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In the circumstances, the Bureau of the Budget recommends against the enactment at this time of either S. 863 or the amendment proposed by Senator Barrett. Sincerely yours,

(Signed) PERCY RAPPAPORT, Assistant Director. Senator ANDERSON. We have a communication from the Federal Power Commission which will be made a part of the record.

(The information referred to follows:)

FEDERAL POWER COMMISSION REPORT ON COMMITTEE PRINT OF PROPOSED

AMENDMENTS To S. 863, 84TH CONGRESS A BILL to recognize and confirm the authority of arid and semiarid states relating to the

control, appropriation, use, or distribution of water within their geographic boundaries, and for other purposes

The proposed amendments to the bill s. 863, as contained in the committee print of August 17, 1955 are in the nature of a substitute and would be known as the Water Rights Settlement Act of 1956. The bill, as amended, would prohibit Federal agencies from interfering with the exercise of existing water rights acquired under and recognized by State custom or law, and would require Federal agencies and those proposing to operate under Federal authority to acquire water rights under State law.

Existing water rights lawfully acquired under State laws are recognized in section 5 of the amended bill in substantially the same manner that they are recognized in section 27 of the Federal Power Act. The Power Act provides for the issuance of licenses for the construction of hydroelectric plants by non-Federal interests on lands and water subject to the jurisdiction of Congress and for the purpose of utilizing surplus water or water power from a Government dam.

Under neither section 5 of the amended bill nor under section 27 of the Federal Power Act can vested water rights be taken without compensation and without compliance with State laws. This is but the continuation of a policy first established by Congress in 1866 to encourage the use of water in the arid and semiarid West by recognizing vested water rights acquired under State law.

Section 6, however, is a departure from past policy and would surrender to the 17 Western States all of the future right of the United States to control, use, license, or permit the use or distribution of navigable and nonnavigable waters within those States. Under Section 6 all Federal agencies and permittees, licensees, and employees would be required to conform to State laws before they could use water for any purpose or permit its use by others. All navigable and nonnavigable water is reserved in section 6 by the United States for appropriation and use of the public pursuant to the State laws. There is an express saving of the right of the United States to store and release water for the prevention of floods, but otherwise the United States is placed on a parity with any other entity or person in the acquisition of water rights under State law.

To the extent that the amended bill is drawn upon the principle that the United States may reserve water on streams or lands over which it has ownership or control, it is a proper recognition of the authority of Congress under the commerce clause and the property clause of the Constitution to control commerce and the waters which affect or make commerce possible and to use and dispose of Federal property, lands, and waters, as Congress may find to be in the public interest. Since these are constitutional powers, it is doubtful, as an incidental matter, that one Congress could deprive a succeeding Congress of its authority to exercise these powers. But whether the provisions of section 6 should be enacted is, of course, a question of policy for Congress and not for the Federal Power Commission and the Commission makes no recommendations thereon, although the wing comments appear pertinent.

The only aspect of the bill which would relate to those uses for wbich the Federal Power Commission has been given responsibilities by Congress concerns the use of water by licensees for the development of hydroelectric power when the water is subject to the jurisdiction of Congress. Under the Federal Power Act these licenses, as the Supreme Court has pointed out, can only be issued for projects which conform to national plans of development wherein the broadpublic interests are safeguarded and recognition is given to the needs of commerce, flood control, water power development, and other beneficial public uses, including recreational purposes.

The licensing provisions of the Federal Power Act, as the Supreme Court has said, are "the outgrowth of a widely supported effort of the conservationists to-secure the enactment of a complete scheme of national regulation which would permit the comprehensive development of the water resources of the Nation, insofar as it was within the reach of the Federal power to do so, instead of the piecemeal, restrictive, negative approach of the river and harbor acts and other Federal laws previously enacted.” The detailed provisions of the Power Act, the Court said, leave no room or need for conflicting State controls (First Iowa Cooperative v. Federal Power Commission, 328 U. S. 152, 180 (1946); see also United States v. Appalachian Electric Power Co., 311 U. S. 377, 404, 405 (1940).

By giving certain States an absolute veto power over licenses for hydroelectric projects within their boundaries, the bill would render nugatory the licensing scheme of the Federal Power Act which has been effective for the past 35 years. This is not to say that there are not proper spheres of control which 'may and should be exercised by the respective States, for the Federal Power Act aiready gives recognition to the desirability for integrated rather than duplicating Federal and State controls. Section 27 of the act protects vested rights acquired under State law for the control, appropriation, use, or distribution of water in irrigation or for municipal or other uses of the same nature. And there are other State laws with which a licensee must comply and for which the Commission may call for a showing under section 9 (b) of the Federal Power Act, as stated in First Iowa Cooperative v. Federal Power Commission, supra, at page 180. Also, as the Supreme Court has held, licensees are required to conform to State proprietary laws in addition to securing a license under the Federal Power Act before they can lawfully use the waters of even navigable streams (Federal Power Commission v. Niagara Mohawk Power Co., 347 U. S. 239 (1954)). But these matters under State control cannot stop the construction of a licensed project nor give the States a veto power as would be permitted under the amended bill.

In a decision last June in the case of Federal Power Commission v. Oregon (349 U. S. 345), the Supreme Court applied the principle of Federal supremacy which it had many times previously stated and it held a Federal Power Act license valid notwithstanding the failure of the power company to secure authority from the State of Oregon, although the only basis of Federal jurisdiction asserted over the waters was the ownership of lands by the United States. The Supreme Court said that this proprietary interest of the United States included a rgiht to use or dispose of the unappropriated waters of a nonnavigable stream flowing across reserved Government lands. No vested water rights were involved, for they are protected by the provisions of section 27 of the Federal Power Act to which we have referred. Nevertheless, section 6 of the amended bill would require State authorization before a Federal Power Commission license could be utilized in a situation similar to any of the situations in which the above decisions were made.

It may be that the principal objective of the bill is to place water use at Federal military, naval, and civil installations under State control, for the provisions of the bill appear to be so drawn. But if it is not intended to severely restrict the effectiveness of the licensing provisions of the Federal Power Act, the bill should be further amended to expressly state that it will not apply or be construced as applying to any provisions of the Federal Power Act. Since this is essentially a policy question for Congress, however, no recommendation is submitted by the Commission as to the passage of the bill.

FEDERAL POWER COMMISSION,
By JEROME K. KUYKENDALL,

Chairman. Senator ANDERSON. We all recognize that this is a matter of extreme importance to the West, a question of the extent to which Federal control will or can be exercised without regard to State laws protecting the water rights and use as those State laws have long been interpreted.

We have a little difficuity, I think, with the points of view inside the administration. Almost any administration would have that difficulty because, within the Department of Justice, seemingly they are in a position of opposition on constitutional and legal grounds.

The Bureau of the Budget has coordinated the position of the other agencies, some of which favor the measure from the policy and admin

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istrative standpoint and some of which do not. A clash of views is therefore possible.

We will start this morning with Senator Barrett who has given an enormous amount of time and thoughtful attention to this problem.

Senator BARRETT. Mr. Chairman, I wonder if we could first have the amendment made a part of the record ?

Senator ANDERSON. That has already been done.

Senator BARRETT. Mr. Chairman, at the outset let me say that Senators Malone, Bible, Dworshak, Allott, Goldwater, Welker, and Curtis have joined with me in offering this amendment. Also, I might say that Congressman Engle, chairman of the House Committee on Interior and Insular Affairs, Congressman Budge of Idaho, Congressman Thomson, of Wyoming, and others have introduced identical bills on the House side.

I should like to ask at this time, Mr. Chairman, unanimous consent to insert in the record a copy of my statement on the western water law problem.

Senator ANDERSON. Without objection, the item will be inserted in the record entitled “The Stakes Are High—The Fight Over Western Water Rights Is Underway.”

(The information referred to follows:)

[From the Congressional Record, 84th Cong., 1st sess.]

THE STAKES ARE HIGH-THE FIGHT OVER WESTERN WATER RIGHTS

IS UNDERWAY

Extension of Remarks of Hon. Frank A. Barrett, of Wyoming, in the Senate of

the United States Tuesday, August 2, 1955 Mr. BARRETT. Mr. President, I ask unanimous consent to have printed in the Appendix of the Record a speech which I have prepared for delivery at the anual convention of the National Reclamation Association at Lincoln, Nebr., on October 24 on the control, appropriation, use, and distribution of water.

There being no objection, the speech was ordered to be printed in the Record, as follows:

THE STAKES ARE HIGH

President Peterson, ladies and gentlemen, I am delighted at the opportunity to meet with you again for the purpose of reporting on the status of irrigation legislation pending before Congress.

I take this opportunity to call attention to a problem of tremendous importance to the people of the West. For nearly a century it has been the settled rule that western water rights are dependent on and determined by State law. That's precisely what the Congress intended down through the years, yet a small but determined group continue to carry on the fight for the control of our western waters. It is true that we have lost a legal skirmish or two but the stakes are high and now the people of the West are alarmed and they are ready to fight. Let no one be so misled as to believe that the people of the western empire will under any conceivable set of circumstances surrender their water rights to the Federal Government. We are prepared to battle to the bitter end to preserve and protect our western water rights.

The economy of thriving communities all over the West depend almost entirely on the crops produced from their 27 million acres under irrigation. Water has been applied to 75 percent of that acreage as a result of substantial local investments over a period of many years. The stability and security of western water law provided the incentive for these large investments of private capital. These unwarranted attacks on our water rights strike directly at the foundation of the economy of the Western States. Freedom to divert water and apply it to beneficial uses long distances from the point of diversion is essential to the growth, development and prosperity of our public land States.

CONGRESS MUST ACT

I am prepared to say that the time has come for the Congress to reaffirm, restate, and reinforce that long list of Federal laws enacted for the express purpose of preserving the integrity of State water law. If we fail to do so I am very fearful there will be a continuing trend toward Federal encroachment on this traditional field of State jurisdiction. Strange as it may seem, this movement could constitute a serious threat to water rights long since acquired and put to beneficial use in the Western States.

MANY BILLS HAVE BEEN PREPARED

Many Members of the Senate and the House from the Western States have been greatly concerned with this problem and appropriate bills have been introduced seeking a solution of this problem. In the last session of Congress I introduced S. 863 for myself and for Senators Malone, Bibie, Dworshak, Allott, Goldwater, Welker, and Curtis. Many other Senators indicated their desire to be associated with legislation along the lines of my bill. Earlier this year H. R. 741, H. R. 3404, and H. R. 6147, all being similar in purpose and effect, were introduced in the House. The position of your association, President Peterson, is plain and evident on the obj of legislation of this general character from resolution No. 2, adopted at your 1954 annual convention, which reads as follows:

RESOLUTION OF THE NATIONAL RECLAMATION ASSOCIATION "Whereas the authority to regulate and control the appropriation, distribution, and use of the waters of streams arising in States lying wholly or partly west of the 98th meridian is properly the exclusive sovereign function of the States; and

“Whereas existing laws have not resulted in clear and uniform practice in accordance with said principles by all Federal agencies and officers having to do with use or development of water resources: Now, therefore, be it

Resolved by the National Reclamation Association, reaffirming and amplifying its policy developed during past years by appropriate resolutions, That the association urges the enactment of a Federal law clearly and unequivocally recognizing the title of the States to waters therein, and requiring all Federal agencies and officers to proceed in conformity with State water laws in all matters having to do with appropriation, adjudication, use, ownership, and distribution of water and water rights in such States; be it further

Resolved, That the association strongly urges the cooperation of the executive branch of the Government in the attainment of the above objectives."

IMMEDIATE ACTION NECESSARY AS RESULT OF THE RECENT OREGON CASE

In my judgment the decision of the Supreme Court rendered on June 6 last in the case of the Federal Power Commission v. The State of Oregon has made the need for this type of legislation more urgent than ever. In a sincere effort to find proper and adequate language to clearly define and restate the Federal law in this field, I have sough the aid and assistance of a number of highly qualified and interested persons in revising the langauge of S. 863 and also in preparing this statement. It seems to me that some of the safeguards afforded : Federal interests in the revised bill are unnecessary, but we have incorporated them in the new draft to meet some of the objections which have been raised to S, 863 at various times.

I have forwarded the redraft to the staff of our Senate Committee on Interior and Insular Affairs and I have been assured that a committee print of the new draft will be made available in the nature of a proposed amendment to my bill S. 863. The revised langauge submitted is as follows:

COMMITTEE PRINT PROPOSED REVISION S. 863 "Be it enacted, etc., That this act may be cited as the 'Water Rights Settlement Act of 1956.'

“DECLARATION OF POLICY “SEC. 2. In the arid and semiarid reigions west of the 98th meridian rights to the use of water are properly rights which are fundamental to the economic life and well-being of the American people. In view of the fact that the needs for water do not coincide with the location or the natural flow of the available

sources of supply, it is recognized that rights to impound and divert water and to apply it to beneficial purposes, frequently at places substantial distances from the points of diversion or storage, are matters of paramount importance. To promote the beneficial application of the available water supplies in these regions it is and has been necessary that public and nonpublic entities be encouraged to make investments in water resource developments. Security of right to the use of water for beneficial purposes is essential to such encouragement, and regulating the acquisition of water rights must be orderly and with full regard to the need for stability of such rights if public and private investments in water-resource development are to continue on a sound basis. Neither the proprietorship functions of the United States derived from the ownership of the public lands nor the exercise of its powers relating to interstate commerce and the general welfare should be permitted unduly to interfere with prior rights to the use of water or the orderly acquisition of such rights in the future. For more than 90 years this policy has been recognized by the Congress and the acquisition of such rights under State law has been encouraged and repeatedly protected by Federal legislation. Under this policy these States have been able to make their proper contribution to the strengh of he Union, and 27 million acres of aird and semiarid land have been brough under irrigation, of which only one-fourth are a result of federally assisted projects. It has not been and is not the intention of the Congress that Federal agencies, in pursuing their programs for water resources development in these arid and semiarid areas, shall have any prerogative to preempt the field or to cast clouds on the security of prior rights under State law acquired for beneficial purposes. Because of the fact that previous acts of Congress have been and may be interpreted with respect to these States so as to cast clouds on such prior rights and to interfere with the future orderly development of water resources in accordance with the foregoing declaration, it i the purpose of this act: (1) to remove any such clouds; (2) to provide for the future acquisition of unappropriated waters, navigable and nonnavigable, in compliance with State laws; and (3) to provide adequate protections of the Federal interests to the end that the Federal Government may perform its functions in a manner consistent with the foregoing purposes.

“DEFINITIONS

“Sec. 3. For the purposes of this act

“(a) 'Federal agency' means the executive departments and independent establishments of the United States, and corporations primarily acting as instrumentalities or agencies of the United States;

“(b) ‘Employee of the Government includes officers or employees of any Federal agency, members of the military or naval forces of the United States, and persons acting on behalf of any Federal agency in an official capacity, whether temporarily or otherwise.

"APPLICABILITY “Sec. 4. This act shall apply only to States lying wholly or in part west of the 98th meridian.

“FEDERAL INTERFERENCE WITH WATER RIGHTS PREVIOUSLY ACQUIRED UNDER

STATE LAW

"SEC. 5. In the use of water for any purpose in connection with Federal programs, projects, or activities no Federal agency or employee of the Government shall interfere with the exercise of any right to the use of water for beneficial purposes heretofore acquired under and recognized by State custom or law except when expressly authorized by law and upon payment of just compensation therefor: Provided, That the provisions of this act shall not be construed to preclude, when authorized by Federal law, the acquisition by the United States of such rights by purchase, exchange, gift, or condemnation.

"FUTURE ACQUISITION OF WATER RIGHTS “Sec. 6. Subject to existing rights under State law, all navigable and nonnavigable waters are hereby reserved for appropriation and use of the public pursuant to State law, and rights to the use of such waters for beneficial purposes shall be acquired under State laws relating to the appropriation, control, use, and distribution of such waters. Federal agencies and permittees, licensees, and employ

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