Urban Canal Modernization Act This bill expands the Bureau of Reclamation's responsibility under the Omnibus Public Land Management Act of 2009 to address aging irrigation and water resources infrastructure in western states to include additional work for urban canals of concern. Specifically, the bill directs Reclamation or the operating entity of a transferred work (i.e., infrastructure owned by Reclamation, but maintained by a nonfederal entity) to carry out any necessary extraordinary operation and maintenance work for urban canals of concern, which are certain transferred works the failure of which would result in loss of life and property in the vicinity of the canal. Reclamation must also provide federal funds to transferred works on a nonreimbursable basis sufficient to cover 35% of the cost of extraordinary operation and maintenance work for (1) urban canals of concern, and (2) certain project facilities which are in proximity to urbanized areas and which could pose a risk to public safety or property if the facilities failed. The bill further specifies that any reimbursable funds provided under the bill must be considered a nonfederal source of funds for purposes of federal grant cost-sharing requirements.