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If the Southern Pacific Railroad refused and told you that it would refuse to participate to the extent of its land holdings in the contemplated San Luis Reservoir, is it your statement that that would affect seriously the Department's decision on the feasibility of the project?
Mr. AANDAHL. We would have to study that. It would affect the feasibility. There is no question about that. Whether we would put that into the category of being serious, I do not know. We would just have to work it out.
Senator KUCHEL. Your answer would be the same under any concept such as the people in the Kern County area have recommended? Mr. AANDAHL. I do not think that Kern County proposal reflects on the feasibility of the project.
Senator KUCHEL. It would have to reflect on the feasibility of the project, would it not, to the extent that the Department recommended participation in it?
Mr. AANDAHL. Are you asking about the relation of the Southern Pacific lands?
Senator KUCHEL. Yes.
Mr. AANDAHL. Yes, I think that would be substantially the same. Senator KUCHEL. In other words, the same elements of feasibility must be before the Department regardless of what actual agreement may ultimately be made on construction and operation? Is that not true?
Mr. AANDAHL. Yes. However, under the Kern County proposal where a portion of the cost is being picked up by the State we might have the feasibility of the land of the San Luis area exclusive of the Southern Pacific land very little affected.
Senator KUCHEL. However, is it not true that even under the bill before us a portion of the cost will be picked up by the State? Mr. AANDAHL. Providing that the works are enlarged.
Senator KUCHEL. Yes. Thank you, Mr. Chairman. Thank you, sir. Senator ANDERSON. I want to be real sure we all understand each other on this Southern Pacific matter.
Your statement on page 5 is as follows:
However, the Southern Pacific Railroad Co., which owns approximately 120,000 acres of land in the service area, 65,000 of which are in the Westlands district, informed the Bureau of Reclamation by letter of October 1, 1956, that it was "not prepared to commit these lands for sale under the usual Bureau of Reclamation recordable contract."
How much of this 120,000 acres would be figured in the 400,000 figure? All of it, would it not?
Mr. AANDAHL. Yes.
Senator ANDERSON. 120,000 of the 400,000 do not want any so-called subsidy or free-interest money and want to keep it all in a single block. Would not the fact that 120,000 acres would not have any acreage limitation, which is part of the Federal reclamation law of the country, have some bearing on your opinion as to the desirability of this project?
Mr. BENNETT. Let me clear up one point, Senator.
The total area is about 496,000. Out of that total area it is planned that about 440,000 would be irrigated in any 1 year. So it is a little hard to compare directly 120,000 with the total; but I think, nevertheless, your statement is correct that that great proportion of the
land would give us a problem in terms of feasibility if it were completely eliminated.
Senator ANDERSON. You are going to give us the Southern Pacific letter?
Mr. AANDAHL. Yes, we will do that.
Mr. HARVEY O. BANKS,
SOUTHERN PACIFIC CO.,
San Francisco, Calif., October 1, 1956.
Director, Department of Water Resources,
Mr. CLYDE H. SPENCER,
United States Bureau of Reclamation, Sacramento, Calif.
GENTLEMEN: The subject of this letter is future irrigation water development in the San Joaquin Valley and, in particular, the Feather River project and the proposed San Luis unit of the Central Valley project as they would affect our landholdings.
Southern Pacific Co. owns about 65,000 acres within Westlands Water District in Fresno and Kings Counties, and an additional 55,000 acres outside of (westerly and above) said district but within the so-called San Luis service area. The company also owns about 30,000 acres in southern Kings and Kern Counties which might be served by the Feather River project.
These lands are not being offered for sale, but are being held for long-range management purposes. Nearly all of the land is under agricultural development leases varying in size from less than 1 section to about 30,000 acres.
Southern Pacific Co. is not prepared to commit these lands for sale under the usual Bureau of Reclamation-type recordable contract. We favor State or local development and control of water resources but welcome Federal aid provided the conditions thereof are reasonable and bearable. Further, we neither seek nor expect any Federal subsidy in the form of 40-year interest-free money, but are willing to pay our fair share of the irrigation benefits provided the capital and operating costs are such that the land and crops can afford same.
Southern Pacific Co. is concerned over the present stalemate on west side water development. We hereby ask the State Department of Water Resources and the United States Bureau of Reclamation, either separately or jointly, to advise us of the contemplated cost of irrigation water to Southern Pacific Co. in the San Luis service area. Presume that either a lump-sum payment or some arrangement for payment of interest costs on properties in excess of 160 acres would be considered in a 100 percent Federal project.
We would like to have the study show the tentative water cost and possible restrictions under the three main proposals:
1. State-owned, constructed, and operated Feather River project.
2. Federal San Luis unit as part of Central Valley project.
3. The most acceptable form of compromise or joint effort of the above, as currently under study by Federal and State agencies.
Your consideration of this request will be very much appreciated.
Yours very truly,
Senator ANDERSON. We will invite the Southern Pacific to testify. Mr. AANDAHL. I might say that the Southern Pacific land is pretty much in one area.
Senator ANDERSON. It is a land-grant transaction?
Mr. AANDAHL. Yes. We would have to check it pretty carefully to know just what the results might be of its elimination.
Senator ANDERSON. Thank you, Mr. Secretary.
I think, for the benefit of the group, that the statement of Governor Knight might be desired, and then we will ask Senator Knowland and Senator Kuchel to comment.
(The letter from Governor Knight follows:)
STATE OF CALIFORNIA,
Hon. CLINTON P. ANDERSON,
GOVERNOR'S OFFICE, Sacramento, March 13, 1958.
Chairman, Subcommittee on Irrigation and Reclamation,
United States Senate, Washington, D. C.
MY DEAR SENATOR: There is enclosed a copy of my statement on S. 1887, to authorize Federal-State cooperation in the construction and operation of the San Luis project. If you desire, the statement may be made a part of your hearings on March 17-18 in Washington.
Mr. Harvey O. Banks, director of water resources, and Mr. Porter A. Towner, chief counsel of our water-resources department, will testify on the bill at the hearings.
I again offer my regrets that the present session of the California Legislature makes it impossible for me to be personally at the hearings before your subcommittee on this very important matter.
With kindest regards.
GOODWIN J. KNIGHT, Governor.
Senator ANDERSON. This is the statement of Governor Knight:
This statement is submitted in response to the invitation of Senator Clinton P. Anderson, chairman of the subcommittee, contained in his letter to me of February 18.
I regret that I am unable to appear personally to testify on this important matter, due to the fact that the California Legislature is now in session and my presence is urgently needed in Sacramento.
I have authorized Mr. Harvey O. Banks, director of the department of water resources, to appear before your subcommittee to present the State's views on S. 1887.
I would, however, like to make a few observations concerning this bill, which would authorize Federal-State cooperation in the financing and construction of the San Luis project in western Merced and Fresno Counties.
I want to repeat the statement I have made many times previously; that, because of the magnitude of the task confronting California in water development, we must make every reasonable effort to obtain financial assistance in this vital field from every available source.
For that reason, I am hopeful that the Congress will see fit to authorize a joint venture between the State and Federal Governments in this urgently needed project.
Such a joint venture will be of financial benefit both to the United States and the State.
I am sure that all are aware that the dam and reservoir, the canals, and the pumping plants involved are of interest not only to the water users in the proposed Federal service area in western Merced and Fresno Counties, but, also, to the water users under the State's Feather River project in Kings County, Kern County, the central coastal area, and southern California.
It is imperative that the Federal project be thoroughly coordinated with the State's projects.
The language of S. 1887 was drafted in March of 1957 in Washington, by members of the California congressional delegation, officials of the Bureau of Reclamation, and representatives of the Westlands Water District. Mr. Banks participated in these drafting sessions.
The purpose was to draft a bill which would be satisfactory to all concerned and provide for the integrated operation we feel is so essential to the success of the San Luis project, the Feather River project, and the California water plan. S. 1887, introduced by Senator's Knowland, and Kuchel, would provide for Federal financing and construction of those facilities such as the dam, pumping plant, and canals which would be pointly used by the State and the Bureau of Reclamation to deliver water to the San Luis service area and to the Feather River project area.
The State would reimburse the Federal Government for its proportionate share of the construction cost of these jointly used facilities.
Upon completion, the State would operate and maintain these facilities.
Senator ANDERSON. Is that your understanding, Mr. Secretary? Mr. AANDAHL. That would be satisfactory.
Senator ANDERSON. The State would operate and maintain these facilities in which there would be a Federal investment?
Mr. AANDAHL. Yes.
Senator ANDERSON (continuing):
The bill calls for a contract covering the details of these matters to be executed between the Secretary of the Interior and the State before construction starts.
Further study by the department of water resources has revealed the need for clarification of the language of S. 1887 to fully protect the interests of the State and the various water users concerned.
These clarifying amendments will be presented to the subcommittee by Mr. Banks.
With these amendments, I feel that the interests of the State would be protected and that satisfactory integration of the Federal and State projects can be accomplished.
Therefore, S. 1887, with the amendments which will be offered by Mr. Banks, is acceptable to me.
Do you know what these amendments are? Have they been submitted to you, Mr. Secretary, officially, for a statement?
Mr. AANDAHL. I do not have the amendments that were actually submitted to the House committee.
Senator ANDERSON. I would like to request then that as soon as we have the suggested amendments by Mr. Banks you submit the comments of the Department of the Interior upon those amendments so we will have what is before the Senate.
Mr. AANDAHL. We will be glad to do that.
(The following comments of the Department of the Interior were subsequently received:)
Section 1: The proposed amendments to the first part of section 1 are minor word clarifications, which do not appear objectionable. The added proviso at the end of section 1 would prohibit water deliveries to the San Luis unit service area until such portion of the master drainage outlet and disposal channel for the San Joaquin Valley necessary to serve the San Luis unit area is physically provided. The plan for the San Luis unit provides fully for drainage by this or alternative means, and we have no objection to the suggested amendment.
Section 2: We do not object to moving the cutoff date to July 1, 1960, nor to the added proviso that, if agreement on a contract with the State appears not to be in prospect, the Secretary report thereon to the Congress and not initiate construction for 90 days.
Section 3 (a): Minor clarifications; no objection.
Section 3 (b): The first proposed amendment of this section would fix "the proportionate capacity of the San Luis unit and the joint-use facilities required by the State's projects" as the basis for cost sharing. The term "proportionate capacity" is ambiguous and may be interpreted many ways. For example, it can mean instantaneous maximum peak capacities over different time periods. It can also refer to capacities by volume either daily or over some longer time base. There are many other possible interpretations relating both to canals and reservoirs. We believe that the sharing of costs should be arrived at by negotiation and agreement and some basis other than "proportionate capacity" may well be found to be most suitable. We prefer, therefore, the language of S. 1887 without amendment.
The second proposed amendment to section 3 (b) would permit the State to make advances to the United States in order to maintain a timely construction schedule. We do not object to this provided it is understood that such action would not obligate the United States to provide construction funds in greater amounts than otherwise would be the case.
Section 3 (c): Minor clarifications; no objection.
Section 3 (d): The language of section 3 (d) was drawn to provide for the possible use by the State of unused capacities in the present Central Valley project,
namely, the Tracy pumping facilities and the Delta-Mendota Canal. posed amendment by eliminating the words "service charge" in line 2 and the reference to other features of the Central Valley project in lines 6 and 7, page 5 of S. 1887, would delete the provisions referring to such possible State use of existing Central Valley project facilities. If the State desires this change we would not object. Section 3 (e): Minor clarifications; no objection. Section 3 (f): Minor clarifications; no objection.
Sections 3 (g) and (h): These sections of S. 1887 provide that the Federal Government throughout the repayment period shall have unrestricted use of such capacities of the San Luis unit joint facilities as are necessary to carry out the purposes of section 1 and the State shall have unrestricted use of the remaining capacities of the joint use facilities. The proposed new section 3 (g) and (h) would base the rights of the United States and the State to use of the capacities of the joint use facilities upon the ratios of capital expenditures of each to the total capital costs. Sections 3 (g) and (h) as now contained in S. 1887 were written to assure that throughout the repayment period the United States would have the use of facilities necessary to deliver water to the San Luis service area and to thus protect the Federal investment involved. This does not appear to be an unreasonable requirement. While the suggested substitute sections 3 (g) and (h) might work out satisfactorily, they do not provide as firm assurance to the United States and might lead to some problems. For instance, if the San Luis Reservoir is built initially to a capacity of 1 million acre-feet with provision for later enlargement, we would expect a State contribution to cover the added costs of providing for later enlargement. We would not, however, expect this to entitle the State to use or control any part of the initial 1 million acre-feet although the language of the proposed substitute sections might so be interpreted. Under the proposed substitute language the United States might not know exactly what its rights to use of capacities were until construction had been completed and the proportionate contributions determined. We much prefer sections 3 (g) and (h) as now written and would not concur in any amended language which did not assure, as a minimum, unrestricted use by the Federal Government of 1 million acre-feet of the San Luis Reservoir and related use of capacity of the San Luis Canal.
Section 3 (i): This proposed amendment would make mandatory upon request of the State, rather than permissive, that the Secretary turn over joint use facilities to the State for operation and maintenance upon completion of construction. It is a long well-established policy that Federal reclamation works be turned over to local interests for operation at the earliest appropriate opportunity. While we would fully expect this to be followed in respect to San Luis unit facilities, we see no reason why this should be a mandatory provision of the authorizing legislation as it is not mandatory with respect to other reclamation projects. We prefer section 3 (i) as presently contained in S. 1887.
Section 3 (j): Minor clarifications; no objection.
Section 6: This suggested new section provides that the Federal reclamation laws shall not be applicable to water service under contract with the State outside of the San Luis service area. We have no objection as we believe this would be the case without such specific provision.
Senator ANDERSON. Let me finish the statement of the Governor.
During the last 2 months a number of meetings have been held by representatives of the various interested groups in California in an effort to arrive at a satisfactory draft of legislation to accomplish Federal-State cooperation at San Luis.
Mr. Banks, and his staff, have assisted in these meetings. While full agreement on all matters has not been reached, substantial progress has been made. Representatives of the interested water agencies will appear before your committee to present their positions. It is my sincere hope that the remaining differences of opinion can be resolved and agreement reached upon a bill to permit us to go forward in this most important joint venture.
I want to emphasize again my support of Federal-State cooperation in the financing, construction, and operation of this project, and will do whatever is possible to forward any plan which is satisfactory to the affected water users, the Federal administrative departments and the Congress.
Thank you, Mr. Secretary.