Mr. CARROLL. Mr. Chairman, I have some questions of Judge Sawyer, and I have been waiting here very patiently.

Mr. ROCKWELL. I know, Mr. Carroll.

Mr. FERNANDEZ. I was cut off a while ago through a misunderstanding, and I would like to complete one question that I dropped. I was inquiring a while ago about the membership, and I was told that • that had been gone into thoroughly at another hearing, and I now find that that was not gone into in any of these hearings but in the seminar, and I want it in this record, and I would like to ask the permission of the chairman that the committee be furnished the answer to two questions:

(1) Do you have public utilities and railroads and banks in your association, and

(2) Is their membership limited to one membership or may they have more than one membership, and if so, is it limited, and if it is limited, what is the limit?

FURTHER STATEMENT OF ROBERT W. SAWYER, PRESIDENT AND OREGON DIRECTOR, NATIONAL RECLAMATION ASSOCIATION, BEND, OREG.

Mr. SAWYER. May I file a copy of that?

Mr. ROCKWELL. Without objection, you may file a copy of the answer to those questions.

Mr. CARROLL. I think I can be educated by then so that I will know what to ask them, the other witnesses, after I talk to the judge.

Judge, you heard the testimony yesterday of the Assistant Secretary of Agriculture, Mr. Brannan?

Mr. SAWYER. Yes, sir.

Mr. CARROLL. How does your association feel about the Department of Agriculture participating in making a report as to the feasibility of this?

Mr. SAWYER. The association has never taken any action on that proposal. I do not believe I can state anything from the association in that regard. It has never been before the association, in my

memory.

Mr. CARROLL. I think if you will examine H. R. 1886, the amendment they put in here yesterday, they asked the Secretary of Agriculture to make a report on the power revenue, and that would necessitate the Department of Agriculture having a power staff to make such an investigation.

Mr. SAWYER. I did not understand that was included in the agricultural proposal.

Mr. CARROLL. But if it is included, this association is not in favor of it?

Mr. SAWYER. The association has never taken any action with respect to any agricultural proposal.

Mr. CARROLL. I see.

Now, let us take a minute or two here to get to the meat of this thing that your association is objecting to; that is, the solicitor's report, and you have assumed that the Department of the Interior has been following the solicitor's report, that power is being sold at a minimum rate.

Mr. SAWYER. I understand Mr. Straus to say that the Bureau is not yet completely following the requirements or the provisions of the solicitor's opinion.

Mr. CARROLL. You and I are both confused. I thought perhaps I would be for the Lemke bill, or for the Rockwell bill, as stated, but as I hear the testimony this morning, and I want you to check me, as I understand it, they are not following the Solicitor's report. They are not giving minimum rates. They are amortizing the capital investment over 50 years. If they are doing all of those things, what are the objections of the Reclamation Association, forgetting about the interest component, now.

Mr. SAWYER. You are talking about what they have done in the past, and I am referring to the future.

Mr. CARROLL. Assuming they continue that policy, what is the objection of the association?

Mr. SAWYER. If the Bureau will return to following the policy and intent of the law set out in 1939, we would be very much in favor of it.

Mr. CARROLL. Now, I will read to you from page 13.

You say, "That of the Bureau as developed through the Solicitor's opinion is, I think, obviously an effort to develop low rates through a mark-off instead of an amortization of capital cost."

And now we learn this morning for the first time, or at least I learned, and perhaps you, too, that that is not their practice, but you conclude here in that same paragraph, that you admit that higher power rates will follow:

I do not know whether this is in point with the gentleman from Wyoming's question, but if we do not follow the minimum rates, if we amortize over a 50-year period, if we pay the interest component into the Treasury Department, does it not necessarily follow that there will be higher power rates to the consumer?

Mr. SAWYER. You say, if we follow the solicitor's opinion?

Mr. CARROLL. If you follow the plan presented here about the 50year amortization of capital investment.

Mr. SAWYER. I will have to ask some of my Colorado friends to answer that.

Mr. CARROLL. You cannot answer that. I think that is all.

Mr. ROCKWELL. Mr. Murdock?

Mr. MUPDOCK. Just one question, Mr. Chairman.

The president of the association can answer this better than anybody else, I think.

We heard the Assistant Secretary of Agriculture yesterday, and he suggested that Federal reclamation law should follow the general trend of the Wheeler-Case Act. That was a special act during the time of the depression. What is your opinion, Judge Sawyer, as president of the National Reclamation Association?

Would you like to see the Federal reclamation law take the direction of the Wheeler-Case Act?

Mr. SAWYER. Mr. Murdock, I would prefer to have that question answered after the Reclamation Association has acted on the Agriculture Department proposal which it has not done. We have never considered that question and I do not believe I should answer it. Mr. ROCKWELL. Are there any more questions?

Thank you, Judge Sawyer.

Now, Mr. Ronald B. Harris, of California, will you take the chair, please?

Will you kindly give your name and whom you represent, Mr. Harris, please?

STATEMENT OF RONALD B. HARRIS, ATTORNEY AT LAW, HARRIS, WILLEY & HARRIS, FRESNO, CALIF.

Mr. HARRIS. My name is Ronald B. Harris and I am a member of of the law firm of Harris, Willey & Harris, practicing law at Fresno, Calif. I am employed by the Irrigation Districts Association of California to assist irrigation districts in negotiating water contracts with the Bureau of Reclamation in connection with the Central Valley project.

I think I should elaborate on what the Irrigation Districts Association of California is. It is an association that has existed for more than 25 years, primarily in the irrigation districts in the State of California. An irrigation district is a political subdivision of the State, the directors of which are elected by the voters entitled to vote within the boundaries of the district, as according to the general election laws.

These directors make up the membership of the Irrigation Districts Association. There are about 81 irrigation districts, operating districts, that are members of this association.

In addition thereto, there is a subsection of county water districts of 15 or 20.

In addition, there are a few reclamation districts that are members, and in addition to that are water storage districts and California water districts.

The total irrigated area irrigated by these districts is in excess of 3,000,000 acres. These districts extend from the northern boundaries of the State of California to the southern boundaries of the State of California.

I rather imagine that Mr. Poulson, from California, can inform you gentlemen as to the standing of the Irrrigation Districts Association of California, that it consists of farmers, that it has no membership outside of farmers, other than their legal advisers and engineers. Now, I will return to my statement, which is rather short, and I probably will need to amplify it here and there.

This contract that is being offered to the irrigation districts seeking water from the Central Valley project of California, is based on section 9 (e) of the Reclamation Project Act of 1939. The contract offered is for a term of 39 years with a maximum charge of $3.50 per acre foot per annum as rental.

The Irrigation Districts Association entered into this matter about a year and a half ago, upon the request of these irrigation districts, for the reason that the Reclamation Bureau was picking them off one by one under the contracts which they said would be the pattern contract in the State. And they did not like the terms of those contracts, but, gentlemen, these irrigation districts are starving for water and because of their necessity, they are being driven to accept contracts and obligations that are not satisfactory for them at all.

99687-47-No. 4- -9

I want to give you an example of one irrigation district, the Lindsay-Strathmore irrigation district. This old irrigation district, whose area is in oranges, citrus, and a number of grapes, and the value of which at the present time runs from $2,000 to $1,000 an acre.

That district is dependent solely on a water supply, under a stipulated judgment in a lawsuit. That stipulated judgment provides that they may use those waters until they are able to get water from the Central Valley project.

Now, under the circumstances, you see, there is no choice as to the kind of contract that they have to accept. It is only that they are able to take water from the Central Valley project. Consequently, they are forced in the position to negotiate and take a contract regardless of what they think of the terms of that contract.

Now, to return to my statement. Since the contract is for water rental and not a repayment contract, a district acquires no permanent right for the delivery of water nor does it have any option to renew the contract upon the expiration of its term. This is highly unsatisfactory for the reason that the lands in the district would have no assured permanent, vested water right. One of the requirements of the Federal land bank in making loans is that the land has appurtenant to it a definite water supply. Under the contract offered when the expiration date would approach the merchantability of the land which was dependent on the Central Valley project supply would be seriously affected, for the reason that this is a water rental contract expiring at the end of 39 years, when all rights cease to water. There is no right to renew dependent upon coming back to the Reclamation Bureau and saying, "Please sell us water."

And on the matter of loans, when you come near the expiration of your term without water, the land reverts to a desert.

Mr. MURDOCK. What is the expiration term date, please?

Mr. HARRIS. The expiration term is 39 years from the date of the execution of the contract.

Mr. MURDOCK. What is that date?

Mr. HARRIS. There is only one contract that I know definitely has been executed by an organization which is not a member of the irrigation association. That is the San Joaquin utility district.

I am not sure about the Lindsay-Strathmore irrigation district. The contract which I last heard reported was in process. It had been sent to Washington and was signed by the Secretary and was back for the board's signature.

Now, on that point, Senator Downey asked us from California to come back and meet with Secretary Krug and the Bureau of Reclamation here in Washington. They are the men who determine the policies and what the contracts are, not the regional director in California.

His idea was that because of the difficulties we were having, to come back here and see the men that have the final determination, so we came back.

Mr. MURDOCK. These contracts have not been negotiated yet, then? Mr. HARRIS. They are in the process of negotiation.

We came back to Washington and went through the details of the contract, and so forth, and they listened to us and we went home.

At the time we were in Washington and the State was presented here, a request was made: You are seeking a general pattern con

tract for all the users of this water to sign. We suggest that the terms of this pattern contract be negotiated between the Central Valley Project Authority, which is created under the laws of the State of California, a State organization, and the Bureau of Reclamation, and second, that the Irrigation Districts Association represent these districts also and be permitted on this general pattern of contract. They refused on the basis that under the law, they have to deal with each contracting agent, separately.

There are not provisions in the contract as to how the annual charge will be applied.

Mr. D'EWART. Before you proceed, how many acre-feet of water does it usually take in this area per crop year?

Mr. HARRIS. Well, it depends on the type of crop you are growing. Mr. D'EWART. Yes, but an average for the district.

Mr. HARRIS. The average is considered 2 acre-feet per annum per acre. That is the general average.

However, almost all of this area is alluvial cones of the Sierra Nevada. All have percolating water therein. One district, from which I am an attorney, our normal supply of gravity water, surface water, is 1 acre-foot. The other acre-foot is drawing on the underground built up by the irrigation.

Mr. D'EWART. One more question. Do these contracts expire when the owner owns his own land as well as when the Reclamation Bureau owns it?

Mr. HARRIS. In the Central Valley irrigated area, outside of the high Sierra Nevada Mountains, there is not a foot of federally public owned land. All of the land is in private ownership. That land is, and most of it has been in private ownership for over 70 years, and the water that comes from the Central Valley Project, as authorized, is solely for the purpose of supplementing the existing supply of

water.

Mr. D'EWART. I see. In other words, it costs about $7 a year for the amount of supplemental water they want to use on their own privately owned property.

Mr. HARRIS. No. I took it when you said the $7 that you are taking it at $3.50 per acre-foot.

Mr. D'EWART. Two acre-feet.

Mr. HARRIS. But you see, being a supplemental supply of water, it is only the amount of additional water. The project has a rate of $3.50 per acre-foot. The cost of his natural supply of water, of course, would determine the total over-all cost. That is the natural supply, and then importing the supply together, the two costs would represent the total cost, and that would vary according to the district and the supply.

Mr. D'EWART. Your supplemental water is covered by the contract and would average about $7 per year.

Mr. HARRIS. If it were a total supply per acre, and they had no independent supply.

Mr. D'EWART. That is about all.

Mr. HARRIS. Of course, there should be this modification: Under the contracts that we are now negotiating, there are two classes of water from the Friant-Kern Canal. There are class 1 and class 2. waters.