‘‘SEC. 1240I. GROUND AND SURFACE WATER CONSERVATION.

‘‘(a) ESTABLISHMENT.—In carrying out the program under this chapter, subject to subsection (b), the Secretary shall promote ground and surface water conservation by providing cost-share payments, incentive payments, and loans to producers to carry out eligible water conservation activities with respect to the agricultural operations of producers, to—

‘‘(1) improve irrigation systems;

‘‘(2) enhance irrigation efficiencies;

‘‘(3) convert to—

‘‘(A) the production of less water-intensive agricultural commodities; or

‘‘(B) dryland farming;

‘‘(4) improve the storage of water through measures such as water banking and groundwater recharge;

‘‘(5) mitigate the effects of drought; or

‘‘(6) institute other measures that improve groundwater and surface water conservation, as determined by the Secretary, in the agricultural operations of producers.

‘‘(b) NET SAVINGS.—The Secretary may provide assistance to a producer under this section only if the Secretary determines that the assistance will facilitate a conservation measure that results in a net savings in groundwater or surface water resources in the agricultural operation of the producer.

‘‘(c) FUNDING.—Of the funds of the Commodity Credit Corporation, in addition to amounts made available under section 1241(a)(6) to carry out this chapter, the Secretary shall use—

‘‘(1) to carry out this section—

‘‘(A) $25,000,000 for fiscal year 2002;

‘‘(B) $45,000,000 for fiscal year 2003; and

‘‘(C) $60,000,000 for each of fiscal years 2004 through 2007; and

‘‘(2) $50,000,000 to carry out water conservation activities in Klamath Basin, California and Oregon, to be made available as soon as practicable after the date of enactment of this section.’’