Senator ANDERSON. Thank you very much.

Senator KUCHEL. Thank you, Congressman Hagen.

Representative HAGEN. I certainly appreciate your courtesy.

Senator KUCHEL. Mr. Banks, if you confine your testimony to those specific points on which there may yet be controversy, how long would it take you to testify?

Mr. BANKS. Merely covering the points on which there is controversy wouldn't take very long. I can set them forth very briefly, I think.

Senator ANDERSON. Why do we not just start off?

All right, Mr. Banks, will you state your name for the record, please.

STATEMENT OF HARVEY 0. BANKS, DIRECTOR OF WATER RESOURCES, STATE OF CALIFORNIA

Mr. BANKS. Senator Anderson, Senator Kuchel, my name is Harvey O. Banks. I am director of water resources for the State of California. Appearing here with me today is Porter A. Towner, chief counsel of the department of water resources. We are appearing before your subcommittee today in support of authorization by the Congress of Federal participation in a joint venture with the State of California in the construction of works to serve the San Luis unit service area in western Fresno County, Calif., and the service area of the State's Feather River project in Kings and Kern Counties and in southern California.

By letter of February 20, Senator Clinton P. Anderson requested that I inform this subcommittee of the position of the California Department of Water Resources on S. 1887 which is before you today. He also requested that I comment on the Kern County concept, which is set forth in H. R. 9969, 85th Congress. Senator Anderson noted that my statement on H. R. 6035, made before the House Subcommittee on Irrigation and Reclamation on January 15, 1958, was available to this subcommittee and requested that I keep my statement today as short as possible.

My position on S. 1887, as outlined in this statement, is the same as that on H. R. 6035 except that one amendment dealing with construction of a master drain has been added. This additional amendment, which has been concurred in by all of the affected water users, is discussed in paragraph 1 of the attached explanatory statement.

For the past year the California Department of Water Resources has been engaged in a comprehensive study of the drainage problems of the San Joaquin Valley, leading to the preparation of plans, cost estimates, and feasibility determinations. These studies will be completed in 1960, and, if then authorized by the legislature, we plan to start construction of a master drain as soon thereafter as possible. We believe these provisions for adequate drainage facilities for the valley is imperative.

The language of S. 1887 was developed in Washington in March 1957, as an effort to solve the problems of joint Federal and State construction and use of the San Luis works. I participated in the drafting sessions, as did Mr. Towner.

As I understand it, the primary intent of the draftsmen of the bill was 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. It was recognized by all of those connected with the drafting of the bill that certain changes and additions might have to be made. Subsequent study by our department and discussions with representatives of the Westlands Water District and water users' organizations in Kern County and southern California have indicated the need for certain clarifying amendments.

There is attached a draft of a revised S. 1887 which indicates the amendments I consider essential. We believe that these amendments remove many of the objections raised to the original language of S. 1887. New material is indicated by italics and deleted material by strikeover or bracketed.

There is also attached an explanation of the proposed amendments. It is requested that the proposed amendments and statement be made a part of the record of this hearing.

Senator ANDERSON. Without objection, that will be done. (The material referred to follows:)

AMENDMENTS TO S. 1887 PROPOSED BY HARVEY O. BANKS, DIRECTOR OF WATER

RESOURCES, STATE OF CALIFORNIA

A BILL TO Authorize the Secretary of the Interior to construct the San Luis unit of the Central Valley project, California, and additional works for joint use with the State of California, to enter into an agreement with the State of California with respect to the financing, construction and operation of such [unit] works, 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 recreation 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 as an integral part of the Central Valley project and to construct additional works for joint use with the State of California (hereinafter referred to as the State) as later provided in this Act, hereinafter referred to as joint use facilities. The principal engineering features of said unit, which may be constructed to permit future expansion joint use with the State, shall be a dam and reservoir at or near the San Luis site, a forebay and afterbay, the San Luis Canal, the Pleasant Valley Canal, and necessary pumping plants and distribution systems, drains, channels, levees, flood works, and related facilities. In constructing, operating, and maintaining the San Luis unit, the Secretary 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 the San Luis unit 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 the purposes of the unit and the terms and conditions of this Act. Water deliveries to the San Luis unit service area shall not be made until there has been physically provided by the State of California acting alone or in co-operation with the United States, or by the United States, or otherwise, such portion of the master drainage outlet and disposal channel for the San Joaquin Valley, as generally outlined in the California Water Plan, Bulletin No. 3, of the California Department of Water Resources, as will serve adequately by connection therewith the drainage system for the San Luis unit mentioned in Section 4 of this Act.

SEC. 2. The Secretary is authorized, on behalf of the United States, to negotiate and enter into an agreement with the State of California (hereinafter referred to as the State) providing for coordinated operation of the San Luis unit and the joint use facilities and joint use of the facilities of the San Luis unit, in order that the State may, without cost to the United States, deliver water in service areas outside the San Luis service area as described in the report of the Department of the Interior, entitled "San Luis Unit, Central Valley Project" dated December 17, 1956. The Secretary shall not commence construction of the San Luis unit, except for the preparation of designs and specifications and other preliminary work, until the execution of such an agreement between the United States and the State, but if such an agreement has not been executed by May 1, 1958 July 1,

1960, and if, after consultation with the Governor of the State, the Secretary determines that the prospects of reaching accord on the terms thereof are not reasonably firm he may proceed to construct and operate the San Luis unit in accordance with section 1 of this Act, provided, that if the Secretary so determines he shall report thereon to the Congress and shall not commence construction for 90 days from the date of his report. In considering the prospects of reaching accord on the terms of the agreement the Secretary shall give substantial weight to any relevant affirmative action theretofore taken by the State, including the enactment of State legislation authorizing the State to acquire and convey to the United States title to lands to be used for the San Luis unit or assistance given by it in financing Federal design and construction of the unit. The authority conferred upon the Secretary by the first sentence of this section shall not, except as is otherwise provided in this section, be construed as a limitation upon the exercise by him of the authority conferred in section 1 of this Act.

SEC. 3. The agreement between the United States and the State referred to in section 2 of this Act shall provide, among other things, that—

(a) the project works and features to be constructed by the Secretary shall be so designated and constructed to such capacities and in such a manner as to permit either (i) immediate integration and coordinated operation with the State's water projects or and (ii) such subsequent enlargement or other modification as may be required for integration and coordinated operation therewith;

(b) the State shall make available to the Secretary during the construction period sufficient funds to pay an its appropriate share of the construction costs of any facilities designed and constructed as provided in paragraph (a) above, said share of costs to be based on the proportionate capacity of the San Luis unit and the joint use facilities required by the State's projects. The State contribution share shall be made paid in annual installments, each of which bears approximately the same ratio to total expenditures during that year as the total of the State's share bears to the total cost of the facilities; the State may make advances to the United States in order to maintain a timely construction schedule of the joint use facilities and the works of the San Louis unit to be used by the State and the United States;

(c) the State may at any time after approval of its plans by the Secretary and at its own expense enlarge or modify San Luis Dam and Reservoir and other facilities to be used jointly by the State or jointly by the State and the United States, but the performance of such work shall be so carried on as not to interfere unreasonably with the operation of the San Luis unit for the purposes set forth in section 1 of this Act;

(d) the State United States and the State shall each pay annually an appropriate service charge in connection with, and/or an appropriate a proportionate share of the operation, maintenance and replacement costs of, those fea tures of the San Luis unit and the joint use facilities which are used or designed to be used jointly by the United States and the State; and any other features of the Central Valley project which are of service to the State;

(e) upon completion of repayment of those portions of the reimbursable Federal costs of constructing the Central Valley project which are assignable to the San Luis unit and the joint use facilities, title to said unit and the facili ties of the San Luis unit shall, upon request of the State, be conveyed to the State. Upon such conveyance, the State shall assume the obligation and responsibility of providing water for service to the users of San Luis unit service area;

(f) promptly after execution of this agreement between the Secretary and the State, and for the purposes of said agreement, the State shall convey to the United States title to any lands, easements, and rights-of-way which it then owns and which are required for facilities of the San Luis unit or the joint use facilities to be used jointly by the United States and the State. The State shall be given credit for the costs of these lands, easements, and rights-of-way toward its share of the construction cost of the San Luis unit and the joint use facilities. The State shall likewise be given credit for any funds advanced by it to the Secretary for preparation of designs and specifications or for any other work in connection with the San Luis unit and the joint use facilities;

(g) the United States shall have unrestricted use of such capacities in the works of the San Luis unit which are used jointly by the United States and the State as shall be required to carry out the purposes of section 1 of this Aet. Such unrestricted use shall extend throughout the repayment period and so long thereafter as title to the works remains in the United States;

(g) the rights of the United States to use the capacities of the joint use facilities and the works of the San Luis unit to be used cooperatively with the State shall be based upon the ratios of the capital expenditures by the United States in such works to the total capital costs of such works;

(h) the State shall have unrestricted use of the remainder of the capacity of San Luis Reservoir and of other jointly used facilities for water service outside the San Luis unit service area solely under the jurisdiction of the State;

(h) the rights of the State to use the capacities of the joint use facilities and the works of the San Luis unit to be used cooperatively with the United States shall be based upon the ratios of the capital expenditures by the State in such works to the total capital costs of such works;

(i) upon completion of construction of the San Luis unit and joint use facilities or any portions thereof which may be utilized to deliver water, the Secretary may shall, upon the request of the State, turn over to the State the care, operation, and maintenance of any of said works of the San Luis unit which are used jointly by the United States and the State at such time and under such conditions as shall be agreed upon hereunder by the Secretary and the State; (j) notwithstanding transfer of title or of the care, operation, and maintenance of any works to the State, as hereinbefore provided, any organization which has theretofore entered into a contract with the United States under the Reclamation Project Act of 1939 for a water supply through the works of the San Luis unit and joint use facilities shall continue to have and to enjoy the same rights which it would have had under its contract with the United States and the provisions of paragraph (4) of section 1 of the Act of July 2, 1956 (70 Stat. 483, 43 U. S. C. 485h-1) in the absence of such transfer, and its enjoyment of such rights shall be without added cost or other any detriment arising from such transfer.

(k) if a nonreimbursable allocation to the preservation and propagation of fish and wildlife has been made as provided in section 2 of the Act of August 14, 1946 (60 Stat. 1080, 16 U. S. C. 662), the features of the unit to which such allocation is attributable shall, notwithstanding transfer of title or of the care, operation, and maintenance to the State, be operated and 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. The 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).

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 provisions of the Federal reclamation laws shall not be applicable to water deliveries or to the use of drainage facilities serving lands under contract with the State to receive a water supply, outside of the San Luis service area described in the report of the Department of the Interior, entitled "San Luis Unit, Central Valley Project," dated December 17, 1956.

See. 6. SEC. 7. There is hereby authorized to be appropriated for construction of the works of the San Luis unit and joint use facilities authorized by this Act, other than distribution systems and drains, the sum of plus such additional amount, if any, as may be required by reason of changes in costs 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.

EXPLANATION OF AMENDMENTS TO S. 1887, PREPARED BY HARVEY O. BANKS

1. The proposed amendments to section 1 were made for the purpose of clarifying the authorization so that it clearly includes the authority to modify the original plans proposed by the Department of Interior for the San Luis unit of the Central Valley project and to provide additional capacities as may be necessary to permit and faciltate joint use of the works of the Bureau of Reclamation and the State. These facilities would be jointly used by the State and the United States to provide service to their respective service areas. Under following sections of the bill, the State would be required to pay its share of the construction costs based on the proportionate capacity of project works required by the State. At the end of section 1, new language has been added to provide that water deliveries shall not be made until a portion of the master drain for the San Joaquin Valley, set forth in bulletin 3 of the department of water resources, is completed. This part of the master drain would be used to dispose of water discharged from the drain for the San Luis unit. The amendment has been agreed to by all of the affected water-user agencies.

2. Section 2 was amended to reflect the amendment to section 1 concerning the authority to construct works for joint use by the State and the United States. This section was also amended by extending to July 1, 1960, the period in which the Secretary of the Interior and the State will negotiate the integration contract contemplated by the bill. After July 1, 1960, if no agreement were reached, the Secretary could, if the likelihood of reaching agreement was found to be remote, proceed to construct the San Luis unit, as a Federal project for the purpose of serving the proposed Federal San Luis service area. If this should occur, a further amendment would require the Secretary to report the status of contract negotiations to the Congress and wait for 90 days before proceeding with construction of the project. The extension of the deadline date would give the Secretary and the State some 2 years to negotiate and execute the cooperative contract and would allow time for any necessary action by the State legislature. The requirement of the report to the Congress would be for the purpose of informing the Congress and the 2 Interior Committees of the reasons for the failure of the 2 parties to come to an agreement within the designated time. These amendments are believed to be a reasonable compromise which attempts to satisfy the widespread concern expressed by water users in Kern County and southern California over the need for constructing the project initially as a joint venture and the adverse effect of constructing only a partial project which could not be used jointly with the State to serve an additional area within the State.

3. Section 3 (a) was amended to more clearly express the concept of joint use of facilities immediately and the necessity for building the works to the capacities required for joint use of the two projects.

4. Section 3 (b) was amended to clarify and define how the State's appropriate share of the construction cost will be determined. This was left to interpretation and conjecture in the original bill, and the proposed amendment specifies with preciseness that the State's appropriate share of the costs would "be based on the proportionate capacity" of the works required by the State's projects. The section was also amended to permit State advances of construction funds to expedite construction in the event Federal appropriations are not adequate. Water users are desirous of having the project constructed as rapidly as possible. 5. Section 3 (d) was amended to provide that both the State and the United States would be responsible for an appropriate share of the operation, maintenance, and replacement costs of facilities to be jointly used.

6. Sections 3 (e) and 3 (f) were amended to conform with the amendments to section 1 and to clarify two minor points.

7. Sections 3 (g) and 3 (h) were amended so that both the United States and the State shall be on an equal basis with reference to the use of capacities of works which will be used jointly. The rights to the use of the capacities will be based upon the ratios of the capital expenditures to the total capital costs of such works. Since both the State and the United States will contribute to the capital cost of the works, it appears equitable that they equitably share use of capacities on the basis of their proportionate contributions.

8. Section 3 (i) was amended to provide for the transfer to the State, at the State's request, of operation and maintenance of authorized works to be jointly used, immediately upon their completion. The amendment makes such a transfer mandatory rather than permissive. Local interests in Kern County and southern California again are agreed that it is imperative that responsi