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TEMPORARY RELIEF OF WATER USERS ON IRRIGATION PROJECTS CONSTRUCTED AND OPERATED UNDER THE RECLAMATION LAW

FEBRUARY 19, 1932.—Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. Smith of Idaho, from the Committee on Irrigation and Reclama

tion, submitted the following

REPORT

[To accompany H. R. 9489)

The Committee on Irrigation and Reclamation, to whom was referred the bill (H. R. 9489) for the temporary relief of water users on irrigation projects constructed and operated under the reclamation law, having considered the same, report thereon with a recommendation that it do pass.

The committee conducted extensive hearings on the urgent necessity of enacting the pending legislation, and was addressed by the Commissioner of Reclamation, Dr. Elwood Mead, and by representatives from the various reclamation projects in the West, and has unanimously reached the conclusion that this legislation is imperative in order to relieve the settlers on many of the projects who are unable to meet their annual construction charges. Because of water shortage, due to unusual drought conditions extending throughout the arid States, and the low price of farm products, such as $7 per ton for hay, 50 cents per 100 pounds for potatoes, 20 cents per pound for butterfat, 15 cents per dozen for eggs, 15 cents per pound for wool, 5 cents per pound for lambs, 5 cents per pound for hogs, and 4 cents per pound for beef, a large proportion of the water users are in arrears and without money.

Certain fixed charges, such as operation and maintenance, must be paid by the settlers each year, in addition to annual charges on construction costs, as well as county and State taxes, amounting to more than the gross value of the crop production last year in many instances.

Under the law the Secretary of the Interior is prohibited from furnishing water for irrigation purposes to the occupants of the land who are more than one year in arrears. Consequently, if this legislation is not enacted, many of the settlers on a number of projects will not be able to raise any crops during the current year.

Farming activities on a reclamation project are much more expensive than in the humid regions and while they may produce larger crops, the low price prevailing during the last two or three years for farm products, has made farming on these projects most unprofitable and involved the settlers in an actual loss, and in many instances made it necessary for them to obtain loans on their machinery and livestock to meet the construction payments which must be promptly made in order to secure water for irrigation.

By reason of the fact that the Government already has a first lien on the land for the unpaid construction charges, it is impossible for the farmers to secure loans from the Federal farm loan bank, and frequently from any other source under existing conditions. In addi- . tion, many of the banks in the irrigated sections have been closed, and the small deposits of the farmers have been tied up. No money is available for financing the farmers to meet their urgent obligations.

This relief legislation is in line with laws heretofore enacted to aid the farmers on other than reclamation and drainage projects, and will permit the water users in the arid regions to carry on their activities with the hope that prices next year will be sufficiently high to enable them to retrieve their losses. By reason of the fact that there is an excessive snowfall in the mountains of the West, there is every reason to believe that all of the projects will have an ample water supply for producing next year's crops.

In this connection, it is well to refer briefly to what has been accomplished under the reclamation law. According to the Commissioner of Reclamation, Doctor Mead, in his testimony before the subcommittee of the House Committee on Appropriations, December 15, 1931, there are 40,354 irrigated farms on the 26 Federal reclamation projects, with a population of 165,956. There are located on these projects 213 cities and towns with a population of 472,723. There are 688 schools, 724 churches, and 120 banks with deposits of $134,261,170, and 226,014 depositors.

Except for the cooperation of the Federal Government toward the construction of Federal reclamation projects, the eastern States would have been deprived of the purchasing power of this vast number of people. Many people are of the opinion that the reclamation of the arid lands is purely a local matter, when as a matter of fact the building up of markets on these projects is beneficial to every State in the Union.

The bill under consideration provides for the temporary relief of water users on reclamation projects which are constructed or are being constructed under the reclamation law.

Section 1 provides that the construction charges for 1931 which were due the 1st of last December shall be deferred until the end of the contract period and that 50 per cent of the construction charges for the current year shall be similarly deferred. The last paragraph of the section provides that the payment of interest at 5 per cent due on the cost of the power plant shall be suspended for 1931, and onehalf of the interest rate shall be suspended for 1932. This provision is applicable only to the Gem irrigation district, which is a portion of the Owyhee project in Oregon and Idaho, which, under the contract with the Secretary of the Interior, is to be paid out in 12 annual installments, nearly 50 per cent of which has already been paid.

Section 2 provides that this deferment shall apply to individual water users who are not on projects where districts or water users' associations have assumed the joint obligation for payment.

Section 3 extends for one year from and after January 1, 1932, the time within which the Uncompahgre reclamation project in Colorado shall commence the construction of a drainage system in lieu of annual construction payments, as provided in the act of January 31, 1931 (46 Stat. 1974), and that all construction charges accruing upon said project for the year 1932 shall be deferred and made a part of the project supplemental construction charge provided for in said act. Section 3 also provides that the payment of all construction charges on the Grand Valley reclamation project, in Colorado, for the year 1932, shall be deferred, in order to afford that project an opportunity to complete the construction authorized by the act of February 21, 1931.

Section 4 provides that the water users' organization and the individual water users shall resume payment of charges in accordance with existing contracts at the end of the period for which deferment has been granted.

Section 5 authorizes the Secretary of the Interior, in his discretion, to permit the adjustment of construction and operation and maintenance charges heretofore deferred on the basis authorized in sections 1 and 2 of this bill.

Section 6 authorizes the Secretary of the Interior to supply water for irrigation purposes to districts or individuals who are delinquent in their payment for the calendar year 1930 or years prior thereto.

Section 7 provides that any irrigation district or water-users' association which has contracted to pay construction charges and is not in arrears for more than one calendar year may authorize the delivery of water to any individual water user who may be delinquent in his payments to the district or association.

Section 8 provides that any profits accruing to the water users or district from the sale of power shall be deducted from the amount of any payment extended under the provisions of this bill, and that any such credits in excess of the construction charge shall be applied as now provided by law and contract. The proviso in this section excepts from the operation of this law those power projects which were not constructed at the expense of the reclamation fund.

Section 9 provides that any payments of construction charges for the year 1931 which have been made heretofore shall be credited upon succeeding payments as they become due, including maintenance and operation charges, and interest at the rate of 6 per cent per annum shall be added to the amounts so collected and be credited on the succeeding payments.

Section 10 provides for the deferment of the repayment of the moneys advanced to the reclamation fund under the act of June 25, 1910, and the act of March 3, 1931, until July 1, 1935.

Under the provisions of rule 13, 2-A, the following is submitted: Act of June 25, 1910 (36 Stat. 835)

Proposed amendment Sec. 3. That beginning five years after the date of the first advance to the reclamation fund under this act, fifty per centum of the annual receipts of the reclamation fund shall be paid into the general fund of the Treasury of the United States until payment so made shall equal the aggregate amount of advances made by the Treasury to said reclamation fund, together with interest paid on the certificates of indebtedness, issued under this act, and any expense incident to preparing, advertising, and issuing the same.

Act of June 12, 1917 (40 Stat. 149)

The act of June twenty-fifth, nineteen hundred and ten (36 Stat. 835), is amended to provide that reimbursement of the moneys advanced under the provisions of that act shall be made by transferring annually the sum of $1,000,000 from the reclamation fund to the general funds in the Treasury, beginning July 1,

nineteen hundred and twenty, and continuing until full reimbursement has been made.

Act of February 6, 1931 (46 Stat. 1069)

The annual payments required to be That the act of June 25, 1910, enmade from the reclamation fund to the titled “An act to authorize advances general funds in the Treasury, as reim- to the reclamation fund, and for the bursement for advances made in accord- issue and disposal of certificates of inance with the provisions of the act debtedness in reimbursement therefor, entitled “An act to authorize advances and for other purposes,

as amended, to the 'Reclamation fund,' and for the is hereby amended so as to provide that issue and disposal of certificates of in- payments in reimbursement of moneys debtedness in reimbursement therefor, so advanced under this act and not and for other purposes," approved June heretofore repaid shall be made by 25, 1910, as amended, are hereby sus- transfer annually from the reclamation pended for a period of two years, be- fund to the general funds of the Treasginning with the fiscal year ending ury beginning July 1, 1935. June 30, 1931.

Act of March 3, 1931 (46 Stat. 1057)

That the Secretary of the Treasury That the act of March 3, 1931 (46 is authorized, upon request of the Sec- Stat. 1507), is hereby amended so as to retary of the Interior and upon approval provide that payments in reimbursement of the President, to transfer from time of moneys so advanced under that act and to time to the credit of the reclamation not heretofore repaid shall be made by fund, created by the act of June 17, 1902 transfer annually from the reclamation (32 Stat. L. 388), such sum or sums, fund to the general funds of the Treasury not exceeding in the aggregate $5,000,- beginning July 1, 1935. 000, as the Secretary of the Interior may deem necessary for the construction and operation of reclamation projects authorized under said act of June 17, 1902, and now under way, and acts amendatory thereof or supplementary thereto.

Act of March 3, 1931 (46 Stat. 1057)

Proposed amendment Sec. 2. That reimbursement of the moneys so advanced under the provisions of this act shall be made by transfer annually, of the sum of $1,000,000 from the reclamation fund to the general funds in the Treasury, beginning July 1, 1933. Act of January 31, 1931 (46 Stat. 1974)

Be it enacted by the Senate and House The Act of Congress approved of Representatives of the United States January 31, 1931, entitled “An act for of America in Congress assembled, That the relief of the Uncompahgre reclaif the Uncompahgre Valley Water mation project, Colorado" (46 Stat. Users' Association shall, under the 1974), is hereby amended to extend for contract of April 8, 1927, between the one year from and after January 1, United States and the association, on 1932, the time for beginning construcor before January 1, 1932, take over tion of drainage system upon the the operation, maintenance, and con- Uncompahgre project, and any and all trol of the entire Uncompahgre recla- construction charges accruing upon or mation project, Colorado, the Secretary for said project for or during the year of the Interior is hereby authorized to 1932 shall be deferred and included in enter into an amendatory contract and made payable as a part of the with the said association which shall project supplemental construction provide as follows:

charge provided for in said act of First. All construction and operation January 31, 1931. and maintenance charges (exclusive of any operation and maintenance charges required to be paid by the association for the operation and maintenance of the project for the calendar year 1930) that were or shall be due and unpaid under said contract of 1927 on December 31, 1930, including the then unpaid deferred charges under articles 17 (b) and (d) of said contract (without interest and penalties on such deferred accounts) and the construction charge that becomes due on December 1, 1931, under said contract, may be included in and made payable as part of the project supplemental construction charge hereinafter mentioned. Interest and penalties heretofore paid on deferred charges under articles 17 (b) and (d) shall be remitted and credited against the association's obligation for supplemental construction.

Second. During each of the years 1932 to 1937, both inclusive, the association shall have the right to expend for the construction of a drainage system such portion of the construction charge payable to the United States under said contract of 1927, as said association may consider necessary and as may be provided for by plans prepared by the association and approved by or on behalf of the Secretary of the Interior, the moneys so expended to be secured from construction charge assessments to be made to meet the regular construction charge installments that become due and payable under the said contract of 1927 on December 1 of the years 1931 to 1936, inclusive. The

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