374 THE OMNIBUS ADJUSTMENT ACT-SEC. 44 Omnibus Adjustment Act. Solicitor Davis 3. Supplemental charges There is no foundation for an interpretation of section 43 of the Omnibus Adjustment Act as amended by the Act of April 23, 1930, which would authorize a deferment of the beginning of payment of supplemental construction charges of the Huntley project for a term of years after the completion of the payment of the primary construction charges. Solicitor Finney Opinion, 53 I.D. 323 (1931). Sec. 44. [Exchanges, if lands eliminated or insufficient to support familyFinal proof on original entry accepted-Entry of contiguous land-Selection of equal area on relinquishing eliminated, by private owner-Credit for amounts paid-Rights not assignable-Rights of lien holders to be considered-Preference to ex-service men.]-Settlers who have unpatented entries under any of the public land laws embracing lands which have been eliminated from the project, or whose entries under water rights have been so reduced that the remaining area is insufficient to support a family, shall be entitled to exchange their entries for other public lands within the same project or any other existing Federal reclamation project, with credit under the homestead laws for residence, improvement, and cultivation made or performed by them upon their original entries and with credit upon the new entry for any construction charges paid upon or in connection with the original entry: Provided, That when satisfactory final proof has been made on the original entry it shall not be necessary to submit final proof upon the lieu entry. Any entryman whose entry or farm unit is reduced by the elimination of permanently unproductive land shall be entitled to enter an equal amount of available public land on the same project contiguous to or in the vicinity of the farm unit reduced by elimination, with all credits in this section hereinbefore specified in lieu of the lands eliminated. Owners of private lands so eliminated from the project may, subject to the approval of the Secretary of the Interior, and free from all encumbrances, relinquish and convey to the United States lands so owned and held by them, not exceeding an area of one hundred and sixty acres, and select an equal area of vacant public land within the irrigable area of the same or any other Federal reclamation project, with credit upon the construction costs of the lands selected to the extent and in the amount paid upon or in connection with their relinquished lands, and the Secretary of the Interior is hereby authorized to revise and consolidate farm units, so far as this may be made necessary or advisable, with a view to carrying out the provisions of this section: Provided further, That the rights extended under this section shall not be assignable: And provided further, That in administering the provisions of this section and section 42, the Secretary of the Interior shall take into consideration the rights and interests of lien holders, as to him may seem just and equitable: Provided further, That where two entrymen apply for the same farm unit under the exchange provisions of this section, only one of whom is an ex-service man, as defined by the joint resolution of January 21, 1922 (Forty-second Statutes, page 358), the ex-service man shall have a preference in making such exchange. (44 Stat. 648; 43 U.S.C. § 423c) Sec. 45. [Amendment of water-right contracts-Water users to contract to pay charges on remaining productive lands-Extension of time on construction charges discretionary with Secretary-Limitation of 40 years-Relief provided for in Fact Finders' Act authorized-Secretary's decision on amending contracts conclusive-Discretionary execution of contracts made in good faith to operate January 1, 1927-Paying charges for 1926, 1927, and 1928-Completion of supplemental contract with Belle Fourche District.]-The Secretary of the Interior is hereby authorized, in his discretion, to amend any existing water-right contract to the extent necessary to carry out the provision of this act, upon request of the holder of such contract. The Secretary of the Interior, as a condition precedent to the amendment of any existing water-right contract, shall require the execution of a contract by a water-users' association or irrigation district whereby such association or irrigation district shall be required to pay to the United States, without regard to default in the payment of charges against any individual farm unit or tract of irrigable land, the entire charges against all productive lands remaining in the project after the permanently unproductive lands shall have been eliminated and the charges against temporarily unproductive areas shall have been suspended in the manner and to the extent authorized and directed by this act. The Secretary is authorized, in his discretion, upon the request of individual water users or district, and upon performance of the condition precedent above set forth, to amend any existing water-right contract to provide for increase in the time for payment of construction charges, which have not then accrued, to the extent that may be necessary under the conditions in each case, subject to the limitation that there shall be allowed for repayment not more than forty years from the date the first payment matured under the original contract, and also to extend the time for payment of operation and maintenance or water rental charges due and unpaid for such period as in his judgment may be necessary not exceeding five years, the charges so extended to bear interest payable annually at the rate of 6 per centum per annum until paid, and to contract for the payment of the construction charges then due and unpaid within such terms of years as the Secretary may find to be necessary, with interest payable annually at the rate of 6 per centum per annum until paid. The Secretary is further authorized, in his discretion, to grant the relief provided for in section 4, act of December 5, 1924 (Forty-third Statutes at Large, page 701), to any of the projects mentioned in this act, without requiring such project to take over the care, operation, and maintenance of the project works. 376 THE OMNIBUS ADJUSTMENT ACT-SEC. 46 The decision of the Secretary as to the necessity for amending any such contract shall be conclusive: Provided, That nothing in this act shall prevent the execution of any contract heretofore negotiated or in connection with which negotiations have been heretofore opened in good faith or which may be hereafter opened in good faith under the act approved December 5, 1924 (Fortythird Statutes at Large, page 701), and which shall be executed on or before January 1, 1927, unless the water users affected elect to have the contract governed by this section: Provided further, That in the execution of any contract provided for in the last proviso, the Secretary of the Interior shall have authority to arrange for payment of construction charges by any project or division for the calendar years 1926, 1927, and 1928 in proportion to the state of development of the project in those years: Provided further, That the Secretary of the Interior is authorized to complete and execute the supplemental contract, now being negotiated and which has been approved as to form by the Secretary, between the United States and the Belle Fourche Irrigation District and at the expiration of said supplemental contract to enter into a permanent contract on behalf of the United States with said District in accordance with the terms of said supplemental contract. (44 Stat. 648; 43 U.S.C. § 423d) EXPLANATORY NOTE Reference in the Text. Section 4, Act of December 5, 1924 (Forty-third Statutes at Large, page 701), referred to in the text, is the Fact Finders' Act. The Act appears herein in chronological order. NOTE OF OPINION 1. Purchase of interest in power plant While subsection F, section 4 of the Act of December 5, 1924 (43 Stat. 702) was in effect, a contract was made between the United States and the Shoshone Irrigation District, by which the district agreed to take over the control of the Garland division of the Shoshone project. In this contract the district did not agree to take an interest in the Shoshone power plant. After subsection F, supra, had been repealed, the district requested that it be allowed to purchase an interest in the power plant and make pay ment therefor on the crop-return basis. The Department held, in approving an Opinion of the Solicitor dated March 24, 1928 (M24229), that purchase of an interest in the power plant could not be made under subsection F after its repeal. It was held, however, that payment could be made under section 45 of the Act of May 25, 1926 (44 Stat. 648), allowing the district a period of 40 years from the first payment matured under the original water-right contract within which to make payment for the desired interest in the power plant. Sec. 46. [No water delivery on new projects until contracts made by district for payment of costs-Cooperation of States-Appraisal and sale of lands in private ownership in excess of 160 acres-No water if owner refuses to sell— Payment required before right to receive water-Payments of operation and maintenance charges annually in advance-Public notice when water available.]-No water shall be delivered upon the completion of any new project or new division of a project until a contract or contracts in form approved by the Secretary of the Interior shall have been made with an irrigation district or irrigation districts organized under State law providing for payment by the district or districts of the cost of constructing, operating, and maintaining the works during the time they are in control of the United States, such cost of constructing to be repaid within such terms of years as the Secretary may find THE OMNIBUS ADJUSTMENT ACT-SEC. 46 377 to be necessary, in any event not more than forty years from the date of public notice hereinafter referred to, and the execution of said contract or contracts shall have been confirmed by a decree of a court of competent jurisdiction. Prior to or in connection with the settlement and development of each of these projects, the Secretary of the Interior is authorized in his discretion to enter into agreement with the proper authorities of the State or States wherein said projects or divisions are located whereby such State or States shall cooperate with the United States in promoting the settlement of the projects or divisions after completion and in the securing and selecting of settlers. Such contract or contracts with irrigation districts hereinbefore referred to shall further provide that all irrigable land held in private ownership by any one owner in excess of one hundred and sixty irrigable acres shall be appraised in a manner to be prescribed by the Secretary of the Interior and the sale prices thereof fixed by the Secretary on the basis of its actual bona fide value at the date of appraisal without reference to the proposed construction of the irrigation works; and that no such excess lands so held shall receive water from any project or division if the owners thereof shall refuse to execute valid recordable contracts for the sale of such lands under terms and conditions satisfactory to the Secretary of the Interior and at prices not to exceed those fixed by the Secretary of the Interior; and that until one-half the construction charges against said lands shall have been fully paid no sale of any such lands shall carry the right to receive water unless and until the purchase price involved in such sale is approved by the Secretary of the Interior and that upon proof of fraudulent representation as to the true consideration involved in such sales the Secretary of the Interior is authorized to cancel the water right attaching to the land involved in such fraudulent sales: Provided, however, That if excess land is acquired by foreclosure or other process of law, by conveyance in satisfaction of mortgages, by inheritance, or by devise, water therefor may be furnished temporarily for a period not exceeding five years from the effective date of such acquisition, delivery of water thereafter ceasing until the transfer thereof to a landowner duly qualified to secure water therefor: Provided further, That the operation and maintenance charges on account of lands in said projects and divisions shall be paid annually in advance not later than March 1. It shall be the duty of the Secretary of the Interior to give public notice when water is actually available, and the operation and maintenance charges payable to the United States for the first year after such public notice shall be transferred to and paid as a part of the construction payment. (44 Stat. 649; Act of July 11, 1956, 70 Stat. 524; 43 U.S.C. § 423e) EXPLANATORY NOTES 1956 Amendment, Involuntary Acquisition. The Act of July 11, 1956, 70 Stat. 524, amended section 46 by adding to it the proviso which begins "Provided, however,". Additionally, section 3 of the 1956 Act authorizes the Secretary of the Interior, upon request of any holder of an existing contract under the Federal reclamation laws, to amend the contract to conform to the provisions of sections 1 and 2 of the Act, 267-067-72-vol. I-27 section 1 being the amendment of this Act and section 2 being an amendment of section 3 of the Act of August 9, 1912. Both the 1956 Act, and that of 1912, appear herein in chronological order. Supplementary Provision, Death of Spouse. The Act of September 2. 1960, 74 Stat. 732, provides that where lands which were eligible to receive water become excess because of the death of a husband or 378 THE OMNIBUS ADJUSTMENT ACT-SEC. 46 wife, they may continue to receive water while owned by the surviving spouse until remarriage, without execution of a recordable contract. The Act appears herein in chronological order. Reference Source, Excess Lands. At the request of the Senate Committee on Interior and Insular Affairs the Secretary of the Interior submitted to the committee on June 30, 1964, a report setting forth the history of the laws, regulations and policies relating to limitations on the delivery of water from Federal reclamation projects for irrigation purposes to lands in excess of a specified number of acres in individual ownership. This report was published as a Committee Print, 88th Cong., 2d Sess., entitled "Acreage Limitation Policy." NOTES OF OPINIONS Construction with other laws 13 Delivery of water 21 Generally 11 Repayment contracts Confirmation proceedings 3 Cost, what constitutes 5 Generally 1 Increase in costs 6 When required 2 1. Repayment contracts-Generally The validity and construction of a contract between the United States and an irrigation district is a question of federal law, and the decision of the United States Supreme Court interpreting such contracts in the instant case, and holding them valid, is therefore binding upon the state court. Ivanhoe Irr. Dist. v. All Parties, 53 Cal. 2d 692, 3 Cal. Rptr. 331-35, 350 P.2d 69, 8387 (1960). The proviso to the Minidoka project portion of the appropriation act of January 12, 1927 (44 Stat. 934) constitutes the Gravity Extension [Gooding] division of the Minidoka project a portion of the Minidoka project proper, and section 46 of the adjustment act is therefore applicable to the gravity extension division. Solicitor Patterson Opinion, M-22401 (June 14, 1927). By section 46 of the Omnibus Adjustment Act of 1926, the mechanism of repayment by "selling" water rights to private landowners disappeared and was replaced by an undertaking by an irrigation district to repay construction charges. Solicitor Barry Opinion, 71 I.D. 496, 502 (1964), in re application of excess land laws to private lands in the Imperial Irrigation District. 2. When required Although execution of a repayment contract is required prior to the delivery of water, it is not a condition precedent to the exercise of the power of eminent domain for the acquisition of land or the construction of the distributing systems. United States v. 277.97 Acres of Land, 112 F. Supp. 159 (S.D. Cal. 1953). Pending completion of a project or avision of a project, water may be furnished under section 46 on a temporary,_rental basis. It has been the policy of the Bureau of Reclamation, however, to require the execution of repayment contracts with water users in advance of or substantially concurrently with the commencement of construction. Memorandum of Chief Counsel Fix to Commissioner, April 20, 1948, at 12, 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 Sess., pt. 3, at 877 (1948). 3. Confirmation proceedings A proceeding to confirm a contract between an irrigation district and the United States for delivery of a supply of water to the district for irrigation purposes and for construction of a distribution system is in rem in nature, and the only issue involved is the validity of the contract. Ivanhoe Irr. Dist. v. All Parties, 53 Cal. 2d 692, 3 Cal. Rptr. 317, 320, 350 P. 2d 69, 72 (1960). Whether the United States has the water rights it needs to operate a reclamation project, and whether it acquires such rights by purchase, by direct or inverse condem |