installments of construction charges under repayment contracts.

1958-Subsec. (a). Pub. L. 85-611 substituted "section 485b" for "sections 485b and 485c".

1945-Subsec. (a). Act Apr. 24, 1945, extended authorIty for modification of existing repayment contracts or other forms of obligations to pay construction charges through Dec. 31, 1950, or Dec. 31 of the fifth full calendar year after the cessation of hostilities of World War II, as determined by proclamation of the President or concurrent resolution of Congress, whichever period was the longer.

Subsec. (b). Act Apr. 24, 1945, authorized Secretary, subject to provisions of this subsection, to defer the time for the payment of such part of any installments of construction charges under any repayment contract or other form of obligation that are due and unpaid as of Apr. 24, 1945, or which would become due prior to the expiration of authority under subsec. (a).

APPLICABILITY TO OTHER IRRIGATION PROJECTS Section 3 of Pub. L. 86-308 provided that: "The provisions of section 17, subsection (b), of the Reclamation Project Act of 1939 [subsec. (b) of this section], as amended by section 1 of this Act, shall apply to any project within the administrative jurisdiction of the Bureau of Reclamation to which, if it had been constructed as a project under the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388) [sections 372, 373, 381, 383, 391, 392, 411, 416, 419, 421, 431, 432, 434, 439, 461, 491, and 498 of this title], and Acts amendatory thereof or supplementary thereto), these provisions would be

applicable."

§ 485c. Repealed. Pub. L. 85-611, § 3, Aug. 8, 1958, 72 Stat. 543.

Section, acts Aug. 4, 1939, ch. 418, § 4, 53 Stat. 1189; Apr. 24, 1945, ch. 94, § 1, 59 Stat. 75, related to repayment contracts with the United States. See section 485h (d) (3) of this title.

§ 485d. Time of payments to the United States.

The Secretary in his discretion may require, in connection with any contract entered into pursuant to the authority of sections 375a, 387-389 and 485485k of this title, that the contract provide (1) that the payments for each year to be made to the United States shall become due and payable on such date or dates, not exceeding two, in each year as the Secretary determines will be substantially contemporaneous with the time or times in each year when water users receive crop returns and (2) if the contract be with an organization, that assessments or levies for the purpose of obtaining moneys sufficient to meet the organization's payments under said contract shall be made and shall become due and payable within a certain period or periods of time prior to the date or dates on which the organization's payments to the United States are due and payable, said period or periods of time to be agreed upon in each said contract.

The Secretary may provide such deferments of construction charges as in his judgment are necessary to prevent said requirements from resulting in inequitable pyramiding of payments of said charges. (Aug. 4, 1939, ch. 418, § 5, 53 Stat. 1191.)

§ 485e. Maintenance and operation of project works; delinquency penalties.

In connection with any contract, relating to construction charges, entered into pursuant to the authority of sections 375a, 387-389 and 485-485k of this title, the Secretary is authorized to require such provisions as he deems proper to secure the adoption of proper accounting, to protect the con

dition of project works and to provide for the proper use thereof, and to protect project lands agains deterioration due to improper use of water. An such contract shall require advance payment adequate operation and maintenance charges. Th Secretary is further authorized, in his discretion, t require such provisions as he deems proper to penalize delinquencies in payments of construction charg or operation and maintenance charges: Provided. That in any event there shall be penalties imposed on account of delinquencies of not less than one-hal of 1 per centum per month of the delinquent charg from and after the date when such charge becomes due and payable: Provided further, That any such contract shall require that no water shall b delivered to lands or parties which are in arrear in the advance payment of operation and maintenance or toll charges, or to lands or parties which are in arrears for more than twelve months in the payment of construction charges due from such lands or parties to the United States or to the organi zation in which the lands or parties are included or to any lands or parties included in an organization which is in arrears in the advance payment of operation and maintenance or toll charges or i arrears more than twelve months in the payment of construction charges due from such organization to the United States. (Aug. 4, 1939, ch. 418, § 6, 53 Stat. 1191.)

§ 485f. Negotiation of equitable contracts by Secre tary.

(a) Existing project contract unit.

The Secretary is authorized and directed to investigate the repayment problems of any existing project contract unit in connection with which, in his judgment, a contract under section 485b or 485c of this title would not be practicable nor provide an economically sound adjustment, and to negotiate a contract which, in his judgment, both would provide fair and equitable treatment of the repayment problems involved and would be in keeping with the general purpose of sections 375a, 387389 and 485-485k of this title.

(b) New projects or projects under construction; public lands; development periods.

For any project, division of a project, development unit of a project, or supplemental works on a project. under construction on August 4, 1939, or for which appropriations had been made, and in connection with which a repayment contract had not been executed, allocations of costs may be made in accordance with the provisions of section 485h of this title and a repayment contract may be negotiated in the discretion of the Secretary, (1) pursuant to the authority of subsection (a) of this section or (2) in accordance, as near as may be, with the provisions in section 485h (d) or 485h (e) of this title. In connection with any such project, division, er development unit, on which the majority of the lands involved are public lands of the United States, the Secretary, prior to entering into a repayment contract, may fix a development period for each irriga. tion block, if any, of not to exceed ten years from and including the first year in which water is delivered for the lands in said block: Provided, That in the event a development period is fixed prior to

execution of a repayment contract, execution thereof shall be a condition precedent to delivery of water after the close of the development period. During any such development period water shall be delivered to the lands in the irrigation block involved only on a toll-charge basis, at a charge per annum per acrefoot to be fixed by the Secretary each year and to be collected in advance of delivery of water. Pending negotiation and execution of a repayment contract for any other such project, division, or development unit, water may be delivered for a period of not more than five years from August 4, 1939, on the same toll-charge basis. Any such toll charges collected and which the Secretary determines to be in excess of the cost of operation and maintenance during the toll-charge period shall be credited to the construction cost of the project in the manner determined by the Secretary.

(c) Report of proposed contracts to Congress; approval; amendment after approval.

The Secretary from time to time shall report to the Congress on any proposed contracts negotiated pursuant to the authority of subsection (a) or (b) (1) of this section, and he may execute any such contract on behalf of the United States only after approval thereof has been given by Act of Congress. Contracts, so approved, however, may be amended from time to time by mutual agreement and without further approval by Congress if such amendments are within the scope of authority granted prior to or after April 24, 1945, to the Secretary under any Act, except that amendments providing for repayment of construction charges in a period of years longer than authorized by sections 375a, 387389, and 485-485k of this title, shall be effective only when approved by Congress. (Aug. 4, 1939, ch. 418, § 7, 53 Stat. 1192; Apr. 24, 1945, ch. 94, § 2, 59 Stat. 76.)

required by subsection (c) of this section has been made of the Secretary. The Secretary shall plan the classification work, undertaken pursuant to the authority of this section, in such manner as in his judgment will result in the most expeditious completion of the work.

(c) Furnishing data.

In any request made to the Secretary for a land classification or reclassification under this section, the organization or representatives of the water users shall furnish a list of those lands which are considered to be of comparatively low productivity or to be nonproductive, and of those lands which are considered to be of greater or lesser productivity than indicated by existing classifications, if any, made pursuant to the Federal reclamation laws, and shall furnish also such data relating thereto as the Secretary by regulation may require. (d) Primary determination.

Upon receipt of any such request the Secretary shall make a preliminary determination whether the requested land classification or reclassification probably is justified by reason of the conditions of the lands involved and other pertinent conditions of the project, including its contractual relations with the United States.

(e) Probable justification.

If the Secretary finds probable justification and if the advance to the United States hereinafter required is made, he shall undertake as soon as practicable the classification or reclassification of the lands listed in the request, and of any other lands which have been, are, or may be included within the project involved and which in his judgment should be classified or reclassified.

(f) Report to Congress.

As soon as practicable after completion of the classification work undertaken pursuant to this section, or from time to time, the Secretary shall report to Congress on the classifications and reclassifications made and shall include in his report, as to each project involved, his recommendations, if any, for remedial legislation.

(g) Expenses.

One-half of the expense involved in any classification work undertaken pursuant to this section shall be charged to operation and maintenance administration nonreimbursable; and one-half shall be paid in advance by the organization involved. On determining probable justification for the requested classification or reclassification as provided in this section, the Secretary shall estimate the cost of the work involved and shall submit a statement of the estimated cost to said organization. Said organization, before commencement of the work, shall advance to the United States one-half of the amount set forth in said statement and also shall advance one-half of the amount of supplementary estimates of costs which the Secretary may find it necessary to make from time to time during the progress of the work; and said amounts shall be and remain available for expenditure by the Secretary for the purposes for which they are advanced, until the work is completed or abandoned. After completion or

abandonment of the work, the Secretary, shall determine the actual costs thereof; and said organization shall pay any additional amount required to make its total payments hereunder equal to one-half of the actual cost or shall be credited with any amount by which advances made by it exceed one-half of said actual cost, as the case may be.

(h) Classification as prerequisite to contract.

If in the judgment of the Secretary a classification or reclassification pursuant to the provisions of this section is a necessary preliminary to entering into a contract under section 485b or 485c of this title, he may require the same as a condition precedent to entering into such a contract.

(i) Modification of existing obligations.

No modification of any existing obligation to pay construction charges on any project shall be made by reason of any classification or reclassification undertaken pursuant to this section without express authority therefor granted by Congress upon recommendations of the Secretary made in a report under subsection (f) of this section. (Aug. 4, 1939, ch. 418, § 8, 53 Stat. 1192.)

REFERENCES IN TEXT

Section 485c of this title, referred to in subsec. (h), was repealed by Pub. L. 85-611, § 3, Aug. 8, 1958, 72 Stat. 543. See section 485h (d)(3) of this title.

§ 485h. New projects; sale of water and electric power; lease of power privileges.

(a) Findings of Secretary.

No expenditures for the construction of any new project, new division of a project, or new supplemental works on a project shall be made, nor shall estimates be submitted therefor, by the Secretary until after he has made an investigation thereof and has submitted to the President and to the Congress his report and findings on

(1) the engineering feasibility of the proposed construction;

(2) the estimated cost of the proposed construction;

(3) the part of the estimated cost which can properly be allocated to irrigation and probably be repaid by the water users;

(4) the part of the estimated cost which can properly be allocated to power and probably be returned to the United States in net power revenues;

(5) the part of the estimated cost which can properly be allocated to municipal water supply or other miscellaneous purposes and probably be returned to the United States.

If the proposed construction is found by the Secretary to have engineering feasibility and if the repayable and returnable allocations to irrigation, power, and municipal water supply or other miscellaneous purposes found by the Secretary to be proper, together with any allocation to flood control or navigation made under subsection (b) of this section, equal the total estimated cost of construction as determined by the Secretary, then the new project, new division of a project, or supplemental works on a project, covered by his findings, shall be deemed authorized and may be undertaken by the Secretary. If all such allocations do not equal said total esti

mated cost, then said new project, new division, a new supplemental works may be undertaken by t Secretary only after provision therefor has bee made by Act of Congress enacted after the Secre tary has submitted to the President and the Congra the report and findings involved.

(b) Allocation of part of cost to flood control navigation.

In connection with any new project, new divist of a project, or supplemental works on a projer | there may be allocated to flood control or navig tion the part of said total estimated cost which the Secretary may find to be proper. Items for any suct allocations made in connection with projects wh may be undertaken pursuant to subsection (a) d this section shall be included in the estimates appropriations submitted by the Secretary for sai: projects, and funds for such portions of the projects shall not become available except as directly appropriated or allotted to the Department of the Inter. In connection with the making of such an allocatio the Secretary shall consult with the Chief of Engineers and the Secretary of the Army, and may perform any of the necessary investigations or studie under a cooperative agreement with the Secretary d the Army. In the event of such an allocation the Secretary of the Interior shall operate the projec for purposes of flood control or navigation, to the extent justified by said allocation therefor. (c) Furnishing water to municipalities; sale of elec tric power; lease of power privileges.

The Secretary is authorized to enter into contracts to furnish water for municipal water supply or m cellaneous purposes: Provided, That any such ecotract either (1) shall require repayment to the United States, over a period of not to exceed forty years from the year in which water is first delivered for the use of the contracting party, with interest not exceeding the rate of 32 per centum per annum if the Secretary determines an interest charg to be proper, of an appropriate share as determined by the Secretary of that part of the construction costs allocated by him to municipal water supply or other miscellaneous purposes; or (2) shall be for such periods, not to exceed forty years, and at such rates as in the Secretary's judgment will produce revenues at least sufficient to cover an appropriate share of the annual operation and maintenance cost and an appropriate share of such fixed charges as the Secretary deems proper, and shall require the payment of said rates each year in advance of delivery of water for said year. Any sale of electric power or lease of power privileges, made by the Secretary in connection with the operation of any project or division of a project, shall be for such periods, not to exceed forty years, and at such rates as in his judgment will produce power revenues at least sumcient to cover an appropriate share of the annus operation and maintenance cost, interest on an appropriate share of the construction investment at not less than 3 per centum per annum, and such other fixed charges as the Secretary deems proper Provided further, That in said sales or leases preference shall be given to municipalities and other public corporations or agencies; and also to cooperatives and other nonprofit organizations financed

in whole or in part by loans made pursuant to the Rural Electrification Act of 1936. Nothing in - this subsection shall be applicable to provisions in It existing contracts, made pursuant to law, for the use it of power and miscellaneous revenues of a project for the benefit of users of water from such project. The provisions of this subsection respecting the terms of sales of electric power and leases of power privileges shall be in addition and alternative to any authority in existing laws relating to particular projects. No contract relating to municipal water supply or miscellaneous purposes or to electric power or power privileges shall be made unless, in the judgment of the Secretary, it will not impair the efficiency of the project for irrigation purposes.

(d) Delivery of water for irrigation; repayment contract prerequisites.

No water may be delivered for irrigation of lands in connection with any new project, new division of a project, or supplemental works on a project until an organization, satisfactory in form and powers to the Secretary, has entered into a repayment contract with the United States, in a form satisfactory to the Secretary, providing among other things

(1) That the Secretary may fix a development period for each irrigation block, if any, of not to exceed ten years from and including the first calendar year in which water is delivered for the lands in said block; and that during the development period water shall be delivered to the lands in the irrigation block involved at a charge per annum per acre-foot, or other charge, to be fixed by the Secretary each year and to be paid in advance of delivery of water: Provided, That where the lands included in an irrigation block are for the most part lands owned by the United States, the Secretary, prior to execution of a repayment contract, may fix a development period, but in such case execution of such a contract shall be a condition precedent to delivery of water after the close of the development period: Provided further, That when the Secretary, by contract or by notice given thereunder, shall have fixed a development period of less than ten years, and at any time thereafter but before commencement of the repayment period conditions arise which in the judgment of the Secretary would have justified the fixing of a longer period, he may amend such contract or notice to extend such development period to a date not to exceed ten years from its commencement, and in a case where no development period was provided, he may amend such contract within the same limits: Provided further, That when the Secretary shall have deferred the payment of all or any part of any installments of construction charges under any repayment contract pursuant to the authority of the Act of September 21, 1959, he may, at any time prior to the due date prescribed for the first installment not reduced by such deferment, and by agreement with the contracting organization, terminate the supplemental contract by which such deferment was effected, credit the construction payments made, and exercise the authority granted in this section. After the close of the development period, any such charges collected and which the Secretary

determines to be in excess of the cost of the operation and maintenance during the development period shall be credited to the construction cost of the project in the manner determined by the Secretary.

(2) That the part of the construction costs allocated by the Secretary to irrigation shall be included in a general repayment obligation of the organization; and that the organization may vary its distribution of construction charges in a manner that takes into account the productivity of the various classes of lands and the benefits accruing to the lands by reason of the construction: Provided, That no distribution of construction charges over the lands included in the organization shall in any manner be deemed to relieve the organization or any party or any land therein of the organization's general obligation to the United States.

(3) That the general repayment obligation of the organization shall be spread in annual installments, of the number and amounts fixed by the Secretary, over a period of not more than 40 years, exclusive of any development period fixed under paragraph (1) of this subsection, for any project contract unit or, if the project contract unit be divided into two or more irrigation blocks, for any such block, or as near to said period of not more than forty years as is consistent with the adoption and operation of a variable payment formula which, being based on full repayment within such period under average conditions, permits variance in the required annual payments in the light of economic factors pertinent to the ability of the organization to pay.

(4) That the first annual installment for any project contract unit, or for any irrigation block, as the case may be, shall accrue, on the date fixed by the Secretary, in the year after the last year of the development period or, if there be no development period, in the calendar year after the Secretary announces that the construction contemplated in the repayment contract is substantially completed or is advanced to a point where delivery of water can be made to substantially all of the lands in said unit or block to be irrigated; and if there be no development period fixed, that prior to and including the year in which the Secretary makes said announcement water shall be delivered only on the toll charge basis hereinbefore provided for development periods. (e) Contracts to furnish water.

In lieu of entering into a repayment contract pursuant to the provisions of subsection (d) of this section to cover that part of the cost of the construction of works connected with water supply and allocated to irrigation, the Secretary, in his discretion, may enter into either short- or long-term contracts to furnish water for irrigation purposes. Each such contract shall be for such period, not to exceed forty years, and at such rates as in the Secretary's judgment will produce revenues at least sufficient to cover an appropriate share of the annual operation and maintenance cost and an appropriate share of such fixed charges as the Secretary deems proper, due consideration being given to that part of

the cost of construction of works connected with water supply and allocated to irrigation; and shall require payment of said rates each year in advance of delivery of water for said year. In the event such contracts are made for furnishing water for irrigation purposes, the costs of any irrigation water distribution works constructed by the United States in connection with the new project, new division of a project, or supplemental works on a project, shall be covered by a repayment contract entered into (Aug. pursuant to subsection (d) of this section. 4, 1939, ch. 418, § 9, 53 Stat. 1193; Aug. 8, 1958, Pub. L. 85-611, §§ 1, 3, 72 Stat. 542, 543; Aug. 28, 1962, Pub. L. 87-613, § 2, 76 Stat. 407.)

REFERENCES IN TEXT

Rural Electrification Act of 1936, referred to in subsec. (c), is classified to chapter 31 of Title 7, Agriculture.

The Act of September 21, 1959, referred to in the text of subsec. (d) (1), amended section 485b-1 of this title, enacted provisions set out as a note under such section 485b-1, and amended a note under section 485b of this title.

CODIFICATION

The Department of War was designated the Department of the Army and the title of the Secretary of War was changed to Secretary of the Army by section 205 (a) of act July 26, 1947, ch. 343, title II, 61 Stat. 501. Section 205 (a) of act July 26, 1947, was repealed by section 53 of act Aug. 10, 1956, ch. 1041, 70A Stat. 641. Section 1 of act Aug. 10, 1956, enacted "Title 10, Armed Forces" which in sections 3011-3013 continued the military Department of the Army under the administrative supervision of a Secretary of the Army.

AMENDMENTS

1962-Subsec. (d) (1). Pub. L. 87-613 authorized the Secretary, when a development period of less than ten years was fixed by contract and, before repayment period conditions arose which would justify a longer period, to amend such contract to extend such period to not exceed ten years from its start, and where no period was provided, to grant a period not to exceed ten years, and where he deferred payment of any construction charges pursuant to act of September 21, 1959, authorized him, prior to the due date of the first installment not reduced by such deferment, by agreement with the contracting organization, to terminate the supplemental contract by which such deferment was effected, credit the construction payments made, and exercise the authority granted

in this section.

1958-Subsec. (d) (3). Pub. L. 85-611, § 1, permitted the general repayment obligation to be spread in annual installments as near to the period of not more than 40 years as is consistent with the adoption and operation of a variable payment formula which permits variance in the required annual payments.

Subsec. (d) (5). Pub. L. 85-611, § 3, repealed provisions which required repayment contracts to provide that each year the installment of the organization's repayment obligation scheduled for such year shall be the construction charges due and payable for such year, or that each year the installment for such year of the organization's repayment obligation shall be increased or decreased on the basis of the normal and percentages plan provided in former section 485c of this title for modification of existing obligations to pay construction charges, and the amount of the annual installment, as thus increased or decreased, shall be the construction charges due and payable for such year.

CONSTRUCTION WITH SECTION 701-1 OF TITLE 33 Section as amended and modified by act Dec. 22, 1944, ch. 665, § 1 (c), 58 Stat. 665, see section 701-1 (c) of Title 33, Navigation and Navigable Waters.

MUNICIPAL, DOMESTIC, AND INDUSTRIAL WATER SUPPLY CON TRACTS; Renewals; ConformING AMENDMENTS TO EX ING CONTRACTS; "LONG-TERM CONTRACT" DEFINED Pub. L. 88-44, June 21, 1963, 77 Stat. 68, provided: "That the Secretary of the Interior shall, upon reques of the other party to any long-term contract for mund pal, domestic, or industrial water supply hereafter enter into under clause (2) in the proviso to the first sente of section 9, subsection (c), of the Reclamation Projec Act of 1939 (53 Stat. 1195, 43 U.S.C. 485h) [subsec. (c) = this section], include provision for renewal thereof subject to renegotiation of (1) the charges set forth in the contract in the light of circumstances prevailing at the time of renewal and (2) any other matters with respec to which the right to renegotiate is reserved in the contract. Any right of renewal shall be exercised within such reasonable time prior to the expiration of the contract as the parties shall have agreed upon and forth therein.

"SEC. 2. The Secretary shall also, upon like reques provide in any such long-term contract or in any con tract entered into under clause (1) of the proviso afore said that the other party to the contract shall, during the term of the contract and of any renewal thereof and subject to fulfillment of all obligations thereunder, have a first right for the purposes stated in the contract (to which right the holders of any other type of contract for municipal, domestic, or industrial water supply shall be subordinate) to a stated share or quantity of the project's water supply available for municipal, domestic or industrial use.

"SEC. 3. The Secretary is hereby authorized, upon request by the other party, to negotiate amendments to existing contracts entered into pursuant to the first sentence of section 9, subsection (c), of the Reclametion Project Act of 1939 [subsec. (c) of this section] to conform said contracts to the provisions of this Act "SEC. 4. As used in this Act, the term 'long-term contract' means any contract the term of which is more than ten years."

EXTENSION OF VARIABLE PAYMENT PLAN TO OTHER ORGANIZATIONS

Section 2 of Pub. L. 85-611 provided that: "The benefits of a variable payment plan as provided in the amendment to paragraph (3) of section 9, subsection (d), of the Reclamation Project Act of 1939 [subsec. (d)(3) of this section] contained in section 1 of this Act may be extended by the Secretary to any organization with which he contracts or has contracted for the repayment of construction costs allocated to irrigation on any project undertaken by the United States, including contracts under the Act of August 11, 1939 (53 Stat. 1418), as amended [sections 590y to 590y-4 and 590y-6 to 590y-10 of Title 16], and contracts for the storage of water or for the use of stored water under section 8 of the Act of December 22, 1944 (58 Stat. 887, 891) [section 390 of this title]. In the case of any project for which a maximum repayment period longer than that prescribed in said paragraph (3) has been or is allowed by Act of Congress, the period so allowed may be used by the Secretary in lieu of the forty-year period provided in said amendment to paragraph (3)."

CROSS REFERENCES

Additional allocations for the Valley Gravity Canal and Storage Project, see section 277f of Title 22, Foreign Relations and Intercourse

Administration of contracts entered into under subsections (d) and (e) of this section, see sections 485h-1 to 485h-5 of this title.

Spokane Valley Project, extension of base period of contract entered into under subsection (d) of this section, see section 615t of this title.

§ 485h-1. Administration of repayment contracts and long-term contracts to furnish water; renewal and conversion; credit for payments; right to available water supply; rates; construction component. In administering subsections (d) and (e) of section 485h of this title, the Secretary of the Interior shall