To increase water storage availability at the New Melones Reservoir to provide additional water for areas served below the reservoir, and for other purposes.

Directs the Secretary of the Interior to develop and offer to the Oakdale Irrigation District and the South San Joaquin Irrigation District in California a contract enabling the Districts to collectively impound and store up to 100,000 acre-feet of their superior Stanislaus River water rights in the New Melones Reservoir in accordance with the terms and conditions of the Warren Act.

Requires any such contract to be for not less than 10 years and to expressly: (1) permit the Districts to use any water impounded and stored in such Reservoir for any legal purpose under California law, including use within the boundaries of either District, transfer to and reasonable and beneficial use by a person or entity not located within such boundaries, and for in stream use in the Stanislaus River, the San Joaquin River, or the Sacramento-San Joaquin River Delta; and (2) prohibit any water impounded and stored by either District from being released or withdrawn if the storage level of such Reservoir is below 1 million acre-feet and to require, in such event, that the impounded and stored water be retained for use by the Districts in the following year, subject to the same minimum storage requirement and without additional payment.

Excludes any water impounded and stored in such Reservoir by either District under such contract from water placed in the Districts' conservation account as defined in the August 30, 1988 Stipulation and Agreement entered into between the Bureau of Reclamation and the Districts.