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Right of Federal Subsistence Homestead Corporation in reclamation projects.Inasmuch as the Federal Subsistence Homestead Corporation is a Government agency, serving no function other than aiding in the purchase of subsistence homesteads by individuals, the section of the reclamation law prohibiting corporations from acquiring lands in a Federal reclamation project and the section limiting holdings to 160 acres, do not apply to this corporation. (Opinion of Assistant Secretary, August 14, 1934.)

4. Residence and occupancy.—Where a tract of land under a reclamation project is owned by two or more persons jointly, unless each is a "resident" or an occupant on the land, no right to use water to irrigate the same can be acquired under this section. (Departmental decision, January 12, 1910.)

To entitle an applicant to the use of water for lands held in private ownership within the irrigable area of an irrigation project under this act to the benefits of this act, he must hold the title in good faith, and his occupancy must be bona fide and in his own individual right. (Secretary's instructions, May 21, 1904, 32 L. D. 647.)

The residence requirements provided for in this section apply to all persons acquiring by assignment water-right contracts with the United States, unless prior to such assignment the final water-right certificate contemplated by section 1 of the act of August 9, 1912 (37 Stat. 265), has been issued, in which event the land may be freely alienated, subject to the lien of the United States. (H. G. Colton, 43 L. D. 518.)

The residence requirement of this section in reference to private lands is fully complied with if, at the time the water-right application is made, the applicant is a bona fide resident upon the land or within the neighborhood. After approval of the application further residence is not required of such applicant, and final proof may therefore be made under the act of August 9, 1912 (37 Stat. 265), without the necessity of proving residence at the time proof is offered. (Departmental decision, April 19, 1916.)

The term “in the neighborhood" held to mean within 50 miles. (Departmental decision, January 20, 1909.)

Paragraph 105 of the general reclamation circular approved May 18, 1916 (45 L. D. 385), provides that in case of the sale of all or any part of the irrigable area of a tract of land in private ownership covered by a waterright application which is not recorded in the county records, the vendor will be required to have his transferee make new water-right application for the land transferred. Held, that in making the new application it is immaterial whether or not the transferee be “an actual bona fide resident on such land or occupant thereof residing in the neighborhood.” (Reclamation decision, July 25, 1917, In re J. W. Merritt, Truckee-Carson.)

Order withdrawing land from entry under section 3, reclamation act, did not relieve entryman from the duty of reclaiming land under section 5, reclamation act, and complying with homestead law as to residence and cultivation under Revised Statutes United States, sections 2289-2291, 2297, prior to amendment of 1912, where the land officials made a public announcement that the withdrawals of lands were not permanent, but were for the purpose of enabling preliminary investigations to be made as to feasibility of irrigation project (Bowen v. Hickey (1921), 53 Cal. App. 250; 200 Pac. 46; certiorari denied (1921), 42 Sup. Ct. 168, 257 U. S. 656, 66 L. Ed. 420).

An entryman under this act does not acquire or maintain a residence by occasional visits or by going upon the land for the purpose of merely formal compliance with the law, substantial residence and good faith being necessary. Determination of officials of the Land Department that entryman under this act failed to establish a residence upon the land held justified by the evidence. (Idem.)

5. Payment of water charges.— The provision in section 5 of the reclamation act that failure to make payment of any two annual installments when due shall render the entry subject to cancellation, with forfeiture of all rights under the act, is not mandatory, but it rests in the sound discretion of the Secretary of the Interior whether the entryman in such case may thereafter be permitted to cure his default by payment of the water charges, where he has continued to comply with the provisions of the homestead law; and in event an entry has been canceled for such failure, the Secretary may, in the absence of adverse claim, authorize reinstatement thereof with a view to permitting the entryman to cure his default. (Marquis D. Linsea, 41 L. D. 86.)

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Inasmuch as the acts of June 17, 1902, and August 13, 1914, did not peremptorily declare in mandatory language that forfeitures must be declared, or that they will necessarily result by operation of law as soon as defaults in payments by water users on reclamation projects have occurred, it rests within the sound discretion of the Secretary of the Interior to determine whether an entryman may thereafter be permitted to cure the default by payment of the charges. (Departmental opinion, December 31, 1923, In re Shoshone irrigation project, 50 L. D. 223.)

One holding a mortgage against only a part of a tract of land in private ownership upon a Federal reclamation project for which entire tract a waterright application has been made, may pay up from time to time the charges on that portion of the tract covered by the mortgage in the event the landowner fails to pay. (Departmental decision, July 13, 1917.)

Fiscal agents upon United States reclamation projects are authorized to accept from water users money tendered in payment of an accrued installment of either construction, operation and maintenance, or rental charges, for any year, even though installments for a previous year remain unpaid. (Reclamation decision, August 6, 1917; C. L. No. 680.)

In cases where the title to lands under water-right application upon a Federal reclamation project is in dispute, and the land is in possession of one other than the record owner, the Reclamation Service (Bureau of Reclamation) may deliver water to the party in possession, upon payment in advance of the operation and maintenance charges. (Reclamation decision, August 24, 1917, In re Wood v. Eggleston, Truckee-Carson.)

Where entries and water-right applications have been held for cancellation for failure to pay the building charges, pending final action, water may be furnished for the land upon proffer of the portion of the installments for operation and maintenance. (Departmental decision, February 9, 1909.)

No power exists in the Secretary of the Interior to formally grant specific extension of time for payment of overdue water-right charges. (Departmental decision, April 22, 1909.)

The provisions of section 5 of the reclamation act of June 17, 1902 (32 Stat. 388), and of sections 3 and 6 of the reclamation extension act of August 13, 1914 (38 Stat. 686), regarding one year of grace for the payment of overdue water charges, refer only to the drastic remedies of cancellation and forfeiture and not to the right to bring suit in a court for collection of a water charge past due and unpaid. (Reclamation decision, December 4, 1917, U. S. v. Edison E. Kilgore, Shoshone. See Secretary's regulations of February 27, 1909, regarding delinquent payments, 37 L. D. 468.)

See notes 5 and 6 under section 4 of this act.

Warrants may be reaccepted after presentation and default.- The Pioneer irrigation district issued a warrant in payment of its indebtedness to the United States, which upon presentation to the district for payment was not paid due to insufficient funds. The Department ruled that an administrative officer may accept a "call” warrant in payment of indebtedness under a contract to be held by the United States until paid in due course, as provided by the State statutes. Or, if it is deemed to the best interest of the United States, the administrative officer may refuse to accept the warrant, instituting suit for recovery of the money. (Decision of Acting Solicitor, approved by First Assistant Secretary, August 2, 1933.)

6. Parties to suit enjoining collection of water charges.-A corporation with which, as the representative of its shareholders, who are parties accepted by the United States as holders of water rights in a project under the reclamation act, the United States makes a contract for the benefit of such shareholders relative to the supply of water due and and the dues to be paid by the shareholders and which covenants in the contract to collect dues for the United States and guarantees the payment thereof, is a proper party plaintiff in a suit to enjoin officers of the United States from collecting unlawful charges from the shareholders, turning the water from their lands, and canceling their water rights and homestead rights because they fail to pay such charges. (Magruder et al. v. Belle Fourche Valley Water Users' Association (1914), 219 Fed. 72; 133 C. C. A. 524.)

In Moody v. Johnson, project manager of the Flathead Indian reclamation project, decided by the Circuit Court of Appeals, Ninth Circuit, July 27, 1933,

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66 Fed. (20) 999, it was held that an injunction would not lie against the project manager to restrain the shutting off of water to enforce the payment of charges due under orders of the Secretary of the Interior (a) unless the Secretary of the Interior were joined as a party defendant where the United States conceded the existence of the water supply claimed by the plaintiff below or (b) unless the Secretary of the Interior and the United States were joined as parties defendant, where the United States disputed the plaintiff's claim of a water supply, and where the allowance of the plaintiff's claim would affect the Government water supply available for the Flathead project.

7. Release of nonirrigable lands.--The director (commissioner) is authorized to assent to the release from stock subscription of any and all lands in any and all projects heretofore or hereafter shown by official survey or by the original or amended farm unit plats to be nonirrigable; also, to assent to the reduction of stock subscription for any such lands to the acreage so shown as irrigable. (Departmental decisions, March 11, 1912, and September 16, 1912.)

8. Taxation of land within reclamation project.-A patent to lands within a reclamation project issued to a homestead entryman under act of August 9, 1912 (37 Stat. 265), on proof of compliance with the provisions of law as to residence, reclamation, and irrigation conveys a legal title, the Government reserving only a prior lien on the land and appurtenant water rights as security for the payment of all sums due or to become due on such water rights, and such lands are taxable by the State; the lien of the tax, however, being subject to the prior lien reserved by the Government. Homestead entrymen on such lands who have made proof of compliance with the general homestead laws, but have not fully complied with the additional requirements of the reclamation act as to reclamation and irrigation, have a vested interest which may be sold, mortgaged, and inherited, and which also is subject to local taxation. Generally speaking, one who has the right to real property and is not excluded from its use and enjoyment should not be permitted to use the legal title of the Government to avoid his just share of taxation. (United States v. Canyon County, Idaho, et al. (D. C. Ida. 1916), 232 Fed. 985. See also Cheney v. Minidoka County, 26 Idaho 471, 144 Pac. 343. To the contrary, see Law Notes, Reclamation Record, 1915, p. 554; Reclamation Record. 1916, p. 65.)

The equitable title to lands within a reclamation project does not pass to the homestead entryman on his compliance with the homestead act (Rev. Stat. sec. 2291), as amended by act June 6, 1912 (37 Stat. 123). Such title does not pass until after his compliance with the requirements of this act, and the rules and regulations established by the Secretary of the Interior under Section 10 of the reclamation act so that the State can not tax the lands within the reclamation project until final certificate of compliance with the reclamation act is issued. (Irwin v. Wright (Ariz. 1922), 42 Sup. Ct. 293, 258 U. S. 219, 66 L. Ed. 573.)

Lands within the Payette-Boise Government project, on which homestead entry and proof had been made, but as to which there had been no reclamation proof made nor certificate of such proof issued, held not subject to taxation, since, until reclamation proof is accepted by the United States and final certificate issued, entryman does not have taxable interest in land. (Wood v. Canyon County (1927), 253 Pac. 839.)

On December 31, 1927, the Supreme Court of South Dakota held, following Irwin v. Wright, 258 U. S. 219, that the lands of a homestead entryman on the Belle Fourche project, on which final homestead proof but not final reclamation proof had been made, were not subject to general State taxation. (Casey v. Butte Co. (1927), 217 N. W. 508, reversing judgment of circuit court.)

The North Side Canal Co. entered into a contract with the United States for the purchase of storage rights in the Jackson Lake reservoir in Wyoming, the water stored therein to be used in Idaho. The State of Wyoming assessed taxes against the interest of the canal company in the reservoir and the canal company resisted the payment of such taxes. The trial judge held (North Side Canal Co. v. State Board of Equalization, Wyoming, September 26, 1925, 8 Fed. (20) 739), that the taxes were properly levied. The case was appealed to the Circuit Court of Appeals for the Eighth Circuit, which reversed the decision of the District Court of the United States for the District of Wyoming and held that the attemped tax is wholly null and void for the reason that the

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water rights in question are appurtenant to the lands on which the water has been applied to beneficial use, which lands are located in the State of Idaho and are therefore not within the jurisdiction of Teton County, Wyo., for taxation purposes. (December, 1926, 17 Fed. (20) 55. Certiorari denied (1927), 47 Sup. Ct. 586; 274 U. S. 740.) Similar ruling in Twin Falls Canal Co. v. State of Wyoming.

Subsequently to this decision the Legislature of Wyoming passed an act (chapter 36, Session Laws of Wyoming, 1927), in effect attempting to make water rights acquired under the laws of Wyoming taxable. Thereafter the State attempted to levy taxes upon the water rights, the taxability of which was litigated in the foregoing suit. The district court, in Twin Falls Canal Co. v. Teton County, unpublished memorandum decision dated November 14, 1928, held that the nontaxability of these water rights by Wyoming was res judicata, and the taxes were therefore annulled.

See Act of April 21, 1928, and notes.

Reinstatement of water right application refused.The Department on December 24, 1935, cancelled water right application of J. W. Thompson, Yuma irrigation project, for nonpayment of construction charges more than cne year in arrears. Pablo Franco later acquired the land and applied for reinstatement of the water right application. The Under Secretary, in letter of May 9, 1936, rejected Franco's application, stating that the Department was without authority to grant the application for reinstatement because the money previously paid by Thompson on this water right application, under section 5 of the Reclamation Act, had been forfeited to the United States.

9. Miscellaneous.-Secretary's instructions of August 30, 1904, relating to form of contracts to be made between water users' associations and land

(33 L. D. 202.) General Land Office instructions of January 18, 1908, to registers and receivers in reference to this section. (36 L. D. 256.)

General Land Office instructions of February 10, 1909, to registers and receivers in reference to reclamation of land. (37 L. D. 448.)

Secretary's regulations of February 27, 1909, regarding reclamation of land. (37 L. D. 468.)

General Land Office circular of September 17, 1909, to registers and receivers regarding proofs. (38 L. D. 229.)

Secretary's instructions of November 15, 1909, as to information from fiscal records. (38 L. D. 311.)

Sections 100-115, inclusive, general reclamation circular, approved May 18, 1916. (45 L. D. 385.)

C. L. No. 720, January 2, 1918, water-right applications by landowners temporarily serving in the Army, Navy, or Marine Corps.

Sec. 6. [Reclamation fund to be used for operation and maintenance Management of works to pass to landowners—Title.]—That the Secretary of the Interior is hereby authorized and directed to use the reclamation fund for the operation and maintenance of all reservoirs and irrigation works constructed under the provisions of this act: Provided, That when the payments required by this act are made for the major portion of the lands irrigated from the waters of any of the works herein provided for, then the management and operation of such irrigation works shall pass to the owners of the lands irrigated thereby, to be maintained at their expense under such form of organization and under such rules and regulations as may be acceptable to the Secretary of the Interior: Provided, That the title to and the management and operation of the reservoirs and the works necessary for their protection and operation shall remain in the Government until otherwise provided by Congress. (32 Stat. 389.)

Textual note.-The first clause, down to the first proviso, of this section is codified as section 491, title 43, United States Code, the first word "That" being omitted, “hereby" in the second line being omitted, and "act" reading "chapter. The two provisos (constituting the remainder of the section) are codified as section 498, title 43, United States Code.

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Payment for operation and maintenance.-The Secretary of the Interior, being authorized to tax and determine the charges, is authorized to divide the same into two parts-one for construction and the other for maintenance and operation; and hence he is authorized to impose reasonable assessments on land irrigated prior to the time when payment of the major portion of the cost of construction had been made and the works passed under management of the owners of the irrigated land. (United States v. Cantrali (C. C. Ore. 1910), 176 Fed. 949.)

Where by a contract between the United States and landowners tributary to a Federal irrigation system, such landowners agreed to pay to the United States the charges duly levied against their lands for the construction and main. tenance of the system, they were only liable for such reasonable charges as the Government was authorized to collect proportionate to their share of the cost of maintaining and operating the system, and not such as might be arbitrarily fixed in advance by such Secretary or other governmental officer. (Idem.)

The Secretary of the Interior has authority to levy and collect assessments on land irrigated from any works to defray the cost of maintaining such works until the time when, under the act, the management passes to the landowners. (Suigart v. Baker (Wash. 1913), 229 U. S. 187, 33 Sup. Ct. 645, 57 L. Ed. 1143, reversing (C. C. A. 1912) 199 Fed. 865, which reversed (D. C. 1912) 196 Fed. 569.)

Fishing in Elephant Butte Reservoir.-On July 5, 1917, Hon. Harry L, Patton, attorney general of the State of New Mexico, rendered an opinion in which he held that, in accordance with sections 2435 and 2470, New Mexico Code, 1915, as amended by sections 7 and 13, chapter 101, Laws, 1915, a State license is required of persons fishing in the Elephant Butte Reservoir, Rio Grande project. In reference to the jurisdiction of the United States, he interprets sections 5562 and 5563 of the New Mexico Code as not applicable to the Elephant Butte Dam, the land involved having been acquired by the United States before the enactment of these sections. He also holds that the reservoir can not be classed as a private lake within the meaning of the New Mexico fish law, as there is open communication between it and the public waters of the State.

On August 3, 1917, the chief counsel of the Reclamation Service (Bureau of Reclamation) held that those who angle in the Elephant Butte Reservoir for fish protected by the New Mexico law must comply with the State law as to fishing, but the mere fact that a person has a state license does not of itself give that person a right to fish in the reservoir; he must also have the consent of the United States.

Transfer of project to water users.—The Secretary of the Interior is not authorized by the reclamation act to turn over the operation and maintenance of completed reclamation projects, in whole or in part, or to any extent, to water users' associations before the payments by such water users for water rights are made by the major portion of the lands irrigated by such works. (Op. Atty. Gen., July 28, 1913; 30 Op. Atty. Gen. 208; but see sec. 5, act August 13, 1914, 38 Stat. 686.)

Liability of State irrigation district.-A petition for damages against a State irrigation district for negligent maintenance of a canal was held to be no cause of action, in view of the State statutes and the contract making the district merely a fiscal agent for the United States, which operated and maintained the works. (Malone v. El Paso County Water Improvement District No. 1. (Tex. Civ. App. 1929) 20 S. W. (20), 815.)

The Secretary of the Interior held an indispensable party defendant.—In a dispute between the Bureau and the Sunnyside Irrigation District as to the amount of water to be delivered the individual landowners in the district under their contract with the United States which reserved to the Government the power to fix the duty of water, the Secretary fixed the duty of water for the individual tracts, and the superintendent of the project began making deliveries in accordance with the departmental findings. The landowners brought suit for an injunction against the superintendent. The district court issued temporary injunctions commanding defendants (project superintendent and others) to open forthwith the headgates and permit a necessary supply of water to flow through them to irrigate each tract of land, in harmony with the practice for

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