Exempts the United States from liability for damages relating to such distribution system, except for damages caused by acts of negligence committed by the United States, its employees, or agents prior the date of conveyance.
Prohibits: (1) such conveyed water distribution systems from being considered to be a part of a Federal reclamation project; and (2) such water districts from being eligible to receive any benefits for any facility comprising such distribution systems, except benefits that would be available to a similarly situated person for such a facility that is not part of such a reclamation project.