the President, under [section 590z(1) of this title](/usc/16/590z.md), may determine to be reimbursable: Provided, That administrative expenses incurred in the District of Columbia in connection with the investigation construction, or operation and maintenance of a [project](/usc/16/410r–5.md?p=c-4) shall not be included in the reimbursable construction costs nor shall they be charged to the water users in any way.
- (c) **Terms—** The repayment contract or contracts for a [project](/usc/16/410r–5.md?p=c-4) shall, in their aggregate, provide for repayment to the United States of the total amount of the reimbursable construction costs of the [project](/usc/16/410r–5.md?p=c-4) allocated to irrigation. Each such contract shall provide, among other things, that—
  - (1) The [Secretary](/usc/16/410r–5.md?p=c-1) shall fix a development period for each [project](/usc/16/410r–5.md?p=c-4) of not to exceed ten years from and including the first calendar year in which water is delivered for the lands in said [project](/usc/16/410r–5.md?p=c-4); and during the development period water shall be delivered to the lands in the [project](/usc/16/410r–5.md?p=c-4) involved at a charge per acre-foot, or other charge, to be fixed by the [Secretary](/usc/16/410r–5.md?p=c-1) each year and to be paid in advance of delivery of water. Such charges shall be fixed with a view of returning such amounts as in the [Secretary](/usc/16/410r–5.md?p=c-1)’s judgment are justified by the rate of [project](/usc/16/410r–5.md?p=c-4) development, including as a minimum the return over the full development period of that part of the cost of operating and maintaining the [project](/usc/16/410r–5.md?p=c-4), during said period, allocated by the [Secretary](/usc/16/410r–5.md?p=c-1) to irrigation; and collections of such charges in excess of the cost of the operation and maintenance during the development period, as thereafter determined by the [Secretary](/usc/16/410r–5.md?p=c-1), shall be credited to the reimbursable construction costs of the [project](/usc/16/410r–5.md?p=c-4) in the manner determined by the [Secretary](/usc/16/410r–5.md?p=c-1).
  - (2) The United States shall operate and maintain the [project](/usc/16/410r–5.md?p=c-4) during the development period fixed for it. After the development period, the United States shall operate and maintain the [project](/usc/16/410r–5.md?p=c-4) or any part thereof as long as is deemed necessary by the [Secretary](/usc/16/410r–5.md?p=c-1), and shall be paid in advance for each year that part of the estimated cost of operating and maintaining the [project](/usc/16/410r–5.md?p=c-4) for such year allocated by the [Secretary](/usc/16/410r–5.md?p=c-1) to irrigation. In the event charges due the United States are not paid when due the United States may, at its election, suspend operations in whole or in part.
  - (3) The repayment of the reimbursable construction costs, except as to Indian lands which shall be repayable in accordance with existing law relating to Indian lands, shall be spread in not to exceed forty annual installments, of the number and amounts fixed by the [Secretary](/usc/16/410r–5.md?p=c-1); and the first annual installment under each contract shall become due and payable on the date fixed by the [Secretary](/usc/16/410r–5.md?p=c-1), in the year next following the last year of the development period fixed under [subsection (c)(1)](#c-1): Provided, That the provisions of this subsection shall not be construed to modify the provisions of special legislation pertaining to any particular [project](/usc/16/410r–5.md?p=c-4).
  - (4) The water users or their organization will [take](/usc/16/3102.md?p=18) such measures as the [Secretary](/usc/16/410r–5.md?p=c-1) deems proper to secure the adoption of proper accounting, to protect the condition of [project](/usc/16/410r–5.md?p=c-4) works, and to provide for the proper use thereof, and to protect [project](/usc/16/410r–5.md?p=c-4) lands against deterioration due to improper use of water. Delinquencies in any payments due to the United States shall be penalized by a penalty of not less than one-half of 1 per centum per month. No water shall be delivered to or for any land or party while either said land or the organization in which it is located or said party is in arrears in the advance payment of operation and maintenance charges or development period charges under [subsection (c)(1)](#c-1), or in arrears for more than twelve months in the payment of an installment of the reimbursable construction costs.
  - (5) The [Secretary](/usc/16/410r–5.md?p=c-1) shall establish the size of farm [units](/usc/16/430f–7.md?p=4) of irrigable lands on each [project](/usc/16/410r–5.md?p=c-4) in accordance with his findings of the [area](/usc/16/539m–1.md?p=1-A) sufficient in size for the support of a family on the lands to be irrigated. No water may be delivered to or for more than the farm [unit](/usc/16/430f–7.md?p=4) [area](/usc/16/539m–1.md?p=1-A) of irrigable lands in the [project](/usc/16/410r–5.md?p=c-4) owned by a single landowner: Provided, That this subsection shall not apply to the United States or any agency or instrumentality thereof, corporate or otherwise. No water shall be delivered to or for any land, in a [project](/usc/16/410r–5.md?p=c-4) [area](/usc/16/539m–1.md?p=1-A), transferred or disposed of subsequent to approval of the [project](/usc/16/410r–5.md?p=c-4) by the President, and within three years from the time water becomes available, unless and until it has been shown to the satisfaction of the [Secretary](/usc/16/410r–5.md?p=c-1) or his duly authorized representative that the land has been transferred or disposed of at a price not exceeding the appraised value as determined by the [Secretary](/usc/16/410r–5.md?p=c-1) or his duly authorized representatives, and upon proof of fraudulent representation as to the true consideration involved the [Secretary](/usc/16/410r–5.md?p=c-1) is authorized to cancel the water right attaching to the land involved: Provided further, That nothing herein shall be construed to create authority to interfere with the delivery of water under prior rights.

## Source credit

(Aug. 11, 1939, ch. 717, § 4, as added Oct. 14, 1940, ch. 861, 54 Stat. 1121; amended July 16, 1943, ch. 242, § 5, 57 Stat. 567.)

## Notes

### Editorial Notes

### References in Text

Herein, referred to in subsec. (c)(5), means act Aug. 11, 1939, which comprises this subchapter.

### Prior Provisions

A prior section 4 of act Aug. 11, 1939, ch. 717, 53 Stat. 1419, covered authorization of appropriations, prior to the general amendment of that act by act Oct. 14, 1940. See section 590z–10 of this title.

### Amendments

1943—Subsec. (d). Act July 16, 1943, added subsec. (d).

### Statutory Notes and Related Subsidiaries

### Extension of Variable Payment Plan

Authority of Secretary to extend benefits of variable payment plan to organizations with which he contracts or has contracted for the repayment of construction costs allocated to irrigation on any project undertaken by the United States, including contracts under this subchapter, see section 2 of Pub. L. 85–611, Aug. 8, 1958, 72 Stat. 542, set out as a note under section 485h of Title 43, Public Lands.

### Executive Documents

### Expiration of Subsection (d)

Subsection (d) of this section, by the terms thereof, ceased to be of force and effect, except as to certain projects, six months after cessation of hostilities of World War II, which was proclaimed at 12 o’clock noon of December 31, 1946, by Proc. No. 2714, 12 F.R. 1, set out as a note preceding section 1 of Title 50, War and National Defense.