TWO BASIC PROBLEMS PRESENTED

A. State authority over intrastate, nonnavigable streams

The Pelton Dam, for which the Federal Power Commission has issued a license over the protest of Oregon agencies, would be located on the Deschutes River, a wholly intrastate stream. In the case before the Commission and the courts,

no party contested its classification as a nonnavigable waterway. Federal jurisdiction was based upon the fact that the dam would be built on Federal land, which had been reserved by administrative action for future power development. The Supreme Court's decision upholding the Federal Power Commission license was based in major part upon a technical difference between "public lands of the United States" and "reserved" lands. There was no doubt that as to "public lands" the Desert Lands Act applied, thereby insuring the State control over water rights. The Court held, however, that reserved lands, though formerly public lands, were not covered by the Desert Land Act and hence the State did not have the authority to withhold approval of a dam and the use of the water proposed.

It is quite clear that this is a technical kind of distinction which has no support in policy considerations. I do not criticize the Court. It interpreted the law as it found it, and that was in a somewhat confused condition.

The bill which Senator Neuberger and I propose would do no more than remove the distinction without a difference from the Federal Power Act. We share the concern of many westerners over the implications of the Federal Power Commission v. Oregon decision. It does endanger State authority in private license proceedings for projects on wholly intrastate, nonnavigable streams.

Some have advocated a drastic and radical revision of the Federal Power Act as a result of what has become known as the Pelton case. This is a dangerous and shotgun approach to what is a narrow problem so far as the text of the law is concerned.

We urge returning the law to the condition it was in before the Federal Power Commission v. Oregon decision without major and dangerous surgery.

B. Power versus conservation

As every member of this committee knows, I am an advocate of hydroelectric power development. None knows this better than the chairman, the senior Senator from Washington, Mr. Magnuson.

However, in approaching problems of resource development in the river-rich Pacific Northwest and elsewhere, a proper balance must be maintained between power production and other very valuable resources. Wherever possible, the use of a stream for power and other conservation uses should be harmonized so as to promote the greatest good for the people of the area. At certain sites the . economic production of power should take precedence over competing potential uses. At others, the preservation of invaluable fish runs or other wildlife resources have a higher social value.

The Deschutes is famous for its commercial and sports fish runs. The power potential of the Pelton site is relatively small; it is a total installed capacity of 108,000 kilowatts. I am not completely convinced that the fish and power uses are finally irreconcilable, although the procedure in this case has led to a winnertake-all result to date. Some, who believe that the power use is more important than fish resources in the Deschutes and the Metolius which joins it above the Pelton site, do not fully appreciate that the power that would be generated would not be used in central Oregon, but would go into the Portland General Electric service area in western Oregon. Yet many who support the project argue that the power produced at Pelton would provide central Oregon with badly needed power.

I believe that a cancellation of the Pelton license and the revision of the law proposed would make possible a fresh start on attempts to harmonize use of the site for power and preservation of fish runs. However, if a final choice must be made between relatively small power production and the irreplaceable commercial and sport fish runs, the latter have higher social utility in this area. Commercial fishing in the Columbia Basin has been declining. Sport fish resources are shrinking in Oregon and elsewhere in the Nation. Once lost they are difficult, and probably impossible, to replace.

Outdoor recreation is of ever-increasing importance to our people. Our growing population, increasing leisure, and the pressures of city life make outdoor recreational opportunities ever more important. We cannot afford to shrink those opportunities.

The bill Senator Neuberger and I have introduced is designed to prevent shortsighted use of a site and the frustration of State authority by a technical, and probably unintended, distinction in the Federal law.

We, therefore, urge that this reasonable and moderate proposal be enacted into law, lest accumulated dissatisfaction result in more far reaching and less desirable revision of the Federal Power Act.

STATEMENT BY SENATOR NEUBERGER ON S. 3250 BEFORE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, MARCH 20, 1956

Mr. Chairman, I appreciate the time which the committee is giving today to hearing opening testimony on the bill introduced by Senator Morse and myself, S. 3250, to deal with the immediate problem of water law raised by the Pelton Dam decision of the Supreme Court of the United States. I realize that your committee has a particularly heavy schedule this week and in the weeks immediately ahead, and that you have interrupted consideration of other measures before you for the sake of these hearings today. Consequently, Mr. Chairman, I shall keep my own remarks brief.

I asked the committee whether it might not be possible to have these first hearings on S. 3250 today because hearings are also being held this week by other committees on related legislation. As one example, the Committee on Interior and Insular Affairs is now holding hearings on S. 863 introduced by Senator Barrett which would have a major impact on the relationship between the Federal Government and the States as to the use and control of water on federally owned lands within the different States. This bill, and others like it. which have been introduced in the House of Representatives, have received much of their present impetus from the Supreme Court's opinion in the case of the Federal Power Commission against Oregon-the decision which we refer to as the "Pelton Dam case" for short.

Mr. Chairman, at the conclusion of my remarks, I am going to ask to have made a part of the record of these hearings the Supreme Court's opinion, from Three Hundred and Forty-ninth United States Reports, page 435, as well as my statement in the Senate in introducing S. 3250. At this time, however, I should only like to review briefly the background of the Pelton Dam case which led up to the Supreme Court's decision of last summer.

The controversy arose 7 years ago from an application by a predecessor of the Portland General Electric Co. to construct a hydroelectric project on the Deschutes River. The Deschutes is a tributary of the Columbia River which is located entirely within the borders of the State of Oregon and which is one of the famous fishing streams of the Pacific Northwest and, indeed, of the Nation. Agencies of the State of Oregon-the State game commission and the State fish commission-as well as the Oregon division of the Izaak Walton League intervened before the Federal Power Commission in opposition to the application for a license to construct the Pelton project on the Deschutes. In 1953 the power company unsuccessfully sought to have State opposition to its project eliminated by means of special State legislation.

The Federal Power Commission granted a license to the Portland General Electric Co., overriding the objections of the intervening agencies of the Oregon State Government. It is important to note tht the FPC did this without any finding concerning navigability of the Deschutes; it based its authority for the license on the fact that the project is to be built on lands belonging to the United States.

The State took an appeal to the United States Court of Appeals for the Ninth Circuit. That court set aside the Commission's order on the ground that Federal public-lands laws had long ago made the use of nonnavigable waters on Federal lands subject to State control and that licensees would have to comply with State water law.

Upon the petition of the FPC, the Supreme Court took up the case for review and reversed the decision of the court of appeals. The significance of the issue presented by the case and in S. 3250 is shown not only by the fact that the Supreme Court granted certiorari, but also by the fact that several other Western States in which, as in Oregon, the Federal Government owns a large proportion of the land joined Oregon in the litigation as amici curiae.

Mr. Chairman, I am not a lawyer, and I shall not try to develop in detail the full legal implications of the Supreme Court's decision that the United States

may by a simple administrative order "reserve" for itself or its licensees the water flowing through all Federal public lands without regard to the procedures of State legislation designed to carry out State policies for the best use of this precious resource. I do want to point out, however, that S. 3250 does not seek to go nearly so far as other pending bills to establish a universal supremacy of State law over Federal needs in this field. I believe that some of the other proposals I have seen go too far, and that as a result of seeking a complete and farreaching solution no legislation at all may be enacted in this highly controversial field. Therefore, my bill, S. 3250, proposes only to reverse the narrow basis for the specific holding in the Pelton Dam case-i. e., that whatever might otherwise be the law on the Federal public lands, the creation of a reservation permits the FPC to disregard State water law in licensing a project even on a wholly intrastate nonnavigable stream.

Section 2 of my bill would revoke the license granted for the Pelton Dam project pending any future procedures in accordance with law as amended by my proposed amendment to the Federal Power Act.

That amendment, to summarize it once more, would only apply to the question of FPC licenses-not to Federal projects-and to only licenses for projects which come under FPC jurisdiction because they are to be built on lands of the United States. As to such projects, of which the Pelton Dam happens to be the example which raised the issue of State water law all the way to the Supreme Court, S. 3250 proposes only to overcome the effect of a Federal "reservation" on the applicability or nonapplicability of State law-in other words, to return the law to the position in which it was before the Supreme Court's decision. Because this aim is much more modest than that of the other proposals made in the wake of the Pelton Dam decision, I believe it can and should be enacted at this session of Congress.

Senator ANDERSON. Mr. Chilson, that is a fine endorsement from a most distinguished member of this committee, so we are very happy to have you here.

STATEMENT OF HATFIELD CHILSON, ATTORNEY, WATER

CONSERVATION BOARD, DENVER, COLO.

Mr. CHILSON. I appreciate it.

My name is Hatfield Chilson. I am attorney for the Colorado Water Conservation Board which is the official agency of the State of Colorado dealing with water policy of that State.

The Colorado Water Conservation Board has officially endorsed this legislation by a resolution which has been forwarded to the congressional delegation of the State of Colorado and a copy has been sent to Senator Barrett.

Senator BARRETT. It has been made a part of the record also.
Mr. CHILSON. Thank you.

Before proceeding with a discussion of this matter, I want to make the position of Colorado very clear, because later in my discussion I shall discuss some legal matters which will deal with certain assumptions of the Federal Government. In so dealing with them, I do not want the position of the State of Colorado to be misconstrued.

The position of the State of Colorado is that the State of Colorado, since it was admitted to the Union, is the owner and has full control over the waters and the water use in the State of Colorado.

I won't take the time to go into the legal reasoning behind that. That is our position.

Senator MILLIKIN. Mr. Chilson, that is in our constitution, is it not? Mr. CHILSON. Yes, sir.

Senator MILLIKIN. That constitution was accepted by the United States Government.

Mr. CHILSON. That is correct, Senator.

So we do not recognize that the Federal Government has any rights in the body of the water or the water use in the State of Colorado except such as they have acquired under the doctrine of appropriation, which is the official water doctrine of the State of Colorado.

With that preliminary statement, I think if I can do my State and this committee and the Senate any service, it is in trying to point up specifically the dangers to the vested rights-I am not talking about unappropriated waters of the people of the State of Colorado and the West and also the danger of the Government's position so far as the future development of Colorado and the Western States is concerned.

The controversy with which this legislation is designed is one of long standing. Let me make my apologies here, gentlemen, for not. having a prepared statement. I was asked to testify unexpectedly. I did not have time to prepare a brief or a statement, and I am testifying offhand and from some notes that I have made.

This controversy is of considerable standing. The Peltor Dam case merely emphasizes the necessity for the early determination of the question.

The basic issue involved is very simple. The question is, Does the Federal Government own and thereby control all of the unappropriated waters in the Western States; and secondly, does the Federal Government by virtue of withdrawals and reservations of Government lands thereby have a water right which was vested at the time of the withdrawal?

This is a matter of such great importance to the West and the Nation that, in my opinion-and I have said this for many years-it is a question that should be finally and conclusively determined by congressional legislation, and as a matter of policy rather than by judicial determination in any particular lawsuit or series of lawsuits.

As we all know, lawsuits are determined upon the particular facts of each case. This as a matter of policy is something that should be determined as a matter of policy rather than upon a particular factual situation.

In spite of the repeated declarations of Congress of its intent to dispute the control and use of waters under the control of the State the theory and philosophy—and I use "philosophy" advisedly because I think it is philosophy-the theory and philosophy of Federal control of western waters has persisted over the years.

This is a matter of great concern, as I have said to the people of the West. No sooner does Congress reaffirm its intent that the use of the waters of the West shall be governed by State law, then we begin to hear the arguments that Congress intended no such thing.

In proceeding with my discussion I will refer frequently to the Attorney General's statement filed with this committee and dated March 19, 1956, and at the bottom of the first page in the last paragraph the Attorney General states this:

This Department questions the validity of the assumption underlying the statement of policy that Federal activities of the Western States involving rights to the use of water threaten the security of prior rights acquired under State law or because undue interference with such rights or with the orderly acquisition of such rights in the future.

In order to point this up specifically I would like to recite Colorado's experience in this regard.

In 1934 the State of Nebraska brought a suit in the United States: district court for an equitable apportionment of the waters of the North Platte River between Nebraska and Wyoming. Colorado was interpleader because the North Platte River rose in Colorado and Colorado also made uses of the water of that river.

The United States intervened in that action. One of the grounds for intervention was that the United States is the owner of all unappropriated water in the North Platte River, irrespective of any appropriation made or to be made by it under the law of any State and that the United States is entitled to have apportioned to it, free from the sovereign control of any State, the water already appropriated by it and all of the remaining unappropriated water of the river.

These contentions were bitterly resisted by the States and complete briefs of the contentions were filed by the parties.

I am not going to take the time to go into the detailed reasons why the States objected, because in sitting here I have heard others relate those things.

In any event, the case finally reached the United States Supreme Court and was decided in 1945, some 10 years after it was started. (Nebraska v. Wyoming (325 U. S. 589)).

The Court refused to determine that question. They determined the litigation on other grounds. The Court said, at page 612:

We do not stop to determine what rights to unappropriated water of the river the United States may have. For the water rights on which the North Platte project and the Kendrick project have been obtained in compliance with State law.

Whether they have been obtained by Federal reservation is not important. Nor, as we shall see, is it important to the decree to be entered in this case that there may be unappropriated water, to which the United States may in the future assert rights through the machinery of State law or otherwise.

During the pendency of that case, I heard many remarks by Government lawyers, also by private water lawyers and others interested in the litigation, that the United States by virtue of this claim did not intend to affect any vested rights; that all they were claiming was that after recognizing all of the rights of all the water users in the States, the balance of the water was under the control of the Federal Government.

Of course that claim related back to the original acquisition of the land, as Mr. Rankin testified yesterday.

So far as Colorado is concerned, the matter of Federal ownership of water, although discussed a great deal, did not reach the courts again until the year 1955. At that time the Federal Government had in litigation the rights to the use of water out of the Colorado River. It is on the western slope of Colorado. This was in connection with the Colorado Big Thompson project, a reclamation project that furnishes supplemental water supply to northern Colorado.

The decision in the Pelton Dam case came out in June 1955.

Shortly thereafter the Federal Government filed an amended claim or amended complaint in that litigation, which included the claim of the right to the use of water, based not on the appropriation of water to a beneficial use but upon the withdrawal of lands by the Federal Government.