This never has to be taken back. The Federal Government can make the savings that come from joint participation in a dam and reservoir and a waterway to the south. On the other hand, the dam and reservoir that are such an important part of the much larger State project would be under the ownership, financing, construction, and operation of the State.

Similarly, the State would provide the large waterway to the south, also designed to serve both the requirements of the Federal San Luis unit and the still greater requirements for transfer of water to the southern parts of the State.

Senator ANDERSON. Senator Kuchel, you do not find anything in there that disturbs you, do you?

Senator KUCHEL. Except this one question. What do you consider the importance, Mr. Peterson, of the problem of title? Why is that important?

Mr. PETERSON. That will be covered here. That is my principal purpose in the whole paper.

Senator KUCHEL. All right.

Mr. PETERSON. In advocating the Kern County concept, or in objecting to the bill, S. 1887, before this committee, even with the excellent amendments proposed by Mr. Harvey Banks, our primary concern is with the effects of the cutoff date.

Under the present situation, when the people of California are trying to set the policy or pattern for an enormous State water-development program, the initial steps toward agreement are necessarily slow-I am not certain that the State legislature and the people can set the policies, amend the constitution, appropriate the money, or approve the necessary bond issue so that the State will be in position to pay the State share of the joint project proposed by this bill, or, for that matter, even authorize the agreement to be entered into under the bill, by the cutoff date of July 1, 1960, presently proposed in the amended bill.

Although I have expressed these doubts, I am hoping and working to the end that these points may be settled during the coming year, say, in the California legislative session of 1959. Also, although the start, I might say, by the State, may be slow, we all believe the progress thereafter will be fast because of the urgent needs for water at so many points in the State.

This is the crux of what you were asking, Senator. If the cutoff date should come with no agreement, and the Federal Government, with full title to the reservoir, becomes free to carry on its own project, there would be no provision by which the State could buy its way back into the San Luis Reservoir, and a facility most vital to the State Feather River project would be lost to the State.

Senator KUCHEL (presiding). May I interrupt you there? I think it might be better for just a question or two, although I hate to interrupt anybody's prepared statement.

Mr. PETERSON. Yes.

Senator KUCHEL. Is it not true that the title to the property on which the works will be built is about to vest in the State government? Mr. PETERSON. I would suppose so.

Senator KUCHEL. How could the Federal Government proceed in the absence of State agreement to build a waterworks?

Mr. PETERSON. Since the bill indicates that they would proceed, and since the authors of the bill know of the point involved, I have only assumed, not with any good knowledge of the legality of it, that the Federal Government probably had some superior right of condemnation and might proceed.

I don't know that positively.

Under the Kern County cencept, these rights are preserved to the State until it settles its own problems and can go ahead.

The water resources of the State must be developed. The State needs all the Federal assistance in such water development that can be obtained.

The Federal San Luis unit is the assistance that is immediately to be contemplated. As large as this Federal project is, $290 million to nearly $400 million if distribution is considered, and as important as this reservoir site is to such project, the same site is of much greater value to the State project as a part of the facilities for the tranmission of water to the south.

I am going to make a change in the next paragraph by interdelineation.

Mr. Banks indicated that if an agreement was reached with appropriate groups he would be willing to accept and work under the Kern County concept.

In a similar way in the interests of seeking an option method I would make another suggestion. I suggest that these objections growing out of the effect of the cutoff date might be met also by amending S. 1887. For convenience since I did not have a copy of your bill,reference is made to the bill. S. 1887 with the suggested amendments as in the draft presented by Mr. Harvey Banks where, in section 1 on page 2, line 10, insert after the word "has" the words:

entered into the agreement with the State as provided in section 2 of this Act and has

and also in section 2 on page 3, line 9, delete the comma after the word "State", and insert in its place a period and delete the balance of the section.

These amendments serve to eliminate the cutoff date. That is the effect of it.

This probably contemplates the inclusion of Mr. Banks' proposed amendments.

I urge your favorable consideration of means of affording protection to the State in holding this San Luis Reservoir site for its use in the Feather River project and using it, under reasonable contract relationships with the Federal Government for the service of the San Luis unit.

I greatly appreciate the opportunity to appear before your committee and work with you toward the solution of this important problem.

Senator KUCHEL. Thank you very much, Mr. Peterson, for a statement that I am sure will be helpful. I do have a few questions. I think I probably should say this first: At the time the State government and the Department of Interior first came into agreement on a theoretically integrated dam there had been, of course, no action taken by the legislature by way of making appropriations for the purchase of the real estate involved and it was at that time that the representa

tives of the State, the Governor and Mr. Banks, agreed that the Federal Government should in line with its recommendations, undertake the construction of the dam which would meet the needs of an expanded Central Valley service area, but which would be constructed in such a fashion that if, as, and when the State Feather River project should be approved by the State and moneys appropriated for the construction of that State project, the dam might then be utilized by the State through a divisional construction to provide the additional storage capacity necessary.

I think that is a fair statement.

Mr. PETERSON. There was effort made toward that end.

Senator KUCHEL. That was, was it not, the position of the State government in making its original recommendations?

Mr. PETERSON. I believe so.

Senator KUCHEL. That was why the bill was drafted in that fashion. I begin to realize that the session of the legislature commencing next year is going to be an important one. It would be a tragedy if it failed to take appropriate action. Certainly we must agree with that. Mr. PETERSON. That is correct.

Senator KUCHEL. I do not underestimate the involved problems that are going to concern our State government next year.

I recognize that this county-of-origin problem has to be solved. It has to be solved to protect these smaller areas, but equally important it has to be solved to protect those areas particularly in southern California whichever chart indicates are going to have a lot more mouths to drink water in the years to come. I would think it would be tragic if the Congress dragged its heels this year.

I think it would be a shame. We have an opportunity to take action. I think it would be an equal tragedy for the State legislature to fail to come to grips with the problem that should have been solved, as you and I, I am sure, agree, considerably before March 1957. Mr. PETERSON. That is correct.

Senator KUCHEL. Meanwhile, however, the State did appropriate the moneys required to purchase the San Luis site and apparently, from the testimony yesterday of Mr. Banks, some of that property actually has been acquired at the moment.

Mr. PETERSON. Yes.

Senator KUCHEL. And funds have been requested in this special session to continue that purchase.

Mr. PETERSON. I might say with respect to those funds that I believe there is a fairly large group of people favorable to that purchase. Mr. GOODCELL. Substantially all.

Mr. PETERSON. I mean the general backing up.

Senator KUCHEL. At any rate, it has been partially accomplished and presumably will be taken in this session of the State legislature to accomplish it completely.

Mr. PETERSON. I hope so.

Senator KUCHEL. With all that background the bill we have introduced, again subject to the amendments which the State has recommended yesterday, with this exception of title, and I would like to discuss that with you again, represents, I take it, an authorization to construct on the part of the Federal Government subject (a) to working out a contract with the State, and (b) to proceeding unilaterally,

in accordance, however, with what you and I have just discussed here for eventual enlargement, if, as and when, the State enters this picture. What, if any, authority the State government would require to enter into that contract is not for me to legislate on.

The director of water resources appearing here yesterday, indicated in answer to my question that in his judgment the State had that authority today.

Mr. GOODCELL. The department of resources had the authority, except it didn't have authority to transfer title of the land as required by the bill and all of these matters should be presented to the legislature.

Senator KUCHEL. That, I take it, would be a responsibility of the State government to put itself in the position to contract, and certainly the State government would require legislative action to put itself in a position to pay; is that not true?

Mr. GOODCELL. Definitely.

Senator KUCHEL. Now, I am coming back to the question of title. With what has been testified to here by everyone as to the needs of a contract spelling out what this bill attempts to provide and what all parties state it should provide, why is the question of title important?

Mr. PETERSON. The question of title is important only, to me, at least, if the eventuality comes that because of the slowness of our own people in getting their problems solved that Mr. Banks or his department is not in position to consummate a contract.

He may know all he wants to have in the contract, there may be total agreement, but if his legislature has not settled some of the policies and problems and thereby does not yet appropriate the for him to go head he cannot sign or consummate a contract.

money

Under your bill, if such a contract finally is not produced and it becomes in effect, then we can understand the desire of the Federal Government to go ahead, but as the bill stands it is my understanding that there is then left no further protection to the State on that matter. That is what I am worried about. I want something in these bills that protects the State so that it can buy back, if you will, into that project.

Let me give you another reason why that is so. May I step to the map a minute?

Senator KUCHEL. Surely.

Mr. PETERSON. I could look up data and give them to you, but the original report of the Department of the Interior on the San Luis project contemplates and says that they would develop this San Luis Dam to a million acre-feet to supply the area that we have had under discussion in your bill.

They also contemplate, in that report, that at a future time they could raise this dam and make a larger reservoir out of it and by the very conduit that is drawn here, the San Luis Canal, bring water to the area known as the Avenal Gap area and put that water derived from the same way, but in larger amounts, of course, on to new lands essentially in the Avenal Gap area.

It is no great difficulty then, with that in mind, for the Department of the Interior or the Secretary to agree to build a dam that can be expanded, because if he holds control he is expanding it for his own. future plans equally well.

I am interested in having something in this bill, or a method of control or division of the work and interests so that the State does not lose under any circumstances the right to have 1,100,000 acre-feet in that reservoir for its Feather River project.

Senator KUCHEL. In perpetuity?

Mr. PETERSON. In perpetuity and that is my whole plea and that is the whole purpose of my appearance before you this morning.

Senator KUCHEL. I think that is excellent. I think it is constructive and certainly any Californian ought to favor the most rapid approval by the State and its people of the Feather River project, and equally important, we agree, that the one water project which we have today, the Federal Bureau of Reclamation-Central Valley project, must be put in a position to see its needs.

We agree on both of those things; do we not?

Mr. PETERSON. Absolutely. If we agree on preserving part of the reservoir for the State Feather River project, using part of it by the Federal Government for the San Luis unit, and taking the advantage of the use of common facilities there with the saving that Mr. Banks mentioned of the order of $30 million to the Federal Government and I suppose, an equal amount to the State or thereabouts, if you accomplish that, you have done the best that can be done for the proper integration of the use of this facility; and the facilities we are talking about involving common uses are not only the dam and the reservoir, but some use of canal facilities as well.

Senator KUCHEL. Let me see now whether I can state here in nonprofessional language my understanding so that we will have no possibility of disagreement.

That your able and important department of the city government would not object, but, to the contrary, would approve Federal legislation designed to build a reservoir at San Luis to serve the needs of an expanded Central Valley project service area either (a) in agreement with the State for a reservoir of sufficient capacity to serve both the State's needs and the Federal Government's needs, or (b) to build a reservoir sufficient to serve the needs of an expanded Central Valley project area to be built, however, in such fashion as to permit the State subsequently to increase its capacity if the State were slower in making that decision.

Mr. PETERSON. That is the aim I have in mind; yes, sir.

You used the words "expanded Central Valley." I think by that you mean that the present Central Valley project would be expanded by the proposed San Luis unit, so-called, the 500,000-acre development that we have talked of in your bill. You don't mean expanded beyond that?

Senator KUCHEL. I do, with the possible exception of the recommendations which the people in the four counties raised yesterday, and I feel I do have a responsibility of studying that thing and having all interested parties comment on it.

Mr. PETERSON. That is not a point to break on.

Mr. GOODCELL. I think there is one thing that should be added there, Mr. Peterson, and that is this: That we believe that the Federal authorization should require that a contract be entered into between the Federal Government and the State of California to carry out the provisions that you have just suggested as being essential for both interests.