2. Issued with the approval of the Secretary subsequent to January 1, 1949, and before the effective date of this bill, in force and in accord with the laws of the State issuing it.

Terms for leases thus exchanged are to be from the effective date of this bill for a period equal to the unexpired term of the old lease, as it may have been extended under the State's laws, provided, however, if no oil or gas was being produced under the old lease on or before December 11, 1950, any new lease shall be for a term from the effective date of this bill equal to the term remaining unexpired December 11, 1950, as may be extended under that State's law, and shall cover the same natural resources and portion of the Continental Shelf as the old lease.

These new leases shall provide for payment to the United States on the same terms as provided in the old lease plus such other terms as the Secretary may prescribe, consistent with the provisions of this bill.

Until such exchange leases are issued or it is determined none will be issued, operations may continue under the terms of the old lease.

Holders of leases from States or from their grantees in order to receive new leases in exchange for old must meet the following conditions:

1. Apply within 6 months of the effective date of this bill with exceptions noted later, submitting a copy of the old lease.

2. Agree that the lease applied for shall be subject to the same overriding royalty obligations as the lease issued by the State or its grantee.

3. Pay to the United States all sums due to the lessor under the old lease which become payable after December 11, 1950, and not yet paid.

4. Meet such other reasonable requirements as specified by the Secretary of the Interior to protect the rights of the United States, which may include furnishing surety bond.

5. File with the Secretary a certificate issued by the proper State official to the effect that the old lease was in force and in compliance with that State's laws, or sufficient documentary evidence as will demonstrate that fact.

Any sums due under the old leases, coming due after December 11, 1950, may be paid to the United States; however, an accounting shall be made to the State issuing that lease of such payments.

ACTIONS INVOLVING CONTINENTAL SHELF

Any court action concerned with the subject matter of this bill is subject to the jurisdiction of the United States district court for the district in which the leaseholder is located, for the district in which the property is located in whole or in part, or for the district nearest to the property involved.

DIVISION OF PROCEEDS

This bill provides for the division of the proceeds with respect to operations for oil, gas, and other minerals in the Continental Shelf as follows:

1. Each coastal State to receive 37% percent of all moneys from within the boundaries of that State if extended seaward to the outer margin of the Continental Shelf, to be paid by the Secretary of the Treasury within 90 days after expiration of the fiscal year.

2. All other sums accrue to the miscellaneous receipts of the United States. 3. In the event of acceptance by the United States of payment in kind, 371⁄2 percent of the value of such royalties, at the prevailing market price shall be paid to the State entitled thereto.

REFUNDS

In the event of overpayment to the United States by a lessee in connection with any lease under this bill, in the view of the Secretary of the Interior, the latter may certify to that effect and the Secretary of the Treasury may repay that amount.

WAIVER OF LIABILITY FOR PAST OPERATIONS

No State is required to render any accounting to the United States for its prior activities in the area the subject of this bill. Nor is any lessee likewise required to render an account to the United States.

This does not apply in the event that court action shows fraud has been practiced in securing any leases therein or in the operations thereunder.

POWERS RESERVED TO THE UNITED STATES

The United States retains the right in case of war or when necessary for national defense, when prescribed by the Congress or the President

1. Of first refusal to purchase at prevailing market price all or any oil or gas production from the Continental Shelf.

2. To terminate any lease issued or authorized hereunder, thus becoming the owner of all property, being accountable however to the leaseholder for just compensation, to be determined as in the case of condemnation.

3. To suspend operations under any lease. In such event the United States is liable to the lessee for such compensation as is required under the Constitution and the liability of the lessee for payment of rentals, royalties, etc., is suspended during the suspension of operations. The time thus elapsing is to be added to the term of the lease.

The United States also reserve the right to designate by and through the Secretary of Defense, with the President's approval, areas of the Continental Shelf needed for navigational purposes or for national defense. No exploration or operations may be conducted in those areas so long as they remain so designated except with the concurrence of the Secretary of Defense. Should such action result in suspension of operations or production payments required under the suspended lease are likewise suspended and the term of the lease extended for an equal period. The lessee is entitled to such compensation as is required under the Constitution.

The ownership of and right to extract helium from all gas produced from the Continental Shelf subject to any lease under terms of this bill is reserved and retained by the United States.

GEOLOGICAL AND GEOPHYSICAL EXPLORATIONS

Any person, acting under applicable provisions of law, or any agency of the United States may conduct geological and geophysical explorations in the Continental Shelf as long as they do not interfere with or endanger actual operations under any lease issued hereunder.

RIGHTS OF STATES NOT PREJUDICED

Nothing in this bill may be so construed as to limit the right of any State to determine by appropriate court action any claim of ownership or otherwise in the use and disposition of the lands or resources of the Continental Shelf as they may have existed before this bill. This bill is not to be interpreted as depriving any State of any rights within any part of the Continental Shelf.

INTERPLEADER AND INTERIM ARRANGEMENTS

In the event that, despite the terms of this bill, any lessee under a State prior to effective date of this bill may certify to the Secretary of the Interior under oath that doubt exists: (1) As to whether such leasehold lies within the Continental Shelf, or (2) as to whom payments under the lease should be made, or (3) the validity of the claims of the issuing State or its grantee to the area covered by the lease and such claims have not been determined by a final judgment by a court of competent jurisdiction, there are three possible actions by the lessee. They are:

1. He may interplead with the United States, and, with their consent, the State or States concerned, in an action filed in the proper United States district court, and deposit with the clerk of that court all payments due under terms of the lease. This shall constitute the lessee's obligations under such lease to make such payments.

2. He may continue such payments as called for under the lease to the State or its grantees until final judgment by the proper court. Payments after such judgment are to be made as the court directs. Should the court find for payment to the United States the State concerned shall pay over all sums deposited by the lessee.

3. The lessee may file application for an exchange lease as provided herein at any time up to 6 months after it is determined by final judgment of a proper court that the claims of the issuing State or its grantee are invalid

as against the United States and the lands under lease are within the Continental Shelf.

The bill provides also that in the event that any lands within the Continental Shelf under lease are involved in litigation between the United States and the issuing State that the lessee may intervene in such action. He may discharge his full obligations under the lease by depositing such sums as he is liable for under the lease with the clerk of that court.

STATEMENT OF RUSSELL V. MACK, MEMBER OF CONGRESS, THIRD DISTRICT OF WASHINGTON

Mr. Chairman and members of the committee, I thank you for extending me the privilege of testifying at these public hearings on the submerged-lands bills. When the Territory of Washington was admitted to statehood in 1889, its State constitution provided that its westerly boundary should extend 3 miles out to That constitution was approved by the Congress of the United States. By that approval the Congress, supreme lawmaking body of the people, gave to the State of Washington title to the submerged lands off its coast. Unless a tidelands oil bill is passed by Congress the Federal Government will deprive the State of these lands it once gave to the State.

sea.

It is essential that a submerged-lands bill be enacted by Congress if Washington's rights to these lands are to be preserved.

If oil explorations are conducted on submerged lands adjacent to a seacoast State, it will be the taxpayers of the State who will have to provide all funds for building roads to the coastal areas in order for oil operators to get personnel and equipment to and from these submerged lands. It will be the taxpayers of the State who will have to provide the funds to supply oil workers and their families employed on the tidelands with police and fire protection, with schooling for their children, old-age-security protection and most other public services. If the States supply these services and of necessity they must, the seacoast States which provide all these tax-burden services should get the oil and gas revenues from the submerged lands and not the Federal Government which does not bear these costs.

For these reasons, Mr. Chairman, I favor the passage of a bill that will vest title to the submerged lands in the States to which these lands are adjacent.

STATEMENT BY EDGAR W. HIESTAND, MEMBER OF CONGRESS, 21ST CONGRESSIONAL DISTRICT OF CALIFORNIA, IN BEHALF OF H. R. 2179

I have introduced H. R. 2719, a measure for restoring to and definitely establishing in the States of this Nation the title to all lands underneath navigable waters within their historic boundaries. This bill is identical with the one which President Truman vetoed last May, and the bill introduced by Senator Holland and 39 other Senators (S. J. Res. 13) in this session, except that certain amendments have been added to fortify the bill against attack on any ground of unconstitutionality.

It is unnecessary to develop at length the events which have taken place requiring this legislation. The States had enjoyed ownership of these lands for over a century of time when the case brought by the Federal Government against California was decided on June 23, 1947; holding that the Federal Government has "paramount rights" in the submerged lands off the coast and that the adjacent State has no title thereto or property interest therein.

Measures have twice been passed by both Houses of the Congress restoring title to the States, only to receive a Presidential veto.

I shall state briefly some of my reasons why I believe my bill should be passed: 1. The Supreme Court has virtually invited congressional action. It stated in its opinion in the California case that it did not assume that "Congress whch has constitutional control over Government property will execute its powers in such way as to bring about injustices to States, their subdivisions or persons, acting pursuant to their permission." In its opinion, it recognized the provisions of article IV, section 3, clause 2, of the Federal Constitution which vests in the Congress "Power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States."

2. The decision of the Supreme Court in the California case, as well as those in the cases of Louisiana and Texas, have brought about a chaotic condition of

titles and ownership. A situation of uncertainty exists which is almost unparalleled along California's 1,100 miles of coastline: it may be said that there is not one acre of ground where there is any degree of assurance as to who possesses title and ownership. For instance, in one important port on California's coast, the city attorney has refused to approve bond proceedings for important and necessary piers and docks because the city cannot expend public funds on property which does not belong to it and the ownership of the lands from ordinary low-water mark out is wholly in doubt. This is a situation which requires definite and permanent decision.

3. If the Federal Government requires the coastal submerged lands within State boundaries, it should acquire them under the provisions of the Federal Constitution, which requires due process of law and just compensation for property taken for public use. The plenary power of the United States has been urged throughout this controversy, but as Mr. Justice Reed said in his dissenting opinion in the California case: "The power of the United States is plenary over these undersea lands precisely as it is over every river, farm, mine, and factory of the Nation." The inference of this is clear; that the right to take after due process of law and the payment of just compensation is not the power to confiscate. The new doctrine of "paramount rights" set up in these decisions of the Supreme Court has caused alarm in all the States of the Nation, coastal and inland alike, and the fear is that the doctrine may be extended to anything, anywhere, whenever the Federal Government desires to take property for its purposes.

4. It must be borne in mind that neither the decision of the United States Supreme Court of June 23, 1947, nor its order and decree effectuating that decision on October 27, 1947, held that the Federal Government has rights "of proprietorship," which is the term ordinarily used to designate ownership: In fact, when the United States Department of Justice submitted a proposed decree to the Supreme Court for its approval, the decree submitted contained the words "of proprietorship" after the word "rights" but the Supreme Court declined to include these words in its decree.

5. California is not the only victim of a decision indicating the Federal Government to have paramount rights within submerged lands within its boundaries. Similar decisions and decrees were later rendered against the States of Louisiana and Texas. This is the reason that in the Senate the bill restoring ownership to the States was sponsored by 40 Senators from the States spanning the entire Nation.

6. In this effort to restore ownership to the States and to rectify what we believe to be the unfair treatment accorded the States who were sued in the United States Supreme Court, we find ourselves in highly respectable company. May I name some of the outstanding official bodies nationwide in scope who have taken the same position as we take with reference to the restoration of these property rights of the States?

(1) The conference of governors, composed of the governors of the 48 States; (2) the National Association of State Land Officials; (3) the American Association of Port Authorities; (4) the National Institute of Municipal Law Officers; (5) the Council of State Governments; (6) the conference of mayors; (7) the National Association of Attorneys General; (8) the National Association of Secretaries of State; (9) the National Reclamation Association; (10) the National Water Conservation Conference; (11) the American Bar Association; and (12) the American Title Association.

While it has made good use of the revenues derived from the submerged lands off its coast within its boundaries, including educational funds, as well as funds for our State public beaches and parks, we wish to emphasize that the State of California is not primarily concerned over the financial revenues involved. The thing in which our State is most concerned in this problem is the basic matter of high principle involved. It is our firm belief that property rights of the States have been denied recognition, after the States' ownership had been respected and recognized for almost a century of time and the Federal Government had, in every instance in which it desired to erect structures or make improvements, determined to proceed without first obtaining a conveyance of title from the State, either by deed of purchase after paying agreed compensation, or by the use of the power of eminent domain, paying just compensation after affording due process of law, or by receiving a deed of gift from the State and these deeds of gift were numerous, testifying to California's generosity and cooperation. It was not until some oil was discovered along relatively small

portions of our coastline that the Federal Government sought to take over. The result is now well known. We believe that it is high time that this situation be remedied, definitely and permanently.

STATEMENT OF HON. PATRICK J. HILLINGS, MEMBER OF CONGRESS, 25TH DISTRICT, CALIFORNIA

Mr. Chairman, since I am a member of the Judiciary Subcommittee which is considering tidelands legislation, I do not feel that it is necessary to present a lengthy statement on the subject at this time. I intend to participate fully in the subcommittee deliberations and will express my views in more complete detail during the course of our subcommittee discussions.

I wish to reiterate at this time, Mr. Chairman, my recommendation that Congress speedily enact legislation to restore the offshore submerged lands to State ownership. I believe these lands rightfully belong to the individual States. I do not believe that the Federal Government has any right, title, or claim to the submerged lands within historic State boundaries. It is vitally important to the people of my State of California and to the people of all other States in the Union that this controversy be settled in the immediate future. It is also important to our national-defense program that Congress resolve the question of ownership of these lands so that development of the natural resources therein may proceed at once. In addition, the people of my State of California and other States will benefit from the proceeds received from the leasing of these lands. Development of schools, harbors, playgrounds, beaches, and other improvements will go ahead without delay as soon as the title of the States is perfected. It is my hope that legislation that I have introduced or similar legislation restoring State ownership of the lands in question will be recommended by this subcommittee.

STATEMENT OF CONGRESSMAN GORDON L. MCDONOUGH ON H. R. 2726

Mr. MCDONOUGH. Mr. Chairman, H. R. 2726 and other bills introduced which provide for establishment of the titles of the States to lands beneath navigable waters within State boundaries and to the natural resources within such lands and waters which are now under consideration of this committee are of vital importance to the people of the State of California.

California for sometime has been a focal point in the controversy over the issue of States rights in which the Federal Government has laid claim upon the tidelands which extend along the coast of California for 1,200 miles.

The 10th amendment to the Constitution provides that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Under this provision for more than a century in California and other States. of the Nation, the rights of the States and their people to the ownership and full enjoyment of all lands beneath navigable waters within their boundaries were recognized by the Federal Government.

The boundary of the State of California, as provided in the State constitution, extends 3 miles into the Pacific Ocean and includes all islands along and adjacent to its coast. Sole ownership of this area by the State has always been recognized by the Federal Government and all of its departments and agencies until a little over a decade ago. As late as September 22, 1933, in answer to a letter addressed to him by an applicant for a leasing permit from the Federal Government, Secretary of the Interior Harold L. Ickes gave the following written reply to the applicant:

"Title to the soil under the ocean within the 3-mile limit is in the State of California, and the land may not be appropriated except by authority of the State."

About 3 years later, however, Secretary of the Interior Ickes changed his mind and decided to seek to establish ownership and control in the United States over these lands. Efforts were made unsuccessfully to have the Congress declare these lands the property of the Federal Government.

When Congress failed to declare the tidelands the property of the Federal Government, proceedings were instituted in the Supreme Court, and a decision rendered which declined to hold that the United States was the owner of the tidelands, but stated that California was not the owner of these lands.