Other Considerations Related to Project Operation
In connection with the development and operation of proj-
ects, there are still other statutory provisions of sufficient im-
portance to warrant comparative review. These include pro-
visions relating to preference, transmission facilities, acreage
limitations, and payments in lieu of taxes.
Pa'rMNCE. PROvISIoNs.--For many years, various federal
statutes relating to the development of water resources have
provided a preference for public. bodies and cooperatives.
Many of these we have previously grouped for review, and they
need not be repeated here."" Biu several significant variations
with respect to disposal of power should be noted.
In the marketing of power from reservoir projects under
Army control, preference is giver'to "public bodies and co-
operatives." 6" But in the marketing of power from projects
under the Reclamation Project Act of 1939, preference must
be given to: 6d"
Municipalities and other public corporations or agen-
cies; and also to cooperatives, and other nonprofit or-
S ganizationsa financed in whole or in part by loans made
pursuant to the Rural Electrification Act of 1936 and
any amendments thereof.
SAs to power sold from projects of the Tennessee Valley Au-
thority, preference must be given to: "8
States, counties, municipalities, and cooperative organ-
izations of citizens or farmers, not organized or doing
business for profit, but primarily for the purpose of sup-
plying electricity to its own citizens or members *
Still different is the situation under the Bonneville Project
and Fort Peck Project Acts. Each provides for both a "prefer-
See supra, n. 236, p. 299.
Act of December 22, 1944, 5, 58 Stat. 887, 890, 16 U. S. C. 825s.
*Act of August 4, 1989, 9(c), 53 Stat. 1187, 1194, 43 U. S. C. 485h(c).
Act of May 18, 19833, 10, 48 Stat. 58, 64, as amended, 16 U. S. C. 8811.
ence and priority to public bodies and cooperatives." And
unlike the foregoing statutes, both of these Acts contain defini-
tions of "public body" and "cooperative." "o But the Bonne-
ville Project Act contains detailed provisions for implementing
the preference requirements, while the Fort Peck Act does
TRANSMISSION FACILITIES.-In the marketing of power from
reservoir projects under Army control, the Secretary of the
Interior has authority to construct or acquire by purchase or
other agreement: 62
only such transmission lines and related facilities as may
be necessary in order to make the power and energy
generated at said projects available in wholesale quan-
tities for sale on fair and reasonable terms and conditions
to facilities owned by the Federal Government, public
bodies, cooperatives, and privately owned companies.
But Reclamation Law includes no comparable blanket pro-
vision. As already noted, however, Congress has recognized
in appropriation legislation that transmission facilities consti-
tute parts of authorized Reclamation projects.W"
The Tennessee Valley Authority has express power "to con-
struct, lease, purchase, or authorize the construction of trans-
mission lines within transmission distance from the place where
generated, and to interconnect with other systems." And it
also has authority "to construct transmission lines to farms and
small villages that are not otherwise supplied with electricity
at reasonable rates" in order "to promote and encourage the
"Act of August 27, 1937, 4 4(a), 50 Stat. 731, 733, 16 U. S. C. 832c(a);
Act of May 18, 1938, 4, 52 Stat. 403, 405, 16 U. S. O. 833c.
S"The former "means States, public power districts, counties, and munici-
palities, including agencies or subdivisions of any thereof." The latter
"means any form of nonprofit-making organization or organizations of citi-
zens supplying, or which may be created to supply, members with any kind
of goods, commodities, or services, as nearly as possible at cost." 3, 50
Stat. 733, 16 U. S. 0. 832b; I 3, 52 Stat. 405, 16 U. S. 0. 833b.
S 4, 5(a), 50 Stat. 733, 734, as amended, 16 U. S. C. 832c, 832d(a).
Act of December 22, 1944, 5, 58 Stat. 887, 890, 16 U. S. C. 825s.
See supra, n. 530, p. 240.
Act of May 18, 1933, 12, 48 Stat. 58, 65, as amended, 16 U. S. 0. 881k.
fullest possible use of electric light and power on farms" within
reasonable distance of its transmission lines."
As to projects covered by the Bonneville Project and the Fort
Peck Project Acts, it is directed that such transmission facilities
be provided and maintained as are \necessary or appropriate
to transmit electric energy to "existing and potential markets"
as well as to make interconnections "for the purpose of inter-
change of electric energy." 6
ACEAGE LIMITATIONS.-In connection with the review of
Reclamation Law, this subject has been discussed in detail."
Several aspects of the relevant legislation merit comment here.
Under the 1902 Reclamation Act, irrigable land holdings on
projects, whether entered public lands or private lands, were
limited to 160 acres for any one entryman or landowner."6 But
the law has been construed as permitting 320 irrigable acres to
be held jointly by man and wife.60 And it was early held that
an owner of more than 160 acres of privately owned land could
transfer the excess to his wife or minor children, enabling each
of them to receive project water.470 Moreover, the Act's pro-
visions do not preclude combined farming endeavor by any
number of owners, members of a family or otherwise, so long as
each owns no more than the acreage limit for any one owner.
In 1938 and 1940 Congress, by special legislation, exempted
three projects from the excess-land limitations.n By other
1940 legislation repayment contracts were required for water
conservation and utilization projects, small reclamation proj-
ects, whereby the Secretary of the Interior shall establish farm
units of a size sufficient "for the support of a family on the
lands to be irrigated." 2 Such a contract must also require
S 10,48 Stat. 64, as amended, 16 U. S. 0. 8811.
Act of August 20,1987, 2(b), 50 Stat. 781, 782, as amended, 16 U. S. C.
882a(b) ; Act of May 18, 1988, 2(b), 52 Stat. 408, 404, 16 U. S. C. 883a(b).
See supra, pp. 217-237.
*Act of June 17, 1902, 3, 5, 82 Stat. 888, 889, as amended, 48 U. S. C.
See supra, pp. 222-228.
O Instructions of the Secretary of the Interior, 32 L. D. 647 (1904).
"See supra, n. 499, pp. 285-28
w"Act of October 14, 1940, S4(c)(5), 54 Stat. 1119, 1122, 16 U. S. C.
that water may not be delivered to or for more than one farm
unit owned by a single landowner."
The 1943 Columbia Basin Project Act authorizes the Sec-
retary to establish "farm units of sufficient acreage for the
support of an average-sized family at a suitable living level,
having in mind the character of the soil, topography, location
with respect to the irrigation system," and other relevant fac-
tors." With specified exceptions, units are not to be less
than 10 nor more than 160 acres." A landowner may receive
water for only one unit."6 The term "landowner" denotes any
"person, corporation, joint-stock association or family," the
latter including a husband and wife together with their children
under 18 years of age."
Noi provisions such as the foregoing are provided by law
where water is delivered by the Army Engineers for irrigation
purposes." But as to irrigation works at any dam and reser-
voir project under Army control, authorized pursuant to Sec-
tion 8 of the 1944 Flood Control Act, such works must be con-
structed, operated, and maintained under Reclamation Law."
PATMi1aNt TO STATE AND LOCAL GovanIM Nmrs.-In the de-
velopment of water resources, the Federal Government neces-
sarily acquires land. In many river basins, it is also an owner
of substantial land areas. As to these lands, state and local
governments do not collect taxes. Statutes relevant here
variously recognize this situation by providing for different
payments to state and local governments.8
As to flood-control projects of the Army Engineers, 759 of
all moneys received from the leasing of lands acquired for flood-
Act of March 10,1943, 2(b) (i), 57 Stat. 14, 15, 1 U. S. C. 835a(b) ().
2(b) (i11),,57 Stat. 15, 16 U. S. 835a(b) (ii).
1" 2(b) (v), 57 Stat. 16, 16 U. 8. C. 835a(b) (v).
S" ee supra, pp. 561-62.
SAct of December 22,1944, 8,58 Stat. 887,891,43 U. S. 390. See also
H. Doc. No. 255, 81st Cong., 1st seas, pp. XIII-XX (1949).
-In connection with this problem, which, of course, is not limited to
development of water resources, see F~Dea&L COITBIaBIION TO STATE AND
LocAL GOVWNiENT UNrIT WITH RESPECT TO FEDERAL OWNzD REAL ESTATE,
H. Doc. No. 216,78th Cong., 1st sess. (1943).
control purposes are required to be paid to the state involved
for the benefit of public schools and public roads of the county
or counties in which such property is.situated.8 In author-
izing certain flood-control work by the Department of Agricul-
ture in 1944, Congress provided for annual payment to the
county in which any lands are acquired of a sum equal to 1%
of the purchase price, or if not acquired by purchase, 1% of
value at time of acquisitions"
No provisions comparable to the foregoing have been pre-
scribed for navigation or irrigation, projects.
On the other hand, the Tennessee Valley Authority Act does
provide for financial assistance to states and local governments
in which power operations are carried on and in which proper-
ties are acquired that were previously subject to state. or local
tax.m8 A detailed formula is prescribed for computation of
such payments which are specifically referred to as "in lieu of
In still other programs related to development of water re-
sources, statutes make provisions for similar payments. For
example, 25% of moneys received from national forests are
paid to the state in which such forest is located, for the
benefit of the public schools and public roads of the county or
counties involved 'Similarly, 50% of the revenues from the
so-called "0 and C lands" are paid to the counties involved."'
With specified exceptions, 1i2Y/o of certain fees collected
under theTaylor Grazing Act are paid to the state for the benefit
of the county or counties involved, and 50% of moneys from
certain isolated grazing tracts are similarly paid to the state for
the benefit of the county or counties involved.66 In the case
of retired submarginal lands, the Secretary of Agriculture is
directed to pay_25% of the net revenues to the county involved
to be used for school or road purposes, or both.687
Act of August 18, 1941, 7, 55 Stat 688, 650, as amended, 33 U. S. C.
Act of December 22, 1944, 13, 58 Stat. 887, 905.
Act of May 18, 1983, 13, 48 Stat. 58, 66, as amended, 16 U. S. C. 8311.
"Act of May 23, 1908, 35 Stat. 251, 260, as amended, 16 U. 8. C. 500.
Act of August 28, 1987, title II, 50 Stat 874, 875.
'm Act of August 6, 1947, 2, 61 Stat. 790, 43 U. S. 0. 3151 (Supp. III).
Act of July 22,1987, 33, 50 Stat 522, 526, 7 U. S. C. 1012.