Directs the Department of the Interior to: (1) enter into negotiations for the transfer of ownership, control, and operation of the New Melones Unit, Central Valley Project to interested local water and power providers within California; (2) report to specified congressional committees every six months on such negotiations, on actions Interior recommends the United States take to finalize an agreement for such transfer, and on the terms of any agreement reached; and (3) transfer such Unit in accordance with such an agreement.
Defines: (1) the "New Melones Unit, Central Valley Project" to mean all federal reclamation projects located within or diverting water from or to the watershed of the Stanislaus and San Joaquin rivers and their tributaries; and (2) "interested local water and power providers" to include the Calaveras County Water District, Central San Joaquin Water Conservation District, Modesto Irrigation District, Oakdale Irrigation District, Stockton East Water District, South San Joaquin Irrigation District, Tuolumne Utilities District, Turlock Irrigation District, and Union Public Utilities District.