SPECIAL PROVISIONS OF SECOND DEFICIENCY ACT, FISCAL YEAR

1924

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

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

*

STATE DEPARTMENT

[Equitable use of waters of Rio Grande below Fort Quitman, Texas.]Commission on equitable use of the waters of the Rio Grande: For a study, in cooperation with representatives of the United States of Mexico, regarding the equitable use of the waters of the Rio Grande below Fort Whitman Quitman], Texas, with a view to their proper utilization for irrigation and other beneficial uses, including salaries of commissioners and other employees, transportation, subsistence (notwthstandng the provisions of any other act), and such other miscellaneous expenses as the President may deem proper, fiscal year 1925, $20,000: Provided, That one of the commissioners so appointed shall be an engineer experienced in such work. (43 Stat. 692.)

[THE FACT FINDERS' ACT]1

Sec. 4. [Definitions.]-SUBSECTION A. That when used in this section

(a) The word "Secretary" means the Secretary of the Interior. (b) The words "reclamation law mean the act of June 17, 1902 (Thirty-second Statutes, page 388), and all acts amendatory thereof or supplementary thereto.

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

1 The enactment of important provisions of this act was recommended by a committee of special advisers on reclamation appointed by the Secretary of the Interior. See Senate Document No. 92, Sixty-eighth Congress, first session.

28038-27

-16

235

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

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

Subsec. B. [Approval of new project contingent upon information as to water supply, engineering features, cost, land prices, feasibility, adaptability for settlement and farm homes.]—That no new project or new division of a project shall be approved for construction or estimates submitted therefor by the Secretary until information in detail shall be secured by him concerning the water supply, the engineering features, the cost of construction, land prices, and the probable cost of development, and he shall have made a finding in writing that it is feasible, that it is adaptable for actual settlement and farm home, and that it will probably return the cost thereof to the United States. (43 Stat. 702.)

NOTES

Secretary not mandatorily required to commence new projects unless convinced of their feasibility. In an opinion promulgated August 4, 1926, the Attorney General ruled that the Secretary of the Interior is not compelled to expend appropriations made by Congress for construction of new projects unless he is certain of their feasibility, their adaptability for settlement, and repayment of their costs to the Government. (See New Reclamation era September, 1926, p. 152.)

Definition of " new project."-In an opinion dated September 17, 1925, regarding the Baker project the Attorney General defined "new project": In one sense the Baker project is not a new one, inasmuch as appropriations have been made for it each fiscal year beginning with that of 1923. The project was under investigation during the period from 1922 to 1925, inclusive, in pursuance of appropriations by Congress, and upon the expiration of each fiscal year without construction having started each appropriation substantially lapsed and the project came to an end. Consequently, each subsequent appropriation constituted a new designation by Congress of the project, and as the second deficiency act was passed December 5, 1924, and the appropriation for the Baker project for the fiscal year 1926 was passed March 3, 1925, it would seem clear that in point of time the Baker project is a new project" within the meaning of subsection B of said second deficiency act. (34 Op. Atty. Gen. 545.)

66

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

NOTES

Regulations. See General Land Office instructions regarding this subsection, 51 L. D. 203, and departmental regulations of September 12, 1925, 51 L. D. 204, or C. L. 1455.

C. L. 1509, February 11, 1926, contains farm application blank for examination and suggestions.

Subsec. D. [Classification of lands-Different construction charges to be fixed against different classes of land.]-That the irrigable lands of each new project and new division of a project hereinafter approved

shall be classified by the Secretary with respect to their power, under a proper agricultural program, to support a family and pay water charges, and the Secretary is authorized to fix different construction charges against different classes of land under the same project for the purpose of equitably apportioning the total construction cost so that all lands may as far as practicable bear the burden of such cost according to their productive value. (43 Stat. 702.)

Subsec. E. [Two public notices relating to construction charges-Date when payments begin on construction charges.]-That hereafter the Secretary shall as to each irrigable acre of land in each new project, or a new division of a project, issue two public notices relating to construction charges. The first public notice shall be issued when the land is ready for settlement and will announce the construction charge per irrigable acre. The second public notice shall be issued when in the opinion of the Secretary the agricultural development of the project shall have advanced sufficiently to warrant the commencement of payment of installments of such construction charge. The second public notice shall fix the date when payments will begin on the construction charge announced by the first public notice, which date shall be not more than five years from the date of the first public notice. (43 Stat. 702.)

NOTES

Repeal. Subsections E, F, and L of this act repealed, with certain exceptions, by section 47, act of May 25, 1926. (44 Stat. 636.)

Subsec. F. [Construction charges to be based on productive power of land-Installments 5 per centum of average gross annual acre income for 10 calendar years-Existing contracts may be amended.]-That hereafter all project construction charges shall be made payable in annual installments based on the productive power of the land as provided in this subsection. The installment of the construction charge per irrigable acre payable each year shall be 5 per centum of the average gross annual acre income for the ten calendar years first preceding, or for all years of record if fewer than ten years are available, of the area in cultivation in the division or subdivision thereof of the project in which the land is located, as found by the Secretary annually. The decision of the Secretary as to the amount of any such installment shall be conclusive. These annual payments shall continue until the total construction charge against each unit is paid. The Secretary is authorized upon request to amend any existing contract for a project water right so that it will provide for payment of the construction charge thereunder in accordance with the provisions of this subsection or for the deferment of such construction charges for a period of three years from the approval of this section, or both. (43 Stat. 702.)

NOTES

Interpretation.-See departmental interpretation of subsections F, G, I, J, and L, dated January 28, 1925, at 51 L. D. 207; L. D. 1360, February 3, 1925. For further interpretation of first section of subsection F see C. L. 1493, December 23, 1925.

Repeal.-Subsections E, F, and L of this act repealed, with certain exceptions, by section 47, act of May 25, 1926 (44 Stat. 636).

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

NOTES

Amendment.-Paragraph 3 of section 45, act of May 25, 1926, authorizes the Secretary to grant relief provided for in this subsection to any of the projects mentioned in act of May 25, 1926, without requiring the project to take over control of the project works.

Interpretation. For interpretation of subsection G, and other subsections, see 51 L. D. 207 (C. L. 1360), and 51 L. D. 215, 218.

Benefits. It is believed that a possible and reasonable construction is that the "benefits" mentioned in subsection G are those only which flow from the execution of the amendatory contracts; that is, those provided for in subsection F immediately following, which require some affirmative action on the part of the water user, and that it has no application to the other provisions of the act, which appear to be more general in character and do not require the execution of amended contracts to make them effective. (51 L. D. 215; C. L. 1389, March 27, 1925.)

Subsec. H. [Penalty against delinquent accounts reduced.]-That the penalty of 1 per centum per month against delinquent accounts, provided in section 3 and section 6 of the act of August 13, 1914 (Thirtyeighth Statutes, page 686), is hereby reduced to one-half of 1 per centum per month as to all installments which may hereafter become due. (43 Stat. 703.)

NOTES

Regulations.-See departmental instructions of March 19, 1925, regarding subsection H, printed at 51 L. D. 218 and in C. L. 1387, March 25, 1925.

Subsec. I. [Profits from projects taken over by water users.]—That whenever the water users take over the care, operation, and maintenance of a project, or a division of a project, the total accumulated net profits, as determined by the Secretary, derived from the operation of project power plants, leasing of project grazing and farm lands, and the sale or use of town sites shall be credited to the construction charge of the project, or a division thereof, and thereafter the net profits from such sources may be used by the water users to be credited annually, first, on account of project construction charge, second, on account of project operation and maintenance charge, and third, as the water users may direct. No distribution to individual water users shall be made out of any such profits before all obligations to the Government shall have been fully paid. (43 Stat.

A

NOTES

Manner of crediting profits.-The difference in the language used with reference to the total accumulated net profits from past operations and that used with reference to net profits thereafter secured, indicates a different intent with reference to these two classes of profits. The last sentence of this subsection appears to apply to all profits of both classes. The credit of the "total accumulated net profits " from past operations "to the construction charge of the project" results in lessening by that much the total construction obligation; but each annual installment based on the average gross acre income would remain the same until the end of the payment period. But the provision regarding net profits hereafter realized from such sources to be credited annually first on account of construction and second on operation and maintenance charges, is understood to provide for the application of future profits annually upon the annual construction charges as the same come due. After the construction charges have been completed credit for future profits will be applied in the same manner upon operation and maintenance charges. (Departmental Decision Jan. 28, 1925, 51 L. D. 212; C. L. 1360, Feb. 3, 1925.) Subsec. J. [Moneys from sale or rental of water shall be credited to project or division of project to which construction cost has been charged.]-That all moneys or profits as determined by the Secretary heretofore or hereafter derived from the sale or rental of surplus water under the Warren Act of February 21, 1911 (Thirtysixth Statutes, page 925), or from the connection of a new project with an existing project shall be credited to the project or division of the project to which the construction cost has been charged. (43 Stat. 703.)

NOTES

Manner of applying profits.-Subsection J provides that profits described therein shall be credited to the project or division of project to which the construction cost has been charged, but does not specify whether the same should be credited on construction or operation and maintenance. It is therefore believed to be within the discretion of the Secretary of the Interior to determine the manner of applying such credit. In this connection, however, it is noted that this fund is to be applied as a credit and not turned over as a cash payment from the Government. Consequently if the water users' organization takes over the operation and maintenance of the irrigation system or a part thereof and collects and pays its own operation and maintenance expenses there will be no indebtedness from the water users to the United States for operation and maintenance except the operation and maintenance of reserved works in cases where only a part of the irrigation works are turned over, and in cases where all of the irrigation works are turned over there would be no indebtedness to the Government on which a credit could apply except indebtedness for the construction payments. (51 L. D. 213; C. L. 1360, Feb. 3, 1925.)

Subsec. K. [Surveys authorized where settlers appear unable to pay construction costs-Expense of such surveys.]-That on each existing project where, in the opinion of the Secretary, it appears that on account of lack of fertility in the soil, an inadequate water supply, or other physical causes, settlers are unable to pay construction costs, or whenever it appears that the cost of any reclamation project by reason of error or mistake or for any cause has been apportioned or charged upon a smaller area of land than the total area of land under said project, the Secretary is authorized to undertake a comprehensive and detailed survey to ascertain all pertinent facts, and report in each case the result of such survey to the Congress, with his recommendations: Provided, That the cost and expense of each such survey shall be charged to the appropriation for the project on