The Reclamation Project Act of 1939 amended the Reclamation Act of 1902 by authorizing multiple-purpose projects and allocating construction costs among the projects’ various purposes such as irrigation, municipal and industrial water supply, hydroelectric power generation, flood control, and navigation. Beneficiaries and the federal government would share the costs for these multipurpose projects and repayment for municipal, industrial water supply, and power projects would have a zero-interest rate.
Congress gave substantial authority to the Secretary of the Interior; they were given discretion to set utility rates of energy producers that would ensure adequate revenue to cover a defined share of annual operation and maintenance costs as well as the interest on an appropriate share of the construction investments. Municipalities, public corporations, and government agencies received preferential treatment. Many of the same rules applied to irrigation projects except that the expenses allocated to irrigation required repayment to the extent available by the projects. Cooperatives and nonprofit organizations received financial aid through loans.
Reclamation Project Act of 1939: Full Text (Center for Columbia River History)
The Reclamation Project Act of 1939: Rates and Repayment (U.S. Department of Energy, Western Area Power Administration)
Testimony on the Reclamation Law and the Allocation of Construction Costs for Federal Water Projects (U.S. Government Accountability Office)