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Öreg., its livestock industry and its tax structure, we feel it necessary that certain limitations and safeguards should be included in such exchange, in order that the economic impact of taking these lands out of Lake County, Oreg., be held to a minimum.

The proponents of this brief propose that two additional amendments should be added to H.R. 10777, these amendments being (1) to limit the acquisition by the Navy Department of lands within Lake County, Oreg., to no more than 96,000 acres (that being the present acreage involved in their Boardman Bombing Range) and (2) to further provide that if and when said lands are no longer used by the Navy for any purpose whatsoever, the same be returned to the jurisdiction of the Bureau of Land Management and used for grazing purposes under the Taylor Grazing Act.

In connection with this proposal, it is to be pointed out that the Navy is now apparently well satisfied with the area of 96,000 acres in the Boardman vicinity. It is further pointed out that based upon information on hand, the evaluation will probably run on an acreage basis three times the value of the Lake County lands, so that in order for the State of Oregon to acquire all of the Boardman Range without the payment of money, it would be necessary to offer three times the acreage of State lands for such exchange. This would practically eliminate the grazing of public lands within Lake County, Oreg., if the total area were taken from Lake County.

Accurate information on the proposals of the State of Oregon have not been made available to the proponents in this brief, but a reliable source has advised that the State is now thinking in the terms of in excess of 125,000 acres as a proposed bombing range in Lake County, Oreg. This would do irreparable damage to the livestock industry and the economy of Lake County. Out of the annual income of Lake County, Oreg., approximately 30 percent thereof comes from the livestock industry. Lake County is presently owned approximately 64 percent by the Federal Government, so that the tax burden falls with a heavy hand upon the privately owned property. Elimination of the State school lands from Lake County, Oreg., will result in the following:

(a) Any possibility of these State lands coming upon the tax rolls of Lake County, Oreg., will be extinguished.

(6) The number of livestock which can be grazed upon public domain by animal-unit months in existence upon the State lands will be drastically reduced.

(c) The period of use resulting from blocking and exchanging of State lands for the use of Bureau of Land Management lands by private livestock operations will be seriously hampered.

(d) Livestock operations will necessarily be reduced, thus further reducing the tax base for the support of county and school district needs.

As a solution to the problem confronting the State of Oregon and Lake County, the following specific proposals are suggested: (1) that the Navy be limited to the taking of 96,000 acres in Lake County, Oreg., as an absolute maximum ; (2) that only the portion of the present bombing range that can be utilized for industrial sites, and excluding the areas now worthless because of live bombs, that is of equal value with the 96,000 acres in Lake County, shall be received by the State of Oregon, and that the balance thereof shall be retained by the Federal Government and made available for the purposes of industrial installations within the State of Oregon when and if needed; and (3) that when and if the Navy no longer needs the areas within Lake County, Oreg., for bombing purposes, that the same become subject to the administration of the Bureau of Land Management under the Taylor Grazing Act.

Because of the time factor it is impossible for the proponents to develop the foregoing arguments at greater length. But we feel that sufficient information has been furnished herewith to adequately point up the problems confronted by Lake County in connection with the Boardman exchange and that from this information the proper safeguards can be written into the proposed legislation, H.R. 10777. Respectfully submitted.

LAKE COUNTY COURT,
By CHICK CHALOUPKA, District Attorney.

LAKE COUNTY CHAMBER OF COMMERCE,
By E. L. McKINNEY, Manager.

APRIL 30, 1960. Hon. JOHN STENNIS, Chairman, Subcommittee on Military Construction, Committee on Armed Ser

vices, U.S. Senate. DEAR John: Enclosed is a memorandum prepared by Mr. Forrest E. Cooper, attorney at law, of Lakeview, Oreg., setting forth eight proposed amendments to the Morse-Lusk amendment to H.R. 10777.

I respectfully request that the enclosed amendments be given careful consideration by the subcommittee and that they be included in the hearing record relative to the above-mentioned Morse-Lusk amendment. With best personal regards, Sincerely,

WAYNE MORSE.

PROPOSED AMENDMENTS TO AMENDMENT PROPOSED BY SENATORS MORSE AND

LUSK ON APRIL 1 to H.R. 10777, THE PENDING MILITARY CONSTRUCTION BILL

The purpose of the Morse-Lusk amendment would be to pave the way for the Navy to exchange the Boardman Bombing Range for a bombing range to be supplied elsewhere in the State of Oregon by the State of Oregon.

Proposed amendment No. 1.-That if the area so acquired from the State of Oregon in exchange for the Boardman Bombing Range which at the time of its acquisition be located within the exterior boundaries of a grazing district heretofor created pursuant to the act of June 28, 1934 (Taylor Grazing Act), said military reservation if and when abandoned by the Navy, shall be transferred without consideration to the public land inventory of the United States and thereafter administered pursuant to said act of June 28, 1934, as amended, and other land laws applicable thereto.

Proposed amendment No. 2.-It shall be the duty of the Navy Department in event of such an exchange to immediately determine whether or not it will permit livestock to graze upon any or all of said military reservation, and if its decision is in the affirmative, it shall reduce its decision to writing, add thereto its rules and regulations relating to the seasons and place of use and transmit the same to the district manager of said grazing district within which the said military reservation shall be established and said district manager and advisory board of said district shall administer said grazing resources in conformity with the said rules and regulations of the Navy and in conformity with any amendments and limitations thereafter imposed by the Navy, if any, and in accordance with the act of June 28, 1934, as amended, with due regard to any and all grazing privileges and priorities attached thereto which may be exercised pursuant to said act of June 28, 1934, immediately prior to the acquisition of any portion of said lands to be conveyed by the State of Oregon to the Navy, at the time of their acquisition.

Proposed amendment No. 3.—That the Bureau of Land Management in the course of its administration of the grazing resources that may be made available from time to time by the Navy within the exterior boundaries of said proposed military reservation shall make provision for the supply of forage either within or without said military reservation in lieu of forage which otherwise might be lost by existing lessee from the State of Oregon within the exterior boundaries of the reservation or which otherwise might be lost through the acquisition by the United States of a possessory title to land located within the exterior boundaries of the reservation which lands are the quid pro quo for existing exchange of use agreements by the owners of said private property and the Bureau of Land Management. Provided further, that in the event the State of Oregon acting pursuant to this act shall exchange to the United States of America, by and through the Bureau of Land Management pursuant to section 8 of the act of June 28, 1934, real property for the purpose of blocking up an area within the State of Oregon for the purpose of exchanging the same to the U.S. Navy in exchange for the Boardman Bombing Range as herein provided, and said State-owned trácts at the time of said exchange are leased to stockmen for grazing purposes, it shall be the duty of the Bureau of Land Management to provide said. lessees with range of like value in lieu thereof in or about their existing Taylor grazing allotments at the same grazing fees charged in said grazing districts for grazing permits issued pursuant to

section 3 of the act of June 28, 1934. Such grazing privileges issued pursuant hereto have class I priority status.

Proposed amendment No. 4.—The Navy is hereby authorized to acquire from the State of Oregon a contiguous tract of real property not exceeding 96,000 acres. In the absence of a national emergency, hereafter decreed to be such by the President, a request for an increase in the size of said military reservation shall be contingent upon the advice and consent of the legislature of the State of Oregon.

Proposed amendment No. 5.-Nothing herein contained shall be construed as an express or implied amendment of Public Law 85–337 ; 72 Stat. 27 enacted February 28, 1958. Any and all requests of the Navy, if any, to hereafter extend the exterior boundaries of said military reservation to be acquired from the State of Oregon as herein provided shall in addition to any other procedures herein provided be processeed in accordance with the provisions of said Public Law 85–337 in the event any such requisite shall embrace more than 5,000 acres of public land, water, or land and water area as defined in said act.

Proposed amendment No. 6.-All grazing fees to be paid for the grazing of livestock within the boundaries of said military reservation shall be due and payable to the Bureau of Land Management and shall be covered into the Treasury in the same manner as grazing fees now paid said agency for class 1 grazing licenses.

Proposed amendment No. 7.-Any Taylor grazing permittee having or claiming to have grazing privileges pursuant to the act of June 28, 1934, within the exterior boundaries of any lands that the State of Oregon may acquire pursuant to section 8 of said act for the purpose of exchange to the Navy as herein provided, whose claim or claims are in course of appeal to the Director or to the Secretary of the Interior or whose claims may be hereafter appealed, shall not have any such claim prejudiced by reason of the Navy's acquisition of his existing area of use and the status quo of said permittee shall be maintained by the Bureau of Land Management and the Secretary until his claim or claims have been adjudicated and any such person shall be dealt with as provided in amendment No. 3 above.

Proposed amendment No. 8.—The Navy shall not acquire from any property owner within Lake County, Oreg., other than the State of Oregon, an estate in any tract of real property greater than a 10-year lease.

Senator STENNIS. The next item here is Naval Air Station at Lemoore, Calif.

Mr. McGanney, you are here representing the Southern Pacific Pipe Lines, is that right?

Mr. McGANNEY. That is correct, sir.
Senator STENNIS. Do you have a prepared statement, sir?
Mr. McGANNEY. I do.

Senator STENNIS. Do you wish to read it, do you wish to insert it in
the record and summarize it and emphasize your highpoints?
Mr. McGANNEY. I would like to read it. It is short, Mr. Chairman.
Senator STENNIS. All right.

STATEMENT OF D. J. McGANNEY, PRESIDENT, SOUTHERN PACIFIC

PIPE LINES, INC., SAN FRANCISCO, CALIF. Mr. McGANNEY. My name is D. J. McGanney. I am president of Southern Pacific Pipe Lines, Inc., 65 Market Street, San Francisco, Calif.

The company which I represent is incorporated in the State of Delaware and has constructed, maintains, and operates common carrier petroleum products pipelines in California, Arizona, New Mexico, Texas, and Nevada. Southern Pacific Pipe Lines, Inc. is affiliated with and wholly owned by Southern Pacific Co. At the present time we operate 1,410 miles of pipelines. Gathering lines connect our in

put pump stations to various oil company refineries and tank farm terminals. The petroleum products currently being shipped are premium gasoline, regular gasoline, diesel fuel, stove oil, furnace oil, aviation gasoline, and jet fuel. We handled 25 million barrels of products in 1959.

At strategic locations, takeoff terminals are located to serve requirements of our commercial oil company customers and, in addition, we have exclusive use of military pipelines serving March Air Force Base, Calif.; Davis-Monthan Air Force Base, Williams Air Force Base, and Luke Air Force Base, Ariz.; Yuma Marine Corps Auxiliary Air Station, Ariz.; McClellan Air Force Base and Mather Air Force Base, Calif.; and Fallon Naval Auxiliary Air Station at Fallon, Nev. Our pipeline service to these fields results in substantial savings to the U.S. Government.

Our northern district pipeline originates at Richmond, Calif., located on San Francisco Bay, with gathering lines connecting the following oil companies to our initial pump station :

Richfield Oil Corp.: Terminal.
Texaco, Inc.: Terminal.
Time Oil Co.: Terminal.
Standard Oil Co. of Calif.: Refinery (capacity 180,000 b.p.d.).
Union Oil Co. of California Refinery (capacity 48,200 b.p.d.).
All of the above locations are served by tankers.

Twenty-three miles east of our Richmond pump station, at Concord, Calif., we have a second pump station, which is connected to refineries of Shell Oil Co. (daily capacity of 57,800 barrels) and Tidewater Oil Co. (daily capacity of 142,000 barrels), as well as the Ozol Air Force POL Retail Distribution Station, which has approximately 1 million barrels of underground storage, all of which are served by tankers. Our main pipeline between Concord and Roseville pump stations is 10 inches in diameter.

Under the provisions of H.R. 10777, an item of $10,818,000 is included for the Naval Air Station at Lemoore, Calif., of which amount $4,759,000 is for the construction of approximately 90 miles of 6 inch pipeline, pumping stations, acquisition of land, 220,000-barrel capacity storage tank farm, and a submarine pipeline for fuel which would be supplied by tanker at Estero Bay and thence via pipeline to Lemoore Naval Air Station. When this project was first indicated, we subsequently discussed the matter with various Navy personnel and, more recently, jointly with both Navy and Air Force personnel.

Previously, the Air Force had approached us as to the practicability of a pipeline to serve its Castle Air Force Base, located near Merced, Calif. An economic study was made of this latter request, and it was found not feasible to construct a pipeline to serve Castle Air Force Base only: however, when the combined fuel consumption of both Cast Force Base and Lemoore Naval Air Station was studied, it

it was economically feasible to make a proposal

nd the Navy to serve both locations by pipel

Base requirements (JP-4) were given to

nth, and the Lemoore Naval Air Station

17,000 barrels per month. The proposal

ines, Inc., as a substitute for the Navy E

ollows:

[graphic]

Senator STENNIS. That is the one in the bill, the Navy Estero Bay! Mr. McGANNEY. Yes, sir. "We propose, first, to construct a 10-inch line from connection of its main line at Stockton to Atwater (68 miles), to handle the combined volumes of the Navy for Lemoore (JP-5) and the Air Force for Castle (JP-4), at a rate of 40 cents per barrel from the Richmond-Concord area to that point.

2. To construct a terminal at Atwater, consisting of three 67,000barrel tanks for Navy JP-5, together with necessary pumps, motors, et cetera.

3. To construct a terminal at Atwater, consisting of three 67,000barrel tanks for Air Force JP-4, together with necessary pumps, motors, et cetera.

4. To construct a 6-inch line from Atwater terminal to Lemoore Naval Air Station (85 miles).

5. To construct a 6-inch line from Atwater terminal to Castle Air Force Base (21/2 miles).

6. Items 2 and 4—that is, the tankage and line to Lemoore above, to be covered by a 5-year service contract with the Navy, at a rental of $66,800 per month (or 40 cents per barrel), for the handling of 167,000 barrels per month. Any volume in excess of that figure per month would be handled at rate of 20 cents per barrel from Atwater to Lemoore.

7. Items 3 and 5, above, to be covered by a 5-year service contract with the Air Force, at a rental of $9,000 per month (or 6 cents per barrel) for the handling of 150,000 barrels per month. Any volume in excess of 150,000 barrels per month would also be handled at 6 cents per barrel.

8. The above indicates a through charge of 80 cents per barrel from the Richmond-Concord area to Lemoore on 167,000 barrels per month. Included in this cost on the entire volume of the new line is about $800,000 per year (or 40 cents per barrel on the 167,000 barrels per month to Lemoore) which will be returned to the Government in income tax payments, making a net cost to the Government at Lemoore of 40 cents per barrel. On any volume in excess of 167,000 barrels per month, crediting income tax payments will result in a net cost to the Government at Lemoore of 30 cents per barrel.

9. During the second 5-year period, if service contract is obtainable or option is desired by the Navy, rental would be $33,400 per month (or 20 cents per barrel) Atwater to Lemoore on throughput of 167,000 barrels per month. This would mean a through rate from the Richmond-Concord area to Lemoore of 60 cents per barrel, or a net cost to the Government of 30 cents per barrel. Crediting of income taxpayments would result in a net cost of 30 cents per barrel, inasmuch as the second 5-year period includes income taxpayments of about $600,000 on the entire volume of the new line. The through rate of 60 cents per barrel, or a net cost to the Government of 30 cents per barrel, would be continued for the third 5-year period.

10. Through charge of 46 cents per barrel from the RichmondConcord area to Castle Air Force Base represents a saving to the Air Force of approximately 9 cents per barrel as against present methods of handling, in addition to giving the Air Force the advantages of pipeline transportation.

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