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FEDERAL POWER ACT-SEC. 14

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. (41 Stat. 1071; 16 U.S.C. § 806)

Sec. 14. [Right of Government to take over project at expiration of licensePayment to licensee-Determination of value of project-Right of condemnation reserved to Federal, State and local governments.]-Upon not less than two years' notice in writing from the Commission the United States shall have the right upon or after the expiration of any 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, transmission, 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 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 in the project or projects so taken and the amount of such severance damages, if any, shall be determined by the Commission after notice and opportunity for hearing. Such net investment shall not include or be affected by the value of any lands, rightsof-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; nor shall the values allowed for water rights, rights-of-way, lands, or interest in lands be in excess of the actual reasonable cost thereof at the time of acquisition by the licensee: Provided, That the right of the United States 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. (41 Stat. 1071; § 207, Act of August 26, 1935, 49 Stat. 844; 16 U.S.C. § 807)

EXPLANATORY NOTES

1953 Modification. The Act of August 15, 1953, 67 Stat. 587, as amended by the Act of July 31, 1959, 73 Stat. 271, provides that section 14 shall not apply to any project owned by a State or a municipality. The 1953 Act reads as follows:

"In order to facilitate the development and construction by States and municipalities of water conservation facilities, certain requirements in the Federal Power Act are made inapplicable to States and municipalities as provided in this Act.

"Sec. 2. The words used in this Act shall have the same meanings ascribed to them in the Federal Power Act.

"Sec. 3. Section 14 of the Federal Power

Act pertaining to the taking over by the United States of any project upon or after the expiration of a license, and sections 301 and 302 of said Act requiring certain records and accounting procedures and section 4(b) requiring the preparation and filing of the statement of actual legitimate original cost of a project, shall not be applicable to any project owned by a State or municipality, and such rights and requirements shall not exist under any license heretofore or hereafter granted to any State or municipality. The Federal Power Commission in determining the amount of annual charges applicable to any such projject may determine the annual charges with

FEDERAL POWER ACT-SEC. 16

reference to the actual cost of services incurred by the Commission with respect to the project.

"Sec. 4. Except as herein provided, the provisions of this Act shall not be construed as repealing or affecting any of the provisions of the Federal Power Act."

277

substituting "by the Commission after notice and opportunity for hearing" in the second sentence of the section, for "by agreement between the Commission and the licensee, and in case they cannot 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 property may be located."

1935 Amendment. The Act of August 26, 1935, 49 Stat. 844, amended section 14 by Sec. 15. [Reissuance of license to original licensee at expiration of license upon such terms as authorized or required under then existing laws and regulations Provision for annual renewal of license until property is taken over by Government or a new license is issued.]—If the United States does not, at the expiration of the original license, exercise its right to take 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 original 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 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 United States does not exercise the right to take over or 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 conditions of the original license until the property is taken over or a new license is issued as aforesaid. (41 Stat. 1072; 16 U.S.C. § 808)

Sec. 16. [Temporary possession of project by Government if safety of the United States demands it.]-When in the opinion of the President of the United States, evidenced by a written order addressed to the holder of any license hereunder, the safety of the United States demands it, the United States shall have the right to enter upon and take possession of any project, or part thereof, constructed, maintained, or operated under said license, for the purpose of manufacturing nitrates, explosives, or munitions of war, or for any other purpose involving the safety of the United States, to retain possession, management, and control thereof for such length of time as may appear to the President to be necessary to accomplish said purposes and then to restore possession and control to the party or parties entitled thereto; and in the event that the United States shall exercise such right it shall pay to the party or parties entitled thereto just and fair compensation for the use of said property as may be fixed by the Commission upon the basis of a reasonable profit in time of peace, and the cost of restoring said property to as good condition as existed at the time of the taking over thereof, less the reasonable value of any improvements that may be made thereto by the United States and which are valuable and serviceable to the licensee. (41 Stat. 1072; 16 U.S.C. § 809)

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FEDERAL POWER ACT-SEC. 17

Sec. 17. [Disposition of proceeds-Reclamation fund.]—(a) All proceeds from any Indian reservation shall be placed to the credit of the Indians of such reservation. All other charges arising from licenses hereunder, except charges fixed by the Commission for the purpose of reimbursing the United States for the costs of administration of this Part shall be paid into the Treasury of the United States, subject to the following distribution: 12 per centum thereof is hereby appropriated to be paid into the Treasury of the United States and credited to "Miscellaneous receipts"; 50 per centum of the charges arising from licenses hereunder for the occupancy and use of public lands and national forests shall be paid into, reserved, and appropriated as a part of the reclamation fund created by the Act of Congress known as the Reclamation Act, approved June 17, 1902; and 37 per centum of the charges arising from licenses hereunder for the occupancy and use of national forests and public lands from development within the boundaries of any State shall be paid by the Secretary of the Treasury to such State; and 50 per centum of the charges arising from all other licenses hereunder is reserved and appropriated as a special fund in the Treasury to be expended under the direction of the Secretary of the Army in the maintenance and operation of dams and other navigation structures owned by the United States or in the construction, maintenance, or operation of headwater or other improvements of navigable waters of the United States. The proceeds of charges made by the Commission for the purpose of reimbursing the United States for the costs of the administration of this Part shall be paid into the Treasury of the United States and credited to miscellaneous receipts.

(b) In case of delinquency on the part of any licensee in the payment of annual charges a penalty of 5 per centum of the total amount so delinquent may be added to the total charges which shall apply for the first month or part of month so delinquent with an additional penalty of 3 per centum for each subsequent month until the total of the charges and penalties are paid or until the license is canceled and the charges and penalties satisfied in accordance with law. (41 Stat. 1072; § 208, Act of August 26, 1935, 49 Stat. 845; 16 U.S.C. § 810)

Sec. 18. [Licensee to maintain navigational lights and signals and fishwaysNavigational aids and reservoir level to be controlled by regulations of the Secretary of the Army-Penalty for non-compliance.]-The Commission shall

FEDERAL POWER ACT-SEC. 19

279

require the construction, maintenance, and operation by a licensee at its own expense of such lights and signals as may be directed by the Secretary of the Department in which the Coast Guard is operating, and such fishways as may be prescribed by the Secretary of the Interior. The operation of any navigation facilities which may be constructed as a part of or in connection with any dam or diversion structure built under the provisions of this Act, whether at the expense of a licensee hereunder or of the United States, shall at all times be controlled by such reasonable rules and regulations in the interest of navigation, including the control of the level of the pool caused by such dam or diversion structure as may be made from time to time by the Secretary of the Army, and for willful failure to comply with any such rule or regulation such licensee shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished as provided in section 316 hereof. (41 Stat. 1073; § 209, Act of August 26, 1935, 49 Stat. 845; § 2, Act of June 4, 1956, 70 Stat. 226; 16 U.S.C. § 811)

EXPLANATORY Notes

1956 Amendment. The Act of June 4, 1956, 70 Stat. 226, amended section 18 by substituting the words "Secretary of the Department in which the Coast Guard is operating" for the words "Secretary of War" in the first sentence of the section.

1935 Amendment. The Act of August 26, 1935, 49 Stat. 845, amended section 18 by adding the first sentence of the section,

and by eliminating the clause which read: "Such rules and regulations may include the maintenance and operation by such licensee at its own expense of such lights and signals as may be directed by the Secretary of the Army and such fishways as may be prescribed by the Secretary of the Interior.", and by substituting "section 316" for "section 25" in the last sentence of the section.

Sec. 19. [Public service licensees-State regulation to control-Regulation by the Commission if no State provision therefor-Commission's jurisdiction to cease when State provides means of regulation and control.]-As a condition of the license, every licensee hereunder which is a public-service corporation, or a person, association, or corporation owning or operating any project and developing, transmitting, or distributing power for sale or use in public service, shall abide by such reasonable regulation of the services to be rendered to customers or consumers of power, and of rates and charges of payment therefor, as may from time to time be prescribed by any duly constituted agency of the State in which the service is rendered or the rate charged. That in case of the development, transmission, or distribution, or use in public service of power by any licensee hereunder or by its customer engaged in public service within a State which has not authorized and empowered a commission or other agency or agencies within said State to regulate and control the services to be rendered by such licensee or by its customer engaged in public service, or the rates and charges of payment therefor, or the amount or character of securities to be issued by any of said parties, it is agreed as a condition of such license that jurisdiction is hereby conferred upon the Commission, upon complaint of any person aggrieved or upon its own initiative, to exercise such regulation and control until such time as the State shall have provided a commission or other authority for such regulation and control: Provided, That the jurisdiction of the Commission shall cease and determine as to each specific matter of regulation and control prescribed in this section as soon as the State shall have provided a commission

280

FEDERAL POWER ACT-SEC. 20

or other authority for the regulation and control of that specific matter. (41 Stat. 1073; 16 U.S.C. § 812)

Sec. 20. [Reasonable rates for power use in interstate commerce-Discriminatory rates unlawful-Commission to enforce rate provisions if no enforcement authority provided by State-Section to be administered according to procedure and practice in fixing and regulating rates, etc., of railroad companies-Valuation of property for rate making limited.]—When said power or any part thereof shall enter into interstate or foreign commerce the rates charged and the service rendered by any such licensee, or by any subsidiary corporation, the stock of which is owned or controlled directly or indirectly by such licensee, or by any person, corporation, or association purchasing power from such licensee for sale and distribution or use in public service shall be reasonable, nondiscriminatory, and just to the customer and all unreasonable discriminatory and unjust rates or services are hereby prohibited and declared to be unlawful; and whenever any of the States directly concerned has not provided a commission or other authority to enforce the requirements of this section within such State or to regulate and control the amount and character of securities to be issued by any of such parties or such States are unable to agree through their properly constituted authorities on the services to be rendered or on the rates or charges of payment therefor, or on the amount or character of securities to be issued by any of said parties, jurisdiction is hereby conferred upon the Commission, upon complaint of any person aggrieved, upon the request of any State concerned, or upon its own initiative to enforce the provisions of this section, to regulate and control so much of the services rendered, and of the rates and charges of payment therefor as constitute interstate or foreign commerce and to regulate the issuance of securities by the parties included within this section, and securities issued by the licensee subject to such regulations shall be allowed only for the bona fide purpose of financing and conducting the business of such licensee.

The administration of the provisions of this section, so far as applicable, shall be according to the procedure and practice in fixing and regulating the rates, charges, and practices of railroad companies as provided in the Act to regulate commerce, approved February 4, 1887, as amended, and that the parties subject to such regulation shall have the same rights of hearing, defense, and review as said companies in such cases.

In any valuation of the property of any licensee hereunder for purposes of rate making, no value shall be claimed by the licensee or allowed by the Commission for any project or projects under license in excess of the value or values prescribed in section 14 hereof for the purposes of purchase by the United States, but there shall be included the cost to such licensee of the construction of the lock or locks or other aids of navigation and all other capital expenditures required by the United States, and no value shall be claimed or allowed for the rights granted by the Commission or by this Act. (41 Stat. 1073; 16 U.S.C. § 813)

Sec. 21. [Licensee may acquire property through the exercise of the right of eminent domain-Jurisdiction of Federal district court where owner of property claims amount in excess of $3,000-Procedure to conform as nearly