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SECOND DEFICIENCY APPROPRIATION ACT FOR 1924
(FACT FINDERS' ACT)

[Extracts from] An act making appropriations to supply deficiencies in certain appropriations for the fiscal year ending June 30, 1924, and prior fiscal years, to provide supplemental appropriations for the fiscal year ending June 30, 1925, and for other purposes. (Act of December 5, 1924, ch. 4, 43 Stat. 672)

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[Commencement of construction work prohibited unless recommended by Commissioner of Reclamation and Secretary of the Interior and approved by the President.]-Provided, That no part of the sums herein appropriated shall be used for the commencement of construction work on any reclamation project which has not been recommended by the Commissioner of Reclamation and the Secretary of the Interior and approved by the President as to its agricultural and engineering feasibility and the reasonableness of its estimated construction cost. (43 Stat. 685)

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[Return of contributions to cooperative investigations of projects.]—Hereafter the Secretary of the Interior is authorized to receive moneys from any State, municipality, irrigation district, individual, or other interest, public or private, expend the same in connection with moneys appropriated by the United States for any such cooperative investigation, and return to the contributor any moneys so contributed in excess of the actual cost of that portion of the work properly chargeable to the contribution. (43 Stat. 685; 43 U.S.C. § 396)

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[THE FACT FINDERS' ACT]

Sec. 4. [Definitions.]-Subsection A. When used in this section(a) The word "Secretary" means the Secretary of the Interior.

(b) The words "reclamation law" mean the act of June 17, 1902 (Thirtysecond Statutes, page 388), and all acts amendatory thereof or supplementary

thereto.

(c) The words "reclamation fund" mean the fund provided by the reclama

tion law.

(d) The word "project" means a Federal irrigation project authorized by the reclamation law.

(e) The words "division of a project" mean a substantial irrigable area of a project designated as a division by order of the Secretary. (43 Stat. 701; 43 U.S.C. § 371)

Subsec. B. [Approval of new project contingent upon information as to water supply, engineering features, cost, land prices, feasibility, adaptability

FACT FINDERS' ACT-SUBSEC. C

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for settlement and farm homes.]-No new project or new division of a project shall be approved for construction or estimates submitted therefor by the Secretary until information in detail shall be secured by him concerning the water supply, the engineering features, the cost of construction, land prices, and the probable cost of development, and he shall have made a finding in writing that it is feasible, that it is adaptable for actual settlement and farm homes, and that it will probably return the cost thereof to the United States. (43 Stat. 702; 43 U.S.C. § 412)

New project 2 Secretary's discretion 1 Source of funds 3

1. Secretary's discretion

NOTES OF OPINIONS

Federal court has no general supervisory power by which to control decision of the Secretary of the Interior as to whether a Reclamation Act project is economically feasible. In an action by irrigation entrymen to recover damages for losses alleged to have resulted because of a failure of the Secretary of the Interior to comply with subsection B of the Act of December 5, 1924, and to compel the Secretary to determine that the Third Division, Riverton Project, lacked economic feasibility, the court sustained a motion to dismiss on the grounds that the law requires the Secretary of the Interior to make a written finding that a new project, or new division of a project, is feasible before it can be approved for construction, but does not create a duty that the Secretary, sixteen years after the project was commenced, make a finding that it is not feasible. Smith v. United States, 224 F. Supp. 402 (D. Wyo. 1963), affirmed 333 F. 2nd 70 (10th Cir. 1964).

The Secretary of the Interior is not required to proceed with the construction of the Baker project, Oregon, even though Congress has appropriated funds therefor, if he is unable to find that the project is feasible and that the costs will be repaid to the United States, as required by subsection B, section 4, of the Act of December 5, 1924, 43 Stat. 702, and section 4 of the Act of June 17, 1902, 32 Stat. 389, and unless a

contract has been executed and confirmed as required by the Act of May 10, 1926, 44 Stat. 479. Letter from the Attorney General to Representative Sinnott and Senators McNary and Stanfield, reprinted in the New Reclamation Era, September, 1926, at 152; 35 Op. Atty. Gen. 125 (1926); 34 Op. Atty. Gen. 545 (1925). See also Solicitor's Opinions dated June 11, 1926, and July 20, 1925. 2. New project

Although appropriations had been made for the Baker project prior to December 5, 1924, these appropriations had lapsed because construction was not started thereunder. Consequently, the Baker project is a "new project" within the meaning of subsection B. 34 Op. Atty. Gen. 545 (1925). 3. Source of funds

The provisions of subsection B apply only to reclamation projects financed out of the reclamation fund and therefore are not applicable to a project primarily for relief which is to be financed out of funds made available by the Emergency Relief Appropriation Act of 1937. Letter of Attorney General to Secretary, July 23, 1937, in re Glendive unit, Buffalo Rapids project.

Where a project is financed in part from nonreimbursable funds, a finding by the Secretary that the new project or the new division of a project will probably return to the United States the amount of the cost expended from the reclamation fund would seem to fulfill the requirements of subsection B. Letter from Department of Justice to Interior Department, September 7, 1937.

Subsec. C. [Qualifications of applicants for entry-Appointment of boards.]-The Secretary is hereby authorized, under regulations to be promulgated by him, to require of each applicant including preference right exservice men for entry to public lands on a project, such qualifications as to industry, experience, character, and capital, as in his opinion are necessary to give reasonable assurance of success by the prospective settler. The Secretary is authorized to appoint boards in part composed of private citizens, to assist in determining such qualifications. (43 Stat. 702; 43 U.S.C. § 433)

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1. Examining Board

FACT FINDERS' ACT-SUBSEC. D

NOTES OF OPINIONS

One is not entitled to make entry for land in a Federal irrigation project until his qualifications have been passed upon and approved by an examining board, and it is too late to cure the defect in that respect after the land has been withdrawn. Thomas S. Cady, 52 L.D. 222 (1927).

The intent of the law is to select the best qualified applicants for all farms available, having regard to their industry, experience, capital, etc. Determination of the fitness and qualifications of applicants rests primarily with the examining board, and its action in

the selection of applicants and the assignment of farm units will not be disturbed in the absence of a clear showing that its discretion has been abused. William Lee Craig, A-11100 (January 11, 1928).

In an appeal by G. E. Farrell from the Examining Board, Kittitas Div., Yakima project, the First Assistant Secretary stated it would be impracticable for him to substitute his opinion for that of the Examining Board, who had had an opportunity to personally interview and question the applicant. Departmental decision, July 26, 1934.

Subsec. D. [Classification of lands-Different construction charges to be fixed against different classes of land.]-The irrigable lands of each new project and new division of a project hereinafter approved shall be classified by the Secretary with respect to their power, under a proper agricultural program, to support a family and pay water charges, and the Secretary is authorized to fix different construction charges against different classes of land under the same project for the purpose of equitably apportioning the total construction cost so that all lands may as far as practicable bear the burden of such cost according to their productive value. (43 Stat. 702; 43 U.S.C. § 462)

Subsec. E. [Two public notices relating to construction charge-Date when payments begin on construction charges.]-Repealed.

EXPLANATORY NOTE

Provision Repealed. Section 47 of the Act of May 25, 1926, the Omnibus Adjustment Act, repealed subsections E, F and L of this Act, except as otherwise provided in the Adjustment Act. Before repeal, subsection E read as follows: "Hereafter the Secretary shall as to each irrigable acre of land in each new project, or a new division of a project, issue two public notices relating to construction charges. The first public notice shall be issued when the land is ready for settlement and will announce the con

struction charge per irrigable acre. The second public notice shall be issued when in the opinion of the Secretary the agricultural development of the project shall have advanced sufficiently to warrant the commencement of payment of installments of such construction charge. The second public notice shall fix the date when payments will begin on the construction charge announced by the first public notice, which date shall be not more than five years from the date of the first public notice.”

Subsec. F. [Construction charges to be based on productive power of land— Installments 5 per centum of average gross annual acre income for 10 calendar years-Existing contracts may be amended.]—Repealed.

EXPLANATORY NOTE

Provision Repealed. Section 47 of the Act of May 25, 1926, the Omnious Adjustment Act, repealed subsections E, F and L of this Act, except as otherwise provided in the Adjustment Act. Before repeal, subsection F read as follows: "Hereafter all moject construction charges shall be made pavable in ms based in the produs tive power of the land as provided in this subsecron The installment of the construc

tion charge per irrigable acre payable each vear shall be 5 per centum of the average gress annual acre income for the ten calendar years first preceding, or for all years of record if fewer than ten years are available, of the area in cultivation in the di vision or subdivision thereof of the project in which the land is located, as found by the Secretary annually. The decision of the Secretary as to the amount of any such

FACT FINDERS' ACT-SUBSEC. G

stallment shall be conclusive. These annual payments shall continue until the total construction charge against each unit is paid. The Secretary is authorized upon request to amend any existing contract for a project water right so that it will provide for pay

Authority of the Secretary 1
Condition precedent 2
Construction charges 3
Power plant 4

1. Authority of the Secretary

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ment of the construction charge thereunder in accordance with the provisions of this subsection or for the deferment of such construction charges for a period of three years from the approval of this section, or both."

NOTES OF OPINIONS

The Secretary may amend Warren Act contracts under this subsection. Interpretation, 51 L.D. 207, 209-10 (1925).

The authority granted the Secretary in the last sentence of subsection F to amend existing contracts is permissive, not mandatory. Interpretation, 51 L.D. 207 (1925).

In the determination by the Secretary of the annual construction charge, the Secretary is without authority to change the per centum of the gross annual crop return payable each year, as set out in subsection F. Decision of Solicitor, May 8, 1935.

2. Condition precedent

The qualification in subsection G that, where two-thirds of a project or division is covered by water-rights contracts, a water users' association or irrigation district must take over operation and maintenance of the project as a condition precedent to receiving the benefits of "this section", applies only to the benefits provided under subsections F and L. Interpretation, 51 L.D. 215 (1925).

3. Construction charges

The provision in the fourth sentence of subsection F that the "annual payments shall continue until the total construction charge against each unit is paid" is not

intended to relieve water users' associations and irrigation districts of their secondary or joint liability under existing contracts to guarantee payment of charges apportioned to each individual unit. Interpretation, 51 L.D. 207, 208-09 (1925).

The three-year deferment authorized in the last sentence applies to the total construction charge, not just to three annual installments under existing contracts. Interpretation, 51 L.D. 207, 210-11 (1925). 4. Power plant

While subsection F was in effect, a contract was made between the United States and the Shoshone Irrigation District, by which the district agreed to take over the control of the Garland division of the Shoshone project. In this contract the district did not agree to take an interest in the Shoshone power plant. After subsection F had been repealed, the district requested that it be allowed to purchase an interest in the power plant and make payment therefor on the crop-return basis. The Department held, in approving an Opinion of the Solicitor, dated March 24, 1928 (M-24229), that purchase of an interest in the power plant could not be made under subsection F after its repeal. It was held, however, that payment could be made under section 45 of the Act of May 25, 1926 (44 Stat. 648), allowing the district a period of 40 years from the first payment matured under the original water-right contract within which to make payment for the desired interest in the power plant.

Subsec. G. [Transfer of project to water users-Receipts credited as part of construction repayments.]-Whenever two-thirds of the irrigable area of any project, or division of a project, shall be covered by water-right contracts between the water users and the United States, said project shall be required, as a condition precedent to receiving the benefits of this section to take over, through a legally organized water users' association or irrigation district, the care, operation, and maintenance of all or any part of the project works, subject to such rules and regulations as the Secretary may prescribe, and thereafter the United States, in its relation to said project, shall deal with a water users' association or irrigation district, and when the water users assume control of a project, the operation and maintenance charges for the year then current shall be covered into the construction account to be repaid as part of the construction repayments. (43 Stat. 702; 43 U.S.C. § 500)

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Subsec. H. [Penalty against delinquent accounts reduced.]—The penalty of 1 per centum per month against delinquent accounts, provided in section 3 and section 6 of the act of August 13, 1914 (Thirty-eighth Statutes, page 686), is hereby reduced to one-half of 1 per centum per month as to all installments which may hereafter become due. (43 Stat. 703; 43 U.S.C. §§ 478, 494)

EXPLANATORY NOTE

Reference in the Text. The Act of August 13, 1914 (Thirty-eighth Statutes, page 686), referred to in the text, is the Reclam

1. Application

ation Extension Act. The Act appears herein in chronological order.

NOTES OF OPINIONS

Subsection H of the Fact Finders' Act, which reduces from one to one-half per cent per month the delinquency penalty on all charges coming due thereafter, also applies to rental charges fixed under section 11

of the Reclamation Extension Act of 1914. Instructions, 51 L.D. 218 (1925).

The Beerline Irrigation District submitted a proposed contract to reduce from 10 per cent to 6 per cent the interest rate on delinquent payments under its contracts of March 31, 1913, and July 3, 1919, but the Assistant Secretary on August 6, 1937, held that the authority vested in the Secretary of the Interior under Subsec. H of the act of

Dec. 5, 1924, was not sufficient to authorize the amendment of these contracts; that Subsec. H authorized a reduction of interest rates only on the contracts referred to in sections 3 and 6 of the act of August 13, 1914. It was also held that Sec. 1 of the act of May 15, 1922, could be considered authority for fixing interest rates consistent with State law on contracts subsequently made; and that there was no consideration passing to the United States for amending these contracts as proposed. 8 Comp. Gen. 25 was cited as holding that contracts may not be modified to the prejudice of the United States, without adequate consideration therefor.

Subsec. I. [Profits from projects taken over by water users.]—Whenever the water users take over the care, operation, and maintenance of a project, or a division of a project, the total accumulated net profits, as determined by the Secretary, derived from the operation of project power plants, leasing of project grazing and farm lands, and the sale or use of town sites shall be credited to the construction charge of the project, or a division thereof, and thereafter the net

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