DRAINAGE, LEVEE, IRRIGATION, AND SIMILAR DISTRICTS MONDAY, JANUARY 25, 1932 HOUSE OF REPRESENTATIVES, The committee met at 10:45 o'clock a. m., Hon. Edward W. Pou (chairman) presiding. The CHAIRMAN. Gentlemen, we are here to consider House Resolution 117, introduced by Mr. Hall of Mississippi providing a special rule for the consideration of the bill H. R. 4650, introduced by Mr.. Smith of Idaho. There are a number of members of Congress who desire to be heard, and as far as possible we will hear them this morning. (The resolution and the bill under consideration are as follows:) [H. Res. 117, Seventy-second Congress, first session] Resolved, That upon the adoption of this resolution it shall be in order tomove that the House resolve itself into the Committee of the Whole House on the state of the Union for the consideration of H. R. 4650, a bill to provide for the aiding of farmers in any State by the making of loans to drainage districts, levee districts, levee and drainage districts, counties, boards of supervisors, and/or other political subdivisions and legal entities, and for other purposes. That after general debate, which shall be confined to the bill and shall continue not to exceed two hours, to be equally divided and controlled by the chairman and ranking minority member of the Committee on Irrigation and Reclamation, the bill shall be read for amendment under the five-minute rule. At the conclusion of the reading of the bill for amendment the committee shall rise and report the bill to the House with such amendments as may have been adopted, and the previous question shall be considered as ordered on the bill and the amendments thereto to final passage without intervening motion. except one motion to recommit. [H. R. 4650, Seventy-second Congress, first session] A BILL To provide for the relief of farmers in any State by the making of loans to drainage districts, levee districts, levee and drainage districts, irrigation and/or similar districts other than Federal reclamation projects or to counties, boards of supervisors, and/or other political subdivisions and legal entities, 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 purpose of aiding the farmers in any State on lands which have been drained and/or irrigated. and/or protected from the flood waters of a stream or streams or other waters by means of levees or other public improvements by duly organized drainage districts, levee districts, levee and drainage districts, irrigation and/or similar districts other than Federal reclamation projects, or by counties, boards of supervisors, and/or other political subdivisions and legal entities existing under and by virtue of the laws of the State where located, where for the payment of such works there are now outstanding bonds, or warrants, certificates of indebtedness, or other lawful indebtedness, and/or unpaid judgments, the Sec retary of the Interior is authorized to loan, out of the revolving fund hereinafter created, to any such district or legal entity an amount sufficient to redeem such bonds, certificates of indebtedness, or lawful indebtedness, and unpaid judgments, warrants, and the accrued interest thereon, in the manner and under such restrictions and conditions as are hereinafter set forth. SEC. 2. Whenever the word "district" appears in the act it shall be interpreted to include drainage districts, levee districts, levee and drainage districts, irrigation and/or similar rural improvement districts other than Federal reclamation projects, and to include counties, boards of supervisors, and/or political subdivisions, and legal entities; and whenever the word "bonds" appears in the act it shall be interpreted to include certificates of indebtedness, or other lawful indebtedness, and/or unpaid judgments, and/or warrants. SEC. 3. Loans shall be made only to the legally constituted authority which has issued the bonds, or its successor in interest, and not unto it until the Secretary of the Interior has satisfied himself by such examination of the engineering works, for which the legal obligations were issued, as he may deem necessary, of the reasonably successful operation thereof, and that the lands designed to be benefited by these works are receiving benefit to a reasonable degree. The Secretary of the Interior shall make or cause to be made an appraisal of the value of the taxable property of each district making application for a loan as well as of its economic value, and no loan may be made until the Secretary is satisfied it will be paid at maturity. Loans may be made annually or otherwise to take up the principal of and/or accrued interest on the aforesaid bonds already due and unpaid and/or as they become due: Provided, however, That when the amount of the outstanding and unpaid bonds and interest of any district is greater than the appraisal and/or the value of the bonds which such district could issue under the terms of this act, then the governing authority of such district, subject to the approval of the Secretary of the Interior, is hereby authorized and empowered to negotiate with the owners and holders of the outstanding bonds and other evidences of debts of any such district for the purpose of compromising and reducing the amount of existing indebtedness, both of principal and interest, in any such district to an amount not greater than the appraisal therein, and thereupon the Secretary of the Interior may loan to such districts in the manner herein provided an amount sufficient to pay off the bonds and other indebtedness so compromised and reduced. SEC. 4. That the Secretary of the Interior, before making the loan, must be satisfied that satisfactory legal authority exists for and ample provisions have been made to annually tax the taxable property pledged as security for the bonds issued sufficient to pay the maintenance expenses of the district for a period equaling the life of the loan, and beginning at the end of 10 years the annual taxes must be sufficient to establish a sinking fund which will retire the loan at the maturity dates fixed by the Secretary of the Interior. All money collected for the sinking fund must be deposited in the Treasury of the United States to the credit of the debtor, but may be transferred into the revolving fund by the Treasurer of the United States on application by the Secretary of the Interior. SEC. 5. Loans shall be made for a period not exceeding 40 years, to be determined by the Secretary of the Interior in each case, which shall bear in terest at a rate of 3 per centum per annum, payable annually: Provided, how ever, That during the first five years of the loan the interest shall accrue and be payable during the succeeding years of the loan in equal annual install ments. Loans shall be secured by the issuance and delivery to the Secretary of the Treasury by the legally constituted authority, refunding bonds payable to the United States in the amount of the loan, and it shall be and appear on the face of each bond that it is a lien on all the taxable property within said district and/or the benefits assessed against said property, and the Secretary of the Interior shall fix the dates of the maturities of said bonds: Provided, however, That where such bonds are issued by a county or other political subdivision, it shall be sufficient if each bond on the face thereof shall pledge the full faith and credit of such county or other political subdivision, and if it shall appear that under the laws of the State in which such county or other political subdivision is situated, such bonds are direct and general obligations of the county or political subdivision issuing same, and that provision is made by |