SEC. 2. The Secretary of the Interior may deliver water pursuant to the Reclamation Law to the equivalent, as determined by the Secretary, of six hundred forty acres of class 1 land (or such larger number of acres as may be determined pursuant to either Subsection (a) or Subsection (b) of Section 46 of the Act of May 25, 1926, as amended) and, the Secretary may, upon request of the contracting organizations, negotiate amendments to existing contracts to conform said contracts to this section. SEC. 3. The Secretary of the Interior, in entering into any contract under Subsection (d) of Section 9 of the Reclamation Project Act of 1939 as amended shall include, upon request of the contracting organization, provisions permitting either or both (1) the furnishing of water service to excess lands in accordance with the requirements of the third sentence of Section 46 of the Act of May 25, 1926, 44 Stat. 649, as amended, and (2) the furnishing of water service to excess lands without regard to the requirements of said Section 46 provided the contracting organization agrees to pay, with interest on the unpaid balance, the prorata share of the irrigation cost allocation of the project, division, or unit as the Secretary may determine to be appropriate, which is attributable to furnishing irrigation benefits in each particular year to land held in private ownership by any one owner in excess of six hundred forty acres (or such larger number of acres as may be determined pursuant to either Subsection (a) or Subsection (b) of Section 46 of the Act of May 25, 1926, as amended), and an appropriate share of operation and maintenance costs, as determined by the Secretary. The Secretary of the Interior is hereby authorized to negotiate amendments to existing contracts for a water supply made under Subsection (d) of Section 9 of the Reclamation Project Act of 1939 as amended so as to give contracting organizations the benefits of this section, if so requested: Provided, That an excess landholder who has executed a recordable contract as provided for in the third sentence of Section 46 of the Act of May 25, 1926 as amended, may not be relieved of such contract and be furnished water service for excess lands pursuant to a contract including the alternative provisions provided for in this Act except on the basis of a retroactive adjustment and payment to the United States of the amounts that would have had to be paid under the provisions of this Act for water furnished in the past for excess lands (one hundred sixty irrigable acres prior to the effective date of this Act) of such landholder. SEC. 4. The Secretary of the Interior is hereby authorized to amend existing contracts for water service made under Subsection (e) of Section 9 of the Reclamation Project Act of 1939, 53 Stat. 1187, 1196, as amended, 43 U.S.C. Secs. 485(h) (e) (1924 ed.) so as to permit the furnishing of water service to lands in excess of six hundred forty acres (or such larger number of acres as may be determined pursuant to either Subsection (a) or Subsection (b) of Section 46 of the Act of May 25, 1926, as amended) without the requirement of a recordable contract: Provided, That any such amendment of an existing contract shall require the payment for water service thereafter furnished for excess lands not under recordable contract at a rate per acre-foot which will return to the United States with interest the pro-rata share of the irrigation cost allocation which is attributable to such service, and an appropriate share of operation and maintenance costs, both as determined annually by the Secretary of the Interior. Such annual determination shall reflect changes in capital, operation, maintenance and replacement costs of the project (as defined in the Reclamation Project Act of 1939, as amended) by means of which such water service is furnished. SEC. 5. The Secretary of the Interior, in entering into contracts under Subsection (e) of Section 9 of the Reclamation Project Act of 1939 as amended, shall include provisions permitting either or both (1) the furnishing of water service to excess lands in accordance with the requirements set forth in the third sentence of Section 46 of the Act of May 25, 1926, as amended, and (2) the furnishing of water service to excess lands without regard to the requirements of said Section 46 provided the contracting organization agrees to pay rates for water service furnished to excess lands which will return to the United States, with interest, the pro-rata share of the irrigation cost allocation which is attributable to the furnishing of such water service to excess lands, and an appropriate share of operation, maintenance and replacement costs, all as determined by the Secretary of the Interior annually. SEC. 6. The interest rate for application under the provisions of Sections 3, 4 and 5 of this Act shall be determined by the Secretary of the Treasury as of the beginning of the fiscal year in which a repayment or water service contract is executed or amended, or the date on which the rate per acre-foot for water provided for excess lands is revised, on the basis of the computed average interest rate payable by the Treasury upon its outstanding marketable public obligations which are neither due nor callable for redemption for 15 years from date of issue, and by adjusting such average rate to the nearest one-eighth of 1 per centum. SEC. 7. All moneys received under a contract conforming to the provisions of this Act, except those that would be received under a contract fully conforming with the provisions of Section 46 of the Act of May 25, 1926 as amended by Sections 1 and 2 of this Act shall be covered into the general fund of the Treasury and shall not be credited to payment of the construction costs of the project. Senator HANSEN. May I observe also for the record that Senator Len Jordan of Idaho regretted very much his inability to be here this morning, and he does have a statement which I ask unanimous consent may be included in the record. (The document referred to follows:) STATEMENT OF HON. LEN B. JORDAN, A U.S. SENATOR FROM THE STATE OF IDAHO Mr. Chairman, Members of the Senate Interior and Insular Affairs Committee and representatives of the National Reclamation Association, it is a privilege, an honor and a pleasure to meet here with you today and discuss some of the issues facing us. All of us, legislators, administrators and those of you selected to represent the Reclamation programs and policies of your various States, face a challenge if we are to continue this wonderful program which Congress authorized some sixtyseven years ago. None can deny the benefits which have accrued in the development of the arid Western States and its impact on our National economy. We are now at the cross roads. We have, not only important decisoins to make, but must acquaint the consumers along with the most interested in our urban problems, that reclamation is important to their interests. We can no longer measure benefits based only on the increased yields of crops on land which may be irrigated, but on community, State and National secondary and related economic and environmental benefits. The problems of the cities and Rural America are interrelated. The movement of people from the farms, ranches and rural towns to over-crowded cities must be fully analyzed. Consumers must also realize that their favorable rates of take home pay to food costs can be partly credited to our Reclamation programs. Only about 17% of the average take home pay of Americans now goes to pay food costs, the lowest in the history of our Nation and lower by far than in any other country. Mr. Chairman, it takes years to study, to obtain authorization and to fund new multipurpose Reclamation projects and to have the lands in such projects actually producing food. With our growing population we certainly need to plan ahead. We can no longer measure the benefits of a Reclamation project on irrigation alone. We measure flood control, power development, water quality programs, fish and wildlife enhancement and recreation features. Some of the problems and challenges as I see them are: 1. More comprehensive and broader consideration of benefit to cost ratios. 2. Consideration of interest costs in determining cost to benefit ratios. 3. Studies on modification of the 160-acre limitation for water delivery based on location, costs of operation and new definition of "family size farms.' 4. With authorization for projects presently exceeding appropriation of funds by some $5 billion, we need to re-examine our priorities and to keep a balance in the future between authorizations for such projects and funds to implement those authorized. 5. To counteract the supposition that because we now are paying cooperators about $3,100,000,000 a year for production controls, we should point out that we will assist in feeding the hungry and poorly nourished people in this country and in the world, as far as we are economically able, rather than to continue a negative program of food production controls. 6. To work cooperatively to solve the jurisdictional problem so we can proceed with the Small Reclamation Projects program. Senator HANSEN. Let me say also, Mr. Sorensen, that I think your last reference to acreage limitations focuses attention on, and I would hope that it might be followed by whatever legislative steps are necessary in order to update, a concept that has long since been proven invalid in much of the West. I come from a State that has an average elevation, I suspectwould it not be right, Mr. Bishop-in excess of 5,000 feet, maybe. In my own area of Jackson Hole, we have, according to the Army Engineers, about 50 frost-free days growing season. So we recognize the importance of a more modernistic formula which will take into account the economics of farming and ranching, and will recognize the need to establish a flexible limit insofar as acreage is concerned, which will be responsive to the need. Senator STEVENS. Mr. Chairman, if I might put in a comment here to close the record today, the comments I made concerning Secretary Udall were not personal ones. It was brought to my attention that the Bureau of the Budget participated in the direction to stop the loans under the Small Projects Loan Act, and I meant no reference to him on a personal basis. But having lived through the 1957 amendments and having thought we had won that fight, I was surprised to find that it was lost 9 years later. I would like to go into that with Mr. Southwick and your board here. Mr. SORENSEN. We feel that this is a very worthwhile program. It fills a gap that no other program takes care of, and we are quite anxious to do everything we can do make that particular program more workable. So we will be taking you up, so to speak, on your willingness to assist us. Mr. Coles notes that the Department of Justice also had a hand in this matter of a decision that the earlier language was not suitable. The earlier revision was not suitable to the last administration. Senator STEVENS. Well, having been part of the administration that cleared it through the Department of Justice, and being a lawyer, all I can say is that in almost every situation, 50 percent of the lawyers are wrong. Mr. SORENSEN. Senator Hansen, I would merely sum up in closing. I hope that we have put before this committee some meaningful thoughts and some meaningful ideas as to what we see as some of the problems in this overall water resource program, and some of the possible solutions. Now I think we need to note one particular thing here. When we talk about the water development program and agricultural use, by and large, we are not talking about production of crops which are in surplus. I think this is a very important point. We are all aware of the fact that the Department of Agriculture talks about many millions of acres that are not needed at this time. This is used as an argument against the reclamation program. It does not seem to us to be a hundred percent valid, since most of those many millions are acres the Department of Agriculture refers to are not those producing crops which irrigated agriculture produces, and so we are caught in something of a matter that needs clarification to make that very clear. I know also that we have tried to emphasize that we think there should be some new looks at the benefit evaluation, to take into account some of our social and environmental problems, and some of the solutions that we are able to provide through the water resource program. Now we would close, noting that our association will be holding its annual meeting in Spokane, Wash. We will more formally invite you, but I want at this time to express on behalf of the association a personal invitation to you, and note that we are going to be there from October 22 through October 24 of this year, and we hope that the committee will see that it is represented. Senator HANSEN. Thank you very much, Mr. Sorensen, and let me thank each of you gentlemen representing your States here. We are pleased to have had you. I think your testimony speaks for itself. Have you anything further, Senator Stevens? Senator STEVENS. No, thank you very much, Mr. Chairman. |