To authorize the Secretary of the Interior to engage in a feasibility study relating to long term water needs for the area served by the Fryingpan-Arkansas Project, Colorado, and for other purposes.

Authorizes the Secretary of the Interior, acting through the Bureau of Reclamation, to conduct a study to determine the most feasible method of meeting water supply and storage requirements within the area served by the Fryingpan-Arkansas Project, Colorado.

Prohibits the Secretary from entering into any new contracts or contract extensions or renewals: (1) with entities for the use of excess capacity space in Fryingpan-Arkansas facilities to store water or for use outside the natural basins of the Arkansas or Colorado rivers; or (2) for beneficial use of the facilities or water rights outside such basins.

Authorizes the Secretary to provide financial assistance to Colorado to conduct a study to identify the cumulative impacts of water transfers from the Arkansas and Colorado River basins to communities not located in such basins and from agriculturally based communities within the Arkansas River basin to expanding municipalities within that basin.

Sets forth conditions under which any excess project water storage capacity of the Fryingpan-Arkansas Project to divert, store, impound, pump, exchange, or convey nonproject water made available under contracts may be used to increase diversion of nonproject water from the natural basin of the Colorado River within Colorado into another river basin for delivery or storage.

Authorizes the Secretary to enter into contracts for the use of excess project capacity for the purpose of diverting, storing, impounding, pumping, exchanging, or conveying nonproject water for irrigation, domestic, municipal industrial, or other beneficial purposes within the natural basin of the Arkansas River within Colorado.