Gerlach Livestock Co. v. United States, 339 U.S. 725 (1950); F.P.C. v. Oregon, 349 U.S. 435 (1955); United States v. Twin City Power Company, 350 U.S. 222 (1956); United States v. Grand River Dam Authority, 363 U.S. 229 (1960); Fresno v. California, 372 U.S. 627 (1963). Proponents of S. 1275 say that these cases have so clouded private water rights that non-Federal water resource development has been inhibited. Yet, in 1950 the Supreme Court decided Gerlach, supra, which affirmed the protection of private water rights required by the reclamation laws. In the 13 years since that decision, no instance has or can be cited to show that present laws have prevented State or private development. This period corresponds to the era in which proposals like S. 1275 have been pressed upon the Congress. Meanwhile, the State of California has successfully initiated its $2 billion State water plan. Last month the State successfully floated a $100 million bond issue for construction under its plan. The rights of the United States, so long recognized, have not created a sense of insecurity among investors. Indeed, States and the United States have an identity of interest. Federal water resource projects are obviously undertaken to benefit the citizens of States. Bond purchasers appear to have no thought that the United States will interfere with the development of water necessary for the State water plan. The working relationship of the United States and the States is exemplified by the experience in California. There the Federal Central Valley project and the State water plan operates side by side in close coordination. In fact, the San Luis Act (74 Stat. 156) provides that they will use joint facilities. The Supreme Court said in Ivanhoe, supra, at pages 279-280: "As the Attorney General of California points out, there is no clash here between the United States and the State of California. Quite to the contrary, the United States and the various State agencies, with commendable faith and steadfastness to one another, have embarked upon and nearly completed a most complicated joint venture known as the Central Valley project. There have at times been differences, but these are inevitable in the everyday implementation of such a giant undertaking. On the whole the parties have kept the ultimate goal firmly centered in their joint vision." While S. 1275 does not enlarge the power of the States, it will cripple the only mechanism available for regional development. S. 1275 could unsettle important programs being carried on under congressional authorization, without providing counterbalancing benefits either public or private. Rather than fostering mutual cooperation S. 1275 would tend toward fragmentation in the development of coordinated programs as the Nation's water needs grow more desperate. It would introduce divisive concepts into water resource development, the full effects of which can be known only after years of experience and litigation. The foregoing observations are substantiated by consideration of the bill's provisions. Section 1(1) provides that "the withdrawal or reservation of surveyed or unsurveyed public lands, heretofore or hereafter made, shall not affect any right to the use of the water acquired pursuant to State law either before or after the establishment of such withdrawal or reservation." It is already the law that the withdrawal or reservation of public lands is subject to existing water rights. However, to subject withdrawals and reservations to future appropriative water rights would upset law announced in 1899 in Rio Grande, supra, in 1957 in F.P.C. v. Oregon, supra, and again last year in Arizona v. California, supra. Congress, in the act of July 26, 1866 (14 Stat. 251, 253), as amended by the act of July 9, 1870 (16 Stat. 217, 218) and in the Desert Land Act of 1877 (19 Stat. 377), assented to the establishment of water rights under State law as against the United States itself with respect to nonnavigable waters on the public lands. Section 1(1) would extend this assent to withdrawn and reserved lands, notwithstanding that the withdrawals and reservations may have been made for purposes requiring the use of theretofore unappropriated water. S. 1275 would thereby frustrate the purposes for which the withdrawals and reservations were made. State lawmakers and those acting under them would thereby have decisive authority to permit or prevent the realization of the purposes of the United States. Rio Grande and Arizona v. California (1963) involved activities affecting navigable waters. Section 1(1) is silent as to whether the waters that would no longer be available for reservation by the United States include navigable as well as nonnavigable waters. We assume that the intent was to reach both. Section 10 of the Rivers and Harbors Act of 1890, as amended (33 U.S.C. 403), prohibits "the creation of any obstruction, not affirmatively authorized by Congress, to the navigable capacity of any waters in respect of which the United States has jurisdiction." An actual or threatened diversion adversely affecting navigable capacity constitutes such an obstruction. Rio Grande, supra; Sanitary District of Chicago v. United States, 266 U.S. 405 (1925). Without specific reference to section 10, it is to be doubted that S. 1275 would repeal it. However, if S. 1275 should be enacted the litigation it would provoke would undoubtedly beget the claim that section 10 has been repealed and the issue will remain uncertain until final judicial illumination. It is probable that by the silence of S. 1275, the prohibition against obstructions to navigable capacity in the 1890 act would be the means of preserving running streams for such purposes as fish and wildlife and recreation. But is it really in the national interest for such a result to turn upon the accident of whether navigable capacity is affected? How ironic it would be if S. 1275 were to resurrect the search for that "highly fictional navigation purpose" thought by the Supreme Court in Gerlach to have been laid to rest. While the Rio Grande case invoked section 10, the suit grew out of the complaints of Mexico not involving navigation but to protect the consumptive use by its citizens of the waters of the Rio Grande. (See note from Mexican Legation to Secretary of State dated Aug. 4, 1896; S. Doc. 229, 55th Cong., 2d sess., pp. 2–5.) The reservation of unappropriated waters for authorized Federal purposes as an incident to the reservation or withdrawal of public lands has proved its worth in the execution of the Nation's conservation programs. S. 1275 would recognize the merits of Federal reservation of waters in certain classes of cases, for it would have no effect upon them. These exempt classes are enumerated in section 2(3) and include: Indian rights, rights of the United States adjudicated prior to enactment of S. 1275, right of the United States to uses lawfully initiated in the exercise of express or necessarily implied statutory authority prior to the acquisition by others of rights under State law, and actual uses for governmental purposes or programs of the United States prior to enactment of S. 1275. Without pausing here to consider ambiguities in these savings clauses, it appears that, except in the case of Indians, the primary intent of S. 1275 is to strip the United States of power to reserve water for future use. For some reason its proponents frown on the conservation of water. It appears to be wrong for the United States to conserve water as distinguished, for example, from timber (16 U.S.C. 471), oil (United States v. Midwest Oil Company, 236 U.S. 459 (1915)), or the public lands themselves (43 U.S.C. 141). Why this should be so is not clear. What is clear, however, is that to permit appropriations of hitherto reserved waters to proceed without regard to the future needs of national programs of conservation would go far to defeat their successful effectuation. Furtherance of those national programs, while still possible although water rights may have to be reacquired, could become a great deal more costly. Some programs could become economically infeasible. From the earliest days of the conservation movement, the reservation of water has been a recognized concomitant of the reservation of public lands (1 Wiel, Water Rights in the Western States (3d ed., 1911), 176, 226, 240-241). The necessity for reservation of waters for national purposes was accurately foreseen by Wiel. Writing in 1911, he predicted that changes could be anticipated in the policy of "free development under local law" which appeared to him to be inconsistent with the conservation movement. Wiel reminded his readers that the right of States to legislate in the field of water rights was Federal in origin, arising from the 1866 act (1 Wiel 164-166). See also United States v. Grand River Dam Authority, supra. The extent to which national conservation policies remain dependent on the reservation of waters is illustrated in Arizona v. California, supra (pp. 595–601). The Stock-Raising Homestead Act of 1916 (39 Stat. 862, 865; 43 U.S.C. 300) will serve to illustrate some of the difficulties and ambiguities that S. 1275 would create. That act provides that "Lands containing water holes or other bodies of water needed or used by the public for watering purposes *** may be reserved * * * and, shall, while so reserved, be kept and held open to the public use for such purposes * * *." (italic added). The act was implemented by the Executive order of April 17, 1926. (See 43 CFR 292.1.) This reservation is of course necessary to keep desirable stockwatering sites open for common access and use by persons grazing stock on the public domain. Clearly such a reservation is worthless without a reservation of the associated water. Section 1(1) would immediately open the waters on these reservations to appropriation. Thus the usefulness of the adjacent public domain as a grazing area could be destroyed, and a person with or without a license to use the public domain for grazing would be able to monopolize the water. Permissible appropriations would not be restricted to stock-water purposes. In 1948 and in 1950 it became necessary for this Department to assert the rights of the public under the Stock-Raising Homestead Act to water sources withdrawn under the 1926 Executive order as against attempts to appropriate under State law initiated after withdrawals had been made. In both cases the Department concluded that the reservations had removed the water from appropriation. Jack A. Medd, A-23951, December 26, 1947, July 28, 1948; M-33969, November 7, 1950. Section 2 of S. 1275 appears not to protect the public from the monopolization of water which would result from State-law appropriations. To protect the public and to carry out the purposes of section 10 of the Stock-Raising Homestead Act, the United States would have to file for a water right under State law or to assert that "water used for governmental purposes or programs of the United States" in section 2(3) (d) means the same as "public use" in the reservation of stock-watering sites. Either course is inadequate protection of the public. Filing for a water right under State law may be an empty gesture. Many western water sources are already heavily overappropriated. And it is not certain that the language of section 2(3) (d) would justify the United States in asserting rights of the public as distinguished from its own rights "for governmental purposes and programs." Here again, S. 1275, rather than introducing clarity, would sow the seeds for future litigation. Our discussion of the threat posed by S. 1275 to reservation of water sources under the Stock-Raising Homestead Act is illustrative only. Similar difficulties would be encountered by other programs, especially those for recreation development, fish and wildlife conservation and controlled forest management. Section 1(2) of S. 1275 would make applicable to all future Federal or federally authorized projects, with respect to waters arising in the Western States. the provisions of section 1(b) of the Flood Control Act of 1944. Thereby the use of water for navigation under all such future projects would be limited to "only such use as does not conflict with any beneficial consumptive use, present or future, in States lying wholly or partly west of the 98th meridian, of such waters for domestic, municipal, stock water, irrigation, mining, or industrial purposes." A similar provision has been included in all rivers and harbors and flood control measures enacted since 1944. However, the language used has given rise to at least one serious ambiguity. That is the question as to whether the use of water for power is or is not a "consumptive use" to which navigation is subordinated. This became an important issue in connection with Missouri River Basin projects a few years ago. Hearings entitled "Missouri Basin Water Problems" before the Committees on Interior and Insular Affairs and on Public Works (U.S. Senate, 85th Cong., 1st sess., pt. 1, May 1, 2, and 3, 1957). The issue could arise again in the case of the Missouri or other western streams and its resolution should be given careful consideration in any general application of the provision. Moreover, preference for "the consumptive use of water" may not be the most desirable allocation of water uses. The needs of water for such nonconsumptive uses as recreation and fish and wildlife ought to be weighed before a final decision is made. The establishment of the Bureau of Outdoor Recreation is a recognition by the Congress of the growing importance of recreation in the life of the Nation. So also is the consideration now being given to the legislation (S. 859; H.R. 3846) that would establish the land and water conservation fund. Even in its present case-by-case application, the language of section 1(b) of the 1944 act merits reexamination. We therefore do not recommend enactment of section 1(2). Section 1(3) of S. 1275 provides that "Any right claimed by the United States to the beneficial diversion, storage, distribution, or consumptive use of water under the laws of any State shall be initiated and perfected in accordance with the procedure established by the laws of that State." We recognize that the advocates of S. 1275 contend that section 1(3) would apply only when the United States claims a right under State law. We agree that the provision by itself is so limited. But, if Federal rights under reserva tion and withdrawals are to be taken away by section 1(1), as a practical matter, except in the cases enumerated in the savings clauses (sec. 2), all water rights would have to be derived under State law. At this point it would be well to quote from section 8 of the Reclamation Act of 1902: "*** nothing in this act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or territory relating to the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder and the Secretary of the Interior, in carrying out the provisions of this act, shall proceed in conformity with such laws ***." (32 Stat. 390). Ivanhoe Irrigation District v. McCracken, supra, originated as an in rem proceeding for validation of the contract the district had made with the United States for a Central Valley project with supply under reclamation law. The objector, McCracken, contended that the contract was invalid in that it deprived him of due process and of the equal protection of the laws. He was an excess landowner whose rights to water were limited by the terms of the contract. The Supreme Court of California agreed with him and sustained his objection to the contract. The theory of that court was that section 8 of the 1902 act conferred on the State of California plenary power over waters within its boundaries and that the restrictions imposed by other provisions of the reclamation laws were inapplicable and improper under the law of California. The U.S. Supreme Court reversed. "As we read section 8, it merely requires the United States to comply with State law when, in the construction and operation of a reclamation project, it becomes necessary for it to acquire water rights or vested interests therein. But the acquisition of water rights must not be confused with the operation of Federal projects * * *. We read nothing in section 8 that compels the United States to deliver water on conditions imposed by the State" (357 U.S. 275, 291–292). The meaning of section 1(3) is doubtful. If section 1(3) of S. 1275 means the same thing as section 8 of the reclamation act, where the United States acquires water rights under State law, it is unnecessary. If, on the other hand, it is intended to give the States the power to control and condition the delivery of water by the United States, it could be the instrument for nullification of the excess land laws. We do not recommend that the retention or repeal of the excess land laws be left to the uncertainty of judicial interpretation. As a general proposition, the acquired right to the use of water by the United States should no more be subject to the police power of the States than is the acquired right to the use of any other property. Section 1(4) would make two significant changes in the law. First, it would confer a bounty upon owners of land sought to be condemned by the United States by allowing them to add the "powersite value" which, if the lands remained in private ownership, could not be realized without a license from the United States. Chandler-Dunbar and Twin City, supra, held that powersite value was not compensable. While section 1(4) refers generally to the taking of water rights "under the authority of" as well as by the United States, it is already the law that a licensee under the Federal Power Act must compensate for water rights necessary under his license. Federal Power Commission v. Niagara Mohawk Power Corp. (347 U.S. 239 (1954)). Hence the only substantial application the section would have would be in condemnation actions brought by the United States. The second change effected by section 1(4) would be to foreclose inverse condemnation of water rights in cases involving Federal projects. The construction of a Federal dam often has unforeseen effects on the water rights of private persons. The method provided by inverse condemnation is peculiarly appropriate where water is involved. All other property rights would still be protected in suits for compensation arising from inverse condemnation. Why are water rights singled out as rights which cannot be acquired by this method? To deprive private water right holders of access to the Court of Claims for compensation for inverse condemnation leaves them with only one remedy: to enjoin as a trespass the construction or operation of any project which threatens damage to their water rights. Surely it is not practical to require construction and operation of water development projects to proceed in the courts. In Dugan v. Rank. supra, the plaintiff attempted to enjoin the operation of Friant Dam until the courts could adjudicate and determine his claimed water rights and could direct how the project should be operated. The court held that his remedy was in the Court of Claims and that the project could go forward without judicial interference. Under section 1(4) the Government, to protect itself and the local beneficiaries of Federal water projects against the harassment of continuously threatened injunctions, would be forced to condemn "by proceedings in eminent domain" all water rights which might possibly be affected, even those which, it may later develop, where not affected at all and might better have remained to be enjoyed by their owners. Cf. United States v. Dickerson (331 U.S. 745 (1947)). In summary, we object to the enactment of S. 1275 because it would confuse rather than clarify the relationship of the United States with the States, because it would hinder and interfere with national programs for the conservation of water resources, because it would abandon Federal property rights in the use of water, which rights would have to be reacquired at great cost for future Federal projects and programs, and because it would jeopardize basic policy positions of the United States with respect to the excess land laws and resource development. The principles that S. 1275 would overturn are not of recent origin. Their genesis is to be found in the earliest cases. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, STEWART L. UDALL, Secretary of the Interior. DEPARTMENT OF AGRICULTURE, Hon. HENRY M. JACKSON, Chairman, Committee on Interior and Insular Affairs, DEAR MR. CHAIRMAN: This is in response to your request for a report from this Department on S. 1275, a bill to clarify the relationship of interests of the United States and of the States in the use of waters of certain streams. The Department of Agriculture fully recognizes the importance of the question of water rights, particularly to the people of the Western States. However, we do not recommend the enactment of this bill. Federal-State water rights has been the subject of legislative proposals for a number of successive Congresses. S. 1275 is a modified version of a previous bill. S. 1275 would: (1) Provide that the withdrawal or reservation of public lands heretofore or hereafter made shall not affect any right to the use of water acquired under State law either before or after the withdrawal or reservation; (2) Extend to all works constructed by or under the authority of the United States with respect to waters arising within States wholly or partly west of the 98th meridian the provisions of section 1(b) of the Flood Control Act of 1944, which provides that use of water for such works shall be only such use as does not conflict with present or future beneficial consumptive uses; (3) Require that rights of the United States to the beneficial diversion, storage, distribution, or consumptive use of water under the laws of any State shall be initiated and perfected in accordance with State law; (4) Provide that any water rights recognized under State law as compensable if taken by or under authority of the State shall not be taken by the United States without compensation and, if not acquired by agreement with the owner, such rights shall be acquired by the Uinted States by proceedings in eminent domain either under the laws of the United States or the State. The bill would further provide that nothing in it shall be construed as: (1) Modifying or repealing any provision of an act of Congress requiring that rights of the United States to the use of water be acquired pursuant to State law; (2) Permitting appropriations of water under State law which interfere with international treaties; or (3) Affecting (a) the rights of the United States or any State to waters under any interstate compact or judicial decree; (b) any obligations of the United States to, or any claim or right owned or held by or for, Indians; |