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by each of the seven States signatory thereto, and shall have approved said compact without conditions, save that of such six-State approval, and the President by public proclamation shall have so declared, and, further, until the State of California, by act of its legislature, shall agree irrevocably and unconditionally with the United States and for the benefit of the States of Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming, as an express covenant and in consideration of the passage of this act, that the aggregate annual consumptive use (diversions less returns to the river) of water of and from the Colorado River for use in the State of California, including all uses under contracts made under the provisions of this act and all water necessary for the supply of any rights which may now exist, shall not exceed four million four hundred thousand acrefeet of the waters apportioned to the lower basin States by paragraph (a) of Article III of the Colorado River compact, plus not more than one-half of any excess or surplus waters unapportioned by said compact, such uses always to be subject to the terms of said compact.

The States of Arizona, California, and Nevada are authorized to enter into an agreement which shall provide (1) that of the 7,500,000 acre-feet annually apportioned to the lower basin by paragraph (a) of Article III of the Colorado River compact, there shall be apportioned to the State of Nevada 300,000 acre-feet and to the State of Arizona 2,800,000 acre-feet for exclusive beneficial consumptive use in perpetuity, and (2) that the State of Arizona may annually use one-half of the excess or surplus waters unapportioned by the Colorado River compact, and (3) that the State of Arizona shall have the exclusive beneficial consumptive use of the Gila River and its tributaries within the boundaries of said State, and (4) that the waters of the Gila River and its tributaries, except return flow after the same enters the Colorado River, shall never be subject to any diminution whatever by any allowance of water which may be made by treaty or otherwise to the United States of Mexico but if, as provided in paragraph (c) of Article III of the Colorado River compact, it shall become necessary to supply water to the United States of Mexico from waters over and above the quantities which are surplus as defined by said compact, then the State of California shall and will mutually agree with the State of Arizona to supply, out of the main stream of the Colorado River, one-half of any deficiency which must be supplied to Mexico by the lower basin, and (5) that the State of California shall and will further mutually agree with the States of Arizona and Nevada that none of said three States shall withhold water and none shall require the delivery of water, which can not reasonably be applied to domestic and agricultural uses, and (6) that all of the provisions of said tri-State agreement shall be subject in all particulars to the provisions of the Colorado River compact, and (7) said agreement to take effect upon the ratification of the Colorado River compact by Arizona, California, and Nevada.

NOTE

In decision of August 30, 1934, the Department held that sec. 4 (a) of the Boulder Canyon Project Act (45 Stat. 1057) providing that the State of California

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shall have, each year, for beneficial consumptive use not to exceed 4,400,000 acre-feet of water from the lower basin of the Colorado River, considered in connection with article III (a) of the Colorado River compact, must be interpreted as forbidding the Secretary of the Interior to enter into a contract for the storage of water in the contemplated reservoir, which might prevent the receipt by California of its stated annual water allotment. (Decision of Solicitor, August 30, 1934.)

(b) Before any money is appropriated for the construction of said dam or power plant, or any construction work done or contracted for, the Secretary of the Interior shall make provision for revenues by contract, in accordance with the provisions of this act, adequate in his judgment to insure payment of all expenses of operation and maintenance of said works incurred by the United States and the repayment, within fifty years from the date of the completion of said works, of all amounts advanced to the fund under subdivision (b) of section 2 for such works, together with interest thereon made. reimbursable under this act.

Before any money is appropriated for the construction of said main canal and appurtenant structures to connect the Laguna Dam with the Imperial and Coachella Valleys in California, or any construction work is done upon said canal or contracted for, the Secretary of the Interior shall make provision for revenues, by contract or otherwise, adequate in his judgment to insure payment of all expenses of construction, operation, and maintenance of said main canal and appurtenant structures in the manner provided in the reclamation law.

If during the period of amortization the Secretary of the Interior shall receive revenues in excess of the amount necessary to meet the periodical payments to the United States as provided in the contract, or contracts, executed under this act, then, immediately after the settlement of such periodical payments, he shall pay to the State of Arizona 1834 per centum of such excess revenues and to the State of Nevada 1834 per centum of such excess revenues. (45 Stat. 1058, 1059.)

Textual note.-Section 4, (a) and (b), is codified as section 617c, (a) and (b), in chapter 12A, title 43, United States Code, with the following changes: In the first paragraph of (a) "act," when it refers to the Boulder Canyon project act, appears as "chapter" and "section 13" appears as "section 617c." In the first paragraph of (b) the word "act." occurring twice, is changed each time to "chapter," and "section 2" is changed to "section 617a." The word "act" in the fourth paragraph of (b) is changed to "chapter."

NOTES

Ratification.-With respect to the adherence of Utah to the Colorado River compact, Chapter 31 of the 1929 Laws of Utah, approved March 6, 1929, clearly shows that the legislature intended the ratification by that State to be "without condition save that of six-State approval." The ratification of the Colorado River compact by the State of Utah conforms to the requirements of the applicable provisions of the Boulder Canyon project act. (36 Opin. Atty. Gen. 72, dated June 22, 1929.)

By decision M-25151, dated April 24, 1929, approved by the Secretary of the Interior, the Solicitor for the Interior Department found that the act of the California Legislature of March 4, 1929 (Assembly Bill No. 1070), embodies the express agreement required of the State of California by the act of December 21, 1928, with respect to the use of the waters apportioned to the lower basin States, effective when six States comply with the requirements and conditions of paragraph 2, section 4 (a) of the act of December 21, 1928.

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The text of the President's proclamation, signed at Washington June 25, 1929 (46 Stat. 3000), is as follows:

By the President of the United States of America:

PUBLIC PROCLAMATION

Pursuant to the provisions of section 4 (a) of the Boulder Canyon project act approved December 21, 1928 (45 Stat. 1057), it is hereby declared by public proclamation:

(a) That the States of Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming have not ratified the Colorado River compact mentioned in section 13 (a) of said act of December 21, 1928, within six months from the date of the passage and approval of said act.

(b) That the States of California, Colorado, Nevada, New Mexico, Utah, and Wyoming have ratified said compact and have consented to waive the provisions of the first paragraph of Article XI of said compact, which makes the same binding and obligatory only when approved by each of the seven States signatory thereto, and that each of the States last named has approved said compact without condition, except that of six-State approval as prescribed in section 13 (a) of said act of December 21, 1928.

(c) That the State of California has in all things met the requirements set out in the first paragraph of section 4 (a) of said act of December 21, 1928, necessary to render said act effective on six-State approval of said compact.

(d) All prescribed conditions having been fulfilled, the said Boulder Canyon project act approved December 21, 1928, is hereby declared to be effective this date.

In testimony whereof I have hereunto set my hand and caused the seal of the United States of America to be affixed.

Done at the city of Washington this 25th day of June, in the year of our Lord one thousand nine hundred and twenty-nine, and of the Independence of the United States of America the one hundred and fifty-third.

HERBERT HOOVER.

Contracts held to be valid. The opinion of the Attorney General addressed to the President under date of June 9, 1930, holds that the Contract for Lease of Power Privilege with the city of Los Angeles, its department of water and power and the southern California Edison Co., Ltd., is a valid agreement binding upon the city and its department to the extent to which funds are available under the provisions of the department's charter, and is in full compliance with section 4 (b) of the Boulder Canyon project act, since the revenues which it will provide out of such funds are, in the judgment of the Secretary of the Interior, adequate to meet the requirements of that section. It further holds that all the requirements of the said section which are made conditions precedent to the appropriation of money, the making of contracts, and the commencement of work for the construction of a dam and power plant have been fully met and performed by the Secretary of the Interior in securing contracts with the city and company. (36 Op. Atty. Gen. 270.)

This opinion was upheld by the Comptroller General in decision A-32702. October 10, 1930. Notwithstanding the objections on the part of the State of Arizona, Congress made an initial appropriation of $10.660,000 in the act of July 3, 1930 (46 Stat. 877). Taking into consideration the fact that no restriction or limitation was contained in this appropriation, and further that compliance with the conditions precedent in the Boulder Canyon project act was reserved by section 4 (b) of said act for the consideration of the Congress, it must be presumed, in view of the appropriation made, that Congress has in fact determined, and has been satisfied, that the law with respect to entering into contracts has been complied with, not only in so far as concerns the making of the appropriation, but also with respect to the other two stens, i. e., the beginning of construction work and the contracting for such work.

Advances for construction of All-American canal not to bear interest.-The omission of any mention of interest in the second paragraph of section 4 (b), in contradistinction to the express mention thereof in the first paragraph, is significant, and strongly indicative of an intention of Congress that interest upon the construction cost of the All-American Canal should not be charged against lands benefited. The main canal was singled out and treated as a purely reclamation project, the expenditures for which were to be reimbursable in the same manner as those for other projects administered under the reclamation law. (36 Op. Atty. Gen. 121, Dec. 26, 1929.)

Advances from the general Treasury to the Colorado River Dam fund, used solely in the construction, operation, and maintenance of the All-American Canal and its diversion dam, and disbursements from the Colorado River Dam fund for such purposes, are not intended by the act to be interest bearing, but

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are intended to fall within the policy of the general reclamation law, i. e., the act of May 25, 1926 (44 Stat. 636), providing for a period of repayment of 40 years without interest. (Op. of Sol. of Int. Dept. Aug. 3, 1929.)

See notes of Attorney General's decision under section 2 with reference to section 2 (b).

See notes of Solicitor's decision under section 5 (c).

In decision A-32702, dated December 6, 1933, the Comptroller held (construing sec. 4 (b) of the Boulder Canyon Project Act) that inasmuch as the Coachella Valley County Water District had filed appeal in the Supreme Court of California from decision of the lower court validating the contract of December 1, 1932, with the Imperial Irrigation District for the construction of the All-American Canal, no funds may be expended for construction until the contract has been found valid by the court of last resort.

The terms of the Boulder Canyon Project Act of December 21, 1928, give the Secretary of the Interior authority to execute a contract with the city of San Diego, Calif., covering capacity for the city in the All-American canal, with a provision for repayment of the city's proportionate share of the construction cost, in accordance with the Reclamation Act, i. e., in 40 annual installments without interest. (Departmental decision, M-27679, April 5, 1934.)

(d)

See paragraph entitled "All-American Canal," following section 1 of this act. Sec. 5. [Contracts for storage of water and its delivery, and for generation and sale of electrical energy-Congress to prescribe basis of chargesRevenues to be in separate fund. (a) Time limit of 50 years on contracts for electrical energy-Contracts to be made with view of returns-Readjustment of contracts upon demand. (b) Renewal of electrical energy contracts. (c) Contracts to be made with responsible applicants for meeting revenues required-Adjustment of conflicting applications. Contracting agencies for electrical energy may be required to share in benefits.]-That the Secretary of the Interior is hereby authorized, under such general regulations as he may prescribe to contract for the storage of water in said reservoir and for the delivery thereof at such points on the river and on said canal as may be agreed upon, for irrigation and domestic uses, and generation of electrical energy and delivery at the switchboard to States, municipal corporations, political subdivisions, and private corporations of electrical energy generated at said dam, upon charges that will provide revenue which, in addition to other revenue accruing under the reclamation law and under this act, will in his judgment cover all expenses of operation and maintenance incurred by the United States on account of works constructed under this act and the payments to the United States under subdivision (b) of section 4. Contracts respecting water for irrigation and domestic uses shall be for permanent service and shall conform to paragraph (a) of section 4 of this act. No person shall have or be entitled to have the use for any purpose of the water stored as aforesaid except by contract made as herein stated.

After the repayments to the United States of all money advanced with interest, charges shall be on such basis and the revenues derived therefrom shall be kept in a separate fund to be expended within the Colorado River Basin as may hereafter be prescribed by the Congress.

General and uniform regulations shall be prescribed by the said Secretary for the awarding of contracts for the sale and delivery of

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electrical energy, and for renewals under subdivision (b) of this section, and in making such contracts the following shall govern:

NOTES

The fixing of financial requirements and rigid examination of the financial status of competing bidders is not only within the Secretary's discretion but is an absolute obligation resting upon him. (Op. Sol. for Int. Dept., Jan. 6, 1930, 53 L. D. 1.)

General regulations for lease of power were issued by the Secretary of the Interior under date of April 25, 1930, amended March 10, 1931, July 1, 1931, and November 16, 1931, and for the sale of water on April 23, 1930, amended September 28, 1931.

(a) No contract for electrical energy or for generation of electrical energy shall be of longer duration than fifty years from the date at which such energy is ready for delivery.

Contracts made pursuant to subdivision (a) of this section shall be made with a view to obtaining reasonable returns and shall contain provisions whereby at the end of fifteen years from the date of their execution and every ten years thereafter, there shall be readjustment of the contract, upon the demand of either party thereto, either upward or downward as to price, as the Secretary of the Interior may find to be justified by competitive conditions at distributing points or competitive centers, and with provisions under which disputes or disagreements as to interpretation or performance of such contract shall be determined either by arbitration or court proceedings, the Secretary of the Interior being authorized to act for the United States in such readjustments or proceedings.

Textual note.-Section 5 is codified as section 617d of chapter 12A, title 43, United States Code, with the following changes in the first paragraph: The word "That" at the beginning of the paragraph is omitted; the word "act," occurring three times, is changed to "chapter," and "section 4," occurring twice, reads "section 617c."

Section (a) is codified as section 617d (a), chapter 12A, title 43, United States Code.

NOTE

Highest bid. The Secretary is not required to accept the highest bid if that bid is in excess of the price which can be realized for the power under competitive conditions at competitive centers. The selling standard is to be "reasonable returns," not "all the traffic will bear." The phrase "shall be made with a view to obtaining reasonable returns" was in fact a specific amendment to this section (Cong. Rec. Senate, Dec. 14, 1928, p. 618), and clearly indicates the selling basis deemed to be feasible and most in line with public interest and the equitable distribution of benefits of Boulder Dam power. If the bidder can not sell his power in competition with other sources he is not a desirable source for reimbursement of the Federal expenditure. (Op. Sol. for Int. Dept., Jan. 6, 1930. 53 L. D. 1.)

(b) The holder of any contract for electrical energy not in default thereunder shall be entitled to a renewal thereof upon such terms and conditions as may be authorized or required under the then existing laws and regulations, unless the property of such holder dependent for its usefulness on a continuation of the contract be purchased or acquired and such holder be compensated for damages to its property, used and useful in the transmission and distribution of such electrical energy and not taken, resulting from the termination of the supply.

Textual note.-Section 5 (b) is codified as section 617d (b), chapter 12A, title 43, United States Code.

(c) Contracts for the use of water and necessary privileges for the generation and distribution of hydroelectric energy or for the