that 'possible severance' of the excess acreage will result in damage constituting a taking of property without just compensation. We deem it unnecessary to discuss other claims in this area, but repeat in connection therewith that if the United States takes any compensable water or property right the courts are open for redress.

"As to the claim of discrimination in the 160-acre limitation, we believe that it overlooks the purpose for which the project was designed. The project was designed to benefit people, not land. It is a reasonable classification to limit the amount of project water available to each individual in order that benefits may be distributed in accordance with the greatest good to the greatest number of individuals. The limitation insures that this enormous expenditure will not go in disproportionate share to a few individuals with large landholdings. Moreover it prevents the use of the Federal reclamation service for speculative purposes. In short, the excess acreage provision acts as a ceiling, imposed equally upon all participants, on the Federal subsidy that is being bestowed (id., at pp. 296-297)."

F. PROSPECTIVE ADOPTION BY CONGRESS OF STATE LAWS

Since U.S. v. Sharpnack, 355 U.S. 286 (1958), there has been no opinion of the Supreme Court which would in any way affect the general principle that in forming its own legislation Congress may adopt legislation to be enacted by the States in the future.

VINCENT A. DOYLE, Legislative Attorney.

EXTRACTS FROM THE REPORT OF THE SPECIAL MASTER, HON. SIMON H. RIFKIND, IN ARIZONA v. CALIFORNIA, ET AL., FILED DECEMBER 5, 19601

111. THE CLAIMS OF THE STATES ΤΟ WATER IN THE MAINSTREAM OF THE COLORADO RIVER

I have concluded that the claims of Arizona, California, and Nevada to water from Lake Mead and from the mainstream of the Colorado River below Hoover Dam are governed by the Boulder Canyon Project Act, 45 Stat. 1057 (1929), the California Limitation Act, Act of March 4, 1929, and the several water delivery contracts which the Secretary of the Interior has made pursuant to the authority vested in him by Section 5 of the Project Act. The Colorado River Compact, the doctrine of equitable apportionment, and the law of appropriation are all irrelevant to the allocation of such water among the three States.

B. The Boulder Canyon Project Act: Sections 1, 5, 6, and 8

The Boulder Canyon Project Act is in my view the source of authority for the allocation and delivery of water to Arizona, California, and Nevada from Lake Mead and from the Colorado River below Lake Mead.18 That the Congress intended the statute to be a source of such authority is made manifest in several :sections. Section 1 of the Act authorizes the Secretary of the Interior "to construct, operate, and maintain" Hoover Dam for several purposes, including "for storage and for the delivery of the stored waters thereof for reclamation of public lands and other beneficial uses.

More specifically, Section 5 authorizes the Secretary "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 . . . as may 'be agreed upon, for irrigation and domestic uses. To make its intention abundantly clear the Congress declared in Section 5 that: "No person shall have or be entitled to have the use for any purpose of the water stored as aforesaid except by contract as herein stated." The intention to exert authority over the allocation and distribution of water stored in Lake Mead can likewise be derived from Section 8(b) of the Act. That section contemplates that Arizona, California, and Nevada, or any two of them, might negotiate a compact for the equitable division of Colorado River water but provides that such a compact shall

1 These extracts were submitted by Northcutt Ely.

18 The Project Act does not govern the mainstream of the Colorado River above Lake Mead. See page 183, infra.

be subject to water delivery contracts made by the Secretary of the Interior prior to congressional approval of such compact.

These provisions, together with the general operational scheme established in the Act and the purposes of the Act explicated in the legislative history, make it clear that the Project Act was designed by Congress to establish the authority for an allocation of all of the available water in Lake Mead and in the mainstream of the Colorado River downstream from Lake Mead among Arizona, California, and Nevada, the only states having geographic access to this water. As to this water, principles such as equitable apportionment or priority of appropriation which might otherwise have controlled the interstate division of the River in its natural flow condition were rendered inapplicable by the Project Act.19

The Act itself clearly reserves to the United States broad powers over the water impounded in Lake Mead and delegates this power to the Secretary of the Interior, as agent of the United States. He is specifically authorized to impound the water of the Colorado River in Lake Mead and to exercise custody over the water so impounded through his control, management and operation of the dam and reservoir. No user, whether it be a state or an individual, may receive the impounded water unless the Secretary, by contract, agrees to release it for delivery to that user. Nothing in the Act purports to require the Secretary to agree to deliver specific quantities of water to any particular state or user, except that Section 6 requires him to satisfy water rights perfected as of June 25, 1929.20 On the contrary, the Act clearly contemplates that water unappropriated as of that date is to be made available for use within a state only if the Secretary, within his discretion, contracts for the delivery of the water to that state. In short, no contract, no water, and the Secretary determines how much water he will contract to deliver to each state subject only to the limitations on his discretion expressed in the Project Act itself. Since Congress realized that the dam authorized by the Project Act would impound substantially all the water of the mainstream," Congress legislated that the Project Act was to be the new source of power for the allocation of water so impounded. In Sections 8(b) and 4(a), Congress provided that the water could be divided by compact among the interested States. But failing such a compact, the water need not run to the sea nor be indefinitely stored in Lake Mead; in such event the water was to be divided by the Secretary of the Interior.

This conclusion, that the allocation of unappropriated water impounded in Lake Mead is governed by the Secretary's water delivery contracts, comports with the basic scheme established by Congress in the Project Act. It was ap parent that water from Lake Mead would be utilized for a great variety of purposes in three different states, as well as on United States projects and in satisfaction of United States treaty obligations. A great many conflicting interests, as between different sovereigns and competing uses, would have to be resolved in order to operate the reservoir and dam. In this context, it is understandable that Congress designed the Project Act itself as the source of the authority and guiding standards necessary for the operation of the dam and reservoir, including the interstate division of the unappropriated water to be impounded by the dam, except only as the Act itself expressly provided otherwise. Congress obviously felt that once the water was within the custody and

19 Since the Project Act does not affect rights to water flowing in the Colorado River upstream from Lake Mead, see page 183, infra, the application of these principles to this reach of the River has not been abrogated by the Project Act.

20 Section 6 of the Project Act directs that Hoover Dam be operated in "satisfaction of present perfected rights in pursuance of Article VIII of said Colorado River compact. ***" Article VIII states: "Present perfected rights * ** are unimpaired by this compact." The phrase "present perfected rights" means rights perfected when the Act_became effective. A statute speaks as of its effective date. See Cabunac v. National Terminals Corp., 139 F. 2d 853 (7th Cir. 1944); Zimmerman v. United States, 277 Fed. 965 (7th Cir. 1921). Under the terms of the Act, it became effective only when the conditions of Section 4(a) were satisfied and the President so proclaimed. The Presidential Proclamation was made on June 25, 1929.

It has been suggested that "present perfected rights" should be construed to mean rights perfected as of the date the Compact was signed, namely, November 22, 1922. This argument must be rejected. A compact, like a statute, speaks as of its effective date. The Colorado River Compact became effective only upon congressional consent thereto, and such consent was given in the Boulder Canyon Project Act. Thus, the Compact became effective when the Act took effect, which, as noted, was June 25, 1929.

21 See Hearings on H.R. 9826 Before the House Committee on Irrigation and Reclamation, 69th Cong., 1st Sess. 163-164 (1926); Legislative History of Sections 4(a), 5 (1st Paragraph), and 8, Boulder Canyon Project Act as compiled by the State of Arizona [hereinafter cited as "Ariz. Legis. Hist."] p. 6.

control of the United States, in default of interstate agreement, the duty would devolve upon the United States, and particularly the Secretary of the Interior, to provide for the allocation of the water.

The argument has been advanced that the Project Act, as I would construe it, constitutes an unconstitutional assumption of power by the United States. The argument does not survive scrutiny. Clearly the United States may construct a dam and impound the waters of the Colorado River, a navigable stream. Arizona v. California, 283 U.S. 423 (1931); see United States v. Twin City Power Co., 350 U.S. 222 (1956); United States v. Chandler-Dunbar Co., 229 U.S. 53 (1913); United States v. Rio Grande Irrigation Co., 174 U.S. 690 (1899). Clearly, also, once the United States impounds the water and thereby obtains physical custody of it, the United States may control the allocation and use of unappropriated water so impounded. Ivanhoe Irrigation District v. McCracken, 357 U.S. 275 (1958); United States v. Gerlach Live Stock Co., 339 U.S. 725 (1950). Since Section 6 instructs the Secretary to satisfy property rights in mainstream water perfected as of June 25, 1929, the effective date of the Act, these rights are not in jeopardy. Rights that might be recognized as of that date under state law but that do not qualify as perfected rights under Section 6 do not receive this protection. See pages 306–309, infra. Despite this fact, however, there is no need to pass on questions of ownership of water in navigable streams or of the validity against the United States of rights therein recognized by state law. There has been no showing that non-perfected rights recognized by state law as of June 25, 1929, if any, have not been satisfied since Hoover Dam was constructed. If it develops that such rights are not satisfied in the future, that will be time enough to determine whether they are of such character as require compensation for their taking.

In order to sustain the Project Act as applied in this case, it need only be held that the United States may, under the Commerce clause of the Constitution, impound waters in a navigable stream and regulate the disposition thereof so long as perfected rights are satisfied, leaving open the question whether nonperfected rights recognized under state law must be compensated if they are not satisfied.

California's objection to the United States claims is on a different footing. For reasons hereinafter stated, I am of the view that state law governs intrastate rights and priorities to water diverted from the Colorado River. The application of such law presents issues which have not been tried and it would be inappropriate in any event to determine in this litigation the water rights of the various federal reclamation projects, adjoining lands and special users under the relevant state law.

Section 18 of the Project Act provides:

"Nothing herein shall be construed as interfering with such rights as the states now have either to the waters within their borders or to adopt such policies or enact such laws as they may deem necessary with respect to the appropriation, control, and use of waters within their borders, except as modified by the Colorado River compact or other interstate agreement."

Under this section, Congress has specifically declined to give the Secretary of the Interior authority to deliver water to users within a state in disregard of the state's water law. Although a contract with the Secretary is necessary under Section 5 of the Project Act for a user to receive mainstream water, the user must also, under Section 18, be under no disability to receive such water under the applicable state law. And, state law governs priorities between various users within a state who have delivery contracts with the Secretary. This is apparent from the language of Section 18 and is corroborated by the legislative history. See page 155, supra.

83

This scheme is similar to the one employed by Congress in the federal reclamation laws, to which the Project Act is specifically stated to be supplementary. Section 8 of the Reclamation Act of 1902 provides:

"... that 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 re

83 All I hold is that under the Project Act state law governs intrastate water rights; I do not pass on whether other federal statutes such as the Gila Project Reauthorization Act, 61 Stat. 628 (1947), supersede state law in particular cases.

lating to the control, appropriation, use, or distribution of water used in irrigation . . . and the Secretary of the Interior, in carrying out the provisions of this act, shall proceed in conformity with such laws.

Under the Reclamation Acts the Secretary is authorized to build dams and irrigation canals and to store and deliver water. Nobody may receive the stored water without a delivery contract. But the water rights of lands in reclamation projects are, under Section 8, governed, at least to some extent, by state law. Ickes v. Fox, 300 U.S. 82 (1937), on remand, Fox v. Ickes, 137 F. 2d 30 (D.C. Cir. 1943); Nebraska v. Wyoming, 325 U.S. 589, 612-615 (1945). And, as the Supreme Court has but recently indicated, the water rights and priorities as between a reclamation project and other users within the same state are governed by state law. See Ivanhoe Irrigation District v. McCracken, 357 U.S. 275, 291 (1958). The fact that the Project Act is denominated as a supplement to the Reclamation Acts buttresses the conclusion, apparent from the plain language of Section 18 itself, that state law governs rights and priorities among intrastate users.

The various delivery contracts made by the Secretary for delivery of water to reclamation projects, adjoining lands and special users are, with one exception, authorized by the Reclamation Acts, the Miscellaneous Special Use Act and the Project Act and are therefore valid. How much water a particular project or user may receive out of a state's total apportionment as against other users in the state who also have or may in the future obtain delivery contracts with the Secretary of the Interior must be decided under state law. The relevant issues for such a decision have not been tried and it would be impossible to determine here all of the relevant rights and priorities under the applicable state laws which would affect a project's water rights. Furthermore, persons who are the most concerned with this decision are other users or potential users in the states, who are not parties to this suit. Therefore, I have declined to accept the United States' invitation to determine the right of any reclamation project or other user to receive water as against competing users in the same state.

*

*

*

*

* IV. THE CLAIMS OF THE UNITED STATES TO WATER IN THE MAINSTREAM OF THE COLORADO RIVER

The United States claims, in addition to control of the mainstream by reason of the Boulder Canyon Project Act and its ownership and management of the various dams and works which regulate mainstream water, the use of water in the Lower Basin for a variety of its projects and needs. The United States urges that it has reserved water for the use of the various Indian Reservations, National Forests, Parks, Recreational Areas, Monuments, Memorials, and lands under the control of the Bureau of Land Management located in the Lower Basin. The United States also claims the right to fulfill its treaty obligations by delivering 1,500,000 acre-feet of water per annum in the Colorado River at the Mexican border, and by consuming water on wildlife refuges and management areas located in the Lower Basin. Finally, the United States claims the right to deliver water from Lake Mead to Boulder City, Nevada, pursuant to a federal statute.

A. Indian Reservations

The United States argues that it has reserved water flowing in the Colorado River and its tributaries in the Lower Basin for the needs of all of the Indian Reservations located within the Lower Basin. Thus the United States claims that each Indian Reservation has the right to divert and consume the amount of water necessary to irrigate all irrigable acreage on the Reservation and to satisfy related needs, subject only to the priority of appropriative rights established before a particular Reservation was created and water reserved for its benefit. Arizona argue that the rights of the various Indian Reservations on the tributaries ought not to be adjudicated in this case.1 I agree with Arizona that there is no need in this litigation to adjudicate the rights or priorities of Indian Reservations diverting water from the Lower Basin tributaries, except for the Gila River. For the reasons detailed at pages 318–321, 323–324, infra, it would be inappropriate at this time to apportion water in any of these tributaries, except the Gila River. Moreover, it would certainly be inappropriate to attempt a determination of the rights and priorities between each Indian Reservation

1 Ariz. Answering Brief, pp. 92-108.

and the myriad individual users who divert water from these tributaries. As to Indian Reservations on the Gila River System, I have made recommendations concerning the United States claims in a subsequent section of this Report at pages 332-334.

As to the mainstream Indian Reservations, I have concluded that it is necessary to determine their water rights, and I have done so in the Findings of Fact and Conclusions of Law which conclude this section of the Report. The United States claims it has reserved mainstream water for Indian Reservations under federal law, independently of the state law of appropriation, in quantities sufficient to irrigate all the irrigable acreage in each of the Reservations and to satisfy related uses. Arizona and California resist this claim. Arizona asserts that the quantity of water reserved for an Indian Reservation is no more than that amount necessary to satisfy the requirements of Indians living on the Reservation at any particular time. California also denies that the United States: intended to reserve water for all irrigable lands on an Indian Reservation.3

This disagreement presents a justiciable controversy between the United States and the States of Arizona and California which ought to be adjudicated in this case in order that the Secretary may know how much water he may release for consumption on each Indian Reservation. Thus in periods when there is insufficient water for the Secretary to fulfill all of his delivery obligations to users in a particular state, he will have to satisfy them according to priority. In such a case it will be necessary for him to know the rights and priorities of Indian Reservations as against other users within the state. What these rights and priorities are can be determined only by resolving the controversy between the United States and the States of Arizona and California over the validity and scope of the reservations of mainstream water which the United States claims to have made. Indeed, if the Indian Reservations can acquire water rights only pursuant to state law, the Secretary may be prohibited from delivering any mainstream water to some of them since, so far as the evidence shows, some of the Reservations have never complied with the formalities required by the applicable state law in order to obtain a water right. Furthermore, the claims of the United States to water from the Colorado River for the benefit of Indian Reservations are of such great magnitude that failure to adjudicate them would leave a cloud on the legal availability of substantial amounts of mainstream water for use by non-Indian projects.

Since the Secretary cannot know how to operate Hoover Dam and the mainstream works below unless the controversy between the United States and the States of Arizona and California is resolved, since failure to adjudicate it will leave non-Indian users in doubt as to the water available for their use, and since this controversy has been properly presented in this case, it is appropriate to adjudicate it here.

The Winters case has been cited many times as establishing that the United States may, when it creates an Indian Reservation, reserve water for the future needs of that Reservation, and that appropriative water rights of others established subsequent to the reservation must give way when it becomes necessary for the Indian Reservation to utilize additional water for its expanding needs.. United States v. Powers, 305 U.S. 527 (1939); United States v. Ahtanum Irrigation District, 236 F. 2d 321 (9th Cir. 1956), cert. denied, 352 U.S. 988 (1957) ; United States v. Walker River Irrigation District, 104 F. 2d 334 (9th Cir. 1939); Conrad Investing Co. v. United States, 161 Fed. 829 (9th Cir. 1908). In the Winters case the United States exercised its power to reserve water by a treaty; but the power itself stems from the United States' property rights in the water, not from the treaty power. Since the United States has the power to reserve water, by treaty, against appropriation under state law, there is no reason why it lacks the power to do so by statute or executive order. In the Walker River case, the Court of Appeals squarely held that the United States had reserved water for an Indian Reservation which had been created by executive order.

2 See Tr. 13796-13810.

California brief, pp. 177-195; California response to United States, pp. 112-127. It should be noted that, under similar circumstances, the Secretary may need to know the water rights intrastate of other users. In the case of the California agencies who are parties to this suit these rights are set out in the Seven-party Agreement. Such rights of other users not parties to this suit obviously cannot be determined herein.