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An expression of opinion regarding this legislation by the Secretary of the Interior follows:
DEPARTMENT OF THE INTERIOR,
Hon. ADDISON T. SMITH,
Chairman Committee on Irrigation and Reclamation,
House of Representatives.
DEAR MR. CHAIRMAN: With reference to your request of February 18 for an expression of my views on H. R. 16976, which would provide for the disposition of power revenues on Federal irrigation projects, there is transmitted herewith a memorandum on the subject that has been submitted by Doctor Mead, Commissioner of Reclamation, to which attention is invited.
After a review of the proposed measure, I agree with Doctor Mead.
RAY LYMAN WILBUR, Secretary.
DEPARTMENT OF THE INTERIOR,
Attached letter of February 18 from Hon. Addison T. Smith, chairman Committee on Irrigation and Reclamation, requests an expression of opinion regarding the advisability of enacting H. R. 16976, a bill to provide for the disposition of power revenues on Federal irrigation projects.
The purpose of the bill is to secure legislation of uniform application with regard to power development on irrigation projects. While there is now in force some legislation of a general character, the general laws have been modified in certain features with respect to particular projects. Such modifications, designed to meet changing conditions, have been incorporated in appropriation acts.
Originally it was the policy to construct power plants on irrigation projects only when such plants were necessary for pumping water for irrigation or to furnish power during construction of the project. The capacities of the plants were accordingly limited to these requirements. When construction was completed and contracts for payment were made, the cost of the power plant was included as a part of the construction cost and the water users were obligated to repay this cost in the same way as the cost for other project works. It was conceived that there was no authority of law for using the reclamation fund for construction of larger and costlier power plants for commercial power development. With small plants built for construction or pumping there was no reason for a distinction, as to the water users' rights and obligations, between the power plant and other project works. However, when money is used from the reclamation fund for development of commercial power without obligation on the part of the water users, there is a very cogent reason for departure from the original plan.
In the act of March 4, 1929, Congress provided with reference to the Shoshone power plant as follows:
"Provided further, That the net revenues from the operation of the Shoshone power plant shall be applied, first, to the repayment of the construction cost of the power system; second, to the repayment of the construction cost of the Shoshone Dam; and third, thereafter such net revenues shall be covered into the reclamation fund."
In the same act the following provision was inserted with regard to the Deadwood Reservoir, Boise project:
"Provided, That all net revenues derived from the operation of the Black Canyon power plant shall be applied to the repayment of the construction cost; first of the Deadwood Reservoir; second, the Black Canyon power plant and power system; and third, one-half the cost of the Black Canyon Dam, until the United States shall have been reimbursed for all expenditures made incident thereto. Thereafter all net revenues shall be covered into the reclamation fund unless and until otherwise directed by Congress. No charge shall be made against any irrigation district for the cost of construction of the said Deadwood Reservoir, the Black Canyon power plant and power system, or more than onehalf the cost of the Black Canyon Dam."
In the act of May 14, 1930, the following provision is found with relation to the Kennewick Highlands unit, Yakima project, Washington:
"Provided further, That all net revenues received from the disposition of power not required for pumping water for the irrigation of lands in the Kennewick
irrigation district shall be applied, first, to the payment of the construction cost incurred by the United States in connection with the Kennewick Highlands unit, including the power plant and appurtenances, until said construction cost is fully paid, and thereafter to retire the obligations incurred by the said district in the purchase of the said dam and right of way: And provided further, That title to and the legal and equitable ownership of the power plant and appurtenances constructed by the United States pursuant to this appropriation shall be and remain in the United States, and all net revenues therefrom shall go to the reclamation fund after payment of aforesaid construction cost and retirement of said obligations."
On page 292 of the hearings before the subcommittee on the Interior Department appropriation bill for 1932 the following appears:
"Another source of income once ignored promises to be an important factor in the repayment of construction costs in the future. That is the revenue from hydroelectric works built as an incident to the construction of irrigation projects. These power plants not only lower construction costs but are a source of income and social betterment afterwards. Cheap power enables farmers to light their homes and operate small farm machinery and home appliances. In Idaho alone 10,000 farms are furnished with these electrical conveniences. On some projects the income from hydroelectric power is nearly equal to the payments from irrigation; hence there is need of a definite policy of power development and of the utilization of power revenues as a part of Federal reclamation. Past experience, coupled with the urgent need of additional funds for accelerating and continuing construction work on irrigation projects, points conclusively to the adoption of a policy relative to hydroelectrical development under which the receipts should, first, be used to repay the cost of the power plant and appurtenant works; second, the cost of the reservoir and dam which regulates the delivery of water to the plant; and after that all net revenues should be credited to the revolving fund in the same manner as oil royalties are now credited."
The foregoing policy is approved by the Secretary of the Interior in paragraph 5, page 21, of his report for 1930, which reads as follows:
"As to hydroelectric development the policy expressed in recent appropriation acts should be adhered to, that is, application of power profits, first, to repay the cost of the power plant and appurtenant works; second, the cost of the reservoir and dam which regulates the delivery of water to the plant; and, after that, all net revenues should be credited to the revolving reclamation fund in the same manner that oil royalties are now credited. Existing contracts must, of course, be respected."
This development of commercial power policy is therefore a departure from the policy pursued on the earlier projects, and the change has been made because the experience on the earlier projects has shown that while the full commercial power possibilities of these projects should be developed, power costs and revenues should be kept separate from irrigation costs and payments. As in the past, power for construction and for the use of irrigators on their farms or in the towns should be furnished at a low rate, but power for industrial and commercial purposes should pay rates corresponding to those of private power development. This confers great benefits on the irrigators on projects having power possibilities, while the profits from such development will do much to recoup losses on existing projects and help build future ones.
The change in policy as to commercial power development incorporated in the foregoing acts of Congress does not work any injustice upon the water users of the various projects. In such cases the costs of the plants have not been charged to the water users of the project and they are not obligated to repay any part of the cost incurred by the United States in their construction. They benefited by cheaper construction. They are benefited by having cheap power to light their houses and operate farm machinery. They will benefit by its influence in promoting local industrial development.
Section 1 provides that facilities used in connection with irrigation (and usable also in power development) shall be included as a part of the commercial power system and the costs of such facilities will be borne entirely from power revenues.
Section 2 of the bill gives the water users of the project, where development has already taken place under the general law, the option of becoming subject to the same provisions as those relating to new development.
Section 3 provides that any extension of power systems now in existence shall be subject to the rule laid down for new development.
Section 4 provides for amendment of the general law now in force to conform with the new policy adopted by Congress and which, if the present bill is passed
and approved, will hereafter be applicable generally. This will in no wise interfere with contracts now in force, but will prescribe a new rule for future guidance. I suggest the following amendments: In line 4, page 1, change the word "a" to "an' and insert "incidental" preceding the words "commercial power". In line 3, page 2, after the word "such" insert "incidental". In line 8, page 2, after the word "having" insert “an incidental”. In line 17, page 2, delete the word "commercial". In line 20 after the word "otherwise" insert "for the creation of commercial power".
These amendments are suggested to emphasize the fact that commercial power development is to take place only as an incident to the construction of irrigation projects and that moneys from the reclamation fund will not be utilized solely for the development of commercial power apart from an irrigation project. It is of the utmost importance that a uniform law be adopted. With the amendments suggested I recommend favorable consideration of the bill.
ELWOOD MEAD, Commissioner.
[H. R. 16976, Seventy-first Congress, third session]
A BILL To provide for the disposition of power revenues on Federal irrigation projects
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That as to irrigation projects hereafter constructed having an incidental commercial power development built by the United States from the reclamation fund, the cost of the power system, includ ing such portion as the Secretary of the Interior may find to be proper and equitable of the cost of structures and other facilities provided and used primarily for irrigation purposes but incidentally used in connection with and as a part of said power system, shall be returnable from power revenues and shall not be charged to or repaid, in whole or in part, by the water users of the project. All revenues derived from the operation of any such incidental commercial power system shall be covered into the reclamation fund and shall not be credited to the charges payable by the water users of the project or any division thereof.
SEC. 2. That as to irrigation projects now constructed or partially constructed having an incidental commercial power development in operation, the cost of which has been charged to the water users who have obligated themselves to repay the same, the water users of the project, or any division thereof, who have assumed such obligation, may, at their option, be placed upon the same basis and become subject to the same conditions as those outlined in section 1 hereof, upon the execution of appropriate contract or contracts therefor satisfactory to the Secretary of the Interior.
SEC. 3. That wherever any power system now in operation constructed by and at the expense of the United States shall be enlarged or new construction work done thereon in the way of betterments or otherwise, for the creation of commercial power, by money appropriated from the reclamation fund, such additional construction work shall be upon the same basis and subject to the same conditions as those provided for in section 1 hereof.
SEC. 4. That Subsection I, section 4, act of December 5, 1924 (43 Stat. L. 703), is hereby amended to read as follows:
"That whenever the water users take over the care, operation, and maintenance of a project or division of a project, the accumulated net profits as determined by the Secretary of the Interior derived from (a) operation of project power plants, the cost of which the water users have obligated themselves to repay to the Government; (b) leases of project grazing and farm lands, and the sale or use of town sites, shall be credited to the construction charge of the project, or division thereof. After the water users have taken over the care, operation, and maintenance of the project, or a division thereof, all net profits or revenues derived from the sources named may be used by the water users to be credited, annually as they accrue, as follows: First, in reduction of the total construction obligation assumed by the water users but not on the annual installments payable by them; second, on account of operation and maintenance charges; and, third, as the water users may direct. No distribution to irrigation districts, water users' associations, or to individual water users shall be made from any such profits or revenues before all obligations to the Government on account of construction charges shall have been fully paid, nor while any accrued operation and maintenance charges then due remain unpaid. The provisions of this section shall not apply when in conflict with any contracts now in force."
TO AMEND THE CODE OF CRIMINAL PROCEDURE FOR THE CANAL ZONE
FEBRUARY 23, 1931.-Referred to the House Calendar and ordered to be printed
Mr. DENISON, from the Committee on Interstate and Foreign Commerce submitted the following
[To accompany H. R. 16554]
The Committee on Interstate and Foreign Commerce, to whom was referred the bill (H. R. 16554) to amend the Code of Criminal Procedure for the Canal Zone, having considered and amended the same, report thereon with a recommendation that it pass.
The following amendments to the bill are recommended by the committee:
Page 6, line 16, strike out the word "of" and insert in lieu thereof the word "and".
Page 12, line 2, strike out the word "an" at the end of the line.
Page 13, line 5, strike out the words "hand over" and insert in lieu thereof the word "deliver".
Page 14, line 4, add the letter "s" to the word "information" so as to make it read "informations".
Page 16, between lines 5 and 6 insert a new section as follows:
SEC. 34. That section 90 of the Code of Criminal Procedure for the Canal Zone is hereby amended to read as follows:
"SEC. 90. The district attorney shall have power to issue subpoenas for witnesses."
Page 20, line 15, strike out the word "forwith" and insert in lieu thereof the word "forthwith".
The bill has the approval of the President and the Secretary of War, as will appear by the letters attached, as follows:
WAR DEPARTMENT, Washington, December 22, 1930.
Hon. JAMES S. PARKER,
Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. DEAR MR. PARKER: The receipt is acknowledged of your letter of December 4, 1930, inclosing and requesting a report and comment upon bill H. R. 14070
entitled "A bill to amend the Code of Criminal Procedure for the Canal Zone," which was introduced by Mr. Denison.
This is one of the proposals made for the revision of the laws of the Canal Zone recommended by me in letter to the President dated June 5, 1930, and, in conformity with the provisions of the act of May 17, 1928 (45 Stat. 596), entitled "An act to revise and codify the laws of the Canal Zone," forwarded by him to the Congress with his message of June 9, 1930.
The message and report transmitted therewith were printed as House Document No. 460, Seventy-first Congress, second session. A statement of the reasons for and the effect of the proposed amendments is set forth on pages 279 to 284 of that document.
Subsequent to the submission of the original report, it was found advisable to make certain changes therein. These changes were recommended by me to the President by letter dated December 1, 1930, which was forwarded by him to the Congress with his message of December 4, 1930, published in House Document No. 675. A statement attached to my letter and printed in House Document No. 675 contains the reasons for the changes proposed. These changes and some typographical errors in the bill as printed are listed on the attached statement and are incorporated in a copy of the bill which is returned herewith.
The early consideration and passage of the legislation proposed for the Canal Zone are recommended.
PATRICK J. HURLEY,
Hon. JAMES S. PARKER,
Chairman Committee on Interstate and Foreign Commerce,
DEAR MR. PARKER: The receipt is acknowledged of your letter of January 27, 1931, inclosing and requesting a report and comment upon bill H. R. 16554, entitled "A bill to amend the Code of Criminal Procedure for the Canal Zone," which was introduced by Mr. Denison:
This bill (H. R. 16554) is a reprint of bill H. R. 14070, with the typographical errors corrected and the amendments made as recommended in my letter of December 22, 1930.
The following typographical errors, however, were made in this bill:
Page 6, line 16, strike out the word "of" and insert in lieu thereof the word "and" before the word "office".
Page 12, line 2, strike out the word "an" at the end of the line, said word being repeated in line 3.
Page 20, line 15, strike out "forwith" and insert in lieu thereof the word "forthwith".
I can only repeat my former recommendation for the early consideration and passage of the legislation proposed for the Canal Zone.
PATRICK J. HURLEY,
DEPARTMENT OF JUSTICE,
Hon. JAMES S. PARKER,
Chairman Committee on Interstate and Foreign Commerce,
DEAR MR. CHAIRMAN: Reference is made to your letter of December 4, submitting H. R. 14070 to amend the Code of Criminal Procedure for the Canal Zone to this department for a report and comment thereon.
Inasmuch as the administration of matters affecting the Canal Zone do not come within the jurisdiction of this department, I do not feel justified in advising you on legislation with respect thereto.
Your attention is called, however, to what seem to be clerical errors appearing in the bill. Line 19 on page 43 apparently should read: "SEC. 82. That section 237 of the Code of Criminal” instead of the words appearing in said line. Also there appears to be an inadvertent omission of section 83.
WILLIAM D. MITCHELL,