maintained in such wise as to retain the bases upon which such allocation is premised and, upon failure so to operate and maintain those features, the amount allocated thereto shall become a reimbursable cost to be paid by the State.

SEC. 4. In constructing, operating, and maintaining a drainage system for the San Luis unit, the Secretary is authorized to permit the use thereof by other parties under contracts conforming generally to the provisions of the Federal reclamation laws with respect to irrigation repayment or service contracts and is further authorized to enter into agreements and participate in construction and operation of drainage facilities designed to serve the general area of which the lands to be served by the San Luis unit are a part, to the extent the works authorized in section 1 of this Act contribute to drainage requirements of said area. Secretary is also authorized to permit the use of the irrigation facilities of the San Luis unit, including its facilities for supplying pumping energy, under contracts entered into pursuant to section 1 of the Act of February 21, 1911 (36 Stat. 925, 43 U. S. C. 523).

The

SEC. 5. The Secretary is authorized, in connection with the San Luis unit, to construct minimum basic public recreational facilities and to arrange for the operation and maintenance of the same by the State or an appropriate local agency or organization. The cost of such facilities shall be nonreturnable and nonreimbursable under the Federal Reclamation laws.

SEC. 6. The United States, acting through the Secretary, may contract with the State to store or transfer water through facilities of the Central Valley project for ultimate delivery by the State, provided that only the excess capacity of the Central Valley Project beyond other requirements existing at the time shall be so used and obligated, and the State shall pay to the United States a service charge or an appropriate share of the construction, operation, maintenance and replacement costs of the facilities so used. The Secretary is also authorized to contract with the State to store or transfer water thru facilities of the State for ultimate delivery by the United States, and the United States shall pay to the State a service charge or an appropriate share of the construction, operation, maintenance and replacement costs of facilities so used. SEC. 7. The Secretary is hereby authorized to construct under provisions of the Federal Reclamation laws such distribution systems and drains as he deems necessary in connection with lands described in section 1 of this Act, to be served by the works of the San Luis unit authorized to be constructed hereunder.

SEC. 8. Subject to the requirements for co-ordination of operations in accordance with the agreement entered into pursuant to sections 2 and 3 of this Act, operation and control of the works of the San Luis unit shall be by the United States and operation and control of the State San Luis works shall be by the State. The provisions of the Federal Reclamation laws shall not be applicable to water deliveries to, or to use of drainage facilities for, lands outside of the San Luis unit service area, as described in the report of the Department of the Interior, entitled “San Luis Unit, Central Valley Project," dated Dec. 17, 1956.

SEC. 6. 9. There is hereby authorized to be appropriated for construction of the works of the San Luis unit authorized by this Act, and for payment to the State as provided in this Act of the share of the United States of the cost of constructing the State San Luis works, other than distribution systems and drains, the sum of 3 plus such additional amount, if any, as may be required by reason of changes in cost of construction of the types involved in the San Luis unit as shown by engineering indices. There are also authorized to be appropriated, in addition thereto, such amounts as are required (a) for construction of such distribution systems and drains as are not constructed by local interests, and (b) for operation and maintenance of the unit and the share of the United States of the costs of operation, maintenance and replacement of the State San Luis works.

EXHIBIT D

EXPLANATION OF AMENDMENTS (REVISED MARCH 12, 1958) to S. 1887 (Prepared by Allen Bottorff, Kern County Farm Bureau; submitted to Senators Knowland and Kuchel and for discussion before Subcommittee on Irrigation and Reclamation, Senate Committee on Interior and Insular Affairs, March 17, 18, 1958)

Paragraph 1, section 1: Includes financing as an additional function under the authorization given the Secretary.

May be about $275,000,000.

Paragraph 2, section 1: Describes the engineering features of the Federal San Luis unit and authorizes their construction by the Secretary. Describes the engineering features which are to be constructed, operated, and maintained by the State to furnish a water supply for both the Federal San Luis unit service area and for the service areas of the State Feather River project. There is also a new special amendment in section 1, last sentence, which is sponsored by certain interests in the Delta-Mendota service area rather than by us, with which we are inclined to agree, however, which provides that water shall not be made in the San Luis unit service area until proper and adequate drainage is provided. It is our understanding that this requirement is favored by both the director of water resources and the Water Commission of the State of California.

Section 2 (a): The amendment offered clearly defines the relationship that shall exists between the United States and the State in the coordinated operation and joint use of facilities of each. It provides that construction of the San Luis unit shall not commence until an agreement has been reached between the United States and the State. It further provides for the act to expire within a period of time, under certain conditions, in event of failure to reach agreement. Section 2 (a) is a new paragraph to the authorization for the agreement, requiring that such an agreement shall provide assurance to both parties that all facilities necessary to water deliveries to the service areas of each shall be constructed, and on a timely basis, provided funds are available to either party, or to both, and regardless of failure by either party to uphold its obligation to construct or to provide funds.

Section 3 (a): This amendment defines what the agreement shall require each party to construct and that the capacities shall be adequate to serve the Federal San Luis unit service area as well as the State Feather River project service areas.

Section 3 (b): This reverses the original language requirement and requires that the United States shall provide funds in proper proportion for construction of the joint-use works, which are called the State San Luis works throughout this amended bill. A new provision requires that the State shall similarly pay its proper share of the cost of any item which might have joint use, if provided by the United States in constructing the Federal San Luis unit.

Section 3 (c): This has been amended to provide that the agreement shall stipulate that the State may, after final approval of plans by the Secretary for construction of the joint-use works to provide service to the Federal San Luis unit as well as the State Feather River project service areas, at the State's expense, further enlarge or modify the State San Luis works to provide greater capacity. This contemplates the possibility that, at some future date, the State may need to add capacity beyond original requirements to serve its service areas. Such enlargement or modification shall not unreasonably interfere with the operation of the Federal San Luis unit.

Section 3 (d): This new language is required due to the State's role as constructor and operator of the joint-use works. It requires the United States to pay its proper share of operation, maintenance, and replacement costs of such works. The last sentence of this subdivision requires agreement that the State shall pay its proper share of costs, if any, for operation, maintenance, and replacement of any portion of the Federal San Luis unit facilities which might be of joint use to the State.

Section 3 (e): Eliminates certain provisions which are not applicable under the concept set forth in the new basic amendments offered. This subdivision has new language which defines the ratio and limitation of use by the United States of the joint-use facilities.

Section 3 (f): Deletions result from the change in general concept provided by the basic amendments offered. New language provides proper credits for costs of each party to the agreement.

Sections 3 (g), (h), and (i): The original language is deleted because of the other basic amendments offered, which change the concept of the position of each party with respect to the joint-use facilities.

Section 3 (j): Now changed to 3 (g) with new language to provide for what will prevail under the basic amendments offered, but no substantive change in this requirement, as originally set forth, is made by such language.

Section 3 (k) is now 3 (h).

Section 6: This is a new section which provides for the reciprocal use of facilities and the terms and conditions thereof, of Federal and State projects for storage and transfer of water destined for delivery by the party receiving such service, when excess capacity exists to make such use possible. This sec

tion would implement maximum usage and efficiency of both Federal and State projects.

Section 7: This new section spells cut the Secretary's authority to construct, under reclamation laws, distribution systems and drains within the Federal San Luis unit service area.

Section 8: This new section sets forth the responsibility for operation and control of the respective State and Federal facilities, and limits the extension of the Federal reclamation laws.

Section 9: Provides authorization for the appropriation of funds by the United States to accomplish the purposes of the act as amended by the amendments here offered.

Senator KUCHEL. Mr. Bottorff, in Harvey Banks' statement this morning, he testified that the intention with which he, his people, the Bureau of Reclamation, and others, drafted the bill, which is the Knowland-Kuchel bill-that it was the primary objective of the draftsmen of the bill to authorize the Secretary of the Interior to enter into a contract with the State for the construction and operation of joint-use facilities of the San Luis site.

Then he said that, under the Kern County proposal, the State would build and operate the joint-use features and the United States would pay to the State its appropriate share of construction costs and be entitled to a proportionate part of the jointly used project capacities. Do you agree with that?

Mr. BOTTORFF. I think that is a correct interpretation. It just entirely reverses, in our proposal, that which has been made in the State's proposal with his amendments.

Senator ANDERSON. It entirely reverses what?

Mr. BOTTORFF. Well, in one it is true that the Federal Government in its program would be the construction agency, with the State obliged to pay its share of the costs associated with the storage capacity and any facilities that might be used.

In the proposal we have before you, it is true that the State would be the construction agency and the United States would be the one which paid that share of the proper costs associated with the storage and the movement of the water, transfer of the water, through facilities that are called the joint-use works.

Senator KUCHEL. Now, that is the first basic difference between the two proposals; is that right?

Mr. BOTTORFF. I believe that that is a basic difference; yes.

Senator KUCHEL. Well, now, tell me: Why is it so fundamentally important to all of us who live in California whether the Federal Government or the State government enters into the contracts for construction? Why is that important?

Mr. BOTTORFF. Well, there have been many people in California, including ourselves, that are very interested in a go-ahead program on the part of the State on a consolidated Feather River project which would have its total financing, its total operation, and all, integrated in a manner that would see the project through on a timely basis. We emphasize the word "timely." In Kern County, which is a service area of the Feather River project, we have an existing water overdraft-deficiency or overdraft-of over 700,000 acre-feet annually.

We are interested in the timeliness of action. And we see that the State fundamentally should take a lead in the responsibility for the construction of this, as well as other items that they are speaking about

under the California water plan and the Feather River project program.

We hold forth the theory that the Federal Government, in due time and in accord with its policies, should have an opportunity to contract for a use that they have of the facilities that would be a part of the basic Feather River project.

Senator KUCHEL. It is true, is it not, that the State itself has recommended the passage of this bill, S. 1887?

Mr. BOTTORFF. Well, Senator Kuchel

Senator KUCHEL. Isn't that true?

Mr. BOTTORFF. Well, Senator, there are recommendations; one set of amendments are to be used in one case; and there are recommendations that are being made here now that refer to another, a different, approach to it.

Senator KUCHEL. The point of it is that I think all of us, all of us who live in California, are interested in an expeditious handling of projects to help solve our water problem.

But again to pinpoint it: I want to go through these things one at a time and try to see the basis for the differences.

I do not understand why the matter of who is the construction agent, who actually contracts to have the reservoir-and I want to talk about the reservoir-constructed is important.

Actually, the only governmental agency available to offer bids for construction with any experience at all is the Federal Government. Now, the State comes in, the State government comes in, and says: We want the Federal Government to build this under certain terms and conditions. And I would aline those arguments against the State's recommendation and see whether we can judge their validity.

I frankly say on this question of who is going to let the contracts out to construct, that I do not see that that makes any great amount of difference.

Mr. BOTTORFF. Well, we have been trying to find a solution to problems that range up and down our State by the offering of an acceptable concept, that would be acceptable to all areas.

We are not trying to define a position to the point where we should try to do it alone. There are other people apparently that have taken this same view. And it has been so seriously taken, and we are so deep in the middle of this thing, that we have had to reach certain conclusions regarding our offer of ideas.

Now, I would point out to you, Senator, that there are, I think, seven or eight hundred employees today in the Department of Water Resources and we want to put them to work in a constructive sense as well as in all the investigative and planning stages sense.

I would say that we conduct a highway program there of $400 million a year. So, our construction capacity in California, insofar as engineering features are concerned, is certainly not to be questioned. And the letting of contracts is all understood quite thoroughly. I see no reason why contracts cannot be let by either the States or the United States in connection with any of them.

Senator KUCHEL. Let us assume that is true. Why should there be a dispute about it?

Mr. BOTTORFF. Well, I am not going to try to entirely answer that question. I recognize there is a dispute. And, therefore, I have tried, and our people have tried, to find the answer to the problems.

Senator KUCHEL. You are looking at the fellow that represents both ends of the State. And I am going to make my decision. decision. And I introduced that bill because I thought that it was the proper approach to the problem.

Mr. BOTTORFF. I would say as we analyze the thing that there is a distinct feeling that a greater measure of movement can be accomplished under the State ownership of this area of the project.

Senator KUCHEL. What do you mean by that. I do not understand that.

Senator ANDERSON. Do you mean you could get it done quicker? Mr. BOTTORFF. Yes, get it done really faster; and that is of such great importance to us that we have had to recognize it.

Mr. WEBB. I would like to speak on this, if I may.

Mr. BOTTORFF. This is Mr. Vance Webb.

Mr. WEBB. I think that is it; that the reason that we feel that the State should do it; that we can get started a little sooner on it. It is very, very important to all areas of the State that it is decided, because many of us, the Westland people as well as Kern County, are in bad, bad shape, and we need water. And I might go just a little bit further, Senator. In timetablewise the testimony before the committee over in the House last January, that same question was asked me by Chairman Aspinall; and I mentioned the fact that statements made by the Bureau of Reclamation were that we could not expect any money before 1962 or 1963. Chairman Aspinall said, "I think they are very optimistic in even making that statement.”

And we feel we want a vehicle, Federal legislation, which will permit us to go ahead, even if it is piecemeal, and get this done, and eventually we will have water running down the canals.

Senator KUCHEL. Well, now, on that point, and while we haven't developed it yet here for the record, I think it is generally conceded that your plan does contemplate a Federal contribution to the reservoir and the works.

Mr. BOTTORFF. Yes.

Senator KUCHEL. In exchange for use of some of the capacity in the reservoir.

Mr. WEBB. That is right.

Senator KUCHEL. Well, then, the completion of that dam must rest upon action by both the Congress in appropriating moneys and on the other hand the legislature appropriating its required appropriations and indeed a vote of the people on the bond issue.

Isn't that true?

Mr. WEBB. Well, approximately 170 million now is in the investment fund in California, plus other moneys coming in from oil-well interests. And if we can start putting 150 or 200 million or so into the project year by year, we are going to have it built before perhaps the Bureau, by their own statement, would be able to get underway. Senator ANDERSON. I want to come back to one statement here. This is paragraph 3 in your basic concept:

The San Luis Dam and Reservoir, with appropriate forebay, and the main canal southward therefrom shall be State owned and operated as features of the State authorized Feather River project, with provisions by agreement with the United States, for usefulness to the Federal San Luis unit and other units of the Central Valley project on an appropriate basis.