Colorado River Storage Project

SEC. 13. There are hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, such sums as may be required to carry out the purposes of this Act.

SEC. 14. As used in this Act

The term "Colorado River Basin", "Colorado River Compact", "Colorado River System", "Lee Ferry", "States of the Upper Division", "Upper Basin", and "domestic use" shall have the meaning ascribed to them in article II of the Upper Colorado River Basin Compact;

The term "States of the Upper Colorado River Basin" shall mean the States of Arizona, Colorado, New Mexico, Utah, and Wyoming;

The term "Upper Colorado River Basin Compact" shall mean that certain compact executed on October 11, 1948, by commissioners representing the States of Arizona, Colorado, New Mexico, Utah, and Wyoming, and consented to by the Congress of the United States of America by Act of April 6, 1949 (63 Stat. 31); and

The term "treaty with the United Mexican States" shall mean that certain treaty between the United States of America and the United Mexican States signed at Washington, District of Columbia, February 3, 1944, relating to the utilization of the waters of the Colorado River and other rivers, as amended and supplemented by the protocol dated November 14, 1944, and the understandings recited in the Senate resolution of April 18, 1945, advising and consenting to ratification thereof.

Senator MILLIKIN. There will be a statement next by the President of the United States under date of March 20, 1954.

Next comes the statement of the report of the Bureau of the Budget, March 18, 1954.

Next a report from the Department of the Interior, April 1954. Next will be a report of the Department of the Army, dated June

14, 1954.

Next a report of the Federal Power Commission, June 18, 1954. Next a report of the Department of Agriculture.

Then there will be H. R. 4449, as reported by the House committee. (The data referred to follows:)

THE WHITE HOUSE

STATEMENT BY THE PRESIDENT

I have today approved recommendations for the development of the upper Colorado River Basin.

The general plan upon which these recommendations are based has been prepared by the Secretary of the Interior. The Secretary's recommendations have been reviewed by the Bureau of the Budget. Legislation embodying the administration's recommendations is being prepared for introduction in the Congress. This is a comprehensive, well-planned development of a river basin. close Federal-State cooperation upon which the Secretary's plan is based also carries out this administration's approach to water resource development.

The

The development will conserve water, enabling the region to increase supplies for municipal uses, industrial development, and irrigation. It will develop muchneeded electric power.

The development calls for sound financing. The legislation now being drafted will set up a fund for the entire project so that it will be constructed and paid for as a basin program.

Construction of the Echo Park and Glen Canyon Dams, two of the large projects in the basin plan, is recommended. These dams are key units strategically located to provide the necessary storage of water to make the plan work at its maximum efficiency.

The legislation being drafted will authorize a number of projects which will put to use the waters of the upper Colorado. This authorization will become effective following further consideration by the Secretary of the Interior, with the assistance of the Secretary of Agriculture, of the relation of these projects to the wise use and sound development of the basin.

I am deferring my recommendation on the Shiprock unit of the Navajo project until the Secretary has completed his study.

SEC. 6. There is hereby established in the Treasury a special fund, designated the "Upper Colorado River Development Fund," to which shall be transferred at the end of each fiscal year, beginning with the initial year of commercial power production by the Colorado River storage project 71⁄2 per centum of the net power revenues for that year after such net revenues exceed $5,000,000 annually, but not to exceed $1,000,000 in any one fiscal year. The moneys so transferred shall be available upon appropriation (such appropriation to remain available until expended) for expenditure by the Secretary, without prejudice to the use by him for the same purposes of other appropriated moneys, for studies and investigations relating to the development, conservation, and utilization of the waters of the Upper Colorado River Basin, all expenditures from said fund to be nonreimbursable and nonreturnable under the reclamation laws. Funds appropriated for carrying out the authorizations contained in section 1 of this Act shall also be available for carrying out the studies and investigations set forth in this section.

SEC. 7. There is hereby established in the Treasury, from the receipts of the Colorado River storage project, a continuing fund of $1,000,000 to the credit of and subject to expenditure by the Secretary to defray emergency expenses and to insure continuous operation of the project.

SEC. 8. The Secretary shall report to the Congress as of the close of each fiscal year beginning with the fiscal year 1955 upon the status of the revenues from and the cost of constructing, operating, and maintaining the Colorado River storage project and the participating projects. The Secretary's report shall be prepared in such manner as accurately to reflect the Federal investment allocated to power, to irrigation, and to other purposes and the progress of return and repayment thereon, and the estimated rate of progress, year by year, in accomplishing full repayment.

SEC. 9. The Secretary is authorized and directed to plan, construct, operate, and maintain public recreational facilities on lands withdrawn or acquired for the development of the Colorado River storage project or of the participating projects, except on lands in Indian reservations, to conserve the scenery, the natural, historic, and archeologic objects, and the wildlife on said lands, and to provide for public use and enjoyment of the same and of the water areas created by these projects by such means as are consistent with the primary purposes of said projects; and to mitigate losses of and improve conditions for the propagation of fish and wildlife in connection with the development of the Colorado River storage project and of the participating projects. The Secretary is authorized to acquire lands and to withdraw public lands from entry or other disposition under the public land laws for the construction, operation, and maintenance of recreational facilities in connection with the said projects, and to dispose of them to Federal, State, and local governmental agencies by lease, transfer, exchange, or conveyance, upon such terms and conditions as will best promote their development and operation in the public interest. The costs, including the operation and maintenance costs, of all said undertakings shall be nonreimbursable and nonreturnable under the reclamation laws, and funds appropriated for carrying out the authorization contained in section 1 of this Act shall, without prejudice to the availability of other appropriated moneys for the same purposes, also be available for carrying out the investigations and programs authorized in this section.

SEC. 10. The Secretary is hereby authorized to undertake the investigations and programs of cooperating Federal agencies outlined in paragraphs 33 to 39, inclusive, of the report of the regional director, region 4, Bureau of Reclamation, dated December 15, 1950, and entitled "Colorado River Storage Project and Participating Projects, Upper Colorado River Basin". The cost thereof shall be nonreimbursable and nonreturnable under the reclamation laws, and funds appropriated for carrying out the authorizations contained in section 1 of this Act shall, without prejudice to the availability of other appropriated moneys for the same purposes, also be available for carrying out the investigations and programs authorized in this section.

SEC. 11. Nothing contained in this Act shall be construed to alter, amend, or repeal the Boulder Canyon Project Act (45 Stat. 1057) or the Boulder Canyon Project Adjustment Act (54 Stat. 774).

SEC. 12. Construction of the projects herein authorized shall proceed as rapidly as is consistent with budgetary requirements and the economic needs of the country.

1. The basinwide planning and close Federal-State cooperation which underlie your report carry out this administration's approach to water resource development.

2. Subject to the requirements of paragraphs 8 and 9 below, authoriaztion of the Glen Canyon and Echo Park units of the storage project would be in accord with the program of the President. These units are strategically located to provide replacement storage to meet the upper basin's commitment to the lower basin and to permit increased consumptive use of water in the upper basin. In addition, both units will generate substantial amounts of hydroelectric power.

3. Authorization of recreational facilities to be constructed by the National Park Service within the Dinosaur National Monument would be in accord with the program of the President. Appropriations for this purpose should be so authorized that they can be made directly to the Park Service.

4. A requirements that conservancy districts be established to assist in irrigation repayments would be in accord with the program of the President and should be met before any participating project is undertaken.

5. Authorization to make the surplus power revenues of the storage projects available for repayment of construction costs of the Eden project and of the previously authorized portion of the Paonia project would be without objection. 6. Provisional authorization of the Shiprock unit of the Navaho project would not be in accord with the program of the President at this time. This advice is without prejudice to further consideration of the project when a report is completed indicating its economic justification, the views of the affected States and agencies, and the relation of the project to other potential uses of water of the San Juan River.

7. Subject to the requirements of paragraphs 8 and 9 below, a conditional authorization for construction of the other participating projects recommended in your report, including the Minnesota unit of the Panonia project, would be in accord with the program of the President. The authorization would become effective following a new finding of favorable economic justification by the Secretary of the Interior after individual project reports have been prepared which include

(a) A joint study with the Department of Agriculture of the direct agricultural benefits of each project.

(b) A reevaluation of the nondirect benefits of each project, based upon a reexamination of the methods presently used to compute the indirect and public benefits of reclamation projects.

The development of irrigation in the upper Colorado River Basin to use the increased supply of water made available as a result of the storage project is recognized as an integral part of the basin plan. Reclamation projects in the upper basin which are economically justified and which represent wise use of available resources in a manner consistent with State water laws and interState compacts have the full support of the administration. Authorization of the participating projects proposed in your report should be contingent on reexamination so that there may be no doubt about the economic justification of the projects finally undertaken. Reexamination is particularly necessary in the case of those projects which show a favorable economic justification only if a useful economic life of 100 years is assumed and if the full estimate of indirect and public benefits-the so-called "secondary" benefits-used in your report is accepted. It is recognized that a basic purpose of the reclamation laws is to spur development of the West. Consequently, it follows that the justification of a reclamation project is not adequately measured by a simple comparison of project costs with the dollar value of the agricultural produce and other goods and services directly produced by the project. However, the procedures used to compute the secondary benefits of the participating projects proposed for authorization would appear to require a fundamental reexamination.

The standards and procedures for the economic appraisal of water-resource projects are now under review in the Executive Office. It is expected that any final recommendations made by the Secretary of the Interior would take into account the conclusions reached as a result of this review.

8. Provision should be made in the authorizing legislation for financing the project through a separate revolving fund established in the Treasury which would (a) receive all appropriations for construction and operation and maintenance as advances from the general fund; (b) receive all revenues collected in connection with the operation of the project; (c) be available for the operation and maintenance of the project, subject to such limitations as may be imposed by the Congress in annual appropriation acts; (d) be available for construction

I hope the Congress will give early consideration to enactment of the administration's legislative proposal. I firmly believe development of the upper Colorado River Basin, in accordance with its provisions, is in the national interest.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington 25, D. C., March 18, 1954.

Hon. HUGH BUTLER,

Chairman, Committee on Interior and Insular Affairs,

United States Senate, Washington 25, D. C.

MY DEAR MR. CHAIRMAN: I am authorized to inform you that the President has given his general approval to the comprehensive plan for the development of the water resources of the upper Colorado River Basin outlined in the supplemental report recently completed by the Secretary of the Interior.

The comprehensive plan of development proposed would consist of (1) a series of large dams on the Colorado River and its major tributaries for the purpose of conservation storage and the generation of hydroelectric energy, and (2) a group of related irrigation projects in the five upper basin States. These projects have been developed to permit the upper basin States to utilize the waters allocated to them under the terms of the Colorado River compact of 1922.

Attached is a copy of our letter to the Secretary of the Interior expressing our views on his supplemental report. This letter also reflects our views with respect to the authorizing legislation necessary to carry out the administration's recommendations. These recommendations would require modification of the terms of S. 1555 on which you have requested the Bureau's views in the following respects:

(1) Authorization limited to those projects which are recommended for construction in the Secretary's report and upon which planning activities have been completed.

(2) Authorization of participating projects to become effective following_reexamination and a new finding of favorable economic justification by the Secretary of the Interior.

(3) Financial arrangements for the entire development consolidated through the establishment of a separate revolving fund.

(4) Provision made for returning to the general fund of the Treasury all reimbursable costs of the project including interest on the commercial power and municipal water supply investment.

(5) Greater emphasis given to the use of conservancy districts for the purpose of carrying out local responsibilities.

(6) Conditions governing the sale of power clarified to provide needed flexibility and still give adequate protection to upper basin interests.

(7) Authorized recreational facilities and improvements for fish and wildlife financed by the agencies responsible for these programs.

(8) Work of participating agencies carried on under existing statutory authority and financed by the agencies performing the work.

Legislation to implement these proposals is now being drafted and will be submitted to the Congress as a part of the President's program.

In the light of the foregoing, it is recommended that you defer your consideration of S. 1555 in its present form, pending submission of the legislation mentioned above.

Sincerely yours,

Jos. M. DODGE, Director.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington 25, D. C., March 18, 1954.

The honorable the SECRETARY OF THE INTERIOR. MY DEAR MR. SECRETARY: This is in response to your letter of December 10 to the President and to the Bureau of the Budget, submitting your supplemental report on the Colorado River storage project and participating projects. Further development of the upper Colorado River Basin in general accordance with the recommendations contained in your supplemental report has the support of the President. Legislation for that purpose which would authorize economically justified developments would be in accord with his program. With respect to the supplemental report, you are advised as follows:

1. The basinwide planning and close Federal-State cooperation which underlie your report carry out this administration's approach to water resource development.

(a) A joint study with the Department of Agriculture of the direct agricultural benefits of each project.

(b) A reevaluation of the nondirect benefits of each project, based upon a reexamination of the methods presently used to compute the indirect and public benefits of reclamation projects.

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