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Mr. KAMERMAN. The United States directly operates and controls all the other dams and through its control over the agents at this dam the operation of Boulder could be coordinated, or the use of the water at Boulder could be coordinated with the use of the water at these other projects which the United States directly operates.

Senator McCARRAN. Please tell me, would that give the Government, through the reclamation project, more control over the operation and output of electrical energy at Boulder Dam than it has now?

Mr. KAMERMAN. That I really do not know. Of course, that operation would be subject to the Colorado River compact, and any use of water that governs operation at all projects. I am not sure. It is really an engineering matter as to which I am not qualified to testify, but at one or all these various points, my understanding is that there would be a greater supply of water available at one project at one time of the year; that is, the seasonal water would be available at different projects, and the idea is to take advantage and to utilize to the maximum capacity all the seasonal water at the various projects, so that none of it would go to waste down the river without being put to the greatest productive use.

Senator McCARRAN, That is the object of the agency?
Mr. KAMERMAN. That is my understanding of it, sir.

Senator McCARRAN. What I want to know is, how the agency is set up and what power the agency has that the Government does not have now.

Mr. KAMERMAN. We have here I do not have it, but another member from the Bureau did have with him an outline of an agency contract between the United States of America and the city of Los Angeles and the Southern California Edison Co., which incorporates, in a general way, the provisions which will go into the contract when it is ultimately drafted and executed.

Senator CHAVEZ. I would like to have it in the record.
Senator McCARRAN. I think the committee would like to have it.

Senator JOHNSON. I would like to ask Mr. Scattergood a question there. You heard the testimony of this witness?

Mr. SCATTERGOOD. Yes, sir.

Senator Johnson. And you, representing the city of Los Angeles, are entirely satisfied with that particular arrangement?

Mr. SCATTERGOOD. Yes; it is satisfactory.
In answer to Senator McCarran's question, if I may interrupt-
Mr. KAMERMAN. Absolutely.

Mr. SCATTERGOOD. In conjunction with what you said, a lessee is like a renter of a house. He has possession and control. An agent is in the nature of an employee, and is under more direct control and is not in possession of the property except in the capacity of an agent operating it for or on behalf of somebody else. There is a very considerable distinction between the two in respect to the ability of the United States to more effectively coordinate the use of water between these various projects, and yet the power contractors all, and the Edison Co., and the city have agreed to this program.

Senator McCARRAN. Is that about what you had in mind ? Have you something further?

Mr. KAMERMAN. Just two minor points. It will only take a couple of seconds.

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Senator McCARRAN. Very well.

Mr. KAMERMAN. I would just like to point out to the commitee, in order to keep the record straight, that the bill in the House with respect to which the Department reported is not precisely the same as this bill which is now under consideration by this committee.

Senator O’MAHONEY. In what particulars does it differ?

Mr. KAMERMAN. Essentially I think the bills are the same. The substantial provisions have been retained. There have been changes in language, but they are primarily, I think, very formal changes.

One substantial change has already been referred to by Judge Stone, and that relates to the Colorado River development fund whereby the amount which will accrue to that fund has been increased from $24,000,000 to $25,000,000 by reason of the payments beginning as of the year of operation, commencing in 1938, rather than the year of operation commencing in 1940.

Senator O'MAHONEY. The bill in the House was H. R. 9877, a substitute for H. R. 6629, was it not?

Mr. KAMERMAN. That is correct, but the report of the Department related to H. R. 9093.

Senator McCARRAN. That was the earlier bill?
Mr. KAMERMAN. That was the earlier bill, Senator.

Senator O'MAHONEY. But the bill before this committee is identical with H. R. 9877, except for the amendment introduced in the House by the House committee yesterday or the day before?

Mr. KAMERMAN. That is correct, sir.

Senator O'MAHONEY. The labor amendment, which is section 15 of the House bill.

Mr. KAMERMAN. That is my understanding,

Senator O’MAHONEY. So that actually our bill does not represent any change from the so-called substitute bill which has been presented for our consideration?

Mr. KAMERMAN. That is correct.

Senator CHAVEZ. In order to be sure, probably it would be best if you put in the record the House bill.

Mr. KAMERMAN. Well, you have here, I think, a copy of the House bill H, R. 9877.

Senator McCARRAN. Did not we put that in the record yesterday morning? I think we did.

Senator CHAVEZ, I do not recall.

Senator McCARRAN. It seems to me that was put in the record the first thing yesterday morning.

Mr. STONE. H. R. 9093 was put in the record, and the original bill. I believe they are all in the record.

Senator O’MAHONEY. What is the difference between H. R. 9877 and H. R. 9093 ?

Mr. KAMERMAX. That is what I tried to indicate, Senator. There have been changes as to form and language.

Senator O MAHONEY. But no substantial change?

Mr. KAMERMAN. With the one substantial change that I indicated, increasing the development fund from $24,000,000 to $25,000,000. As far as I know that is the only change of substance.

Senator McCarrix. In order to clarify the record, members of the committee, there has come to the hands of the subcommittee of the

Senate Committee on Irrigation and Reclamation, H. R. 9877, of date, May 28, 1940. It is reported from the committee of the House to the House.

Senator O'MAHONEY. You are referring to Union Calendar No. 896 ?

Senator McCARRAN. That is right. I wonder if it would not be worth while to have this bill reported from the committee of the House to the House, and known as Union Calendar No. 896, inserted in the record here?

Senator O’MAHONEY. I suggest that you do that.
Senator McCARRAN. That will be done.

Senator O’MAHONEY. That is the bill which has been reported to the House and is now on the House Calendar.

(H. R. 9877 is as follows:)

[H. R. 9877, 76th Cong., 3d sess., Rept. No. 2328, Union Calendar No. 896]

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A BILL Authorizing the Secretary of the Interior to promulgate and to put into effect

charges for electrical energy generated at Boulder Dam, providing for the application of revenues from said project, authorizing the operation of the Boulder Power Plant by the United States directly or through agents, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Interior is hereby authorized and directed to, and he shall, promulgate charges, or the basis of computation thereof, for electrical energy generated at Boulder Dam during the period beginning June 1, 1937, and ending May 31, 1987, computed to be sufficient, together with other net revenues from the project, to accomplish the following purposes:

(a) To meet the cost of operation and maintenance, and to provide for replacements, of the project during the period beginning June 1, 1937, and ending May 31, 1987;

(b) To repay to the Treasury, with interest, the advances to the Colorado River Dam Fund for the project made prior to June 1, 1937, within fifty years from that date (excluding advances allocated to flood control by section 2 (b) of the Project Act, which shall be repayable as provided in section 7 hereof), and such portion of such advances made on and after June 1, 1937, as (on the basis of repayment thereof within such fifty-year period or periods as the Secretary may determine) will be repayable prior to June 1, 1987;

(c) To provide $600,000 for each of the years and for the purposes specified in section 2 (c) hereof; and

(d) To provide $500,000 for each of the years and for the purposes specified in section 2 (d) hereof.

Such charges may be made subject to revisions and adjustments at such times, to such extent, and in such manner, as by the terms of their promulgation the Secretary shall prescribe.

SEC. 2. All receipts from the project shall be paid into the Colorado River Dam Fund and shall be available for:

(a) Annual appropriation for the operation, maintenance, and replacements of the project, including emergency replacements necessary to insure continuous operations;

(b) Repayment to the Treasury, with interest (after making provision for the payments and transfers provided in subdivisions (c) and (d) hereof), of advances to the Colorado River Dam Fund for the construction of the project (excluding the amount allocated to flood control by section 2 (b) of the Project Act), and any readvances made to said fund under section 5 hereof; and

(c) Payment subject to the provisions of section 3 hereof, in commutation of the payments now provided for the States of Arizona and Nevada in section 4 (b) of the Project Act, to each of said States of the sum of $300,000 for each year of operation, beginning with the year of operation ending May 31, 1938, and continuing annually thereafter until and including the year of operation ending May 31, 1987, and such payments for any year of operation which shall have expired at the time when this subdivision (c) shall become effective shall be due immediately, and be paid, without interest, as expeditiously as administration of this Act will permit, and each such payment for subsequent years of operation shall be made on or before July 31, following the close of the year of operation for which it is made. All such payments shall be made from revenues hereafter received in the Colorado River Dam Fund.

Notwithstanding the foregoing provisions of this subsection, in the event that there are levied and collected by or under authority of Arizona or Nevada or by any lawful taxing political subdivision thereof, taxes upon

(i) the project as herein defined ;

(ii) the electrical energy generated at Boulder Dam by means of facilities, machinery, or equipment both owned and operated by the United States, or owned by the United States and operated under contract with the United States;

(iii) the privilege of generating or transforming such electrical energy or of use of such facilities, machinery, or equipment or of falling water for such generation or transforming; or

(iv) the transmission or control of such electrical energy so generated or transformed (as distinguished from the transmission lines and other physical properties used for such transmission or control) or the use of such transmission lines or other physical properties for such transmission or

control, payments made hereunder to the State by or under the authority of which such taxes are collected shall be reduced by an amount equivalent to such taxes. Nothing herein shall in anywise impair the right of either the State of Arizona or the State of Nevada, or any lawful taxing political subdivision of either of them, to collect nondiscriminatory taxes upon that portion of the transmission lines and all other physical properties, situated within such State and such political subdivision, respectively, and belonging to any of the lessees and/or allottees under the Project Act and/or under this Act, and nothing herein shall exempt or be construed so as to exempt any such property from nondiscriminatory taxation, all in the manner provided by the constitution and laws of such State. Sums, if any, received by each State under the provisions of the Project Act shall be deducted from the first payment or payments to said State authorized by this Act. Payments under this section 2 (c) shall be deemed contractual obligations of the United States, subject to the provisions of section 3 of this Act.

(d) Transfer, subject to the provisions of section 3 hereof, from the Colorado River Dam Fund to a special fund in the Treasury, hereby established and designated the "Colorado River Development Fund," of the sum of $500,000 for the year of operation en ling May 31, 1938, and the like sum of $500,000 for each year of operation thereafter, until and including the year of operation ending May 31, 1987. The transfer of the said sum of $500,000 for each year of operation shall be made on or before July 31 next following the close of the year of operation for which it is made: Provided, That any such transfer for any year of operation which shall have ended at the time this section 2 (d) shall become effective, shall be made, without interest, from revenues received in the Colorado River Dam Fund, as expeditiously as administration of this Act will permit, and without readvances from the general funds of the Treasury. Receipts of the Colorado River Development Fund for the years of operation ending in 1938, 1939, and 1940 (or in the event of reduced receipts during any of said years, due to adjustments under section 3 hereof, then the first receipts of said fund up to $1,500,000), are authorized to be appropriated only for the continuation and extension, under the direction of the Secretary, of studies and investigations by the Bureau of Reclamation for the formulation of a comprehensive plan for the utilization of waters of the Colorado River system for irrigation, electrical power, and other purposes, in the States of the upper division and the States of the lower division, including studies of quantity and quality of water and all other relevant factors. The next such receipts up to and including the receipts for the year of operation ending in 1955 are authorized to be appropriated only for the investigation and construction of projects for such utilization in and equitably distributed among the four States of the upper division. Such receipts for the years of operation ending in 1956 to 1987, inclusive, are authorized to be appropriated for the investigation and construction of projects for such utilization in and equitably distributed among the States of the upper division and the States of the lower division. The terms “Colorado River system," "States of the upper division," and "States of the lower division" as so used shall have the respective meanings defined in the Colorado River compact mentioned in the Project Act. Such projects shall be only such as are found by the Secretary to be physically feasible, economically justified, and consistent with such formulation of a comprehensive plan. Nothing in this Act shall be construed so as to prevent the authorization and construction of any such projects prior to the completion of said plan of comprehensive development; nor shall this Act be construed as affecting the right of any State to proceed independently of this Act or its provisions with the investigation or construction or any project or projects. Transfers under this section 2 (d) shall be deemed contractual obligations of the United States, subject to the provisions of section 3 of this Act.

SEC. 3. If, by reason of any act of God, or of the public enemy, or any major catastrophe, or any other unforeseen and unavoidable cause, the revenues, for any year of operation, after making provision for costs of operation, maintenance, and the amount to be set aside for said year for replacements, should be insufficient to make the payments to the States of Arizona and Nevada and the transfers to the Colorado River Development Fund herein provided for, such payments and transfers shall be proportionately reduced, as the Secretary may find to be necessary by reason thereof.

SEC. 4. (a) Upon the taking effect of this Act, pursuant to section 10 hereof, the charges, or the basis of computation thereof, promulgated hereunder, shall be applicable as from June 1, 1937, and adjustments of accounts by reason thereof, including charges by and against the United States, shall be made so that the United States and all parties that have contracted for energy, or for the privilege of generating energy, at the project, shall be placed in the same position, as nearly as may be, as determined by the Secretary, that they would have occupied had such charges, or the basis of computation thereof, and the method of operation which may be provided for under section 9 hereof, been effective on June 1, 1937: Provided, That such adjustments with contractors shall not be made in cash, but shall be made by means of credits extended over such period as the Secretary may determine.

(b) In the event payments to the States of Arizona and Nevada, or either of them, under section 2 (c) hereof, shall be reduced by reason of the collection of taxes mentioned in said section, adjustments shall be made, from time to time, with each allottee which shall have paid any such taxes, by credits or otherwise, for that proportion of the amount of such reductions which the amount of the payments of such taxes by such allottee bears to the total amount of such taxés collected.

SEC. 5. If at any time there shall be insufficient sums in the Colorado River Dam Fund to meet the cost of replacements, however, necessitated, in addition to meeting the other requirements of this Act, or of regulations authorized hereby and promulgated by the Secretary, the Secretary of the Treasury, upon request of the Secretary of the Interior, shall readvance to the said fund, in amounts not exceeding, in the aggregate, moneys repaid to the Treasury pursuant to Section 2 (b) hereof, the amount required for replacements, however necessitated, in excess of the amount currently available therefor in said Colorado River Dam Fund. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums, not exceeding said aggregate amount, as may be necessary to permit the Secretary of the Treasury to make such readvances. All such readvances shall bear interest.

SEC. 6. Whenever by the terms of the Project Act or this Act payment of interest is provided for, and whenever interest shall enter into any computation thereunder, such interest shall be computed at the rate of 3 per centum per annum, compounded annually.

SEC. 7. The first $25,000,000 of advances made to the Colorado River Dam Fund for the project shall be deemed to be the sum allocated to flood control by section 2 (b) of the Project Act and repayment thereof shall be deferred without interest until June 1, 1987, after which time such advances so allocated to flood control shall be repa yable to the Treasury as the Congress shall determine.

SEC. 8. The Secretary is hereby authorized from time to time to promulgate such regulations and enter into such contracts as he may find necessary or appropriate for carrying out the purposes of this Act and the Project Act, as modified hereby, and, by mutual consent, to terminate or modify any such contract: Provided, however, That no allotment of energy to any allottee made by any rule or regulation heretofore promulgated shall be modified or changed without the consent of such allottee.

Sec. 9. The Secretary is hereby authorized to negotiate for and enter into a contract for the termination of the existing lease of the Boulder Power Plant

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