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Project adapt. ed to utilize nay.

power, etc.

Restriction on

ation, etc.

(a) That the project adopted, including the maps, igation, water plans, and specifications, shall be such as in the judgment

of the commission will be best adapted to a comprehensive scheme of improvement and utilization for the purposes of navigation, of water-power development, and of other beneficial public uses; and if necessary in order to secure such scheme the commission shall have authority to require the modification of any project and of the plans

and specifications of the project works before approval. alterations.

(b) That except when emergency shall require for the protection of navigation, life, health, or property, no substantial alteration or addition not in conformity with the approved plans shall be made to any dam or other project works constructed hereunder of a capacity in excess of one hundred horsepower without the prior approval of the commission; and any emergency alteration or ad. dition so made shall thereafter be subject to such modifi

cation and change as the commission may direct. Project works to be maintained

(c) That the licensee shall maintain the project works in effective oper- in a condition of repair adequate for the purposes of

navigation and for the efficient operation of said works in the development and transmission of power, shall make all necessary renewals and replacements, shall establish and maintain adequate depreciation reserves for such purposes, shall so maintain and operate said works as not to impair navigation, and shall conform to such rules and regulations as the commission may from time to time pre

scribe for the protection of life, health, and property. Liability for Each licensee hereunder shall be liable for all damages damaxes to prop. occasioned to the property of others by the construction,

maintenance, or operation of the project works or of the works appurtenant or accessory thereto, constructed under the license, and in no event shall the United States be liable therefor.

(d) That after the first twenty years of operation out

of surplus earned thereafter, if any, accumulated in exDisposition of. cess of a specified reasonable rate of return upon the

actual, legitimate investment of a licensee in any project or projects under license the licensee shall establish and maintain amortization reserves, which reserves shall, in the discretion of the commission, be held until the termi

nation of the license or be applied from time to time in Rate to be reduction of the net investment. Such specified rate of specified in li.

return and the proportion of such surplus earnings to be paid into and held in such reserves shall be set forth in

the license. Annual charges. (e) That the licensee shall pay to the United States Basis of.

reasonable annual charges in an amount to be fixed by the commission for the purpose of reimbursing the United States for the costs of the administration of this Act; for recompensing it for the use, occupancy,and enjoyment of its lands or other property; and for the expropriation to the Government of excessive profits until the re

Amortization reserves to be established.



Use of Govern.


No charge to


spective States shall make provision for preventing excessive profits or for the expropriation thereof to themselves, Price to conor until the period of amortization as herein provided is reached, and in fixing such charges the commission shall seek to avoid increasing the price to the consumers of power by such charges, and charges for the expropriation of excessive profits may be adjusted from time to time by the commission as conditions may require: Provided, That when licenses are issued involving the use of Government dams or other structures owned by the United or Indian tribal States or tribal lands embraced within Indian reservations the commission shall fix a reasonable annual charge for the use thereof, and such charges may be readjusted at the end of twenty years after the beginning of operations and at periods of not less than ten years thereafter in a manner to be described in each license: Provided, That licenses for the development, transmission, or dis- States

, etc. if tribution of power by States or municipalities shall be public issued and enjoyed without charge to the extent such proft, etc. power is sold to the public without profit or is used by such State or municipality for State or municipal purposes, except that as to projects constructed or to be constructed by States or municipalities primarily designed to provide or improve navigation licenses therefor shall be issued without charge; and that licenses for the devel- Small projects. opment, transmission, or distribution of power for domestic, mining, or other beneficial use in projects of not more than one hundred horsepower capacity may be issued without charge, except on tribal lands within Indian reservations; but in no case shall a license be issued free of charge for the development and utilization of Government damn. power created by any Government dam and that the amount charged there for in any license shall be such as determined by the commission.

(f) That whenever any licensee hereunder is directly Payment by libenefited by the construction work of another licensee, een story work a permittee, or of the United States of a storage reser- another. voir or other headwater improvement, the commission shall require as a condition of the license that the licensee so benefited shall reimburse the owner of such reservoir or other improvement for such part of the annual charges for interest, maintenance, and depreciation thereon as the commission may deem equitable. The proportion of such charges to be paid by any licensee shall be determined by the commission.

Whenever such reservoir or other improvement is constructed by the United States the commission shall Government conassess similar charges against any licensee directly bene. Struction. fited thereby, and any amount so assessed shall be paid into the Treasury of the United States, to be reserved and appropriated as a part of the special fund for headwater improvements as provided in section 17 hereof.

(g) Such further conditions not inconsistent with the other provisions of this Act as the commission may require.


No free use of










Dams on navi. gable waters.

Additional quirements to


Construction of locks, etc.


(h) That combinations, agreements, arrangements, or in restraint of understandings, express or implied, to limit the output electric service

stervice of electrical energy, to restrain trade, or to fix, maintain, prohibited. or increase prices for electrical energy or service are

hereby prohibited. Waiving

(i) In issuing licenses for a minor part only of a comditions for minor plete project, or for a complete project of not more than

, lowed.

one hundred horsepower capacity, the commission may in its discretion waive such conditions, provisions, and requirements of this Act, except the license period of fifty years, as it may deem to be to the public interest

to waive under the circumstances: Provided, That the Indian lands provisions hereof shall not apply to lands within Indian excepted.


Sec. 11. That if the dam or other project works are to be constructed across, along, or in any of the navi

gable waters of the United States, the commission may, promote naviga. in so far as it deems the same reasonably necessary to

promote the present and future needs of navigation and. consistent with a reasonable investment cost to the licensee, include in the license any one or more of the following provisions or requirements:

(a) That such licensee shall, to the extent necessary to preserve and improve navigation facilities, construct, in whole or in part, without expense to the United States, in connection with such dam, a lock or locks, booms, sluices, or other structures for navigation purposes, in accordance with plans and specifications approved by the Chief of Engineers and the Secretary of

War and made part of such license. Convey ance,

(b) That in case such structures for navigation puretc.

, for construc poses are not made a part of the original construction States, of locks, at the expense of the licensee, then whenever the United

States shall desire to complete such navigation facilities the licensee shall convey to the United States, free of cost, such of its land and its rights of way and such right of passage through its dams or other structures, and permit such control of pools as may be required to complete such navigation facilities.

(c) That such licensee shall furnish free of cost to for opera the United States power for the operation of such navi

gation facilities, whether constructed by the licensee or by the United States.

SEC. 12. That whenever application is filed for a proj

connect hereunder involving navigable waters of the United if Government States, and the commission shall find upon investigation fails so to do, that the needs of navigation require the construction of a

lock or locks or other navigation structures, and that such structures can not, consistent with a reasonable investment cost to the applicant, be provided in the manner specified in section 11, subsection (a) hereof, the commission may grant the application with the provision to be expressed in the license that the licensee will install


Power free of cost tiun.

Installing locks,

etc., navigable waters,


the necessary navigation structures if the Government fails to make provision therefor within a time to be fixed in the license and cause a report upon such project to be prepared, with estimates of cost of the power develop- Report to Con ment and of the navigation structures, and shall submit gress, etc. such report to Congress with such recommendations as it deems appropriate concerning the participation of the United States in the cost of construction of such navigation structures.

SEC. 13. That the licensee shall commence the construc- Time limit for tion of the project works within the time fixed in the constriction and license, which shall not be more than two years from the date thereof, shall thereafter in good faith and with due diligence prosecute such construction, and shall within the time fixed in the license complete and put into operation such part of the ultimate development as the commission shall deem necessary to supply the reasonable needs of the then available market, and shall from time to time thereafter construct such portion of the balance of such development as the commission may direct, so as to supply adequately the reasonable market demands until such development shall have been completed. The periods for the commencement of construction may be extended once but not longer than two additional years and the period for the completion of construction carried on in good faith and with reasonable diligence may be extended by the commission when not incompatible with the public interests. In case the licensee shall not commence actual construction of the project works, or of any specified part thereof, within the time prescribed in ures the license or as extended by the commission, then, after due notice given, the license shall, as to such project works or part thereof, be terminated upon written order of the commission. In case the construction of the project

Proceedings if

partly completed. works, or of any specified part thereof, have been begun but not completed within the time prescribed in the license, or as extended by the commission, then the Attorney General, upon the request of the commission, shall institute proceedings in equity in the district court of the United States for the district in which any part of the project is situated for the revocation of said license, the sale of the works constructed, and such other equitable relief as the case may demand, as provided for in section 26 hereof. Sec. 14. That upon not less than two years' notice in

Right of Gov. writing from the commission the United States shall over

, have the right upon or after the expiration of any tion of license. license to take over and thereafter to maintain and operate any project or projects as defined in section 3 hereof, and covered in whole or in part by the license, or the right to take over upon mutual agreement with the licensee all property owned and held by the licensee then valuable and serviceable in the development, trans

Termination of license on fail

ernment to take made.

operate, on expira

of amount.


Costs for


mission, or distribution of power and which is then dependent for its usefulness upon the continuance of the license, together with any lock or locks or other aids to navigation constructed at the expense of the licensee,

upon the condition that before taking possession it shall Payment to be pay the net investment of the licensee in the project or

projects taken, not to exceed the fair value of the property taken, plus such reasonable damages, if any, to property of the licensee valuable, serviceable, and dependent as above set forth but not taken, as may be caused by the severance therefrom of property taken, and shall assume all contracts entered into by the licensee with the approval

of the commission. The net investment of the licensee Determination

in the project or projects so taken and the amount of such severance damages, if any, shall be determined by agreement between the commission and the licensee, and in case they can not agree, by proceedings in equity instituted by the United States in the district court of

the United States in the district within which any such Provisos.

property may be located: Provided, That such net included.

ex. vestment shall not include or be affected by the value

of any lands, rights of way, or other property of the United States licensed by the commission under this Act, by the license, or by good will, going value, or prospective revenues: Provided further, That the val.

ues allowed for water rights, rights of way, lands, or ter rights, etc., interest in lands shall not be in excess of the actual rea

sonable cost thereof at the time of acquisition by the

licensee: Provided, That the right of the United States right reserved. or any State or municipality to take over, maintain, and

operate any project licensed under this Act at any time by condemnation proceedings upon payment of just compensation is hereby expressly reserved.

Sec. 15. That if the United States does not, at the ex

piration of the original license, exercise its right to take To original li. over, maintain, and operate any project or projects of

the licensee, as provided in section 14 hereof, the commission is authorized to issue a new license to the origi. nal licensee upon such terms and conditions as may be authorized or required under the then existing laws and regulations, or to issue a new license under said terms

and conditions to a new licensee, which license may cover Condition.

any project or projects covered by the original license, and shall be issued on the condition that the new licensee shall, before taking possession of such project or projects, pay such amount, and assume such contracts as the United States is required to do, in the manner specified

in section 14 hereof: Provided, That in the event the Yearly continu; United States does not exercise the right to take over or ance of original license. does not issue a license to a new licensee, or issue a new

license to the original licensee, upon reasonable terms, then the commission shall issue from year to year an annual license to the then licensee under the terms and con.



Issue licenses.




To new licenBee.


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