Water Subsidies: Views on Proposed Reclamation Reform Legislation

GAO discussed four legislative proposals to amend the Reclamation Reform Act of 1982, which permits multiple landholdings to continue to be operated collectively as one large farm while individually qualifying for federally subsidized water. GAO noted that: (1) if the farm operations in the five case studies remain constant, each of the proposals could limit federally subsidized water to some or all of the operations; (2) three of the five large farm operations in the case studies could continue to receive subsidized water on land in excess of the 960-acre limit, under the House bill; (3) under the Senate bill, four of the five large farm operations would be able to continue to receive subsidized water on more than 960 acres; (4) three of the large farm operations could continue to receive subsidized water on land in excess of the 960-acre limit under the Bureau of Reclamation's draft bill; and (5) the Subcommittee on Water, Power, and Off-Shore Energy Resources's draft bill could stop the flow of federally subsidized water to more than 960 acres in all five of the case studies. GAO believes that since farmers have ample financial incentive to reorganize their operations in response to any new reclamation legislation enacted, some farmers are likely to reorganize again to be eligible to receive additional federally subsidized water.