bility for operation and maintenance of jointly used features be in the State of California. This is considered in accord with the apparent current policy of Department of the Interior to transfer responsibility for operation and maintenance of reclamation projects to local interests whenever it is feasible. 9. Section 3 (j) was amended only to conform with the amendments provided in section 1.

10. Section 6 was added to clarify the fact that the restrictions of the Federal reclamation laws will not be imposed on water deliveries or drainage works in areas, outside the Federal San Luis service area, and served under contract with the State. Since the State will pay its proportionate share of the capital cost of the authorized joint-use works in order to provide water to its service area, it is not considered that any Federal restrictions on water deliveries should apply to the State's service area.

Mr. BANKS. If the subcommittee desires, I shall be glad to discuss the proposed amendments in detail or answer any questions concerning them.

If these amendments are adopted, the department of water resources supports S. 1887.

Senator ANDERSON. From that we understand these are essential before the department would support the bill. If we decided not to adopt the philosophy involved in the amendment, the department would rather not have the bill passed?

Mr. BANKS. Senator, may I say this about the amendment: They do not, in our opinion, in any way change the philosophy or the underlying concept of the bill. They are primarily aimed at clarifying the intent of the original language as we understood it in the drafting sessions in which we participated.

I think you will find that there is no intent whatsoever to change the basic concept or the basic philosophy of S. 1887.

Senator ANDERSON. You say that you do not change the basic philosophy, but if you decide that the State of California shall have complete and total control, you may not think that changes the basic philosophy as you talked about it in the drafting sessions, because that might have been what you had in mind, but that might not have been in the minds of the authors of the bill. You think the amendment should be clarified in character.

Mr. BANKS. That is true; yes, sir, with the one exception which was not with respect to drainage, and that has been added. It was not in the original bill, and it has been concurred in, as I say, by all of the affected water-user agencies that this is a desirable addition to

the bill.

Senator ANDERSON. Then your amendments do not touch the socalled Kern County concept.

Mr. BANKS. They do not. The Kern County concept will, no doubt, be discussed in detail by others who will appear before the subcommittee later.

The primary difference between the Kern County concept and the approach in S. 1887 is in the responsibility for the construction and operation of the project. Under S. 1887 the Secretary of the Interior would construct all of the joint-use features and the State would pay to the United States its appropriate share of the construction costs, and, in exchange, would be entitled to proportionate right to the use of the joint-use facilities. The State would take over the operation of the joint-use facilities upon completion.

On the other hand, under the Kern County concept, 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 use a proportionate part of the jointly used project capacities.

Under either proposal, the United States would serve water to nearly 500,000 acres on the west side of the San Joaquin Valley, and the State would serve water to areas in Kern County and southern California.

Under both proposals, Federal reclamation law would apply only in the Federal San Luis service area which would be financially integrated with the Federal Central Valley project.

There are certain other differences in the two approaches, including the so-called cutoff date, which is in S. 1887, but not in the concept. Insofar as the State is concerned, either the approach taken by S. 1887 or that in the Kern County concept could be used to bring about successful Federal-State integration and cooperation at San Luis. My position on the Kern County concept is, in short, that it would be acceptable to the State if it is found acceptable by the Department of the Interior, by the affected water users in California, and by the Congress.

A few general observations, if I may.

Since authorization of the State's Feather River project in 1951, the California Legislature has appropriated more than $40 million in furtherance of the project. At the present time there is some $24 million committed in construction contracts and engineering work on the project is well underway. The Governor's budget now before the legislature provides an additional $60 million in furtherance of the project for fiscal year 1958-59.

As you may recall, the California Department of Water Resources has developed the California water plan, which has been published as bulletin No. 3 of the department. This plan is the result of some 10 years' work and an expenditure of approximately $8 million.

The California water plan is intended to be a master plan to guide, assist, and coordinate the development, conservation and utilization of California's water resources for the benefit of all areas of the State. The Feather River project is the first major project for State construction under the plan. Construction of all of the projects con-templated by the plan will require the expenditure of $12 billion

or more.

It is obvious that expenditures of this magnitude cannot be made solely by any one entity and that the combined efforts of State, Federal, and local interests will be essential if California's water resources are to be developed in a proper and timely manner. It is clear that Federal assistance will be required, and the joint venture contemplated by the bill before you, or by the Kern County concept, is, in my opinion, an excellent way for the United States to work with our State in the development of its water resources. Our studies have shown that the joint venture would be of financial advantage to both the State and the United States and to the taxpayers of both. For example, the saving to the United States under an integrated plan of development at San Luis would be in excess of $30 million.

In summary, then, our position is that Federal and State cooperation in the construction and operation of joint-use facilities at San Luis makes good sense to all concerned. We believe that S. 1887, with our proposed amendments, could be used to accomplish the

desired results in a manner equitable to all. The Kern County concept could also be so used, if it is acceptable to the interests concerned.

In the past 2 months our department has worked closely with the various affected water users' organizations in California to reach general agreement on the approach to San Luis. Four well-attended meetings have been held by the California group, the last being in Sacramento on March 12. Agreement has been reached on some points, but not on all. However, I am hopeful that the prevailing differences will be resolved shortly, and I intend to continue to offer the services of the department of water resources to forward settlement.

Thank you for the opportunity to appear here today.

Senator KUCHEL (presiding). If it is agreeable to you, I would like to ask questions for the next few minutes, and we will conclude until 2 o'clock when Senator Anderson gets back.

First of all, you state, on page 4 of your statement, that the Feather River project was authorized in 1951. Does the State legislature's authorization that year specifically include this San Luis project?

Mr. BANKS. Not at that time, that particular authorization. There was a subsequent report submitted in 1955 which was authorized for construction by the legislature and did include the San Luis features. Senator KUCHEL. Your statement is that the legislature has generally authorized the San Luis Reservoir?

Mr. BANKS. Yes. They accepted and received the 1955 report and Senator KUCHEL. In the 1955 report of your department did you contemplate a joint-use construction with the Federal Government? have based general appropriations upon the basis of that 1955 report. Mr. BANKS. At that time, no, we did not. The joint-use aspect of this has been worked out generally as a result of the proposal of the Bureau of Reclamation to construct a project to serve the San Luis

area.

Senator KUCHEL. What is your understanding of the State legislative authorization of San Luis today?

Mr. BANKS. It is an authorization under which the State could, if appropriations are made available, construct all of the works at San Luis to serve the entire service area in the westerly-southerly end of the San Joaquin Valley, including the San Luis service area and areas in Kern County and southern California.

Senator KUCHEL. Are the recommendations you make in favor of S. 1887 in your judgment in consonance with the State legislative authorization or in derogation of them?

Mr. BANKS. I think they are in consonance with the basic policy set up under the State Central Valley Project Act, which was passed by the legislature many years ago and which is still in effect and which envisions cooperative endeavor between the State and the Federal Government.

The Feather River project, I might add, was authorized as a unit of the State's Central Valley project.

Senator KUCHEL. Then do I understand that the action of the State legislature in authorizing the San Luis unit, in your judgment, did not include the authorizations as to who would build the project and by whom it would be operated?

Mr. BANKS. May I turn that around, Senator, and put it this way: In my opinion, the present State authorization does not preclude

the type of coordinated and joint development as envisioned in the proposal before you.

Senator KUCHEL. There was no testimony before the State legislature at the time it approved the San Luis project on the possibility of joint construction or joint use with the Federal Government?

Mr. BANKS. I don't recall any, Senator. I would have to go back and examine the record to make sure of that.

Senator KUCHEL. At any rate, in your judgment, your recommendations in favor of the Senate bill before us here today in no way is an affront to the intention under which the State legislature approved the San Luis project?

Mr. BANKS. I do not believe so.

Senator KUCHEL. What was the amount of money estimated by your Department for construction of the San Luis unit at the time. the State legislature approved such a reservoir?

Mr. BANKS. Senator, I don't have those figures. I would have to go back to the report to get them. I can give you, however, our estimate of the cost of what we term the so-called jointly used facilities here, which include the San Luis Dam and Reservoir, the San Luis forebay, the San Luis Canal and bay, at present-day prices. These include the large reservoir built with the 2,100,000 acre-feet capacity. The total amounts to $247 million. That is our estimate as of January 1958 prices.

Senator KUCHEL. What is, just in general, the difference between your figures which you use today, of $247 million, and the Department of Interior estimated cost to the Federal Government of constructing a unit to a size which it could use, of two hundred and nine-odd million dollars?

Mr. BANKS. In the January 1954 report of the Bureau of Reclamation the estimated cost of a 1 million acre-foot capacity San Luis Dam and the San Luis Canal to serve the proposed Federal service area was $131 million, approximately. Bringing those up to present-day costs for comparative purposes, it amounts to about $141 million. Senator KUCHEL. What amounts to $141 million?

Mr. BANKS. The cost of San Luis Dam and the San Luis Canal, built to the capacities as proposed in the Bureau of Reclamation report to serve the San Luis unit service area; or, to make that more specific, with San Luis Reservoir built to 1-million acre-foot capacity.

Senator KUCHEL. Which government envisioned building it to a million acre-foot capacity?

Mr. BANKS. The Bureau of Reclamation. The Bureau's report includes other works, including the Pleasant Valley Canal and certain other works which the Bureau proposed, which would not be included in the so-called jointly used facilities, to be used by both the State and the United States as is being discussed today.

Senator KUCHEL. Will you state for the record, first, Mr. Banks, what the Department's plans with respect to San Luis are as to the use of peak pumping for water in the San Luis Reservoir?

Mr. BANKS. As far as my department is concerned, that is the State department of water resources, we envisage using off-peak energy for all of our pumping installations except that diverting directly in the delta where we must pump all of the time, if possible, when there is surplus water there.

Senator KUCHEL. Senator Anderson, I am sure, will want to go into the cost of water which the State envisages under the Feather River project, and I will not go into those questions now in his absence. But, getting back to the intent underlying the bill which I have coauthored. The recommendation embodied in the Kern County Farm Bureau's proposal, which you have discussed them in general terms, indicate that the present Senate bill would provide for the construction of the joint-use features by the Federal Government, the State thereafter to pay the Federal Government its appropriate share of the construction costs, and the State thereafter would be entitled to a proportionate rate to the use of the joint facilities. The State would take over the operation of the joint-use facilities on completion. Then you describe the Kern County proposal as envisaging the building and operating of the joint-use features at the San Luis unit by the State. The United States would pay its proportionate share of the construction costs and be entitled to a proportionate part of the jointly used project capacities.

Would you say that that, to your judgment, constitutes a pretty full statement of the distinction between these alternative proposals?

Mr. BANKS. That is one element of the distinction. The other element of the distinction is the matter of a cutoff date.

Senator KUCHEL. With the addition of the problem involved in the cutoff date, would you say that your statement is a pretty clear and full description of the differences?

Mr. BANKS. I think those are the major points of difference, Senator Kuchel. I think some of the people who will testify later may have some questions concerning relative water rates.

In my opinion, the matter of water rates cannot be settled in Federal legislation, but must be settled by action of the State water rights board. But that is a third point of issue which I think possibly will be brought before you.

Senator KUCHEL. I agree with your statement that water rights must be determined pursuant to laws of our State.

Can you describe the differences of opinion with respect to the cutoff date? How does that work out in S. 1887 and the Kern County project?

Mr. BANKS. In S. 1887, and using the amendments which we have proposed here, the cutoff date would be set at July 1, 1960.

Senator KUCHEL. What would that mean?

Mr. BANKS. That would mean that, if by that time the Secretary of the Interior and the State had not reached an agreement and if at that time the Secretary of the Interior made a finding that the prospects of agreement were not good, and that the State of California had taken no affirmative

Perhaps, Senator, if I may do it, we may read it because I think the language is rather explicit :

The Secretary shall not construct

Senator KUCHEL. You are reading now from what?

Mr. BANKS. This is the same language as the present S. 1887, and I will indicate our proposed amendments there, too, as I go along, if I

may:

The Secretary shall not commence construction of the San Luis unit, except for the preparation of designs and specifications and other preliminary work,