DROP Act

The DROP Act (HR 3637) creates rules to prevent unreasonably high prices for water rights during droughts. It requires the Federal Trade Commission to establish regulations prohibiting entities from selling or leasing water rights at excessive prices in drought-affected areas, with exemptions for small businesses ($100M revenue cap), state/local governments, and tribal governments. The law includes an annual inflation adjustment for the revenue threshold and defines "excessive" pricing as using drought as a pretext to raise prices far above recent market averages. Violations would be enforced by the FTC under existing laws, treating them as unfair or deceptive practices. The bill directly affects water rights sellers in drought zones but excludes most government entities and small businesses.