Sec. 131. Washington Aqueduct

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The Secretary may carry out capital improvements for the Washington Aqueduct that the Secretary determines necessary for the safe, effective, and efficient operation of the Aqueduct. Subject to paragraphs

(2)through

(4)and subsection (c), the Secretary is authorized to borrow from the Treasury of the United States such amounts as are sufficient to cover any obligations that will be incurred by the Secretary in carrying out capital improvements for the Washington Aqueduct under subsection (a). The amount borrowed by the Secretary under paragraph

(1)may not exceed $40,000,000 in any fiscal year. Amounts borrowed under paragraph

(1)may only be used to carry out capital improvements with respect to which the Secretary has entered into an agreement with each customer. Subject to subsection (c), the Secretary of the Treasury shall provide amounts borrowed under paragraph

(1)under such terms and conditions as the Secretary of Treasury determines to be necessary and in the public interest. The term of any loan made under paragraph

(1)shall be for a period of not less than 20 years. There shall be no penalty for the prepayment of any amounts borrowed under paragraph (1). The Secretary may not borrow any amounts under subsection

(b)until such time as the Secretary has entered into a contract with each customer under which the customer commits to pay a pro rata share (based on water purchase) of the principal and interest owed to the Secretary of the Treasury under subsection (b). Any customer may pay, in advance, the pro rata share of the principal and interest owed by the customer, or any portion thereof, without penalty. A customer that enters into a contract under this subsection shall, as a condition of the contract, commit to pay any additional amount necessary to fully offset the risk of default on the contract. Each contract entered into under paragraph

(1)shall include such terms and conditions as the Secretary of the Treasury may require so that the total value to the Government of all contracts entered into under paragraph

(1)is estimated to be equal to the obligations of the Secretary for carrying out capital improvements for the Washington Aqueduct. Each contract entered into under paragraph

(1)shall— include other conditions consistent with this section that the Secretary and the Secretary of the Treasury determine to be appropriate; and provide the United States priority in regard to income from fees assessed to operate and maintain the Washington Aqueduct. In this section, the term customer means— the District of Columbia; Arlington County, Virginia; and Fairfax County, Virginia.