43 Usc 387

August

4, 1939

634

RECLAN4ATION

PROJECT

ACT

OF

1939

An act to provide a feasible and comprehensive plan for the variable payment of construction charges on United States reclamation projects, to protect the investment of the
United States in such projects, and for other purposes. (Act of August 4, 1939, ch.418,
53 Stat. 1187)

[Sec. 1. Repayment problems— Variable payments of construction charges—
Revision of obligation to pay construction charges. ]—For the purpose of providing for United States reclamation projects a feasible and comprehensive plan
for an economical and equitable treatment of repayment problems and for
variable payments of construction charges which can be met regularly and fully
from year to year during periods of decline in agricultural income and unsatisfactory conditions of agriculture as well as during periods of prosperity and good
prices for agricdtural products, and which will protect adequately the financial
interest of the United States in said projeets, obligations to pay construction
charges may be revised or undertden
pursuant to tie provisions of this Act.
(53 Stat. 1187; 43 U.S.C. ~ 485)

1. Purpose

A principal purpose of the Reclamation
Project Act of 1939 was to place water
users repa~ent on a basis of payment

ability rather than to burden them with all
costs. Solicitor Bar~ Opinion, 68 I.D. 305,
310 ( 1961), in re Columbia Basin repayment problems.

Sec. 2. [Definitions of terminology employed. ]—As used in this Act—
(a) The term “Federal reclamation laws” shall mean the Act of June 17, 1902
(32 Stat. 388), and all Acts amendatory thereof or supplementary thereto.
(b) The term “Secretary” shall mean the Secretary of the Interior.
shall mean any reclamation or irrigation project,
(c) The term “project”
including incidental features thereof, authorized by the Federal reclamation
laws, or constructed by the United States pursuant to said laws, or in connection
with which there is a repayment contract executed by the United States, pursuant
to said laws, or any project constructed or operated and maintained by the
Secret~
through the Bureau of Reclamation for the reclamation of arid lands
or other purposes.
(d) The term “construction charges” shall mean the amounts of principal
obligations payable to the United States under water-right applications, repayment contracts, orders of the Secreta~, or other forms of obligation entered into
pursuant to the Federal reclamation laws, excepting amounts payable for water
rental or power charges, opemtion and maintenance and ofier yearly service
charges, and excepting also ~Y o~er operation and mainten~ce,
interest> Or
other charges which are not covered into the principal sums of the construction
accounts of the Bureau of Reclamation:
(e) The term “repayment contract” shall mean any contract providing for
payment of construction charges to the United States.

August

4, 1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

2

635

(f) The term “project contract unit” shall mean a projector any substantial
area of a project which is covered or is proposed to be covered by a repayment
contract. On any project where two or more repayment contracts in part cover
the same area and in part different areas, the area covered by each such repayment contract shall be a separate project contract unit. On any project where
there are either two or more repayment contracts on a single project contract
unit or two or more project contract units, the repayment contract or project
contract units may be merged by agreements in form satisfactory to the Secretary.
shall mean any conservancy district, irrigation
(g) The term “organization”
district, water users’ association, or other organization, which is organized under
State law and which has capacj.ty to enter into contracts with the United States
pursuant to the Federal reclamation laws.
(h) The term “division of a project” shall mean any part of a project designated as a division by order of the Secretary or any phase or feature of project
operations given a separate designation as a division by order of the Secretary
for the purposes of orderly and efficient administration.
(i) The term “development unit” shall mean a part of a project which, for
purposes of orderly engineering or reclamation development, is designated as a
development unit by order of the Secretary.
(j) The term “irrigation block’ shall mean an area of arid or semiarid lands
in a project in which, in the judgment of the Secretary, the irrigable lands should
be reclaimed and put under irrigation at substantially the same time, and which
is designated as an irrigation block by order of the Secretary. (53 Stat. 1187; Act
of August 8, 1958, 72 Stat. 543; 43 U.S.C. $ 485a)
EXPLANATORY NOTE
1958 Amendment. Section 3 of the Act
of August 8, 1958, repealed subsection (h)
of section 2 and relettered the subsections
following accordingly. The repealed subsection read as follows: “(h) The term
‘annual returns’ shall mean the amount of
the annual gros~ crop ret.ur~sper acre of
the area in cultivation wlthm the project
contract unit involved; and the term ‘normal
returns’for any year shall mean the weighted
average of the annual returns of those ten

years, of the thirteen-year period covering
said year and the twelve years preceding it,
in which the annual returns are the highest.”
These definitions relate to the “normal and
percentage plan” of repayment which had
been authorized by section 4. Inasmuch as
the 1958 Act also repealed section 4, the
need for these definitions was eliminated.
In place of the “normal and percentage
plan,” the 1958 Act provided for a variable
repayment plan.

NOTESOF OPINIONS
Organization
Project 1

2

1. Project
The definition of the term “project” in
section 2 of the Reclamation Project Act of
1939 includes projects not under the reclamation laws that are constructed or operated
and maintained by the Secretary of the Interior throu~h ~he Bureau of Reclamation
for other agencies, such as the Lower Two
Medicine Dam on the Blackfeet Indian Irrigation project. Consequently, the provisions of section 12 of the Act authorize the

inclusion . of
. the usual contingency-uponaPProPrlatiOns clause m the construction
contract. Memorandum of Associate Solicitor Hogan, October 6, 1966.

‘2. Organization
The reasoning of the Solicitor’s memorandum opinion, M-28 771 (October
10,
1936 ), in re the Public Irrigation District
for the Pine River Projec~, Colorado, that
the term “irrigation district”, as used in
section 46 of the Omnibus Adjustment Act,
means that an organization must have the
power of taxation in order to enter into a

August
636

RECLAMATION

PROJECT

repayment contract, is no longer valid, for
section 2 (g) of the Reclamation Project Act
of 1939 defines “organization” in a broader
sense; and a still broader definition is given
in section 2(c) of the Small Reclamation

ACT

OF

1939—SEC.

4, 1939

3

Projects Act. Memorandum
of Ass?ciate
Solicitor Hogan., August 17, 1964, m re
Louden
Irrigating Canal and Reservoir
Company.

Sec. 3. [Secretary authorized to amend contracts for repayment of corrstruction charges—?eriod
of repayment not to exceed forty years from date
when first installment was due. ] —In connection with any repayment contract
or other form of obligation, existing on the date of this Act: to pay construction
charges, providing for repayment on the basis of a definite period, the Secretary
is hereby authorized, upon request by the water users involved or their duly
authorized representatives for amendment under this section of said contract or
other form of obligation, and if in the Secretary’s judgment such amendment is
both practicable and in l
and in connection with which a repayment contract has not been executed, allocations of costs may be made in accordance with the provisions of section 9 of
this Act and a repayment contract may be negotiated, in the discretion of the
Secretary, (I) pursuant to the authority of subsection (a) of this section or (2)
in accordance, as near as may be, with the provisions in subsection 9(d) or 9 ( e )
of this Act. In connection with any such project, division, or development unit,
on which the majority of the lands involved are public lands of the United
States, the Secretary, prior to entering into a repawent
contract, may fix a
development petiod for each irrigation block, if any, of not to exceed ten years
from and including the first year in which water is delivered for the lands in
said block: Provided, That in the event a development period is fixed prior to
execution of a repayment contract, execution thereof shall be a condition precedent to delivery of water after the close of the development period. During any
such development period water shall be delivered to the lands in fie irrigation
block involved only on a toll-charge basis, at a charge per annum per acre-foot
to be fixed by the Secretary each year and to be collected in advance of delivery

August

4, 1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

7

641

of water. Pending negotiation and execution of a repayment contract for any
other such project, division, or development unit, water may be delivered for a
period of not more than five years from the date of this Act on the same tollcharge basis. Any such toll charges collected and which the Secretary determines
to be in excess of the cost of operation and maintenance during the toll-charge
period shall be credited to the construction cost of the project in the manner
determined by the Secretary.
(c) [Execution of contracts otiy after approval by Act of Congress—Subsequent amendatory contracts maybe executed without approval by Congress.]—
The Secretary from time to time shall report to the Congress on any proposed
contracts negotiated pursuant to the authority of subsection (a) or (b) ( 1) of
WIS section, and he may execute any such contract on behalf of the United
States only after approval thereof has been given by Act of Congress. Contracts, so approved, however, may be amended from time to time by mutual
agreement and without further approval by Congress if such amendments are
within the scope of authority heretofore or hereafter granted to the Secretary
under any Act, except that amendments providing for repayment of construction
charges in a period of years longer than autiorixed by this Act, as it may be
amended, shall be effective only when approved by Congress. (53 Stat. 1192;
Act of April 24, 1945,59 Stat. 76; 43 U.S.C. ~ 485f)
EXPLANATORY NOTES
1945 Amendment. The Act of April 24,
1945, 59 Stat. 75, amended subsection 7 (c)
by adding to it the last sentence of the subsection which authorizes the amendment of
certain
contracts
without
further Congressional approval. The j 945 Act appears
herein in chronological order.
Supplementary Provisions: Extension of
Time for Modification of Repayment Contracts—Repeal
of Section 4. The Act of
March 6, 1952, 66 Stat. 16, provided that
the authority vested in the Secretary of the
Interior by sections 3, 4 and 7 of this Act
be extended through December 31, 19541
The Act of Au~st 31,’ 195!, 68 Stat. 1044,
amended the 1952 Act by inserting “1957”
in place of “1954.” The 1954 Act was in

turn amended by the Act of August 21,
1,957, 71 Stat. 390, which replaced “1957”
with “1960,” The authority vested in the
Secretary by sections 3, 4 and 7 of this Act
thus being extended tirough December 31,
1960. The Act of August 8, 1958, 7,2 Stat.
542, repealed section 4 of this Act and
amended the 1952 Act referred to in this
note by deleting the reference in it to section 4. Each of these Acts appears herein in
chronological order.
Editor’s Note, Contracts Approved by
Act of Congress. Numerous Acts of Congress have been passed pursuant to this subsection. References to these statutes are indexed under the names of the individual
projects involved.

NOTES OF OPINIONS
Approval by Congress
2
Under construction
1
1, Under construction
The Columbia Basin project was a project under construction but for which no
repayment contract had been made at the
time of enactment of the Reclamation
Projec} Act of 19~9, and therefore it was
a ProJect for which, pursuant to section
7(b)
of that act, the Secretary was authorized to allocate costs ~ursuant to section 9(a) and to negotiate- repayment con-

tracts pursuant to section 9(d)
or 9(e).
Solicitor Barry Opinion, 68 I.D. 305, 306
( 1961), in re Columbla Basin repayment
problems.
2. Approval by Congress
A contract containing a clause terminating excess land limitations upon payment
of construction charges is considered not to
be affected by the 1961 Solicitor’s Opinion
holding that payout does not suspend application of excess land laws to Dre-existin=
holdings if such contract has bee; approved

August 4, 1939
642

RECLAMATION

PROJECT

by Congress, even though it was submitted to
Congress for some other reason such m under section 7 of the Reclamation Project
Act of 1939. Letter from Secretary Uddl

ACT

OF

1939—SEC.

8

to Chairmm Wayne Aspinall, House Committee on Interior and Insular Affairs, April
11, 1962, note No. 2.

Sec. 8. (a) [Classification or reclassification of lands at 5-year intervals.] —
The Secretary is hereby authorized and directed in the manner hereinafter provided to classify or to reclassify, from time to time but not more often than at
five-year intervals, as to irritability and productivity those lands which have
been, are, or maybe included within any project.
(b) [No classification unless requested by organization of water users.]—
No classification or reclassification pursuant to the authority of this Act shall be
undertaken unless a request therefor, by an organization or duly authorized
representatives of the water users, in the form required by subsection (c) of this
section has been made of the Secretary. The Secretary shall plan the classification
work, undertaken pursuant to the authority of this section, in such manner as in
his judgment will result in the most expeditious completion of the work.
(c) [Water users organization
to furnish list of lands considered nonproductive.]—In
any request made to the Secretary for a land classification or
recl~sification under Wls section, the organization or representatives of the water
users shall furnish a list of &ose lands which are considered to be of comparatively low productivity or to be nonproductive,
and of those lands which are
considered to be of greater or lesser productivity than indicated by existing
classifications, if any, made pursuant to the Federal reclamation laws, and shall
furnish also such data relating thereto as the Secretary by regulation may require.
(d) [Secretary to determine if classification justified. ]-Upon
receipt of any
such request the Secretary shall make a preliminary determination whether the
requested land classification or reclassification probably is justified by reason
of the conditions of the lands involved and other pertinent conditions of the
project, including its contractual relations with the United States.
(e) [Classification
to be undertaken if justified.] -If
the Secretary finds
probable justification and if the advance to the United Stites hereinafter required is made, he shall undertake as soon as practicable the classification or reclassification of the lands listed in the request, and of any other lands which have
been, are, or may be included within the project involved and which in his
judgment should be classified or reclassified.
(f) [Classification
to be reported to Congress with recommendations
for
remedial legislation. ] —As soon as practicable after completion of the classification work undertaken pu~uant to this section or from time to time, the Secretary
shall report to Congress on the classifications and reclassifications made and shall
include in his report, as to each project involved, his recommendations, if any,
for remedial legislation.
(g) [One-half expense classification to be charged operation and maintenance nonreimbursable—one-half
to be paid in advance by water users. ]—
One-half of the expense involved in any classification work undertaken pursuant
to this section shall be charged to operation and maintenance administration
nonreimbursable;
and one-half shall be paid in advance by the organization involved. 0]1 determining probable justification for the requested classification or

August

4, 1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

643

9(a)

reclassification as provided in this section, the Secretary shall estimate the cost of
the work involvecl arsd shall submit a statement of the estimated cost to said
organization. Said organization, before commencement of the work, shall advance
to the United States one-half of the amount set forth in said statement and also
shall advance one-half of the amount of supplementary estimates of costs which
the Secretary may find it necessary to make from time to time during the progress
of the work; and said amounts shall be and remain available for expenditure
by the Secretary for the purposes for which they are advanced, until the work is
completed or abandoned. After completion or abandonment of the work, the
Secretary shall determine the actual cost thereof; and said organization shall pay
any additional amount required to make its total payments hereunder equal to
one-half of the actual cost or shall be credited with any amount by which advances made by it exceed one-half of said actual cost, as the case may be.
(h) [If classification necessary preliminary to contract under sees. 3 or 4,
Secretary may require classification. ]—If in the judgment of the Secretary a
classification or reclassification pursuant to the provisions of this section is a
necessary preliminary to entering into a contract under section 3 or 4 of this
Act, he may require the same as a condition precedent to entering into such a
contract.
EXPLANATORY NOTE
The 1958 Act appears herein in chronological order.

Reference in the Text. Section 4, referred
to in the text, was repealed by section 3 of
the Act of August 8, 1958, 72 Stat. 542.

(i) [No modification of obligation without express authority of Congress.]—
No modification of any existing obligation to pay construction charges on any
project shall be made by reason of any classification or reclassification undertaken pursuant to this section without express authority tierefor granted by Congress upon recommendations of the Secretary made in a report under subsection
(f) of this section. (53 Stat. 1192; 43 U.S.C. $ 485g)
NOTE OF OPINION
1. Reclassification

authority
as to such lands while in that class, authority to make the adjustment of the repayment contract
with the United
States
necessary to reflect such suspension must be
granted by Congress. Memorandum of Acting Chief Counsel Fk, August 21, 1944.

If lands, being classified or reclassified in
accordance with the procedure prescribed
in section 8(i) of the Reclamation Project
Act of 1939 (53 Stat. 1187), are proposed
to be classed as temporarily unproductive
with the object of suspending the payment
of construction charges to the United States
Sec.
report

9.

(a)

[No

to President

Secretary

and

authorized—If

expenditures
and

repayable
allocations

for

Congres+If
allocations
do not

construction
proposed
equal

equal

until

estimated
cost

after

construction
cost,

construction

investigation
found

construction
may

only

and

feasible
may

by
be

be under-

taken after provision
by Congress. ]—No expenditures for the construction of
any new project, new division of a project, or new supplemental works on a
project shall be made, nor shall estimates be submitted therefor, by the Secretary
until after he has made an investigation thereof and has submitted to the President and to the Congress his report and findings on—

August
644

RECLAMATION

PROJECT

ACT

OF

1939—SEC.

4, 1939

9(a)

(1) The engineering feasibility of the proposed construction;
(2) The estimated cost of the proposed construction;
(3) The part of the estimated cost which can properly be allocated to irrigation and probably be repaid by the water users;
(4) The part of the estimated cost which can properly be allocated to power
and probably be returned to the United States in net power revenues;
(5) The part of the estimated cost which can properly be allocated to municipal water supply or other miscellaneous
United States.

purposes and probably be returned to

If the proposed construction is found by the Secretary
feasibility and if the repayable and returnable allocations

to have engineering
to irrigation, power,

and municipal water supply or other miscellaneous purposes found by the Secretary to be proper, together with any allocation to flood control or navigation
made under subsection (b) of this section, equal the total estimated costs of construction as determined by the Secretary, then the new project, new division of a
project, or supplemental works on a project, covered by his findings, shall be
deemed authorized and may be undertaken by the Secretary, If all such allocations do not equal said total estimated cost, then said new project, new division,
or new supplemental works may be undertaken by the Secretary only after provision therefore has been made by Act of Congress enacted after the Secretary
has submitted to the President and the Congress the report and findings “involved.
(53 Stat. 1193; 43 U.S.C. ~ 485h(a)

)

EXPLANATORY NOTE
1944 Supplementary Provision: Federal
and State Review; Congressional Authorization: Section 1 (c) of the Flood Control
Act of December 22, 1944, requires that
project reports shall be reviewed by the
Secretary of the Army and by the fiected

Statesj and provides that if objections are
set forth, the proposed works shall not be
deemed authorized except by Act of Congress. The 1944 Act appears herein in
chronological
order.

NOTES OF OPIN1ONS
Allocation of costs
5
Authorization
7
Construction with other laws
Cost!, what constitutes
4
Finding of feasibility
3
Purpose
1
Repayment
6

2

1. Purpose
Subsections 9(a) and 9(c) of the Reclamation Project
Act of 1939, although
related, sewe two different purposes: Subsection 9 (a) embodies the test for feasibility,
while subsection 9(c) contains the criteria
for rates to be charged by the Secretary for
the sale of power. Solicitor Harper Opinion,
M–33473 (September 29, 1944).
A principal purpose of the Reclamation
Project Act of 1939 was to place water
users’ repayment on a basis of payment

ability rather than to burden them with all
costs. Solicitor Barry Opinion, 68 I.D. 305,
310 ( 1961), in re Columbia Basin repayment problems.
2. Constmction
with other laws
Allocations of cost of the Columbia Basin
(Grand Coulee ) Project and tie establishment of the rate schedule for the sale of
power therefrom are governed by the provisions of section 9 of the Reclamation Project
Act of 1939 (53 Stat. 1193 )., notwithstanding the broad power vested m the President
“to make and enter into any and all necessary contracts” in connection with the proj ect, by section 2 of the Act of August 30,
1935 (49 Stat. 1039), since section 1 of the
Columbia
Basin Project
Act, approved
March
10, 1943 (Public Law 8, 78th
Cong. ), “authorized and reauthorized” the

August 4, 1939
RECLAMATION

PROJEC T ACT.

project as one “subject to the Reclamation
Project Act of 1939.”
Soficitor Harper
Opinion, M–33473 (September 29, 1944).
3. Finding of feasibility
A finding of feasibility prepared pursuant
to section 9 (a) of the Reclamation Project
Act of 1939 does not itself commit the
United States to complete the project regardless of cost and to apply power revenues
to repay all costs above the estimates made
in the finding. Solicitor Barry Opinion, 68
I.D. 305, 312 ( 1961), in re Columbia Basin
repayment problems: ‘
Section 9 (a) of the Reclamation Act of
1939 authorizes the Secretary to make a
finding of feasibility on a single-purpose
power project.
Memorandum
of Chief
Counsel Fix, February 15, 1950, in re Alcova
power plant.
The provision in the Interior Appropriation Act for 1950 making $100,000 available for the emergency reconstruction
of
the northwest unit pipeline of the Grants
Pass irrigation district was intended as .11]
authorization for tht> work as well as ali
appropriation,
as shown by the legislative
history and the inclusion of the word “emergency”. Consequently the requirement of
section 9(a)
of the Reclamation
Project
Act of 1939 for a finding of feasibility does
not apply as a condition precedent to the
expenditure
of funds. Memorandum
of
Chief Counsel Fix, September 21, 1949.
4. Costs, what constitutes
Section 9 (a) of the Reclamation Project
Act of 1939 provides for estimates of costs
and estimates of repayments, while the requirements of repayment and return are
dealt with in subsections 9 (c), 9 (d), and
9(e)
in terms of actual costs. Solicitor
Barry Opinion, 68 I.D. 305, 310 ( 1961), in
re Columbia Basin repayment problems.
The provision of section 208 of the Flood
Control Act of 1962, relating to the nonreimbursability of Federal costs of relocating roads to current standards, must be construed in @ari materia with section 9 and
section 14 of the Reclamation Project Act
of 1939. This means that ( 1 ) the cost of
relocating a road in kind is included as a
part of total project cost to be allocated as
provided in section 9 of the 1939 Act; (2)
the additional cost of constructing the substitute road to current standards under section 208 is a non-reimbursable federal cost;
and (3) the further cost of constructing the
road to a still higher standard requested by
the State must be paid by the State. Memorandum of Associate Solicitor Weinberg,
December 6, 1962.
If an upstream project, such as the pro-

OF

1939—SEC.

9 (a)

645

posed Central Arizona project and Bridge
Canyon project in the Lower Colorado
River Basin, interferes with the statutory
responsibility of the Secretary to’ recover the
costs of Hoover Dam by June 1, 1987, or to
recover the costs of Davis and Parker Dams
within a reasonable period of time, then the
cost of such interference should be included
as one of the “costs” of the new upstream
development under section 9(a) of the Reclamation Project Act of 1939. Memorandum of Chief Counsel Fix, October 9, 1947.
5. Allocation of costs
Subsection 9(a) speaks of two kinds of
allocations of estimated costs with respect to
irrigation, power, municipal water supply,
and other miscellaneous purposes. One 1s
an allocation in an accounting or engineering sense, and the other is an allocation
ody in the sense of an assignment of
amounts to be returned from the sources
named. In some cases the amount that can
be returned will be less than the amount
properly allocable, and in other cases it
will be more. Memorandum of Chief Counsel Fisher, September 12, 1952, in re procedure on use of surplus pwer revenues for
assistance in financing irrigation distribution systems.
6. Repayment
The availability of power revenues to aid
irrigation has, in one form or another, been
a part of general reclamation law almost
since its beginning. This is. evident from section 5 of the Act of April 16, 1906, 34 Stat.
116, 117, 43 U.S.C. $ 522; the Act of February 24, 1911, 36 Stat. 930, 43 U,S.C.
$ 522; and subsection I, section 4, of the
Act of December 5, 1924, 43. Stat. 703, 43
U.S.C. ~ 501. This generaf trend has been
reinforced
by
the
Hayden-O’Mahoney
amendment
to the Interior Department
Appropriation
Act,
1939, the Act of
May 9, 1938, 52 Stat. 322, 43 U.S.C.
$ 392a, and a provision in the Interior Department Appropriation
Act, 1947, Act of
July 1, 1946, 60 Stat. 366, as well as section
9 of the Reclamation Project Act of 1939,
Act of August 4, 1939, 53 Stat. 1193, 43
U.S.C.
$ 485h. Memorandum
of Chief
Counsel Fisher, September 12, 1952, in re
procedure on use of surplus power revenues
for assistance in financing irrigation distribution systems.
The practice of using power revenues to
assist in the payment of irrigation costs and
in determining whether a project will probably return its cost to the United States
originated with section 5 of the Act of April
16, 1906, 34 Stat. 116, 117, 43 U.S.C.
$ 522; was followed in a number of subse-

August 4, 1939
646

RECLAMATION

ACT

PROJECT

(b)

[Secretary
with

may

Chief

of

allocate

part

1939—SEC.

9 (b)

Except for contracts under subsections
9(c) ( 1) and 9 (d), which are governed by
a 40-year maximum limit, there is no legal
objection under general reclamation law to
utilizing a depreciation method for repayment of Federal mvestmentj that is, repayment within the useful life of the property.
Memorandum
of Chief Counsel Fisher to
Commissioner, April 10, 1952.

quent enactments, including section 9 of the
Reclamation
Project Act of 1939, Act of
August 4, 1939, 53 Stat. 1187, 1193, 43
U.S.C. $ 485h; and has repeatedly been recognized and accepted by Congress. Letter
from Acting Commissioner
Markwell
to
Rep. Leroy Johnson, April 2, 1948.
Subsections (c), (d), and (e) require repayment or return of all actual costs, not
estimated costs, allocated to irrigation. The
requirement for full return of such costs
can be met by assignins for return from
power revenues, where such revenues are
available, all increased costs properly allocable to irrigation but which are beyond
the water users’ ability to pay. Memorandum of Chief Counsel Fix to Commissioner, April 20, 1948, at 26, in re questions
of law raised by House Appropriations Subcommittee;
reprinted in Hearings on Interior Department Appropriation
Bill for
1949 Before a House Apbrobriations
Subcommittee, 80th Cong., “2-d Sess., pt. 3, at
885 (1948).
The Reclamation Project Act (53 Stat.
1193 ), specifies no period within which
there must be repaid that portion of the
costs “properly chargeable to irrigation but
which are beyond the ability of the water
users to repay”
(the irrigation subsidy).
The repayment period accordingly may be
such as tie Secretary of the Interior in his
discretion shall determine to be proper for
each project, within the useful life of that
project.
Solicitor
Harper
Opinion,
M–
33473
(Supplemental)
(September
10,
1945).

Consult

OF

7. Authorization
A project is an authorized project when
a report thereon under section 9(a) has
been submitted as provided in that section,
and therefore the initisd appropriation for
such project is not subject to a point of
order. Ruling of Chairman of the Committee of the Whole House on the State
of tie Union, May 14, 1941, Cong. Rec. p.
4138.
----Section 9(a) of the Reclamation Project
Act of 1939, as amended, makes provision
for the administrative authorization (without further Congressional action ) of projects, parts of projects, and individual units
embracins one or more of the purposes of
irrigation, flood control, navigation, power,
fish and wildlife, and municipal water supply or other miscellaneous purposes. These
purposes stand on a par with each other,
and there can be no question that the
language covers construction of single-purpose or multiple-purpose
projects that do
not include
the function
of irrigation.
Solicitor Bennett Opinion,
65 I.D. 129
( 1958),
in re authority
to investigate
Pleasant Valley Development.
of cost

Engineer+Perform

to flood

control

investigations

or navigation—
under

cooperative

connection with any new project, new
division of a project, or supplemental works on a project there maybe allocated
to flood control or navigation the part of said total estimated cost which the
Secretary may find to be proper. Items for any such allocations made in connection with projects which may be undertaken pursuant to subsection (a) of
this section shall be included in the estimates of appropriations submitted by
the Secretary for said projects, and funds for such portions of the projects shall
not become available except as directly appropriated or allotted to the Deagreement

with

Secretary

of War. ] —In

partment of the Interior. In connection with the making of such an allocation,
the Secretary shall consult with the Chief of ‘Engineers and the Secretary of
War, and may perfom
any of the necessary investigations or studies under a
cooperative agreement with the Secretary of War. In the event of such an allocation

the Secretaq

of the Interior

flood control or navigation,
Stat. llg4;43U.SC.5485h(b)

shall operate the project

to the extent

)

justified

for purposes

by said allocation

of

thereof. (53

August

4, 1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

647

9(c)

NOTES OF OPINIONS
Effect of allocation
Report
3
Supplemental works

2
1

1. Supplemental works
The distribution system for Coachella
Valley, with respect to which an appropriation had been made prior to the enactment of the Reclamation
Project Act
of 1939 but a repayment contract had not
been executed, is a, “supplemental work”
within the meaning of section 9 of the Act
with respect to which costs may be allocated to flood control on a nonreimbursable
basis. Solicitor White Opinion, M-34900
(March 27, 1947), in re flood protection
works in Coachella Valley.
2. Effect of allocation
Section 7 of the Flood Control Act of
1944, which requires the operation of Federd reservoirs for flood control or navigation under regulations issued by the Secretary of the Army, applies only to reservoirs
in which storage has been allocated to flood
control or navigation, and does not apply
to reservoirs for which only costs, not
(c)
repaid

[Sales

or

leases

in not to exceed

of

water

or

storage, have been allocated to either purpose. In the latter case, the Secretary of
the Interior is charged by section 9 (b) of
the Reclamation Project Act of 1939 with
the responsibility for operating the project
for such purposes. Memorandum of Chief
Counsel Fisher, April 30, 1952, in re operation of Shasta Dam, Central Valley project, for navigation. Accord: Memorandum
of Chief Counsel Fix, May 2, 1946, in re
application of section 7 of the Flood Control Act of 1944.
3. Report
The Secretary is required by section 9 (b)
of the Reclamation Project Act of 1939 to
consult with the Chief of Engineers and
the Secretary of the Army with regard to
the allocation of costs of the emergency
reconstruction of Ochoco Dto flood control; but because this work was authorized
by the Interior Appropriation Act for 1949,
it is not legally necessary to submit a report
on such allocation to Congress. Memorandum of Acting Chief Counsel Devries, August 4, 1949.

power—

40 year+Preference

Appropriate
to municipalities

share

of

cost

and other

to

be

public

corporations
and agencies. ] —The Secretary is authorized to enter into contracts
to furnish water for municipal water supply or miscellaneous purposes: Prouided,
That any such contract either ( 1) shall require repayment to the United States,
over a period of not to exceed forty years from the year in which water is first
delivered for use of the contracting party, with interest not exceeding the rate of
3~z per centum per annum if the Secretary determines m interest charge to be
proper, of an appropriate share as determined by the Secretary of that part of
the construction costs allocated by him to municipal water supply or other miscellaneous purposes; or ( 2 ) shall be for such periods, not to exceed forty years,
and at such rates as in the Secretary’s judgment will produce revenues at least
sufficient to cover an appropriate share of the annual operation and maintenance
cost and an appropriate share of such fixed charges as the Secretary deems proper,
and shall require the payment of said rates each year in advance of delivery of
water for said year. Any sale of electric power or lease of power privileges, made
by the Secretary in connection with the operation of any project or division of a
project, shall be for such periods, not to exceed forty years, and at such rates
as in his judgment will produce power revenues at least sufficient to cover an
appropriate share of the annual operation and maintenance cost, interest on an
appropriate share of the construction investment at not less than 3 per centurn
per annum, and such other fixed charges as the Secretary deems proper: Provided further,
That in said sales or leases preference shall be given to municipalities and other public corporations or agencies; and also to cooperatives and other
nonprofit organizations financed in whole or in part by loans made pursuant to

August
RECLAMATION

648

PROJECT

ACT

OF

1939—SEC.

4, 1939

9 (C)

the Rural Electrification Act of 1936 and any amendments thereof, Nothing in
this subsection shall be applicable to provisions in existing contracts, made pursuant to law, for the use of power and miscellaneous revenues of a project for
the benefit of users of water from such project. The provisions of this subsection
respecting

the terms

be in addition
ticular

and

projects.

purposes

of sales of electric
alternative

No contract

or to electric

judgment

of the

irrigation

purposes.

relating

power

Secretary,

power

and leases of power

to any authority
to municipal

or power
it will

in existing

not

water

privileges
impair

(53 Stat. 1194; 43 U.S.C.

shall

privileges

Ia-ws relating

supply

or miscellaneous

be made

the efficiency

shall
to par-

unless,

in the

of the project

for

$ 485h (c) )

EXPLANATORY NOTES
Supplementary Provision: Right of Renewal; First Right to Share of lVater Supply. The Act of June 21, 1963, directs the
Secretary of the Interior, upon request, to
provide for renewal of water supply contracts under clause (2), and to grant parties
to water supply contracts under clauses ( 1)
or ( 2 ) a stated share . of project water
supply available for mumclpd, domestic or
industrid use. The Act appears herein in
chronological order.
Reference in the Text. The Rural Electrification Act of 1936, referred to in the text,

was enacted May 20, 1936, 49 Stat. 1363,
and has been amended at intervals since its
enactment. The Act as amended is found
in title 7, United States Code, section 901,
etseq.
Administrative
Practice:
Charging
of
Interest, Since 1949 it has been the policy
of the Department, as a general rule, that
costs allocated to municipal water supply
should be repaid with interest on the unpaid
balance. See Memorandum
of Secretary
Krug to Commissioner, October 12, 1949.

NOTES OF OPINIONS
Generally
1-4
Power
>14
Contracts
7
Exceptions
5
Falling water
6
Preference customers
10
Rates
8
Repayment
9
Transmission lines
12
IVater
1S24

Contracts 17
Miscellaneous purposes 16
Municipal water supply 15
Rates 18
1. Generally
Subsections 9(a) and 9 (c) of the Reclamation Project Act of 1939, although related, serve two di~rent
purposes: Subsection 9 (a) embodies the test for feasibility, while subsection 9(c)
contains the
criteria for rates to be charged by the Secretary for the sale of power. Solicitor Harper
Opinion, M–33473
(September 2g> 1g44),
The
Hayden-OMahoney
amendment
deds with the cash distribution of revenpes
in the Tremury as between the reclamation
fund and the general fund. Its purpose
was to assure that the reclamation fund
would receive as to each reclamation project an amount of dollars equal to that required to amortize the power investment

plus the irrigation assistance. It does not,
however, purport to deal with payout requirements of reclamation projects. These,
except for special requirements applicable
to given projects, are governed by Section
9(c)
of the Reclamation
Project Act of
1939. Statement furnished by Asst. Secretary Holum for Hea~ings on H.R. 2337, to
Provide jo7 the Construction of the Lower
Teton Division, Teton Basin Federal Reclamation Project, Before the Irrigation and
Reclamation
Subcommittee
of the House
Committee on Interior and Insular Affairs,
88th Cong., 2d Sess. 38 ( 1964).
5. Power—Exceptions
On July 1, 1941, the Secretary approved
a rate schedule for the sde of commercial
electrical energy from the Minidoka project.
The approval was based on a financial study
which assumed and expressly stated that
contracts with water users organizations for
the furnishing of. pow~r for pumping, as a
part of the project irrigation operations,
are not sales of electric power within the
meaning of Section 9(c) of the Reclamation Project Act of 1939.
6.—Falling water
The reference in section 9(c)
to the
“lease of power privileges;’ as distinguished
from the “sale of electric power” is suffi-

August

4, lg3g
RECLAMATION

PROJECT

ciently broad to comprehend
a so-called
sale of falling water or other contractual
arrangements to uti~ze power head and
storage at, or operationally in conjunction
with, Federal reclamation dams. Memorandum of Solicitor Armstrong to Commissioner of Reclamation, April 12, I g~5.
7.—Contracts
In view of the Secretary’s authority under
section 2 of the .4ct of August 26, 1937,
50 Stat. 850, to acquire PrOPertY for tie
Central Valley project by any means he
deems necessary, includlng dOnatl(>n, and
the broad authority of section 9(c) of the
Reclamation
Project Act of 1939 to fix
rates, the Secretary may grant rate discounts to power customers that reflect the
amortization of construction costs of transmission facilities built by the cmtomer and
conveyed to the Government or that reflect
the operation and maintenance costs of facilities built and retained by the customer.
(Dec. Comp. Gen. &62789, letter of Assistant Comptroller General Wei=el to Chairman John E. Moss, Special Subcommittee
on Assigned Power and Land Problems,
House Committee on Government Operations, June 28, 1960).
Under the authority of the Act of March
4, 1921,41 Stat. 1404, to accept and expend
advances as if appropriated, and the broad
authority of section 9 ( c ) of the Reclamation
Project Act of 1939 to fix the rates at w~lch
electric power is sold, the Secretary is
authorized’ to enter into a contract with
a commercial customer of the Kendrick
project whereby the customer advances the
cost of constructing the necessary feeder
transmission facilities, the Bureau constructs
the facilities, and power is sold to the
customer at a discount rate untif the customer has paid the United States, in the
form of the reduced rate plus the advanced
funds, the same amount for the power received as it would have paid at standard
rates if the Bureau had constructed the
facilities with appropriated
funds. Dec.
Comp. Gen. %62789
(January 9, 1947).
In an appropriate case the Commissioner
of Reclamation may condition the sale of
temporary, withdrawable
Central Valley
project
power to a potential municipal
customer on the customer’s demonstrating,
by some appropriate means, that it has an
abi~ty to obtain a source of power to meet
its requirements upon the withdrawal of the
Bureau’s supply. Memorandum of Associate
Solicitor Fisher to the Commissioner
of
Reclamation, May 6, 1960.
8.—Rates
Although the principles stated in section
9 (c) of the Reclamation
Project Act of
g6T_~6T—T%.v 01.1—44

ACT

OF

1939—SEC.

9 (C)

649

1939 pertaining to power rates are stated
in terms of the minimum charge for power,
they are also clearly intended to set the
maximum charge. The Government of the
United States markets power to serve the
public interest, not to make a profit. We
beheve that the public interest is best served
by marketing power at the Iowest rate
consistent with orderly repa~ent
of all
proper cos~s, and we believe that is what
Congress intended.
Letter of Secretary
Udall to Representative Aspinall, May 15,
1965, in re basis for establishing power rates
for the Colorado River Storage project.
The provisions relating to power marketing and power rates in section 9(c) of the
Reclamation
Project Act of 1939, section
5 of the Flood Control Act of 1944, and seetion 6 of the Bonneville Power Act are in
pari materia, and each may he examined
to shed light on the Congressional intent
with respect to the others. Indeed, as a
practical matter, as illustrated by the Bonneville Power Administration,
because a
single system may be used to market power
from three different sources, the three. statutes have to be read together and interpreted as establishing identicd criteria for
power rates. Consequently, the mandate of
the Flood Control Act of 1944 to market
power from Army projects “in such manner
as to encourage the most widespread use
thereof at the lowest possible rates to consumers consistent with sound business principles,” applies also to power marketed from
reclamation projects under reclamation law.
Letter of SecretaW Udall to Representative
Aspinall, May 15, 1965, in re basis for
establishing power rates for the Colorado
River Storage Project,
Under section 9 (c) of the Reclamation
Project Act of 1939, as construed consistently with the Hayden-O’Mahoney
amendment to the Interior Department Appropriation Act, 1939, the minimum rates for tie
sale of power must be such as will cover
( 1) an appropriate share of annual oPeration and maintenance costs and (2) an
amount equal to 3 percent per annum of the
original power construction costs; however,
if the 3 percent factor is not enough to
return power construction
costs plus the
irrigation subsidy (the amount of irrigation
construction costs beyond the ability of the
water users to repay) within a reasonable
period of time, then the rates must be increased accordingly. There is no statuto~
obligation for the Government to recover a
profit (in the form of interest) on the
investment in power construction costs, and
therefore all of the power revenues are available to return power construction costs and
the irrigation subsidy. Three percent per

August 4, 1939
650

RECLAMATION

PROJECT

annum is a minimum rate of return which
continues without regard to pay-out. Solicitor Harper opinion, M–3 3473 (September
29, 1944)
and M–33473
(Supplemental)
(September 10, 1945). [Editor’s
Note: Although this opinion has not specifically been overruled, it is not followed in
two respects. First, the 3 percent factor used
in section 9(c) is regarded as annual interest on the unamortized balance of power
construction costs, rather fian as a. sonstant annual percentage of the orlgmal
power costs. Second, the revenues represented by the interest component (that part
of power revenues attributable to a recovery
of interest on the power construction costs)
are not considered to be available to return
irrigation
costs. This latter policy was
adopted following a period of controversy
culminated by the recommendation
of the
House Appropriations
Committee against
use of the interest component to return irrigation costs. H.R. Rept. No. 314, 83rd
Congress, 1st Sess. 12 ( 1953 ).]
9.—Repayment
Subsections
(c), (d), and (e) require
repayment or return of all actual costs, not
estimated costs, allocated to irrigation. The
requirement for full return of such costs
can be met by assigning for return from
power revenues, where such revenues =e
availabl~, all increased costs properly all~
cable to Irrigation but which are beyond the
water users’ ability to pay. Memorandum
of Chief Counsel Fix to Commissioner,
April 20, 1948, at 26, in re questions of
law raised by House Appropriations
Subreprinted in Hearings on Zncommittee;
terior Department
Appropriation, Bill for
1949 Before a House Afipropriattons Subcommittee, 80th Cong., 2d Sess., pt. 3, at
885 (1948).
There is no limitation in reclamation law
on the number of years in which power
costs have to be paid out. The 40-year limit
specified in section 9 ( c ) of the Reclamation
Project Act of 1939 is a limit on the length
of a contract for the sale of power, but not
a limit on payout. Fifty years have been
selected as a matter of policy but not of
law. Testimony of Assistant Solicitor Weinberg, Missouri Basin Water Problems: Joint
Hearings Before the Senate Committees on
Znterior and Znsular Aflairs and Public
Works, 85th Cong., 1st Sess. 334 ( 1957).
There is no specific statutory period under the Reclamation
Project Act of 1939
(53 Stat. 1193 ), within which the costs
allocated to be repaid from net power revenues thereunder must be repaid. The repayment period accordingly may be such as the
Secretary of. the Interior in his discretion
shall determme to be proper for each proj-

ACT

OF

1939—SEC.

9(c)

ect, within the useful life of that project.
Solicitor Harper Opinion, M–33473
(Supplemental) (September 10, 1945 ),
Neither the Hayden-O’ Mahoney amendment nor the power mmketing statutes involved in the power operations of tie Bonneville Power Administration (section 7 of the
Bonneville Project Act, section 9 (c) of the
Reclamation Project Act of 1939, and section 5 of the Flood Control Act of 1944)
require that the costs of each project to be
met from power revenues have to be amortized on the basis of a fixed annual obligation. The legal requirements are satisfied if
such costs are returned within a reasonable
period of years whatever accounting procedure is applied. Statement furnished by
Assistant Secretary Holum in regard to
statutory authority for revised procedure for
presenting Bonneville Power Administration
rate and repayment data on a consolidated
system basis, printed in Hearings on H.R.
2337, to Provide for the Construction of the
Lower Teton Division, Teton Bmin Federal
Reclamation Project, Before the Irrigation
and Reclamation
Subcommittee
of the
House Committee on Interior and Znsular
Affairs, 88th Cong., 2d Sess. 36-38 ( 1964).
Except for contracts under subsections
9(c) ( 1) and 9 (d), which are governed by
a 40-year maximum limit, there is no legal
objection under general reclamation law to
utilizing a depre~iation method f?r repayment of Federal investment, that 1s, repayment within the useful life of the property.
Memorandum
of Chief Counsel Fisher to
Commissioner, April 10, 1952.
1O.—Preference

customers

The Bureau of Reclamation has authority
to contract with the Arizona Power Pooling
Association—a
proposed
nonprofit
corporation formed by Arizona preference customers for the purpose of representing them
collectively as a purchasing agent under
their Colorado River Storage project allotments to obtain the maximum benefits of
their respective diversities—as a preference
customer. Memorandum of Acting Associate
Solicitor Coulter to Commissioner of Reclamation, February 25, 1965.
The Navajo Irldian Tribe qualifies as a
preference customer for the purchase of
power marketed by the Bureau of Reclamation under section 9(c) of the Reclamation
Project Act of 1939, Memorandum of Associate Solicitor Weinberg, April 14, 1961.
12.—Transmission
lines
The Secretary of the Interior has authority under subsection 2 (b), 2 (f), 5 (a),
5 (b) and 9 (b) of the Bonneville Project
Act; section 5 of the Flood Control Act of
1944; sections 9(c) ad 14 of the Reclama-

August 4, 1939
RECLAMATION

PROJECT

tion Project Act of 1939; and section 2 of
the Act of August 30, 1935, 49 Stat. 1039,
reauthorizing the Grand Cotiee Dam proJect, to construct transmission lines between
the Pacific Northwest and the Pacific Southwest. Solicitor Barry Opinion, 70 I.D. 237
(1963).
Power marketing and transmission operations of the Bureau of Reclamation
under the reclamation laws have not been
considered to be restricted to the reclamation states, and this administrative
construction of the law has been concurred in
by action of the Congress in appropriating
funds for transmission lines in states such
as Io~a and Minnesota. Memorandum
of
Associate Solicitor Weinberg to Director,
Division of Budget and Finance, July 23,
1962, in re authority to construct the Creston-Fairport intertie.
15. Water—Municipal
water supply
Section 4 of the Act of April 16, 1906,
authorizes the furnishing of project water
to a town in the immediate vicinity of the
project which has a pre-existing water right
in the same source of water as the project
source. The authority to furnish water in
such a case under the 1906 Act is neither
repealed by, nor subject to the conditions
of, the Act of Febmary 25, 1920, 41 Stat.
451, or section 9 (c) of the Reclamation
Project Act of 1939. Memorandum of Acting Commissioner Lineweaver to Regional
Director, Boise, September 26, 1950, in re
contracts with cities of Culver and MetoIius, Deschutes Project, Oregon.
16.—Miscellaneous
purposes
A contract to permit the Public Service
Company of Colorado to divert water from
a canal of the Grand Valley project for
cooling purposes may be entered into pursuant to the Act of February 25, 1920, or
under section 9(c)
or section 10 of the
Reclamation Project Act of 1939. Revenues
arising from the furnishing of water for this
purpose should be credited as a kdil end
reduction of the water users organizations
repayment obligation for construction and
rehabilitation and betterment costs. Memorandum of Associate Solicitor Fisher, October 26, 1956.
(d)

[No

water

deliverd

period

to irrigation

to be included

construction

charges

(3)

repayment

on

in annual

installment

for irrigation

each

irrigation
in general

account

OF

contract

block,

(2)

repayment
over

period

executed

construction

providing
cost

(1)

allocable

obligation—Distribution

of land

and

benefits

not exceeding

of

accruing,

40 years,

(4)

water may be delivered
with any new project, new division of a

on date fixed by Secretary

of lands in connection

651

9(d j

18.—Rates
It is clearly within the authority of the
Secretary under section 9(c) of the Reclamation Project Act of 1939 to charge
different ra~es for water from the Central
Valley
project
delivered for municipal
water supply than for water delivered for
irrigation purposes. City of Fresno v. California, 372 U.S. 627 (1963).
The Secretary has discretion to charge
interest in a water supply contract for
municipal or miscellaneous purposes under
section 9(c) ( 2 ) of the Reclamation Project
Act of 1939. Although interest is not specifically mentioned, it is one of the items
which properly can be included within the
classification of “fixed charges.” Memorandum of Chief Counsel Fix to Commissioner,
March 26, 1947.

productivi~

installments

1939—SEC.

17.—Contracts
Although section 5(d) of the Colorado
River Storage Project Act fixed an over-all
period of 50-years for return with interest of
costs allocated to municipal water, the Act
permits no other payment arrangements
than those provided by section 9(c) ( 1 ) and
9 (c) (2) of the Reclamation Project Act of
1939. Thus} although more than one contract covering such costs may be signed,
none can have a term greater than 40 years.
A 9(c) (2) contract maybe entered into for
the maximum 40-year period, followed by
either a 9(c) (1) or 9(c) (2) contract for 10
years. If the first contract is written under
9(c) ( 1), however, it would require that full
repayment be accomplished in the persnissible 40-year period. Memorandum
of Associate Solicitor Fisher, March 5, 1958? and
Memorandum of Acting Associate Sohcitor
Weinberg, September 20, 1957, in re contract negotiations for Vernal Unit.
A water supply contract for municipal or
miscellaneous
purposes
under
section
9(c) ( 1) of the Reclamation Project Act of
1939 is a contract “relating to construction
charges” within the meaning of section 6,
and therefore, it must include payment of
operation and maintenance costs as provided
in section 6 even though section 9(c)(1)
does not mention such costs. Memorandum
of Chief Counsel Fix to Commissioner,
March 26, 1947.

~~ntil repayment

development

first annual

for

ACT

.]—No

August 4, 1939
RECLAMATION

652

PROJECT

ACT

OF

1939—SEC.

9(d)

project, or supplemental works on a project until an organization, satisfactory
in form and powers to the Secretary, has entered into a repayment contract with
the United States, in a form satisfactory to the Secretary, provi~ng
among
other things—
( 1) That the Secretary may fix a development period for each irrigation
block, if any, of not to exceed ten years from and including the first calendar
year in which water is delivered for the lands in said block; and fiat during the
development period water shall be delivered to the lands in the irrigation block
involved at a charge per annum per acre-foot, or other charge, to be fixed by the
Secretary each year and to be paid in advance of delive~ of water: Provided,
That where tie lands included in an irrigation block are for the.most part lands
owned by the United States, the Secretary, prior to execution of a repayment
contract, may fix a development period, but in such case execution of such a
contract shall be a condition precedent to delivery of water after the close of the
development period: Provided further, That when the Secretary, by contract or
by notice

given

thereunder,

ten years,

and

at any time

ment

period

justified
extend

conditions

the fixing

arise which

of a longer

such development

mencement,

and

shall have
thereafter

in a case where

a development

he may

to a date

of the Secretary

amend

such

not to exceed

no development

period

commencement

in the judgment

period,

period

fixed

but before

period

contiact

of less than
of the repaywould

have

or notice

to

ten years from

its com-

was provided,

he may

jurther, That when the
Secretary shall have deferred the payment of all or any part of any installments
of construction charges under any repayment contract pursuant to the authority
of the Act of September 21, 1959 (73 Stat. 584), he may, at any time prior to
the due date prescribed for the first installment not reduced by such deferment,
and by agreement with the contracting organization, terminate the supplemental
contract by which such deferment was effected, credit the construction payments
made, and exercise the authority granted in this section. After the close of the
development period, any such charges collected and which the Secretary determines to be in excess of the cost of the operation and maintenance during the
development period shall be credited to the construction cost of the project
in the manner determined by the Secretary.
(2) That the part of the construction costs allocated by the Secretary to
irrigation shall be included in a general repayment obligation of the organization; and that the organization may vary its distribution of construction charges
in a manner that takes into account the productivity of the various classes of
lands and the benefits accruing to the lands by reason of the construction: Proamend

such

contract

within

the same

limits:

Prouided

uided, That no distribution of construction charges over the lands included in
the organization shall in any manner be deemed to relieve the orgmization or
any party or any land therein of the organization’s general obligation to the
United States.
(3) That the general repayment obligation of the organization shall be spread
in annual installments, of the number and amounts fixed by the Secretary, over
a period of not more than 40 years, exclusive of any development period fixed
under paragraph ( 1) of this subsection, for any project contract unit or, if the

August 4, 1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

9 (d)

653

project contract unit be divided into two or more irrigation blocks, for any such
block, or as near to said period of not more than forty years as is consistent with
the adoption and operation of a variable payment formula which, being based on
full repayment within such period under average conditions, permits variance
in the required
the ability

annual

payments

of the organization

in the light

of economic

factors

pertinent

to

to pay.

(4) That the first annual installment for any project contract unit, or for
any irrigation block, as tie case may be, shall accrue, on the date fixed by the
Secretary, in the year after the last year of the development period or, if there
be no development period, in the calendar year after the Secretiry announces
that the construction contemplated in the repayment contract is substantially
completed or is advanced to a point where delivery of water can be made to
substantially all of the lands in said unit or block to be irrigated; and if there
be no development period fixed, that prior to and including the year in which
the Secretay- makes said announcement
water shall be deiivered only 01 the
toll

charge

basis

hereinbefore

provided

for

development

periods.

(5) Repealed.
(53 Stat. 1195; Act of August 8, 1958, 72 Stat. 542; Act of August 28,
76 Stat. 407; 43 U.S.C, $ 485h(d) )

962,

EXPLANATORYNOTES
1962 Amendments. Section 1 of the .4ct
of August 28, 1962, authorizes the Secretary of the Interior, prior to the commencement of the development period authorized
by subsection 9 (d)(1),
to amend repayment contracts to provide for irrigation
blocks, or add to or modify existing blocks.
Section 2 of the Act added the second and
third provisos in subsection 9 (d) ( 1). The
Act appears herein in chronological order.
1962 Amendment. Section 3 of the Act of
August 28, 1962, authorizes the annual installment provided for in subsection 9(d)
(3) to be paid in two parts. The Act appears herein in chronological order.
1958 Amendment. Section 1 of the Act
of August 8, 1958, amended paragraph (3),
subsection (d) of section 9 to read as it
appears above, thereby authorizing a variable repayment plan in place of the “normal
and percentage plan” of repayment formerly authorized by section 4, which was
repealed by the 1958 act. The original
language read as follows:
“The general
repayment obligation of the organization
shall be spread in annual installments, of
the number and amounts fixed by the Secretary, over a period not exceeding forty
years, exclusive of any development period
fixed under subsection (d) ( 1) of this section, for any project contract unit, or for any
irrigation block, if the :project contract unit
be divided into two or more irrigation
blocks.” The 1958 Act appears herein in
chronological order.

Provision Repealed. Section 3 of t} Act
of August 8, 1958, repealed paragrap ,:5;;
subsection (d) of section 9, the t
which appears below. It also repeah
section 4, which authorized the “norrni
and
percentage plan” referred to below. In place
of that plan, the same Act amended paragraph (3) of section 9, subsection (d), to
provide for a variable plan of repayment.
“(5)
Either (A) that each year the installment of the organization’s
repayment
obligation scheduled for such year shall be
the construction charges due and payable
by the organization for such year; or (B)
that each year the installment for such year
of the organization’s repayment obligation
shall be increased or decreased on the basis
of the normal and percentages plan provided in section 4 of tiis Act for modification of existing obligations to pay construction charges, and the amount of the
annual installment of the organization’s obligation, as thus increased or decreased,
shall be the construction charges due and
payable for such year. Under (B) of this
subsection the provisions of section 4 of
this Act shall be applicable, as near as may
be, to the repayment contract made in connection with the new project, new division
of a project or supplemental works on a
project; and the organization shall make
payments on the basis therein provided until
its general repayment obligation has become
due and payable to the United States in
full.”

August
654

RECLAMATION

PROJECq 7 ACT

The 1958 Act appears herein in chronological order.
Supplementary Provision: Variable Payment Plan. Section 2 of the Act of August 8,
1958, provides as follows:
“The benefits
of a variable payment plan as provided in
the amendment to paragraph (3) of section 9, subsection (d), of the Reclamation
Project Act of 1939 contained in section
1 of this Act may be extended by the
Secretary to my organization with which
he contracts or has contracted for the repayment of construction costs allocated to
irrigation on any project undertaken by the
United States, includins contracts under
the Act of August 11, 1939 (53 Stat. 1418),
as amended, and contracts for the storage
of water or for the use of stored water under section 8 of the Act of December 22,
1944 (58 Stat. 887? 891 ). In the case of
any project for which a maximum repayment period longer than that prescribed
in said parasraph
( 3 ) has been or is allowed by Act of Congress, the period so
allowed may be used by the Secretary in
lieu of the forty-year period provided in
said amendment to paragraph (3) .“

OF

1939—SEC.

4, 1939

9(d)

The 1958 Act appears herein in chronological order. The Act of August 11, 1939
(53 Stat. 1418 ), as amended, which is the
Water Conservation and Utilization Act,
and extracts (including
section 8 ) from
the Act of December 22, 1944 (58 Stat. 887,
891 ), which is the Flood Control Act of
1944, both referred to in this note, are
found herein in chronological order.
Supplementary
Provisions: Administration of Contracts. The Act of July 2, 1956,
70 Stat. 483, is an act relating to the administration of contracts under this subsection and subsection (e). The 1956 .4ct
appears herei~ in chronological order.
Reference m the Text. The Act of September 21, 1959 (73 Stat. 584)., referred
to in the text, amended subsection 17(b)
of this Act. The amended subsection authorizes the Secretary to defer the payment
on installments of construction charses under any repayment contract or other form
of obligation as he deems necessary to adjust such installments to amounts within
the probable ability of the water users to
pay. The 1959 Act appears herein in
chronological order.

NOTES OF OPINIONS
Additional costs
2
Costs, what constitutes
Repayment
3-8
Generally
3
Installments
4
Ownership of facilities
Water rights
10

1

9

1. Costs, what constitutes
The reference in subsection 9(d) (2) to“the part of the construction costs allocated
by the Secretary to irrigation”
is to the
amount assigned by the Secretary to be repaid by the irrigators and not to the total
costs allocated to irrigation in the accounting or engineering sense. Memorandum of
Chief Counsel Fisher, September 12, 1952,
in re procedure on use of surplus power
revenues for assistance in financing irrigation distribution systems.
2. Additional costs
Where a repayment contract is entered
into with the water users, based on estimates
of costs at that time, and provides for a
determination by the Secretary as to continuation of work when increased costs reach
a ceiling fixed in the contract, the Secretary
may require an additional obligation to be
assumed by water users as a condition to
continuation of construction when that ceiling is reached. In reaching a decision the
Secretary must consider the ability of water
users to bear increased costs as well as the

ability of, purchasers of power to absorb
them. Sohcltor Barry Opinionj 68 I.D. 305
( 1961), in re Columbia Basin repayment
problems.
The Coachella
Valley County Water
District is not required to pay for the additional costs—i.e.,
those in excess of the
$13,500,000 tied in the repayment contract
of December 22, 1947—incurred
by the
United States in completing the distribution
system pursuant to the provision in the Interior Department Appropr~ation Act, 1952,
and subsequent
appropriations.
United
States v. Coachella Valley County Water
District, 111 F. Supp. 172 (S.D. Cal. 1953).
3. Repayment4enerally
Subsections (c),
(d), and (e) require
repayment or return of all actual costs, not
estimated costs, allocated to irrigation. The
requirement for full return of such costs can
be met by assigning for return from power
revenues, where such revenues are available,
all increased costs properly allocable to irrigation but which are beyond the water
users’ ability to pay. Memorandum of Chief
Counsel Fix to Commissioner,
April 20,
1948, at 26, in re questions of law raised by
House Appropriations
Subcommittee;
reprinted in Hearings on Interior Department
Appropriation Bill for 1949 Before a House
Appropriations Subcommittee,
80th Cong.,
2d $ess., pt. 3, at 885 (1948).
The last sentence of section. 9(e) does

August

4, 1939
RECLAMATION

PROJECT

not require that the entire cost of a distribution system must be covered by a repayment
contract under section 9(d), and therefore,
surplus power and municipal and industrid
water supply revenues may be applied to assist in payout of part of the distribution system costs. Memorandum of Ctilef Counsel
Fisher, September 12, 1952, in re procedure
on use of surplus ,power revenues for assistance in financing irrigation distribution
systems.
The Department of the Interior is without authority to charge interest on the return
of costs allocated to irrigation because Con.
gress has not specifically authorized such
charge, Letter of Acting
Commissioner
Llneweaver to Mr. William A. Owen, February 12, 1952.
Except for contracts under subsections
9 (c) ( 1) and 9 (d), which are governed by
a 40-year maximum limit, there is no legal
objection under general reclamation law to
utilizing a depreciation method for repayment of Federal investment, that is, repayment within the useful tife of the property.
Memorandum
of Chief Counsel Fisher to
Commissioner, April, 10, 1952.
The estimated accumulated revenues representing the interest component on the sale
of power from the Columbia Basin project
are not available to reduce the average
amount per acre of construction cost contracted to be repaid by the project water
users. Solicitor Barry Opinion, 68 I.D, 305,
306–09 (1961).
4.—Insta1lments
The verb “to fix”, as used in that part of
subsection
(d),
section 9, Reclamation
Reject Act of 1939, stating that the general
repayment obligation of a contracting organization “shall be spread in annual installments, of the number and amounts bed
by the Secretary;’
means to establish
definitely, so that tie contracting parties
know how many installments are contemplated by the contract and how much monev

ACT

OF

1939—SEC.

9(e)

655

is involved in each installment. Solicitor
White Opinion, 60 I.D. 150 ( 1948)., in re
proposed contract with Savage Irrigation
District.
A repayment contract entered into under
subsection 9(d) which prescribes a formula
pursuant to which the amount of each annual installment is to be determined, which
formula has no relationship to the “normal
and percentages plan” authorized by Congress in subsection 9 (d) and section 4 for
variable payments, is not in conformity with
the requirements of the Reclamation Project
Act of 1939. Solicitor White Opinion, 60
I.D. 150 ( 1948), in re proposed contract
with Savage Irrigation District.
9. Ownership of facilities
A repayment contract is not invalid because of absence of provision that the district
will obtain title to the distribution system
when its obligation therefor has been totally
discharged.
Ivanhoe
Irr. Dist. v. McC7a.ken, 357 U.S. 275, 289-9(1958).
While water users under section 9 contracts acquire a water right, they acquire no
equity in the physical assets of the project
which would be required to be reflected as
such in the balance sheets of the Bureau of
Reclamation.
No legal objection
is perceived, therefore, to considering receipts
from both section 9 (d) and section 9 (e)
contracts as income. Dec. Comp. Gen. &
91527–O.M,
(January 18, 1950).
10. Water rights
Objections
of appellees that contracts
executed under section 9 of the Reclamation Project Act of 1939 are invalid because
they imply that water users are not entitled
to water rights beyond the 40-year terms
of the contracts and because they do not
make clear that the districts and landowners become free of indebtedness upon repayment, are answered by the Act of July
2, 1956, 70 Stat. 483. Ivanhoe 17r. Dist. v.
McC7acken, 357 U.S. 275,297-8
( 1958).

(e) [Short- or long-term contracts to furnish water for irrigation—Payment
in advance of delivery of water —Cost of works to be covered by repayment
contract under subset. (d). ]—In lieu of entering into a repayment contract
pursuant to the provisions of subsection (d) of this section to cover that part of
the cost of the construction of works connected with water supply and allocated
to irrigation, the Secretary, in his discretion, may enter into either short- or longterm contracts to furnish water for irrigation purposes. Each such contract shall
be for such periocl, not to exceed forty years, and at such rates as in the Secretary’s judgment will produce revenues at least sufficient to cover an appropriate
share of the annual operation and maintenance cost and an appropriate share of
such fixed charges as the Secreta~ deems proper, due consideration being given
to that part of the cost of construction of works connected with water supply and

Au,wst
656

RECLAMATION

PROJECT

ACT

OF

1939—SEC.

4, 1939

~0

allocated to irrigation; and shall require payment of said rates each year in advance of delivery of water for said year. In &e event such contracts are made
for furnishing water for irrigation pUrpOXS, the costs of any irrigation water distribution works constructed by the United States in connection with the new
project, new division of a project, or supplemental works on a project> shall be
covered by a repayment contract entered into pursuant to said subsection
(53 Stat. 1196; 43 U,S.C. $ 485h(e) )

(d).

EXPLANATORY NOTE
ministration of contracts under this subsection and subsection (d). The 1956 Act
appears herein in chronogical order.

Supplementary
Provisions:
Administration of Contracts. The Act of July 2, 1956,
70 Stat, 483, is an act relating to the ad-

NOTES OF OPINIONS
fi~~

Contracts
1
Repayment
2
Water rights
3
1. Contracts
Contracts executed under section 9(e)
of the Reclamation Project Act of 1939 are
not invalid because of failure to recite a
definite sum as being the total amount due
for water supply facilities. Ivanhoe Irr. Dist.
v. McCracken,
357 U.S. 275, 298 (1958).
Objections
of appellees that contracts
executed under section 9(e) of the Reclamation Project Act of 1939 are invalid
because they imply that water users are not
entitled to water rights beyond the 40-year
terms of the contracts and because they do
not make clear that the districts and landowners become free of indebtedness upon repayment, are answered by the Act of JUIY
2, 1956, 70 Stat. 483. Ivanhoe Irr. D;st. v.
M. Cracked, 357 U.S. 275, 297-8 ( 1958).
2. Repayment
There is no legal requirement that contracts entered into under subsection 9(e)
must provide for recovery within 40 years
of the construction costs connected with
water supply and allocated to irrigation.
Sec.
lands

10.

[Removal

without

ments,

and

of

competitive

rights-of-way.

the removal,

from

administered

under

lands
the

sand,

gravel,

bidding—
] —The

or operation

and maintenance

minerals

and building

materials

with

60

I.D.

180

3. Water rights
While water users under section 9 contracts acquire a water right, they acquire
no equity in the physical assets of the project which would be required to be reflected
as such in the balance’ sheets of the Bureau
of Reclamation. INO legal objection is perceived, therefore, to considering receipts
from both section 9 (d) and section 9(e)
contracts as income. Dec. Comp. Gen. &
91527-O.M.
(January 18, 1950).
and

other

Authority
in lands

reclamation

struction

Opinion,

‘ Sub~ections (c),
(d), and (e) require
repayment or return of all actual costs, not
estimated costs, allocated to irrigation. The
requirement for full return of such costs can
be met hy assigning for return from power
revenues, where such revenues are available,
all increased costs properly sdlocable to
irrigation but which are beyond the water
users’ ability to pay. Memorandum of Chief
Counsel Fix to Commissioner,
.4pnl 20,
1948, at 26, in re questions of law raised
by House Appropriations Subcommittee; reprinted in Hearings on Interior Department A+proQriation Bill for 1949 Before a
House ApQroQriations Subcommittee,
80th
Cong., 2d Sess., pt. 3 at 885 ( 1948).

Secretary,

or interest
Federal

White

minerals

to grant

from

leases,

in his discretion,
withdrawn
laws

or without

may

(a)

or acquired

in connection

of any project,

withdrawn

licenses,

with

of sand, gravel,

competitive

bidding:

easePermit

and being
the conand other
Provided,

That removals may be permitted without charge if for use by a public agency
in the constmction of public roads or streets within any project or in its immediate vicinity; and (b) grant le~es and licen ses for periods not to exceed fifty

August

4, 1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

10

657

years, and easements or rights-of-way with or without limitation as to period of
time affecting lands or interest in lmds withdrawn or acquired and being administered under the Federal reclamation laws in connection with the construcThat, if a water
tion or operation and maintenance of any project: Provided,
users’ organization is under contract obligation for repayment on account of the
project or division involved, easements or rights-of-way for periods in excess of
twenty-five years shall be granted only upon prior written approval of the governing board of such organization. Such permits or grants shall be made only
when, in the judgment of the Secretary, their exercise will not be incompatible
with the purposes for which the lands or interests in lands are being administered,
and shall be on such terms and conditions as in his judgment will adequately protect the interests of the United States and the project for which said lands or
interests in lands are being administered. (53 Stat. 1196; Act of August 18, 1950,
64 Stat. 463; 43 U.S.C. ~ 387)
EXPLANATORY NOTES
1950 Amendment. The Act of August 18,
1950, 64 Stat. 463, amended clause (b) by
removing the 50-year limitation on easements and rights-of-way and adding the
proviso requiring consent of the water users’
organization for easements or rights-of-way
for periods in excess of 25 years. As originally enacted in 1939, clause (b) of section
10 read as follows:
“(b)
grant leases, licenses, easements, or
rights-of-way, for periods not to exceed fifty
years, affecting lands or interests in lands
withdrawn or acquired and being administered under the Federal reclamation laws
in connection with the construction or operation and maintenance of any project.”
Codification. The second sentence of the
orisinal section was’ omitted from the section as codified at 43 U,S.C. ~ 387. This
omission is believed to be erroneous, however, particularly in view of the statement in
tie letters of the Secretary of the Interior
transmitting to the House and Senate the
draft of bill which became the basis for the
1950 amendment, that the legislation “will
in no way tiect”
the second sentence. H.R.
Rept. No. 450 ( 1949). S. Rept. No. 1942
( 1950), 81st Congress. The sentence has
been reinstated in the supplement to the
1964 edition of the U.S. Code.

Prior Act: Sale of Railroad. The Act of
August 11, 1916, 39 Stat. 506, authorized
the Secretary of the Interior to appraise
and sell the Boise and Arrowrock Railroad.
which was constructed by the Reclamation
Semite in connection with the construction
of the Arrowrock Dam, Boise project, and
was no IonSer needed for that purpose. The
railroad was 17 miles in length and connected the OreSon Short Line Rafiway and
the site of the Arrowrock Dam. After an
attempt to iease the railway failed, the Department requested legislative authority to
sell it.
Prior Acts: Sale of Lands to Railroad
Companies. The Act of February 26, 1917,
39 Stat. 940, authorized the sale and conveyance of certain lands of the Milk River
project, Montana, to the Great Northern
Railway
Company for division terminal
yards and other railway purposes. The Act
of December 17, 1919, 41 Stat, 1453, authorized the sde and conveyance of certain
lands of the Minidoka project, Idaho, to
the OreSon Short Line Railroad Comp~ny
for railroad purposes “at a price to be fixed
by the Secretary of the Interior in order to
return the expenditure heretofore made or
proposed for the irrigation of the !ands at
not less than $50 per acre . . .“.

NOTES OF OPINIONS
Easements and rights-of-way
Leases and licenses
2
Removal of materials
1

3

1. Removal of materiak
Under the Act of February 8, 1905, and
the Act of March 3, 1891, as amended, the
Bureau may issue a permit to an irrigation
district to remove clay without charge from

public lands to be used in connection wi~
the operation and maintenance of drainage
facilities of a federaf reclamation project.
This authority is not repealed by section
10 (a) of the Reclamation
Project Act of
1939. Memorandum
of Acting Associate
Solicitor Coulter, AuSust 11., 1966, in re
request of Yuma Mesa Irrigation and Drainase District.

Au~st
658

RECLAMATION

PROJECT

2. Leases and licenses
Under section 10 of the Reclamation
Project Act of 1939 there is authority to
lease reclamation withdrawn or acquired
lands for 50 years for. recreation purposes
without monetary consideration. Memorandum of Associate Solicitor Hogan to Commissioner of Reclamation, January 24, 1964,
in re Park Moabi lease along the Lower
Colorado River.
Under the authority of section 10 of the
Reclination
Proiect Act of 1939, the Secretary is empowe;ed to offer trespassers on
reclamation
withdrawn
land along the
Lower Colorado River an opportunity to
enter into agreements under which they
would pay a reasonable charge for past occupancy and receive permits for continued
occupancy under reasonable terms while the
lands involved are being placed under a
permanent
land-use program.
Letter of
Secretary Udall to the Comptroller General,
April 20, 1961.
A Dermit to search for hidden treasures
on reclamation withdrawn lands may be
issued under section 10 of the Reclamation
Project Act of 1939. The permit should provide for a minimum charge and a sufficient
return if treasure is located, and no reservation should be contained recognizing any
claim of the Stite of California to any
treasure discovered. Memorandum of Acting Associate Solicitor Weinberg, September
10, 1959.
Under section 10 of the Reclamation
Project Act of 1939 the United States may
Sec.

11.

instances

[Sale
2, 1911,

where

May

of May

43

of said
U.S.C.

Acts

appraised

not

20, 1920. ]—The

20, 1920

(41

at public

as to notice,

1939—SEC.

11

3. Easements and rights-of-way
The Secretary is authorized under section
10 of the Reclamation Project Act of 1939
to grant to a county, with the consent of the
water users, a permanent easement in an
access road constructed as a part of a project, and under section 14 of the 1939 Act,
to m~e an advance payment to the county
in recognition of the saving to the government of costs of maintenance and repair of
the road. Dec. Comp.
Gen. B–109485
(July 22, 1952 ), in re contract with Shasta
County.
Section 10 gives the Secretary of the
Interior authority to grant, or to deny a
request for, a right-of-way for a rtilroad
company across hinds within a reclamation
withdrawal. Moreover, the act specifically
authorizes the Secretary to impose terms and
conditions upon the rights granted by him
“as in Kls judgment will adequately protect
the interests of the United States,” and a
requirement for a stipulation on fair employment practices would be within this
authority. Southern Pacific Railroad Company, A-26143
(August 20, 1951 ).

to be sold under

may sell said property

provisions
1197;

and

property

895 ), or the Act
$300,

of property,

OF

issue a permit or license to School District
No. 7.of Natrona County, Wyoming, to connect lts water and sewer Enes to Recl~ation systems. Memormdum
of Associate
Solicitor Fisher, August 7, 1958, in re use
of service facilities,
Alcova
Dam
and
Reservoir.
A contract to permit the Public Service
Company of Colorado to divert water from
a canal of the Grand Valley project for
cooling purposes may be entered into pursuant to the Act of February 25, 1920, or
under section 9(c) or section 10 of the Reclamation Project Act of 1939. Revenues
arising from the furnishing of water for this
purpose should be credited as a tail end
reduction of the water users organizations
repayment obligation for construction and
rehabilitation and betterment costs. Memorandum of Associate Solicitor Fisher, October 26, 1956.

A private person may not be permitted
under this section to remove sand, gravel
and other materials without charge. Shotwell v. United States, 163 F. Supp. 907
(E.D. Wash. 1958).
Where authority to grant permits for removal of sand and gravel had been delegated and redelegate
to district manager,
other personnel of the Bureau of Reclamation were without authority to grant permission for such removal. Shotwell v. United
State$, 163 F. Supp. 907(E.D. Wash. 1958).

February

ACT

4, 1939

to

the Act

Stat.

exceed

Secretary
605),

or private

$300,

of February

2, 1911

is appraised

sale without

publication,

and

under

Acts

in his discretion,

mode

of

in any
(36

Stat.

at not to exceed

complying
of

sale.

with
(53

the
Stat.

~ 375a)
EXPLANATORY NOTE

References in the Text. The Act of February 2, 1911 (36 Stat. 895), referred to in
the text, authorizes the sale of lands ac-

quired for reclamation purposes and not
needed for such purposes. The Act of May
20, 1920 (41 Stat. 605 ), also referred to in

August

4, 1939
RECLAMATION

PROJECT

the text, authorizes the sde of withdrawn
lands, not otherwise reserved, that have
been improved at the expense of the reclamation fund, but are no longer needed for

ACT

OF

1939—SEC.

13

659

the purpose for which they were withdrawn.
Both acts appear herein in chronological
order.

Sec. 12. [Liabili~
of United States on contracts for services, supplies, etc.,
contingent upon appropriations. ] —When appropriations have been made for
the commencement or continuation of construction or operation and maintenance
of any project, the Secretary may, in connection with such construction or operation and maintenance, enter into contracts for miscellaneous services, for materials and supplies, as well as for construction, which may cover such periods of
time as the Secretary may consider necessary but in which the liability of the
United States shall be contingent upon appropriations being made therefor.
(53 Stat. 1197; 43 U.S.C. ~ 388)
EXPLANATORY NOTES
Cross Reference, Loans for Local Distribution Systems. Provisos in each annual
Public Works Appropriation Act beginning
with the Act of September 10, 1959, 73
Stat. 495, provide that loans beyond the
current fiscal year for the construction of
local distribution systems under the Act of
July 4, 1955, 69 Stat. 244, are subject to the
same conditions as stated in section 12 of
the Reclamation Project Act of 1939, that
is that they shall be contingent upon appro-

priations being made therefor. The 1955
Act and the relevant extract from the 1959
Act appear herein in chronological order.
Cross Reference, Prior Law. Section 16
of the Reclamation
Extension
Act of
August 13, 1914, which appears herein in
chronological
order, was interpreted generally as limiting the contracting authority
of the Bureau of Reclamation
to an annual basis and within current annual
appropriations.

NOTES OF OPINIONS
Application
Construction

1
with other laws

2

1. Application
The definition of the term “project”
in
section 2 of the Reclamation Project Act of
1939 includes projecti not under the reclamation
laws that are constructed
or
operated and maintained by the Secretary
of the Interior tirough the Bureau of Reclamation for other agencies, such as the
Lower Two Medicine Dam on the Blackfeet
Indian
Irrigation
project.
Consequently, the provisions of section 12 of the
Act authorize the inclusion of the usual
contingency -upon-appropriations
clause in
the construction contract. Memorandum of
Associate Solicitor Hogan, October 6, 1966.

2. Construction with other laws
Provisions in the Interior Department
Appropriation
Act, 1949, authorizing the
Commissioner of Reclamation to enter into
contracts with respect to construction of the
Cachuma Unit, Santa Barbara project, and
the Palisades project, up to certain amounts
over and above the amount of the appr~
priatlons for the projects, fully obligate the
United States to pay the contractors up to
the stated amounts and are additional to
the authority in section 12 of the Reclamation Project Act of 1939 to this extent. Dec.
Comp.
Gen., B–79145
(September
10,
1948).

Sec. 13. [Supplies, equipment, services, not in excess of $300, may be procured in open market. ] —The purchase of supplies and equipment or the procurement of services for the Bureau of Reclamation at the seat of government
and elsewhere may be made in the open market without compliance
with section
3709 or section 3744 of the Revised Statutes of the United States, in the manner
common among businessmen, when the aggregate payment for the purchase or
the services does not exceed $300 in any instance. (53 Stat. 1197; 41 IJ.S.C.
\ 16d note)

Au@st
660

RECLAMATION

PROJECT

ACT

OF

1939—SEC.

4, 1939

14

EXPLANATORY NOTE
References in the Text. Section 3709 of
the Revised Statutes (41 U.S.C. $ 5) ~ referred to in the text, deals with competitive
bidding. The section is found herein in the
.kppendix. Section 3744 of the Revised
Statutes required that contracts made by

the Secretaries of War, Navy and Interior
be in writing, and that copies of these contracts be filed in the returns office of the
Department of the Interior. Section 3744 of
the Revised Statutes was repealed by the
Act of October 21, 1941, 55 Stat. 743.

Sec. 14. [Authority to purchase or condemn lands for relocating highways,
roadways, railroads, telegraph, telephone, and electric transmission lines—
Exchange Government propertie*Grant
perpetual easement*Exchange
or
replacement of water, water rights, or electric energy. ] —The Secretary is
hereby authorized, in connection with the. construction or operation and maintenance of any project, (a) to purchase or condemn suitable lands or interests in
lands for relocation of highways, roadways, railroads, telegraph, telephone, or
electric transmission lines, or any other properties whatsoever, the relocation
of which in the judgment of the Secretary is necessitated by said construction
or operation and maintenance, and to perform any or all work involved in said
relocations on said lands or interests in lands, other lands or interests in lands
owned and held by the United States in connection with the construction or
operation and maintenance of said project, or properties not owned by the
United States; (b) to enter into contracts with the owners of said properties
whereby they undertake to acquire any or all property needed for said relocation, or to perform my or all work involved in said relocations; and (c)
for the purpose of effecting completely said relocations, to convey or exchange
Government properties acquired or improved under (a) above, with or without
improvements, or other properties owned and held by the United States in
connection with the construction or operation and maintenance of said project,
or to grant perpetual easements therein or thereover. Grants or conveyances
hereunder shall be by instruments executed by the Secretary without regard
to provisions of law governing the patenting of public lands.
The Secretary is further authorized, for the purpose of orderly and economical constr~ction or operation and maintenance of any project, to enter
into s“uch contracts for exchange or replacement of water, water rights, or electric energy, or for the adjustment of water rights, as in his judgment are necessary and in the interests of the United States and the project. (53 Stat. 1197;
43 U.S.C. ~ 389)
EXPLANATORYNOTE
Prior Acts: Exchanges of Lands. The Act
of August 9, 1921, 42 Stat. 147, authorized
an exchange of lands between the United
States and the Swan Land and Cattle Company, Limited. The Act of Februmy 25,
1925, 43 Stat. 970, authorized an exchange

of lands between the United States and
Anton Hiersche. Both exchanges were for
the purpose of acquiring l=ds needed by
the United States for construction, operation and maintenance of the North Platte
project, Nebraska-Wyoming.

N’OTES OF OPINIONS
Exchanges
IL19
Power
11
Water and water rights
Relocations
1-9
Generally
1

10

Other properties
3
Roads
2
1. Relocatio~Generally
The Secretary of the Interior is without
authority to compensate a church under

August

4, lg3g
RECL.4MATION

PROJECT

section 14 of the Reclamation Project Act
of 1939 for the cost of relocating church
buildings that were constructed pursuant to
a special use permit issued by the Forest
Service, which is revocable at will, on lands
covered
by a reclamation
withdrawal.
Memorandum of Associate Solicitor Fritz to
Field Solicitor, Billings, January 7, 1955, in
re parcel number 10, Pactola Dam and
Reservoir.
Section 14 authorizes negotiation for relocation of a facility by its owner, as well as
relocation by the Bureau; and a contract
may be entered into to pay the owner a
fixed sum for this work, rather than a sum
based on actual cost,. where analysis shows
this to be in the best interests of the government. Memorandum of Assistant Commissioner Markwell to Regional Director, Denver, .November 28, 1951.
2.—Roads
The provision of section 208 of the Flood
Control Act of 1962, relating to the nonreimbursability of Federal costs of relocating roads . to current standards, must be
construed m pari mate7ia with section 9 and
and section 14 of the Reclamation Project
Act of 1939. This means that ( 1 ) the cost
of relocating a road in kind is included as a
part of total project cost to be allocated as
pTovided in section 9 of the 1939 Act; (2)
the additional cost of constructing the substitute road to current standards under section 208 is a non-reimbursable fede~al cost;
and (3) the further cost of constructing the
road to a still higher standard requested by
the State must be paid by the State. Memorandum of Associate Solicitor Weinberg,
December 6, 1962.
In highway relocations the obligation of
the United States is to be measured bv the
costs of a necessary substitute highway
which will provide equivalent service and
equivalent standards to the highway being
taken. That is, the obligation of the United
States is measured by the cost of such highway as is required to be constructed as a
result of the taking, and where the remaining Klghway system is adequate or where
the taking eliminates the source of traffic,
and hence the need for the road, only nominal compensation is required. California v.
United States, 169 F. 2d. 914 (1948), Fo7t
Worth V. U.S., 188 F. 2d. 217, 221-222
( 1951). While the question of necessity for
substitute highways is not necessarily controlled by whether or not an express legal
duty is imposed upon the State or other
pubhc entity involved, U.S. v. Des Moines
County, 148 F. 2d. 448 ( 1945), it is clear
that the test is one of adequacy, not one
merely of convenience or the fulfillment of
a desire. Washington v. U.S., 214 F. 2d. 33,

ACT

OF

1939—SEC.

14

661

40 ( 1954). “. . . the test . . , is not what
the state . . . would like to get or even what
might be more desirable, but rather what is
reasonable and fair under all the circumstances. ” U.S. v. 0.886 of an acre, 65 F.
Supp. 827, 828 ( 1946). See also U.S. v.
Alderson, 53 F. Supp. 528 ( 1944). Memorandum of Assistant Commissioner Golze
to Regional Directo~, Billings, November 7,
1958, in re relocation of State secondary
road at Clark Canyon Reservoir.
The Secretary is authorized under section
10 of the Reclamation Project Act of 1939
to grant to a county, with the consent of
the water users, a permanent easement in an
access road constructed as a part of a project, and under section 14 of the 1939 Act,
to make an advance payment to the county
in recognition of the saving to the government of costs of maintenance and repair of
the road. Dec. Comp. Gen. B–109485 (July
22, 1952 ), in re contract with Shasta
County.
Although it is the general rule that personal services necessary in connection with
governmental activities are for performance
by regular employees of the government who
are responsible to the government
and
subject to government supervision, it is
permissible, under the broad authority of
section 14, to reimburse a State for the services of a State highway engineer in connection with the relocation of a State highway,
where the services of the State engineer
facilitate the work of relocation and the
Bureau is unable to locate a qualified engineer to perform this work. Dec. Comp.
Gen. B-60222
(September 17, 1946).
3.—Other properties
The terms “relocation”
and “any other
properties whafioever”, taken toge~er, are
broad enough to include transfer of a business or an operation or a function from
a site needed for a project to other land.
It is not necessary that the transfer involve
a physicaI transfer or relocation of physical
property affixed to the old site. Memorandum of Acting Chief Counsel Stinson,
May 3, 1941, in re Provo River Project,
Utah.
10. Exchanges—Water
and water rights
In the event Congress enacts a provision
of law, as proposed in an amendment to
H.R. 4671 pending before the 89th Congress, directing the SecretaW of the Interior,
tist, to en~er into contracts exhanging
Colorado River mainstream water for Gila
River System water presently used by Arizona users, and second, to offer to enter into
contracts making avadable to New Mmico
users the GiIa River System water which he
had so acquired, no amendment
to the

Au~st
662

RECLAMATION

PROJECT

Supreme Court decree in Arizona v. California, 376 U.S. 340 (1964) would be required to implement the Congressional enactment. Solicitor Barry Opinion, 73 I.D.
252 (1966).
In view of the long history of attempts
to resolve disputes with water users diverting water from the Sacramento River, some
part of which is attributable to the operation of Shasta Reservoir of the Central
Valley Project, and in view of the costs and
uncertainties of litigation, it is appropriately
within the jud~ent
of the Secretary under
the authority of section 14 of tie Reclamation Project Act of 1939 to waive payment for past diversions as a part of agreements with the di~erte~s requiring payments for future diversions. Dec. Comp.
Gen., B–152983 (January 21, 1964).
In view of the provision in section 14
of the Reclamation
Proiect Act of 1939
authorizing contracts fo; exchange or replacement of water or water rights, water
delivered to the Feather Water District in
the Sacramento River at the mouth of the
Feather River as replacement for water
diverted by the District from the Feather
River can be considered as “stored water”
of the Central Valley project delivered “for”
the lands of the District within the meaning
of section 2 of the Act of August 26, 1937,
as amended. Memorandum
of Associate
Solicitor Fishe;, July 27, 1959.
The authority of the Secretary under
section 14 to enter contracts not only for
the exchange or replacement of wattr but
also for the “adjustment of water rights,”
may reasonably be construed to authorize a
contract for a cash payment to a town for
the 10SSof use of its water suppiy system
occasioned by construction and operation
of the Colorado-Big Thompson project, in
lieu of a contract for replacement of the
water system. Dec. Comp. Gen. B–84264
(May 10, 1949), in re contmct with Town
of Hot Sulphur Springs, Colorado,
11.—Power
The advantages at federal hydroelectric
projects to be realized from implementing
and the
the “Treaty
between Canada
United States of America Relating to Cooperative Development of the Water Resources
of the Columbia River Basin” through the
execution of exchange agreements, support,
as a matter of law, the Bonneville Power
Administrator’s determination of “economical operation” as required by section 14 of
the Reclamation Project Act of 1939 (53
Stat. 1197, 43 U.S.C. s 389) and section
5 (b) of the Bonneville Project Act (50 Stat.
734, 16 U.S.C. $ 832d (b)). Solicitor Barry
Opinion, 71 I.D. 315, 326-28 (1964).

ACT

OF

1939—SEC.

4, 1939

14

Agreements providing for the delivery
to the Bonneville Power Administrator of
a quantity of power which cannot, with
certainty, be determined but which constitutes a valuable power resource, in return
for the delivery by the Administrator of
stated amounts of power over the same
period,
constitute
power-for-power
exchange agreements which the Administrator is authorized to enter into under section 14 of the Reclamation Project Act of
1939 (53 Stat. 1197, 43 U.S.C. ~389) and
section 5(b) of the Bonneville Project Act
(50 Stat.
734, 16 U.S.C.
~832d(b) ).
Sohcltor
Barry Opinion,
71 I.D.
315
( 1964), in re Canadian Entitlement Exchange agreements.
The Secretary of the Interior is authorized to construct transmission lines, such
as the Creston-Fairport intertie between the
Missouri River Basin project and the Southwestern Power Administration,
which are
necessary to effectuate an exchange of power for the purpose of orderly and economical
construction
or operation
and
maintenance of any reclamation project, as
provided in section 14 of the Reclamation
Project of 1939. Memorandum of Associate
Solicitor Weinberg to Director, Division of
Budget and Finance, July 23, 1962.
As a prerequisite to the execution of a
proposed agreement with the Washington
Public Power Supply System to furnish firm
power in exchange for the total electric
power generated at the Atomic Energy Commission’s New Production Reactor at Hanford, Washingtonj
the Bonneville Power
Administration must make a determination
that the agreement is in the interest of
economical operation, as required by section 14 of the Reclamation Project Act of
1939 and section 5(b)
of the Bonneville
Project Act. Dec. Comp. Gen. B–149016,
B–1 49083 (letter to Chairman Holifield,
July 16, 1962) .
A propose”d agreement
whereby
the
Washington Public Power Supply System
would furnish to the Bonneville Power Administration the total electric power generated from steam to be purchased from
the Atomic Energy Commission’s New Production Reactor at Hanford, Washington,
and would receive in exchange therefor firm
power from BPA, is clearly a contract for
the exchange of power and comes within
the general authority granted by section
5(b)
of the Bonneville Project Act and
section 14 of the Reclamation Project Act
of 1939, which governs the operation of the
Columbia Basin project as provided by section 1 of the Columbia Basin Project Act.
Dec. Comp. Gen. B–149016,
&149083
(letter to Chairman Hofifield, Joint Committee on Atomic Energy, July 16, 1962).

August

4, ,1939
RECLAMATION

PROJECT

ACT

OF

1939—SEC.

17

663

Sec. 15. [Authority of the Secretary. ]-The
Secretary is hereby authorized
to perfom
any and all acts and to make such rules and regulations as may be
necessary and proper for the purpose of carrying the provisions of this Act
into full force and effect. (53 Stat. 1198; 43 U.S.C. $ 485i)
NOTE OF OPINION
1. Necessary and proper
In cases where, because of administrative
laxity in enforcing the excess land limitations of reclamation law, or because projects
were initiated prior to the enactment of
section 46 of the 1926 Actj owners of excess lands have been receiving water therefor without having executed recordable
contracts, the Secretary, in the exercise of
his authority to perform all acts necessary
and proper to carry the reclamation laws

into full force and effect (sec. 10 of the
Reclamation
Act of 1902; sec. 15 of the
Reclamation Project Act of 1939), may per.
mit the continued delivel~ of water to such
excess lands on condition that the owner,
by the execution of a recordable contract,
agrees to dispose of such lands within a reasonable time on reasonable conditions, Associate Solicitor Cohen Opinion, M–34999
(October 22, 1947).

Sec. 16. [Effect on existing laws. ]—The provisions of previous Acts of Congress not inconsistent with the provisions of this Act shall remain in full force
and effect. (53 Stat. 1198; 43 U.S.C. $ 485j)
Sec. 17. (a) [Extension of time for modification of existing repayment contracts.—The
authority granted in section 3 of this Act for modification
of
existing repayment contracts or other forms of obligations to pay construction
charges shall continue through December 31, 1960.
(b) [Deferment of construction chages.]—The
Secretary is hereby authorized, subject to tie provisions of this subsection, to defer the time for the payment of such part of any installments of construction charges under any repayment contract or other form of obligation as he deems necess~
to adjust such
instaHments to amounts within the probable ability of the water users to pay.
Any such deferment shall be effected only after findings by the Secretary that the
installments” under consideration probably cannot be paid on their due date
without undue burden on the water users, considering the various factors which
in the Secretary’s judgment bear on the abitity of the water users so to pay.
The Secretary may effect the deferments hereunder subject to such conditions
and provisions relating to the operation and maintenance of the project involved
as he deems to be in the interest ,of the United States. If, however, any deferments would affect installments to accrue more than twelve months after the
action of deferment, they shall be effected ordy by a formal supplemental contract. Such a contract shall provide by its terms that, it being only an interim
solution of the repayment problems dealt with therein, its terms are not, in themselves, to be construed as a criterion of the terms of any arnendatory contract
that may be negotiated and that any such arnendatory contract must be approved
by the Congress unless it does not lengthen the repayment period for the project
in question beyond that permitted by the laws appliwble to that project, involves no reduction in the total amount payable by the water users, and is not
in other respects less advantageous to the Government than the existing contract
arrangements. The Secretary s~lall report to the Congress all deferments granted
under tfis subsection. (53 Stat. 1lg8; Act of April 24, 1945, 59 Stit. 76; Act of

August 4, 1939
664

RECLAIIATION

PROJECT

ACT

OF

1939—SEC.

18

August 8, 1958, 72 Stat, 543; Act of September 21, 1959, 73 Stat. 584; 43 U.S.C.
$ 485b-1 )
EXPLANATORY NOTES
1959 Amendment. The Act of September
21, 1959, amended section 17, subsection
(b) to read as it appears above. The 1939
language of the subsection read: “The authority of the Secretary under the Act entitled ‘An act to authorize further re~ef to
water users on United States and on Indian
reclamation projects,’ approved May 3 I,
1939 (Public, Numbered 97, Seventy-sixth
Congress, first session), is hereby extended
in connection with the constmction charges
due and payable, under any existing obligation to pay construction charges, for each of
the years 1939 to 1943, inclusive, to the
extent such charges are not covered by
modification of said obligation under section 3 or 4 of this Act.” The 1959 Act appears herein in chronological order.
1958 Amendment. Section 3 of the Act
of August 8, 1958, amended section 17,, as
amended,
by substituting the expression
“Section 3“ for the expression “Sections 3
and 4”, where the latter occurred in the
section-section
4 having been repealed by
the same 1958 Act. The repealed section 4
authorized the “normal and percentages
plan” of repayment which was superseded
in the 1958 Act by a variable repayment
plan. The 1958 Act appears herein in
chronological order.
1945 Amendment. Section 3 of the Act
of April 24, 1945, 59 Stat. 75, amended section 17 by extending the time in which payment contracts may be modified and by
broadening the authority of the Secretary

to grant deferments. The 1945 Act appears
herein in chronological order.
Supplementary
Provision:
Application
of Subsection “(b)” Provisions. Section 3 of
the Act of September 21, 1959, the act
which amended subsection 17(b), provides
that the. amended subsection “shall apply to
any proJect within the administrative jurisdiction of the Bureau of Reclamation
to
which, if it had been constructed as a project under the Federd reclamation laws . . .
these provisions would be applicable.” The
1959 Act appears herein in chronological
order.
Supplementary Provisions: Extension of
Time for Modification of Repayment Contracts—Repeal
of Section 4. The Act of
March 6, 1952, 66 Stat. 16, provided that
the authority vested in the Secretary of the
Interior by sections 3, 4 and 7 of this Act
be extended through December 31, 1954.
The Act of August 31, 1954, 68 S&t. 1044,
amended the 1952 Act by inserting “1957”
in place of “1954.” The 1954 Act was in
turn amended by the Act of August 21,
1957, 71 Stat. 390, which replaced “1957”
with “1960.” The authority vested in the
Secre=ry by sections 3, 4 and 7 of this Act
was thus extended through December 31,
1960. The Act of August 8, 1958, 72 Stat.
542, repealed section 4 of this Act and
amended the 1952 Act referred to in this
note by deleting the reference in it LOsection
4, Each of these Acts appears herein in
chronological order.

Sec. 18. [Act not to amend Boulder Canyon Project Act. ]—Nothing in this
Act shall be construed to amend the Boulder Canyon Project Act (45 Stat. 1057),
as amended. (53 Sbt. 1198; 43 U.S,C. ~ 485j, note)
Sec. 19. [Short title. ]—This Act may be cited as the “Reclamation
Project
Act of 1939.” (53 Stat. 1198; 43 U.S.C. $ 485k)
EXPLANATORY NOTE
Legislative History. H,R, 6984, Public
Law 260 in the 76th Congress. H.R. Rept.
No. 995. S. Rept. No. 758. ~.R. Rept. No.

1027 (on H. Res. 242).
1252 (conference report).

H.R.

Rept.

No,