Farm Water Act of 1981

Farm Water Act of 1981 - Replaces the existing acreage limitation of 160 acres of reclaimed land per landowner with a limitation of 320 acres. Permits larger acreages where the land is less productive or other factors make it less valuable for agriculture.

Lists specified lands to which the acreage limitations shall not apply including land within a water district which has paid reclamation project construction charges incurred for the delivery of water to such landholding.

Prohibits the delivery of water to irrigable land in excess of 320 acres held in private ownership by a single landowner if such landowner refuses to execute a valid contract for the sale of such excess land. States that the provisions of this Act shall not effect existing contracts between the United States and excess landowners relating to the disposal of such excess lands.

Permits the delivery of project water to excess land after the effective date of this Act only if the title to such land is made subject to a condition that the land shall not be sold at a price greater than the landowner's costs increased only by the rate increase of the consumer price index for the period between the dates of purchase and sale.

Abolishes the requirement that a qualified recipient must reside on or near a landholding in order for such landholding to be eligible to receive water.

Permits charitable or religious nonprofit organizations to continue to receive water supplies under contracts executed prior to January 1, 1978.

Waives the sovereign immunity of the United States to State law claims and other contractual actions brought in the Federal district courts.