Authorizes the Secretary of the Interior to use funds provided by the American Recovery and Reinvestment Act of 2009 or appropriation measures through FY2012 for any required non-federal share of the cost of projects that: (1) are funded by the federal government; (2) are located in an area that either has been identified by the U.S. Drought Monitor as experiencing severe, extreme, or exceptional drought within the 24 months prior to this Act's enactment or has been designated as a disaster area by California during 2009; (3) will make progress towards providing a more reliable water supply for California and protecting, restoring, and enhancing the Sacramento-San Joaquin Delta ecosystem, will increase water management flexibility, or will reduce impacts on environmental resources from projects operated by the California State Department of Water Resources, the California State Department of Fish and Game, the Bureau of Reclamation, the United States Fish and Wildlife Service, or other relevant state and federal agencies; (4) show potential to restore agriculture production or agricultural employment for such areas; and (5) have made significant progress in the completion of any necessary environmental or public review.
Directs that the use of funds for the nonfederal share of projects as authorized in this Act be considered a drought assistance adjustment. Requires the Secretary to establish criteria for calculating such adjustments utilizing existing practices for adjustments in water service and repayment rates.