months those who have felt some divergence of view in this particular bill may now be able to move into an area where we can go forward with what I believe is a critically indispensable reclamation project in California which would also be the subject of maximum utility to our State in the Feather River plant and as a part of the State water plan, which, incidentally, Mr. Chairman, is an $11 billion contemplated State undertaking.

That is all I have to say.

Senator ANDERSON. Congressman Hagen we are very glad to welcome you, Mr. Congressman, and will be happy to have any statement you wish to make.

STATEMENT OF HON. HARLAN HAGEN, A REPRESENTATIVE IN CONGRESS FROM THE 15TH DISTRICT OF THE STATE OF CALIFORNIA

Representative HAGEN. It is a pleasure to be here, Senator. I do not have any prepared statement.

I do appreciate the opportunity of appearing here, and subsequently there will be at least three of my constituents who will appear to present the so-called Kern County concept.

Mr. Bottoroff, Mr. Webb, and Mr. Moore are the constituents I refer to.

I wish to comment briefly on Governor Knight's letter.

I would judge from the tenor of that that he is not confining his endorsement to any specific legislation, but to any proposal that would provide for a joint State-Federal contribution and usage, and that basically is what is offered by the competing proposal competing to the Knowland-Kuchel bill, which is offered by the Kern County group.

You are aware, I am sure, that this is a matter of some difference of opinion in the State of California.

The State has authorized a Feather River project which would serve portions of the San Joaquin Valey which would not be served by the San Luis project and would ultimately also serve the area south in Los Angeles County and perhaps even down to San Diego, and there would be no conflict except for the fact that the Feather River project envisages use of the same reservoir sight at San Luis that the San Luis project would require.

The people that I represent feel that before any authorizing legislation is passed which would permit any action on the part of the Federal Government certain guaranties should be established which would guarantee the integrity of the Feather River project and they feel that the legislation therefore should provide for State ownership of the basic works with the Federal Government making a ratable contribution to the cost contributable to the value of usage for San Luis deliveries, and they contemplate also an ultimate State operation subject to Federal requirements for the San Luis area deliveries. They also have the feeling that with the State appropriations in the Congress they can proceed perhaps more expeditiously with these basic structures than the Federal Government itself could.

They also envisage that during the course of construction of these two projects certain usages of water and certain economies could be

achieved which would not be possible under the specific proposals that you are considering.

I have introduced a bill in the House which contains the so-called Kern County concept and it is my understanding that if this proposal is agreeable to the Bureau of Reclamation it is agreeable to Mr. Sisk, who has put a great deal of productive time on this whole subject, and it has been indicated that perhaps the Bureau of Reclamation might be willing to accept the basic outlines of this Kern County concept.

I understand, also, Senator Anderson, that pretty generally the so-called Kern County concept is acceptable to the people of Los Angeles. By way of conclusion, I want to say this: I think there are so many intangibles of control within the State of California. For example, the State is currently in the process of acquiring all these lands of the San Luis Reservoir site. They have acquired some already.

Basically the assignment of water rights is a State responsibility. I really cannot conceive of any real progress on either one of these projects without the acceptance of them by an overwhelming majority of the people in the State of California.

To merely pass an authorization bill without such acceptance in my judgment would amount to an idle act.

Senator KUCHEL. How do we judge the acceptance of the people of California, Congressman Hagen? How do we do that?

Representative HAGEN. Senator Kuchel, I think in this very room you have people who in the main must be satisfied and in agreement before any real progress can be made on the San Luis project.

There is one segment of opinion represented by the State Grange, Mr. Sehlmeyer, who is a very admirable man, who does not endorse any type of State project because the State does not have an acreage limitation law.

For example, he will not be satisfied by any kind of partnership whether it is the kind you offer or the kind that other people offer. However, I think agreement could be achieved without the agreement of Mr. Sehlmeyer, and I think it has to be achieved before any progress could be made regardless of whether this Congress passes an authorization bill or not, because in my judgment the State has so many locks on various aspects of progress that the State acceptance has to be present for any progress to be made.

Senator KUCHEL. You and I are in complete agreement on the necessity for water projects in our State.

Representative HAGEN. Oh, yes.

Senator KUCHEL. Was it helpful to you to listen to the Assistant Secretary of the Interior indicate that so far as operation of a project is concerned we are the State to ask it and we are the State to be in the position to ask it, and the Department would have no objection to State operation of the unit?

Representative HAGEN. Yes, I heard that.

Senator KUCHEL. Is that not helpful to you and me?

Representative HAGEN. Yes; and that basically is what those people who are my constituents who have an interest in this are for. Senator KUCHEL. You mentioned several guaranties which the good people of your area and some others require.

Did you mean to indicate those guaranties to be along the lines of "State ownership" and, second, "State operation" of a joint-use project?

Representative HAGEN. That is my understanding of the proposal; that the actual construction would be undertaken by the State. Actual ownership of the works would be in the State.

The Federal Government would make a ratable contribution and would by virtue of agreement acquire definite contractual rights to water and the usage of water, which would be binding of course as if they had unilateral Federal operation and unilateral Federal ownership.

Senator ANDERSON. What will the Federal Government get for its money?

Representative HAGEN. The Federal Government will get the same usage of structures that the Federal Government would receive had the Federal Government actually undertaken the construction and had ownership of the real estate.

Senator ANDERSON. How much would it contemplate the Federal Government would put in?

Representative HAGEN. Senator, that question has never been exactly resolved according to my understanding.

Some statements have been made that perhaps the State would be picking up a larger portion of the bill under the so-called Kern County concept, but that has never been demonstrated and I think the idea is that under either proposal, the proposal you have under current consideration or the proposal I introduced in the House, the contribution would be about the same.

Senator ANDERSON. You mean the Federal Government would put up $290 million in either case?

Representative HAGEN. That is correct.

Senator ANDERSON. And not charge the interest on it?

Representative HAGEN. Yes. They would not be making any contribution to the State water deliveries, but their contribution to the San Luis service area through the San Luis works would be exactly the same.

That, of course, is the reason the San Luis people do not want to become a part of the Feather River project, because they want the benefit of their investment. They feel that they can get cheaper water deliveries from the Federal Government than they can from the State of California.

Senator ANDERSON. We were just talking about that a moment ago. It is $56 an acre a year approximately if you pay the interest and it is $36 interest free, and almost anybody would see the desirability of paying $36 as against $56.

What does the Government get? The Government ordinarily, when it puts up its money, has something to say about what happens to its money. Do I understand you to suggest that the Government would put up the $290 million and then hand complete management over to the State of California?

In other words, just give it an interest-free loan for $290 million for 50 years and not have a single word to say about its operation. Would that be true?

Representative HAGEN. The latter part of your statement would not be correct. They would have something to say about the operation.

Senator ANDERSON. What, for example?

Representative HAGEN. They would have specific guaranties in a contract that certain quantities of water would be available at certain times.

Senator ANDERSON. Who would give those guaranties?

Representative HAGEN. It would be a matter of bilateral agreement between the Federal Government and the State of California.

Actually on this cost question, it is my understanding that currently these farmers in the San Luis area perhaps are paying $15 an acrefoot for water in terms of amortization of well investment and actual power wheels and they contemplate getting water under this project at a cost perhaps of, say, $8 an acre-foot, so it is a definite saving to them.

They can see that the only way they can get $8 water is by becoming a part of the Central Valley project where they can get some writeoff of costs through power revenues of the Trinity project, where they can get the use of the low cost of Trinity power and where they can get the use of works which are currently in place for which they make no contribution to retirement of the capital investment.

It is a very economical project. That is the reason they are so desirous of joining the Federal project rather than the State project. Senator ANDERSON. Let me ask you one thing here. You mentioned the fact that the State has the Feather River project and the United States has the San Luis project. You say they use the same site. Quite obviously they both cannot use this site.

Has the State of California determined which project should have its say as far as it is concerned? Which is it buying land for, the Feather River project or the San Luis unit?

Representative HAGEN. I guess the only way to describe it would be to say they are buying the site for some project.

Senator ANDERSON. You mean it is the sort of thing where a man goes down and buys an engagement ring with no particular woman in mind?

Representative HAGEN. That is right. They are hopeful that some vehicle can be developed which will permit joint State and Federal use of the same site, but in the interim the State is going ahead and purchasing the actual real estate.

Senator ANDERSON. Do I understand that the State has any specific language that will accomplish this? I realize you are not a witness for the State. I was interested in your statement that both parties use the same site.

Do you know of any language that the State of California has worked out or have you been acquainted with any language that would permit this so-called joint use of the site?

Representative HAGEN. Certainly it is embodied in the Senate bill which you are considering.

bill?

Senator ANDERSON. What is your
Representative HAGEN. H. R. 9969.

Senator ANDERSON. Let us put a copy of the Congressman's bill in the record at this point of the testimony.

(H. R. 9969 is as follows:)

[H. R. 9969, 85th Cong., 2d sess.]

A BILL To authorize the Secretary of the Interior to construct the San Luis unit of the Central Valley project, California, to enter into an agreement with the State of California with respect to the financing, construction, and operation of such unit, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, for the principal purpose of furnishing water for the irrigation of approximately five hundred thousand acres of land in Merced, Fresno, and Kings Counties, California, and as incidents thereto of furnishing water for municipal and domestic use and providing recreational and fish and wildlife benefits, the Secretary of the Interior (hereinafter referred to as the Secretary) is authorized to construct, operate, and maintain the San Luis unit, hereinafter described as an integral part of the Central Valley project. In constructing, operating, and maintaining the San Luis unit, the Secre tary shall be governed by the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory thereof or supplementary thereto) except so far as the provisions thereof are inconsistent with this Act. Construction of said works shall not be commenced until the Secretary has secured, or has satisfactory assurance of his ability to secure, all rights to the use of water which are necessary to carry out said purposes and the terms and conditions of this Act. SEC. 2. The principal engineering features of the San Luis unit shall generally conform to those described in the report of the Department of the Interior entitled "San Luis unit, Central Valley project, California," dated December 17, 1956, with exceptions set forth in this section or as may otherwise be agreed upon by the Secretary and the State of California (hereinafter referred to as the State). The Secretary is authorized to construct, operate, and maintain, as the San Luis unit, those engineering features which will provide a water supply to the San Luis unit service area described in said report of December 17, 1956, except the following engineering features which will be constructed, operated, and maintained as features of the Feather River project by the State: the San Luis Dam, reservoir, forebay, afterbay, and main aqueduct extending southward therefrom in the San Joaquin Valley (hereinafter referred to as the State San Luis works).

SEC. 3. The Secretary is authorized, on behalf of the United States, to negotiate and enter into an agreement with the State providing generally for coordinated operation of the Central Valley project and Feather River project and particularly for coordinated operation and joint use of the San Luis unit and the State San Luis works in order that the United States and the State each may deliver water to their respective service areas. Construction of the works authorized hereunder, except for the preparation of designs and specifications and other preliminary work, shall not be commenced until the execution of such an agreement between the United States and the State.

SEC. 4. The agreement between the United States and the State referred to in section 3 of this Act shall provide, among other things, that—

(a) the United States shall construct the San Luis unit and the State shall construct the State San Luis works, in accordance with section 2 hereof. (b) the State San Luis works shall be so designed and constructed as to permit (I) immediate joint use and coordinated operation with the San Luis unit or (II) such subsequent enlargement or other modification as may be required for joint use and coordinated operation therewith;

(c) the United States shall make available to the State during the construction period sufficient funds to pay the share of the United States, based upon the proportions of total capacities required by it, of the construction costs of any facilities designed and constructed by the State as provided in section 2 hereof. The United States contribution shall be made in annual installments each of which bears the same ratio to total expenditures during that year as the total of the United States share bears to the total cost of the State San Luis works. The State similarly shall make available to the United States funds to pay the share of the State of the construction costs of any facilities constructed by the United States as provided in section 2 hereof. (d) the United States shall pay annually to the State the share of the United States, based upon the proportions of total capacities required by it, of the operation, maintenance, and replacement costs of the State San Luis works. The State shall pay annually to the United States the share of the 23863-58- -4