The bill Senator Neuberger and I have introduced is designed to prevent shortsighted use of a site and the frustration of State authority by a technical, and probably unintended, distinction in the Federal law.

We, therefore, urge that this reasonable and moderate proposal be enacted into law, lest accumulated dissatisfaction result in more far reaching and less desirable revision of the Federal Power Act.

STATEMENT BY SENATOR NEUBERGER ON S. 3250 BEFORE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, MARCH 20, 1956

Mr. Chairman, I appreciate the time which the committee is giving today to hearing opening testimony on the bill introduced by Senator Morse and myself, S. 3250, to deal with the immediate problem of water law raised by the Pelton Dam decision of the Supreme Court of the United States. I realize that your committee has a particularly heavy schedule this week and in the weeks immediately ahead, and that you have interrupted consideration of other measures before you for the sake of these hearings today. Consequently, Mr. Chairman, I shall keep my own remarks brief.

I asked the committee whether it might not be possible to have these first hearings on S. 3250 today because hearings are also being held this week by other committees on related legislation. As one example, the Committee on Interior and Insular Affairs is now holding hearings on S. 863 introduced by Senator Barrett which would have a major impact on the relationship between the Federal Government and the States as to the use and control of water on federally owned lands within the different States. This bill, and others like it, which have been introduced in the House of Representatives, have received much of their present impetus from the Supreme Court's opinion in the case of the Federal Power Commission against Oregon-the decision which we refer to as the "Pelton Dam case" for short.

Mr. Chairman, at the conclusion of my remarks, I am going to ask to have made a part of the record of these hearings the Supreme Court's opinion, from Three Hundred and Forty-ninth United States Reports, page 435, as well as my statement in the Senate in introducing S. 3250. At this time, however, I should only like to review briefly the background of the Pelton Dam case which led up to the Supreme Court's decision of last summer.

The controversy arose 7 years ago from an application by a predecessor of the Portland General Electric Co. to construct a hydroelectric project on the Deschutes River. The Deschutes is a tributary of the Columbia River which is located entirely within the borders of the State of Oregon and which is one of the famous fishing streams of the Pacific Northwest and, indeed, of the Nation. Agencies of the State of Oregon-the State game commission and the State fish commission-as well as the Oregon division of the Izaak Walton League intervened before the Federal Power Commission in opposition to the application for a license to construct the Pelton project on the Deschutes.

In 1953 the power company unsuccessfully sought to have State opposition to its project eliminated by means of special State legislation.

The Federal Power Commission granted a license to the Portland General Electric Co., overriding the objections of the intervening agencies of the Oregon State Government. It is important to note tht the FPC did this without any finding concerning navigability of the Deschutes; it based its authority for the license on the fact that the project is to be built on lands belonging to the United States.

The State took an appeal to the United States Court of Appeals for the Ninth Circuit. That court set aside the Commission's order on the ground that Federal public-lands laws had long ago made the use of nonnavigable waters on Federal lands subject to State control and that licensees would have to comply with State water law.

Upon the petition of the FPC, the Supreme Court took up the case for review and reversed the decision of the court of appeals. The significance of the issue presented by the case and in S. 3250 is shown not only by the fact that the Supreme Court granted certiorari, but also by the fact that several other Western States in which, as in Oregon, the Federal Government owns a large proportion of the land joined Oregon in the litigation as amici curiae.

Mr. Chairman, I am not a lawyer, and I shall not try to develop in detail the full legal implications of the Supreme Court's decision that the United States

may by a simple administrative order "reserve" for itself or its licensees the water flowing through all Federal public lands without regard to the procedures of State legislation designed to carry out State policies for the best use of this precious resource. I do want to point out, however, that S. 3250 does not seek to go nearly so far as other pending bills to establish a universal supremacy of State law over Federal needs in this field. I believe that some of the other proposals I have seen go too far, and that as a result of seeking a complete and farreaching solution no legislation at all may be enacted in this highly controversial field. Therefore, my bill, S. 3250, proposes only to reverse the narrow basis for the specific holding in the Pelton Dam case-i. e., that whatever might otherwise be the law on the Federal public lands, the creation of a reservation permits the FPC to disregard State water law in licensing a project even, on a wholly intrastate nonnavigable stream.

Section 2 of my bill would revoke the license granted for the Pelton Dam project pending any future procedures in accordance with law as amended by my proposed amendment to the Federal Power Act.

That amendment, to summarize it once more, would only apply to the question of FPC licenses-not to Federal projects-and to only licenses for projects which come under FPC jurisdiction because they are to be built on lands of the United States. As to such projects, of which the Pelton Dam happens to be the example which raised the issue of State water law all the way to the Supreme Court, S. 3250 proposes only to overcome the effect of a Federal "reservation" on the applicability or nonapplicability of State law-in other words, to return the law to the position in which it was before the Supreme Court's decision. Because this aim is much more modest than that of the other proposals made in the wake of the Pelton Dam decision, I believe it can and should be enacted at this session of Congress.

Senator ANDERSON. Mr. Chilson, that is a fine endorsement from a most distinguished member of this committee, so we are very happy to have you here.

STATEMENT OF HATFIELD CHILSON, ATTORNEY, WATER

CONSERVATION BOARD, DENVER, COLO.

Mr. CHILSON. I appreciate it.

My name is Hatfield Chilson. I am attorney for the Colorado Water Conservation Board which is the official agency of the State of Colorado dealing with water policy of that State.

The Colorado Water Conservation Board has officially endorsed this legislation by a resolution which has been forwarded to the congressional delegation of the State of Colorado and a copy has been sent to Senator Barrett.

Senator BARRETT. It has been made a part of the record also.
Mr. CHILSON. Thank you.

Before proceeding with a discussion of this matter, I want to make the position of Colorado very clear, because later in my discussion I shall discuss some legal matters which will deal with certain assumptions of the Federal Government. In so dealing with them, I do not want the position of the State of Colorado to be misconstrued.

The position of the State of Colorado is that the State of Colorado, since it was admitted to the Union, is the owner and has full control over the waters and the water use in the State of Colorado.

I won't take the time to go into the legal reasoning behind that. That is our position.

Senator MILLIKIN. Mr. Chilson, that is in our constitution, is it not? Mr. CHILSON. Yes, sir.

Senator MILLIKIN. That constitution was accepted by the United States Government.

Mr. CHILSON. That is correct, Senator.

So we do not recognize that the Federal Government has any rights in the body of the water or the water use in the State of Colorado except such as they have acquired under the doctrine of appropriation, which is the official water doctrine of the State of Colorado.

With that preliminary statement, I think if I can do my State and this committee and the Senate any service, it is in trying to point up specifically the dangers to the vested rights-I am not talking about unappropriated waters of the people of the State of Colorado and the West and also the danger of the Government's position so far as the future development of Colorado and the Western States is concerned.

The controversy with which this legislation is designed is one of long standing. Let me make my apologies here, gentlemen, for not having a prepared statement. I was asked to testify unexpectedly. I did not have time to prepare a brief or a statement, and I am testifying offhand and from some notes that I have made.

This controversy is of considerable standing. The Pelton: Dam casemerely emphasizes the necessity for the early determination of the question.

The basic issue involved is very simple. The question is, Does the Federal Government own and thereby control all of the unappropriated waters in the Western States; and secondly, does the Federal Government by virtue of withdrawals and reservations of Government lands thereby have a water right which was vested at the time of the withdrawal?

This is a matter of such great importance to the West and the Nation that, in my opinion-and I have said this for many years-it is a question that should be finally and conclusively determined by congressional legislation, and as a matter of policy rather than by judicial determination in any particular lawsuit or series of lawsuits.

As we all know, lawsuits are determined upon the particular facts of each case. This as a matter of policy is something that should be determined as a matter of policy rather than upon a particular factual situation.

In spite of the repeated declarations of Congress of its intent to dispute the control and use of waters under the control of the State the theory and philosophy-and I use "philosophy" advisedly because I think it is philosophy-the theory and philosophy of Federal control of western waters has persisted over the years.

This is a matter of great concern, as I have said to the people of the West. No sooner does Congress reaffirm its intent that the use of the waters of the West shall be governed by State law, then we begin to hear the arguments that Congress intended no such thing.

In proceeding with my discussion I will refer frequently to the Attorney General's statement filed with this committee and dated March 19, 1956, and at the bottom of the first page in the last paragraph the Attorney General states this:

This Department questions the validity of the assumption underlying the statement of policy that Federal activities of the Western States involving rights to the use of water threaten the security of prior rights acquired under State law or because undue interference with such rights or with the orderly acquisition of such rights in the future.

In order to point this up specifically I would like to recite Colorado's experience in this regard.

In 1934 the State of Nebraska brought a suit in the United States. district court for an equitable apportionment of the waters of the North Platte River between Nebraska and Wyoming. Colorado was interpleader because the North Platte River rose in Colorado and Colorado also made uses of the water of that river.

The United States intervened in that action. One of the grounds: for intervention was that the United States is the owner of all unappropriated water in the North Platte River, irrespective of any appropriation made or to be made by it under the law of any State and that the United States is entitled to have apportioned to it, free from the sovereign control of any State, the water already appropriated by it and all of the remaining unappropriated water of the river.

These contentions were bitterly resisted by the States and complete briefs of the contentions were filed by the parties.

I am not going to take the time to go into the detailed reasons why the States objected, because in sitting here I have heard others relate those things.

In any event, the case finally reached the United States Supreme. Court and was decided in 1945, some 10 years after it was started. (Nebraska v. Wyoming (325 U. S. 589)).

The Court refused to determine that question. They determined the litigation on other grounds. The Court said, at page 612:

We do not stop to determine what rights to unappropriated water of the river. the United States may have. For the water rights on which the North Platte project and the Kendrick project have been obtained in compliance with State law. Whether they have been obtained by Federal reservation is not important. Nor, as we shall see, is it important to the decree to be entered in this case that there may be unappropriated water, to which the United States may in the future. assert rights through the machinery of State law or otherwise.

During the pendency of that case, I heard many remarks by Government lawyers, also by private water lawyers and others interested in the litigation, that the United States by virtue of this claim did not intend to affect any vested rights; that all they were claiming was that after recognizing all of the rights of all the water users in the States, the balance of the water was under the control of the Federal Government.

Of course that claim related back to the original acquisition of the land, as Mr. Rankin testified yesterday.

So far as Colorado is concerned, the matter of Federal ownership of water, although discussed a great deal, did not reach the courts again until the year 1955. At that time the Federal Government had in litigation the rights to the use of water out of the Colorado River. is on the western slope of Colorado. This was in connection with the Colorado Big Thompson project, a reclamation project that furnishes supplemental water supply to northern Colorado.

The decision in the Pelton Dam case came out in June 1955.

Shortly thereafter the Federal Government filed an amended claim or amended complaint in that litigation, which included the claim of the right to the use of water, based not on the appropriation of water to a beneficial use but upon the withdrawal of lands by the Federal Government.

To understand the import of these claims, the Colorado Big Thompson project was not started until about the year 1935. Under the appropriation laws of the State of Colorado, the Colorado Big Thompson would get a priority as of the year 1935, which would mean that all rights initiated prior to that time would be ahead of the rights of the Federal Government. First in time, first in right. However, the claims based on the withdrawals of Government land according to the Government, related the Government's claim back to the date of the withdrawal.

Now I would like to tell you what that action means.

Senator WATKINS. What withdrawal are you speaking of there? Mr. CHILSON. In this particular case, Senator, I tried to get the exact withdrawals but I was unable to do so. I tried to get that information.

Senator WATKINS. In a general way, what were they?

Mr. CHILSON. Oil shale claims, power site withdrawals, and I am not too sure but I think some forest land withdrawals. Oil shale and power site withdrawals I am sure were involved.

I also tried to get the exact date of those withdrawals but I was unable to do so.

Generally, I think the earliest one was somewhere around 1908 or 1910, and varied from there up to about 1920. If I can, I want to try to put into words what that means.

In Colorado, we recognize the generation of power as a beneficial use. We recognize that one who appropriates water to generate hydroelectric power is entitled to a water right and a priority as of the date of the initiation of this use. So if the Federal Government should utilize those power rights to the extent that they could use the entire flow of the river for power and let us assume that the power withdrawal was 1915, to take a date; I don't know that that is the date, but we will assume it is; that would mean that the Federal Government would have a claim on the entire flow of the Colorado River at the point of these power sites for the generation of power and that any other user who came in after that and wanted to apply the waters to a beneficial use would be prohibited from doing it because the water would have to pass on down and go through these powerplants.

The oil shale withdrawals in Colorado are very large. I mean by that that they involve large deposits of oil shale. If and when those oil shale deposits are developed, it will take tremendous amounts of water.

Colorado had a survey made by an engineer, Mr. Raymond J. Hill, whose estimate of the amount of water that would be needed to develop the oil shale deposits in Colorado, the privately owned ones as well as the Federal ones, and the uses that go with that development, would be 300,000 acre-feet a year, which is a tremendous amount of water. What I am trying to say is that the power site withdrawals and the oil shale withdrawals could demand practically the entire flow of the Colorado River.

Those rights relate back to the date of withdrawal.

The city and county of Denver, which is on the east slope of the Colorado, has been very short of water. They have spent some $20 million in developing a transmountain diversion of water through the Moffat Tunnel by building the Williams Fork Reservoir and other