United States v. California (509 F. Supp. 867, 1981)

Citations

509 F. Supp. 867

Full opinion text

MEMORANDUM DECISION

PRICE, District Judge.

PRINCIPAL ISSUE.

The issue before the court, simply stated, is as follows:

To what extent may the State of California, after finding that there is unappropriated water available to operate a federal reclamation multi-purpose project totally within the state, impose conditions upon the nature of the use and distribution of water appropriated by the federal government pursuant to permits issued by the appropriate agency of the State of California?

PRIOR DECISION AND THE MANDATE OF THE SUPREME COURT.

Prior reported decisions concerning the New Melones Project, the subject matter of this litigation, are 403 F.Supp. 874 (E.D.Cal. 1975), 558 F.2d 1347 (9th Cir. 1977), and 438 U.S. 645, 98 S.Ct. 2985, 57 L.Ed.2d 1018 (1978). The Supreme Court reversed the Ninth Circuit Court and returned the case for further consideration in light of its opinion.

The Supreme Court, in its six to three decision, laid to rest for all time the absolute right of the State of California to control the appropriation of unallocated sources of water to the United States, as well as the condemnation of prior-acquired water rights by the United States.

Two footnotes contained in the majority opinion are worthy of note. Footnote 21, in its entirety, reads as follows:

“Congress did not intend to relinquish total control of the actual distribution of the reclamation water to the States. Congress provided in § 8 itself that the water right must be appurtenant to the land irrigated and governed by beneficial use, and in § 5 Congress forbade the sale of reclamation water to tracts of land of more than 160 acres. It is conceivable, of course, that Congress may not have intended to actually override state law when inconsistent with these other provisions but instead only intended to exercise a veto power over any reclamation project that, because of state law, could not be operated in compliance with these provisions. A project simply would not be built by the Federal Government if such a conflict existed. As the House Report explained the workings of the 160-acre limitation and the appurtenance requirement:

“ ‘The character of the water rights contemplated being clearly defined, the Secretary of the Interior would not be authorized to begin construction of works for the irrigation of lands in any State or Territory until satisfied that the laws of said State or Territory fully recognized and protected water rights of the character contemplated. This feature of the bill will undoubtedly tend to uniformity and perfection of water laws throughout the region affected.’ H.R.Rep.No.794,, 57th Cong., 1st Sess., 6 (1902).

Some support for this interpretation of the congressional intent can also be found in contemporaneous administrative material of the Department of the Interior. See, e. g., Department of the Interior, Proceedings of First Conference of Engineers of the Reclamation Service 103 (1904) (‘Before the filing of the first notice of appropriation of water in any State the matter of the advisability of making such filing should be submitted to the chief engineer, because some of the State laws may be such that it is impossible to comply with them in conducting operations under the reclamation act’); Department of the Interior, Second Annual Report of the Reclamation Service 33 (1904) (‘[Cjareful study must be made of the effect of State laws upon each project under consideration in that particular State. It appears probable that in some of the States radical changes in the laws must be made before important projects can be undertaken.’)

“In previous cases interpreting § 8 of the 1902 Reclamation Act, however, this Court has held that state water law does not control in the distribution of reclamation water if inconsistent with other congressional directives to the Secretary. See Ivanhoe Irrigation District v. McCracken, 357 U.S. 275 [78 S.Ct. 1174, 2 L.Ed.2d 1313] (1958); City of Fresno v. California, 372 U.S. 627 [83 S.Ct. 996, 10 L.Ed.2d 28] (1963). We believe that this reading of the Act is also consistent with the legislative history and indeed is the preferable reading of the Act. See n. 25, infra.' Whatever the intent of Congress with respect to state control over the distribution of water, however, Congress in the 1902 Act intended to follow state law as to appropriation of water and condemnation of water rights. . Under the 1902 Act, the Secretary of the Interior was authorized in his discretion to ‘locate and construct’ reclamation projects. As the legislative history of the 1902 Act convincingly demonstrates, however, if state law did not allow for the appropriation or condemnation of the necessary water, Congress did not intend the Secretary of the Interior to initiate the project. Subsequent legislation authorizing a specific project may by its terms signify congressional intent that the Secretary condemn or be permitted to appropriate the necessary water rights for the project in question, but no such legislation was considered by the Court of Appeals in its opinion in this case. That court will be free to consider arguments by the Government to this effect on remand. See Part V, infra.” California v. United States, 438 U.S. at 668 n. 21, 98 S.Ct. at 2997 n. 21 (emphasis added).

Footnote 25, in its entirety, reads as follows:

“As discussed earlier in n. 21, it is at least arguable that Congress did not intend to override state water law when it was inconsistent with congressional objectives such as the 160-acre limitation, but intended instead to enforce those objectives simply by the Secretary’s refusal to approve a project which could not be built or operated in accordance with them. This intent, however, is not clear, and Congress may have specifically amended § 8 to provide that state law could not override congressional directives with respect to a reclamation project. See n. 19, supra. Ivanhoe and City of Fresno read the legislative history of the 1902 Act as evidencing Congress’ intent that specific congressional directives which were contrary to state law regulating distribution of water would override that law. Even were this aspect of Ivanhoe res nova, we believe it would be the preferable reading of the Act.” California v. United States, 438 U.S. at 672 n. 25, 98 S.Ct. at 2999 n. 25 (emphasis added).

In conclusion, the Supreme Court mandated that:

“Because the District Court and the Court of Appeals both held that California could not impose any conditions whatever on the United States’ appropriation permit, those courts did not reach the United States’ alternative contention that the conditions actually imposed are inconsistent with congressional directives as to the New Melones Dam. Nor did they reach California’s contention that the United States is barred by principles of collateral estoppel from challenging the consistency of the permit conditions. Assuming, arguendo, that the United States is still free to challenge the consistency of the conditions, resolution of their consistency may well require additional fact-finding. We therefore reverse the judgment of the Court of Appeals and remand for further proceedings consistent with this opinion.” California v. United States, 438 U.S. at 679, 98 S.Ct. at 3003.

The foregoing language of the Supreme Court raised two collateral issues which had been raised by the defendants before the District Court and the Ninth Circuit Court of Appeals during the early history of this case. This court dealt with those issues in its October 7, 1980 Memorandum Decision pertaining to the Motion for Summary Judgment filed on behalf of the California defendants.

Ill

THE SEARCH FOR CONGRESSIONAL “DIRECTIVES”.

We review as much of the legislative history as is necessary to determine the intent of Congress in the authorization and funding of the New Melones Project.

The New Melones Project was originally authorized by the Flood Control Act of 1944, 58 Stat. 887. Although the nation was still at war and materials were critically short, Congress, true to its historic custom, annually considered areas of the nation that were in need of protection from flood waters produced by the country’s waterways. Congress’ directives in this regard are contained in the following language of Chapter 665, Public Law 534, enacted on December 22, 1944:

“The plan of improvement for flood control and other purposes on the lower San Joaquin River and tributaries, including Tuolumne and Stanislaus Rivers, in accordance with the recommendations of the Chief of Engineers in Flood Control Document numbered 2, 78th Congress, 2nd Session, is approved, and there is hereby authorized $8 million for initiation and partial accomplishment of the plan.”

The New Melones Dam as originally contemplated was of modest dimensions: A reservoir with an initial gross storage capacity of 450,000 acre-feet with provisions for possible future raising of the proposed dam to an ultimate gross storage capacity of 1,100,000 acre feet.

The original project included provision for the continued use of the then-existing Melones power plant by means of special penstock outlet facilities.

The appropriate agencies of the State of California expressed grave doubts about, if not outright opposition to, the original project. Further, there developed considerable support for construction of the project by the irrigation districts and water districts which already had appropriators’ rights on the Stanislaus River.

As California’s need for water increased, further feasibility studies continued apace. By 1958, the U. S. Bureau of Reclamation proposed further studies of the New Mel-ones Project entailing a contemplated reservoir capacity of 2,400,000 acre-feet with additional power generating capacity. See U. S. Army Engineer District, Sacramento Corps of Engineers Review Report for Flood Control of New Melones Project, Stanislaus River, California, June 1, 1961. Both the agencies of the United States and the State of California conducted feasibility studies of the enlarged project.

During this period of time, state and federal governmental agencies were not alone in conducting feasibility studies looking to the construction of the greater Melones Dam and Reservoir. By the time the matter came before the Senate Sub-Committee on Public Works for final hearing, the opponents of the enlarged New Melones Dam and Reservoir had marshalled substantial arguments in opposition to the enlargement of the original project.

By way of background, it should be noted that the residents of the Stanislaus River Basin, as well as those residing in the Tuolumne and Merced River Basins had early on availed themselves of the provisions of California law allowing the formation and operation of locally controlled and directed irrigation districts, and had developed complete and comprehensive schemes of irrigation of lands lying within the basins of the aforementioned rivers. Unlike other areas of the West, their only previous experience with the United States “being on the river” arose from the limited flood control activity by the Army Corps of Engineers. Further, the local interests had developed some very compelling historical data which seriously disputed the availability of any substantial amount of excess unappropriated water for the operation of the enlarged reservoir. Accordingly, the opponents requested a direct appropriation from the federal government to the local districts in excess of $14 million, which constituted the portion of the costs of the original project allocated to flood control functions. Armed with these federal funds, the opponents promised that those water and irrigation districts owning prior rights on the Stanislaus River would proceed with the construction of the originally proposed project.

Significantly, the opponents had little to say about the power production component as proposed for the expanded project, except to argue their previously expressed belief that the river would not produce sufficient water to meet power development projections made by the proponents.

In preparation for the Congressional hearings on the enlarged project, the Secretary of the Army transmitted a letter from the Chief of Engineers, Department of the Army, consisting of a complete review of the reports on the New Melones Project which had been requested by the House of Representatives pursuant to Resolution adopted April 12, 1961 (H.D. 453). All of the agencies, departments, and bureaus of the United States who had interest in, or potential jurisdiction over the project or any of its component parts were asked to comment.

All aspects of the proposal were thoroughly discussed and analyzed. Due to pri- or questions concerning the economic feasibility of the project, much attention was given to that aspect.

Total annual power benefits from the contemplated project were estimated at $3,990,000, or an average of approximately 38 percent of the total annual estimated benefits. If the power benefits were removed from the formula, the cost ratio to benefits would have fallen below the permissible factor by which reclamation projects were then measured.

In response to a request for comments the State of California, over the signature of William E. Warne, Director of Water Resources, submitted its extensive reply which consisted of comments by each of the state agencies whose jurisdiction encompassed certain aspects of the operation of the proposed project.

The comments of the state agencies were as positive and enthusiastic as they were negative in 1946. The state accepted the estimated dollar benefits without question. However, it was cautious about the marketability of the power to be produced at New Melones “if proposed hydroelectric generating capacity as presently contemplated by the various private, local, state and federal agencies is constructed.”

The conclusions of the State of California, found in H.D. 453, pp. xi, xii, and xxxi, et seq., are as follows:

“It is concluded in the State’s report that the New Melones Project is economically justified and would provide optimum multipurpose development of the waters of the lower Stanislaus River. Furthermore, it is recommended that the Congress authorize the New Melones Project for construction and operation by federal agencies subject to certain provisions specified in the State’s report.” H.D. 453, pp. xi, xii.

“CONCLUSIONS

“As a result of review of the New Melones Report by the various state agencies concerned, it is concluded that:

“1. Optimum multipurpose development of the New Melones Reservoir site should be made for the purposes of flood control, water conservation, hydroelectric power, recreation, and fish and wildlife. Reservoir storage capacity of 2,400,000 acre-feet as planned in the report, is adequate for these purposes.

“2. To be in conformance with objectives of The California Water Plan the New Melones Project should be subject to the rights of the upstream areas dependent upon waters of the Stanislaus River to use water required for the future development of such areas.

“3. On the assumption that the Hogan Service Area will be served by an exchange of water from the Folsom South Canal and from New Hogan Reservoir, estimates of future upstream depletions as presented in the New Melones Report are reasonable.

“4. The design of the dam and appurtenances are adequate and estimated project, costs are reasonable.

“5. The flood control aspects of the project are urgently needed.

“6. The New Melones Project appears to be economically justified.

“7. If adequate provisions are made for land acquisition and releases of water for stream flow maintenance, the New Melones Project will protect and enhance fish, wildlife; and recreation.

“8. It has not fully been demonstrated that the channel downstream from Goodwin Diversion Dam is adequate to contain a flow of 8,000 cubic feet per second.

“9. The New Melones Project does not adequately provide for the water needs of Calaveras and Tuolumne Counties and the Bachelor Service Area.

“RECOMMENDATIONS

“It is recommended that the proposed New Melones Project on the Stanislaus River be authorized by the Congress at an early date for construction and operation by the federal government; provided that:

“1. Recognition be given to the right of the upstream areas dependent upon waters of the Stanislaus River to develop and utilize water required for the future development of such areas.

“2. Water be released downstream for fisheries purposes and land be acquired for recreation and wildlife as previously recommended herein.

“3. Studies be authorized to develop the full potential of the North Fork of Stanislaus River, including formulation of additional features of the New Melones Project designed to serve 30,000 acre-feet of water each year initially increasing to 50,000 acre-feet by the year 2015, for use in upper Calaveras County. Further, that the Sonora-Keystone Investigation of the Bureau of Reclamation be programmed to formulate features of the New Melones Project to provide 30,000 acre-feet each year to the Sonora-Keystone area.

“4. The Bachelor Service Area be served, water from the New Melones Project or by an exchange from the Folsom South Canal.”

H.D. 453, pp. xxxi, et seq.

Significantly, the appropriate state agency had conceded in 1960 that: “The reservoir, when at maximum level, will inundate about twelve miles of trout stream.” H.D. 453, p. 95. The state’s support of the enlarged project was communicated to Congress despite the acknowledged loss of this valuable resource.

Thus, the stage was set for the showdown hearing before the Senate Sub-Committee on Public Works. Former Congressman John McFall of Manteca presented the case for the enlarged New Melones Project. Cosponsors of the legislation authorizing said project were former Congressmen Moss, Sisk, Hagen, Miller, King, and Roosevelt who were all members of the California delegation. During the hearing communications of support from the two senators from California, The Honorable Claire Engle and The Honorable Thomas Kuechel, were added to the record. Senator Engle stated he was authorized to announce the support of Congressman Harold T. Johnson for the project.

In addition, each party had lined up its lists of sponsors and filed the same with the Committee either during the hearing or in advance thereof. At the outset of the hearing, the Chairman, Senator Metcalf, read a telegram from the Honorable Edmund G. Brown, Governor of California, urging speedy construction of the enlarged project.

Finally, at the conclusion of the hearings before the appropriate committees of both Houses, Public Law 87-874, 76 Stat. 1173, 1191, was enacted on October 23, 1962 approving the New Melones Project, Stanislaus River, California, as “hereby modified substantially in accordance with the recommendations of the Chief of Engineers, in House document numbered 453, 87th Congress.”

Congress, in P.L. 87-874, 76 Stat. 1173, added specific provisos, however, which are important to note:

1. That on completion of the construction of the dam and power plant by the Corps of Engineers, the project shall become an integral part of the Central Valley Project, and be operated and maintained by the Secretary of the Interior pursuant to the Federal Reclamation Laws, except that the flood control operation project shall be in accordance with the rules and regulations prescribed by the Secretary of the Army.

2. That the Stanislaus River channel, from Goodwin Dam to the San Joaquin River, shall be maintained by the Secretary of the Army to a capacity of at least 8,000 cubic feet per second, subject to the condition that responsible local interests agree to maintain private levees and prevent encroachment upon the existing channel and floodway between the levees.

3. That before initiating any diversions of water from the Stanislaus River Basin in connection with the operation of the Central Valley Project, the Secretary of the Interior shall determine the quantity of water required to satisfy all existing and anticipated future needs within that basin and the diversion shall, at all times, be subordinate to the quantity so determined.

4. That the Secretary of the Army adopt appropriate measures to insure the preservation and propagation of fish and wildlife in the New Melones Project, and shall allocate to the preservation and propagation of fish and wildlife as provided in the Fish and Wildlife Coordination Act of August 14,1946, 60 Stat. 1080, an appropriate share of the cost of constructing the Stanislaus River diversion and of operating and maintaining the same:

5. That the Secretary of the Army, in connection with the New Melones Project, construct basic recreation facilities, and acquire land necessary for that purpose. The cost of constructing such facilities and acquiring such lands would be non-reimburse-able and non-returnable:

6. That the contracts for the sale and delivery of the additional electric energy available from the Central Valley Project power system, as a result of the construction of the plants herein authorized, and their integration with that system, shall be made in accordance with preferences expressed in the federal reclamation laws, except that a first preference, to the extent as needed as fixed by the Secretary of the Interior, but not to exceed 25 per centum of such additional energy, shall be given under reclamation law to preference customers in the Tuolumne and Calaveras Counties, California, for use in that county, who are ready, able, and willing, within 12 months after notice of availability by the Secretary of the Interior, to enter into contracts for energy, and that Tuolumne and Calaveras County preference customers may exercise their option in the same date in each successive fifth year providing written notice of their intention to use the energy is given to the Secretary not less than 18 months prior to said dates:

7. That the Secretary of the Army give consideration during the preconstruction planning for the New Melones Project to the advisability of including storage for the regulation of streamflow for the purpose of downstream water quality control.

Once the New Melones Project was approved, the Federal agencies were next required to seek permission from the State to appropriate the requisite amount of water to operate the project as proposed, and Congress had to appropriate the necessary funds to construct the project. Both required inordinately long periods of time!

THE CALIFORNIA SCHEME FOR THE APPROPRIATION OF WATER.

Prior to 1928, California recognized the English common law of riparian rights as it applied to state streams and lakes. Several decisions rendered under this doctrine made it abundantly clear that California’s future growth and development could not be achieved under the restrictions imposed by said doctrine. Accordingly, in 1928, California voters amended the state Constitution to provide that beneficial use should be the keystone by which the right to use and develop state water should be measured, and that even prior riparian rights would be restricted to the extent of their potential beneficial use. The legislature was mandated to implement and direct the policy declarations contained in the constitutional amendment. Thereafter, evolving through several state government reorganizations, the power to grant rights to appropriate state waters finally vested in the State Water Resources Control Board. The composition, power, and internal statutory directives governing the Board are found in Division 1, Chapter 2, Article 3 of the Water Code of the State of California.

A SURVEY OP PRIOR EXPERIENCE OF FEDERAL AGENCIES BEFORE THE STATE WATER RESOURCES CONTROL BOARD.

As might be imagined, the federal agencies have been frequent applicants before the Board. The court requested, and counsel for the California defendants voluntarily furnished the court with multiple decisions, orders, permits, licenses, and amendments thereto which were previously issued by the board. Included in the foregoing documents were three decisions which are presently in litigation, namely, Decision 1379, Decision 1485, as well as Decision 1422 which is under consideration in the instant case.

In reviewing these documents, the court found that there was a remarkable consistency about the format and procedures of the Board when dealing with prior applications of governmental entities:

1. (a) The granting clause itself was generally contained in the substantial equivalent of the following format: “The water appropriated shall be limited to the quantity which can be beneficially used and shall not exceed_per annum by storage to be collected from_of each year to-of_year.” (b) The permit always contained a clause requiring that the work on the project be pursued with reasonable diligence and generally contained a mandated completion date.

2. Generally, the document permitting appropriation contained the following catch-all phrase: “All rights and privileges under this permit, including method of diversion, method of use and quantity of water diverted, are subject to the continuing authority of the State Water Resources Control Board in accordance with law, and in the interest of the public welfare to prevent waste and reasonable use and reasonable method of use or unreasonable method of diversion of said water.”

It is also noted that while the applications covered the entire gamut of possible beneficial uses for water being sought, the board apparently did not go outside the record, i. e., the proposed uses urged by the governmental entity were considered on their own merits, and not measured against some possible or theoretical future use.

The court emphasizes that the foregoing observations, while not conclusive as to the court’s ultimate determination in this matter, indicate the Board’s earlier course of conduct which, if not actually noted by individual congressional committees, was certainly known to those agencies of the Department of the Interior who would be required to construct and to operate the New Melones Project.

THE APPLICATION OF THE FEDERAL GOVERNMENT FOR THE NECESSARY APPROPRIATIONS TO OPERATE THE NEW MELONES PROJECT.

Starting in 1952, both the United States government and the Department of Finance of the State of California filed several applications for the appropriation of unappropriated surplus waters produced by the Stanislaus River Basin.

These filings were consistent with prior government action in obtaining water for federally authorized projects. Before the State Water Resources Control Board acted upon the federal applications, construction preparation commenced immediately. Construction continued sporadically as permitted by congressional appropriation of money, the absence of Executive Orders freezing the usage of monies appropriated for the project, and the termination of litigation which halted the project.

VII

EXPRESSIONS OF CONGRESSIONAL INTENT AFTER THE PASSAGE OF PUBLIC LAW 87-874.

It should be noted that as delays were experienced in the construction of the project, inflation, of course, was taking a steady toll of the estimated costs of the project. In addition, new power studies were undertaken resulting in a recommendation to increase the power production capacity of the enlarged reservoir. Accordingly, as the Corps of Engineers approached the Congress each year for annual and supplemental appropriations, the congressional record is replete with statements by individual congressmen as well as interested committees of the need to bring this “new clean power source on record as rapidly as possible.” Significantly, Congress did not express any parallel concern to speed up the capture and distribution of additional irrigation waters.

Finally, Congress was undoubtedly aware that in November, 1974, after the contract for the construction of the dam had been let but before construction of the dam was commenced, the people of the State of California decisively rejected a ballot proposal, placed on the ballot by California’s initiative process, to make portions of the Stanislaus River a wild and scenic river, and to prohibit the erection of any structures on the river except for flood control purposes. Arguendo, Congress could have interpreted this action by California voters as being consistent with the position taken by California’s representatives in 1962.

VIII

THE EFFECT OF THE INCLUSION OF THE NEW MELONES PROJECT WITHIN THE CENTRAL VALLEY PROJECT.

In 1943, prior to the enactment by Congress of the original authorization for a New Melones Dam, California’s legislature enacted the California Water Plan, which tied together into a single integrated plan several State and Federal projects which previously had been viewed as separate and independent projects.

Undoubtedly Congress was cognizant that in 1943, California’s State Legislature passed a detailed outline of the proposed Central Valley Project which had its origin as a comprehensive combined water and power project to be constructed in cooperation with the federal government (Cal. Water Code §§ 11100 et seq.). Recognizing that the projects listed therein were not comprehensive, the legislature enacted Water Code § 11290, stating:

“The project includes such other units as may be from time to time added by the department to the units specifically enumerated. The department may add additional units which are consistent with and which may be constructed, maintained, and operated as a part of the project and in furtherance of the single object contemplated by this part.”

and Water Code § 11295:

“§ 11295. Inclusion of additional plants and works

In addition to the works specified, the units shall include such plants and works for the generation of electric power by steam or other power, and such electric transmission lines and facilities for the sale, use and distribution of electric power as the department determines to be necessary for making a reasonable, proper, and advantageous sale, use, and distribution of electric power made available by the units.”

Significantly, in Chapter 4 of the same enactment, Cal.Water Code § 11500, entitled, “Enumerated powers of department” the California Legislature provided:

“Notwithstanding anything in this part to the contrary or in conflict herewith the department may do any or all of the following:

“(a) Enter into contracts with the United States for the construction, maintenance, or operation of all or any part of the project or for the financing thereof.

“(b) Enter into contracts for the acquisition by the department of the works and properties of the project or any part thereof and for the repayment by the department of the cost thereof to the United States.

“(c) Conform to such requirements, not otherwise inconsistent with the law of this State, as may be prescribed by the United States under congressional legislation now in effect or which may hereafter be adopted or under rules and regulations duly adopted thereunder, (emphasis added)

“(d) Transfer land owned or acquired for the construction of the project, or any part thereof to the United States pursuant to a contract with the department for such construction in conjunction with the construction of a federally authorized project utilizing the facilities with the state authorized project.

“(e) Otherwise cooperate with the United States to the end that the people of the State may receive the benefits to be deprived from the construction, maintenance, and operation of the project.”

Congress’ specific direction that New Melones “shall become an integral part of the Central Valley Project” is significant evidence of the expectations of Congress as to its operating functions when completed.

CONTENTIONS OF THE PARTIES.

Other than the broad polarity of the positions of the United States and the California defendants, there are subtle differences in their suggested resolution of this case which require particular attention.

The California defendants, for instance, argue that a “directive” is more specific than an expressed “intent of Congress.” They point particularly to footnote 25 and footnote 31 in California v. United States, supra, as support for this position. Unfortunately, footnote 25 apparently uses “intend,” “objective,” “intent,” and “directives,” interchangeably.

Footnote 31, on the other hand, is not as free standing as is footnote 25, and the text and the footnote must be read together:

“The United States suggests that, even if the Congress of 1902 intended the Secretary of the Interior to comply with state law, more recent legislative enactments have subjected reclamation projects ‘to a variety of federal policies that leave no room for state controls on the operation of a project or on the choice of uses it will serve.’”

Inferentially, the government argues that the court’s task here is to determine Congressional intent as that term is traditionally used, and that the State’s attempted distinction is without significance.

Both parties agree inferentially that the congressional meaning that the court must refine consists of the same types of materials, namely, HD 453, the Committee and Sub-Committee transcripts, the Committee reports, copies of the appropriation applications, and copies of decisions, permits, orders and amendments of the State Water Resources Control Board. Although there is a respected school of thought that would dispense with legislative history materials as a useful tool in determining the “meaning” of a statute, the court feels that if it be recognized that a judge “when operating within the fringes of meaning, is not interpreting a pre-existent intent but is exercising a legislative power, the conclusion ought to be that less attention should be paid to dictionary meanings, and more to legislative policy.”

We now turn to the analysis of D 1422 as measured by the legislation authorizing the project, and read in the context of the foregoing summary of information available to Congress and other federal governmental entities at the time of the enactment.

THE FEDERAL APPLICATIONS — THE CALIFORNIA DEFENDANTS’ RESPONSE THERETO — DISCUSSION PERTAINING THERETO.

For the sake of convenience, Decision 1422 (hereinafter D 1422) of the State Water Resources Control Board (hereinafter “Board”) is reproduced in its entirety as Appendix A to this Memorandum Decision. Further, the federal applications are grouped together according to proposed use of the water to be appropriated, rather than in the numerical order assigned by the Board.

A. Substance of the applications filed by the Bureau of Reclamation.

1. Application 14858

(a) Amount of water sought to be appropriated:

(1) 8,800 cubic feet per second (hereinafter “cfs”) to be stored and later applied to beneficial use.

(2) 900,000 acre feet per annum (hereinafter “afa”) to be stored and later applied to beneficial use.

(b) Period of Diversion:

(1) 8,800 cfs: January 1 to December 31 of each year.

(2) 2,400,000 afa: October 1 to July 1 of each season.

(d) Flood Control: The application specifically provided that quantities of water temporarily stored and later released to provide flood control space will be in addition to the 2,400,000 afa specified in this application.”

2. Application 19304

(a) Amount of water sought to be appropriated:

(1) 2,250 cfs by direct diversion

(2) 2,400,000 afa to be stored and later applied to beneficial use.

(b) Period of Diversion:

(1) 2,250 cfs: January 1 to December 31 of each year.

(2) 2,400,000 afa: January 1 to. December 31 of each season.

(c) Proposed Uses: Irrigation, preservation and propagation of fish and wildlife, incidental domestic, recreational and water quality control.

3. Application 14859

(a) Amount of water sought to be appropriated:

(1) 8,800 cfs by direct diversion

(2) 980,000 afa to be stored and later applied to beneficial use. The application specified that the 2,400,000 afa will be stored at rates equal to the flow of all presently unappropriated flows above New Melones.

(b) Period of Diversion:

(1) 8,800 cfs: January 1 to December 31 of each year.

(2) 2,400,000 afa: October 1 to July 1 of each season.

4. Application 19303

(a) Amount of water to be appropriated:

(1) 6,000 cfs by direct diversion.

(2) 2,400,000 afa to be stored and later applied to beneficial use. The application specified that the 2,400,000 afa will be stored at rates equal to the flow of all presently unappropriated flows above New Melones.

(b) Period of Diversion:

(1) 8,800 cfs: January 1 to December 31 of each year.

(2) 2,400,000 afa: January 1 to July 1 of each season.

(c) Proposed Use: Hydroelectric power generation at the New Melones Power Plant for the production of electrical energy for domestic, commercial and industrial use within the areas served by those systems interlocked with the Central Valley Project.

(d) Flood Control: The application specifically provided that, “Quantities of water temporarily stored and later released to provide flood control space will be in addition to the 2,400,000 afa specified in this application.”

There is no explanation as to why the applications appear to be duplications as to the amount of water sought to be appropriated; all the parties concede that the amount sought for direct diversion is 6,000 cfs and the maximum storage sought was 2,400,000 afa.

B. The Board’s Findings

Quickly summarized, the Board’s findings of fact upon which it based its ultimate order are as follows:

1. There is sufficient unappropriated water available on the Stanislaus River to satisfy the water demands of the New Mel-ones Project as proposed, “and, subject to suitable conditions, such water may be diverted and used in the manner proposed without causing any substantial injury to any lawful user of water.” D 1422, p. 10.

2. The average annual unappropriated flow is 335,000 acre-feet, and varies from zero to 1,980,000 acre-feet.

3. There is no unappropriated water in the river during the month of October, hence, no diversion shall be allowed during that month.

4. Diversions during the months of July, August, and September are prohibited by past decisions of the Board.

5. The Bureau of Reclamation has no present definite plan as to when, and at what specific locations, project water will be used for “consumptive purposes” outside of the four basin counties, i. e., Calaveras, San Joaquin, Stanislaus and Tuolumne.

6. The Bureau of Reclamation has sufficient surplus water from other sources to meet future increased demands for consumptive purposes outside these counties for long periods of years.

7. The public interest requires that the use of the Stanislaus River for white water boating, stream fishing and wildlife habitat be protected to the extent that water is not presently needed for other beneficial uses.

8. Although the Bureau demonstrated a need for the full yield of the project in the four basin counties at some future date, no present contracts for such use have been negotiated. However, weighing the adverse effect of the proposed reservoir upon the aforementioned white water recreational uses, impoundment of water to satisfy that need would not presently be permitted.

9. The preservation and enhancement of fish life requires appropriation by storage of up to 98,000 afa.

10. Water quality requirements necessitate sufficient storage to enable the operators of the reservoir to meet total dissolved solids objectives of 500 parts per million, and dissolved oxygen objectives as required by the interim water control plans.

11. Storage of water should be allowed to replace water stored in the existing Mel-ones Reservoir which would be inundated by the enlarged reservoir.

12. Beneficial use of project water can be made for the generation of power.

13. Preservation of the existing upstream reach of the river for white water recreation purposes conflicts with the need for increased storage for power purposes, and hence storage for power generation . should be limited to the amount of storage authorized for other project purposes.

14. By dedicating the initial storage project yield to demonstrated needs for flows of water quality control and for fish and wildlife preservation and enhancement, by allowing use of only these flows for power generation, and by deferring significant impairment of upstream recreational values until a need for other uses is demonstrated, the Board’s decision assures both maximum public benefit and maximum utilization of the available resources in the public interest.

The court does not recite the foregoing as a preliminary step to the traditional function of the court in reviewing the order of an administrative agency; rather, it is our purpose to measure the proceedings of the Board against the expressed or inferred objectives of Congress. \ \

C. The Order Issued by the State Water , Resources Board.

The Board, after approving the assignment to the Bureau of the applications previously filed by the Department of Finance, State of California, approved Applications 14858, 14859, 19303 and 19304 in part, and specified that the permits issued pursuant thereto would be subject to certain limitations.

We again group the Board’s action on the Bureau’s Applications together according to the proposed uses to be made of the water.

1. Conditions contained in the Permits issued pursuant to Applications 14858 and 19304:

(a) 1-a:

“The water appropriated under the permit issued pursuant to Application 14858 shall be limited to the quantity which can be beneficially used and shall not exceed 980,000 acre-feet per annum by storage to be collected from November 1 of each year to June 30 of the succeeding year. Until further order of the State Water Resources Control Board, the water shall be used only for preservation and enhancement of fish and wildlife, recreation and water quality control purposes.”

(b) 1-d:

“The water appropriated under the permit issued pursuant to Application 19304 shall be limited to the quantity which can be beneficially used and shall not exceed 1,420,000 acre-feet per annum by storage to be collected from November 1 of each year to June 30 of the succeeding year. Until further order of the State Water Resources Control Board, the water shall be used only for preservation and enhancement of fish and wildlife, recreation and water quality control purposes.”

“Permits issued pursuant to Applications 14858 and 19304 shall authorize the use of water for consumptive purposes only in the counties of Stanislaus, Calaveras, Tuolumne and San Joaquin. A petition to amend the permits to include other specific areas will be considered by the Board upon a showing that water from other CVP sources is not available to serve such areas. Any use of. water for consumptive purposes outside the counties of Stanislaus, Calaveras, Tuolumne and San Joaquin that may be authorized later shall be subordinate to beneficial use within said counties and shall terminate when contracts are executed and the water is needed for beneficial use within said counties.

(d) 5:

“Releases of conserved water from New Melones Reservoir for water quality control purposes shall be scheduled so as to maintain a mean monthly total dissolved solids concentration in the San Joaquin River at Vernalis of 500 parts per million or less and a dissolved oxygen concentration in the Stanislaus River as specified in the Water Quality Control Plan (Interim), San Joaquin River Basin 5C, State Water Resources Control Board, June 1971.”

D 1422, pp. 29-31.

DISCUSSION

The conditions imposed on the federal agency with regard to applications 14858 and 19304 are not inconsistent with the objectives of Congress when it authorized the enlarged New Melones Project, and ordered it to be included in and operated as an integral part of the Central Valley Project. Although there is must discussion in HD 453 about development of additional water for transportation to other areas served by the Central Valley Project, but outside the counties of Calaveras, San Joaquin, Stanislaus and Tuolumne, there is no evidence in the record that the Bureau, at the time the Board had these applications under consideration, had signed any contracts obligating it to deliver water to such areas. While the court can confidently say that Congress intended that ultimately surplus water would be so used (and the Board recognizes this fact), nothing in the record would indicate that Congress intended such surplus water to be impounded and held behind the New Melones Reservoir until its beneficial use in such areas could be implemented by the Bureau.

Conditions 1-a and 1-d also limit the period of appropriation to November 1 of each year to June 30 of the succeeding year. This is actually consistent with the Board’s findings concerning the period of the year during which unappropriated water is available; hence, it would be consistent with Congress’ purposes in entrusting the Bureau with the task of securing the necessary unappropriated waters pursuant to state law in order to operate the project.

The following statement appears in D 1422, p. 18:

“In view of the preponderance of adverse' consequences of maintaining a reservoir of the size proposed by the Bureau, the public interest requires that any permits issued pursuant to Applications 14858 and 19304 prohibit the impoundment of water in New Melones Reservoir for consumptive purposes until further order of the Board following a showing that the benefits that will accrue from a specific proposed use will outweigh any damage that would result to fish, wildlife, and recreation in the watershed above New Melones Dam and that the permittee has firm commitments to deliver water for such purposes.”

The court accepts this statement as an undertaking by the Board to consider such future applications in light of the legislative objectives of Congress; hence, the interests of the United States are adequately protected with regard to the proposed uses of water listed in Applications 14858 and 19304.

2. Conditions Contained in the Permits Issued Pursuant to 14859 and 19303:

(a) 1-b:

“The water appropriated under the permit issued pursuant to Application 14859 shall be limited to the quantity which can be beneficially used and shall not exceed 6,000 cubic feet per second by direct diversion to be diverted from January 1 to December 31 of each year and 980,000 acre-feet per annum by storage to be collected from November 1 of each year to June 30 of the succeeding year to be used for power purposes.”

(b) 1-e:

“The water appropriated under the permit issued pursuant to Application 19303 shall be limited to the quantity which can be beneficially used and shall not exceed 1,420,000 acre-feet per annum to be collected from November 1 of each year to June 30 of the succeeding year to be used for power purposes.”

D 1422, p. 29.

DISCUSSION

The power generation applications present the court with a great deal of difficulty.

First, it should be noted that Application 14859 was originally filed by the State of California Department of Finance, presumably some time prior to 1943. Congress, therefore, could reasonably conclude that the appropriate state agencies considered the Stanislaus River a potential source of electrical energy.

Second, the Board specifically found that the generation of power was a beneficial use; it determined that the need for white water recreation in an area upstream from the dam outweighed the immediate need for electrical power. In making this determination, the Board was following the mandate of the legislature contained in California Water Code Sections 1243 and 1257.

We now analyze the materials available to Congress to ascertain the legislative objectives with regard to the generation of power at New Melones.

Although not fully detailed by the record before the court, the court takes judicial notice that the Central Valley Project was an integrated project that provided for electrical energy to be developed wherever possible to transport water from one watershed to another when such transfer could not take place by gravity flow.

Further, HD 453 contained a comprehensive recreation development proposal by the Corps of Engineers in its original project plans as part of the New Melones Project. The preservation of the portion of the river immediately upstream from the dam for white water boating was not discussed. The State of California commented in great detail upon the proposed recreational projects to be built as part of the New Melones Project. Specifically, the State commented that the federal New Melones proposal contemplated the immediate acquisition of 1500 acres for initial recreational development, followed by an additional acquisition of approximately 2675 acres. The state urged the government to buy the additional 2675 acres “concurrently with the acquisition of the other project land.” H.D. 453, p. xxi. After a detailed analysis, Mr. Harry Anderson, Deputy Director, Department of Fish and Game, generally concluded that, “The Department investigated this project jointly with personnel of the Office of River Basin Studies, Fish and Wildlife Service, and in general concurs with their evaluation regarding benefits to improved anadromous and warm water fisheries. Our recommendations parallel those of the Fish and Wildlife Service.” H.D. 453, p. xxv. Anderson’s comments contain several pages of specific detailed recommendations which appear to be consistent with the above general approval.

The state report which was submitted under a cover letter dated April 20, 1962, does not indicate that California desired to save that portion of the Stanislaus River lying immediately upstream from the dam for white water boating. Neither does the state report contain any indication that would signal Congress that California was going to deny the appropriation of a certain amount of the Stanislaus River flow for that purpose. Although not treated by the Board as an appropriation, the reservation of water for this specific use is in fact an appropriation, for it denies other potential users the right to use of such water. In effect, the Board decrees that the water will flow unimpeded through the New Mel-ones Reservoir and will not be impounded.

If this information had been available to Congress, then consistent with its options enumerated by Justice Rehnquist in California v. United States, supra, Congress could have determined to incorporate that into its planning and to authorize a smaller reservoir which would accommodate California’s purposes. Alternatively, Congress could have decided to abandon the project entirely! Since California did not mention this desire, the court can only deduce that Congress concluded that California and its appropriate agencies had no more beneficial use for the water than those uses proposed by the federal government in H.D. 453, including power generation.

In addition, we point to the language of the Act itself. Congress specifically mentioned the power potential of the New Mel-ones Project in Public Law 87-874. The court can only conclude that by altering the traditional priorities contained in the federal reclamation laws to favor preference customers situated in Tuolumne and Calaveras Counties who might be willing to enter into binding contracts for electrical energy, Congress intended a steady and dependable year-round supply of power to be available to fulfill such contracts. Certainly Congress did not contemplate that such “preference” customers would buy power from the Bureau of Reclamation for a few hours of the day, or during certain months of the year.

The court notes that the treatment of the power component of the New Melones Project by the Board was different from their treatment of the component relating to consumptive uses. In the consumptive use segment of the decision, the Board, in effect, said to the Bureau, “Show us your contracts and your ability to deliver the water and it may be available to you.”

With respect to the power component, the Board ties the use of power production at New Melones to the need for such production in transporting New Melones water for consumptive uses out of the basin of origin. Only then should increased power production at New Melones be considered. The Board specifically rejected the use of New Melones power for general use in the Northern California power pool:

“The Bureau calculates the annual benefits of the power function of the proposed project to be over five and one-half million dollars. Restriction of storage for power purposes to the amount required for satisfaction of prior rights and flood control plus the amount allowed for fish and wildlife and water quality control would reduce the capacity of the power-plant from 300 megawatts, with an annual electrical energy production of 430,000 megawatt-hours, to some lesser but undetermined production. The opportunity to contribute to the solution of the present power supply problems should not be overlooked. However, the project was not proposed as a means of alleviating the power shortage and the Bureau did not offer evidence to show that full approval of its power applications would decrease the need for development of other sources of power.” D 1422, p. 22.

Instead of requiring that the Bureau present binding contracts for the sale of New Melones power as a condition precedent to the issuance of a permit to appropriate water for the generation of electrical energy, the Board assumed authority that possibly was never granted to it, and which, if it had existed, California had seemingly assured Congress would not be used!

In subsequent documents filed with the court, and in various oral arguments before the court, attorneys for the Board have consistently invited the Bureau to file new applications to let the Board once again review the power component of the New Melones Project.

The Bureau has consistently refused to make such a gesture, reiterating its basic stand that the conditions imposed upon its operation of the New Melones Project are invalid.

Such intransigent attitudes well deserve the imprecation of “a plague on both your houses.” The Board has ample authority under the power allotted to it by the legislature to reconsider, sua sponte, any appropriation permit; indeed, it makes reference to such authority in condition 13 of its order.

To the extent that there is unappropriated water available, any limitation of the amount of water which the United States might appropriate for the generation of electrical energy up to and including 2,400,-000 afa is inconsistent with the congressional objective that New Melones be constructed and operated as a multi-purpose reclamation project. Further, the State conditions, if enforced, would deny the United States a very important source of revenue which it had intended to use for the repayment of the very substantial costs of this project.

The court notes that both California and the United States operate statewide water systems employing the San Joaquin-Sacramento River Delta area as a transfer point to move water produced in both those river systems to the Central Valley and Southern California. Both the feasibility of those projects and the survival of the ecological system of the Delta lands and water are dependent upon water quality in the Delta.

The Stanislaus River contributes approximately 25 percent of the total inflow into the San Joaquin River. In order to make these massive projects work successfully, each party must be fully informed as to what water is being impounded, where, and hence, what adjustments must be made to maintain the aforementioned water quality in the Delta.

In reviewing the conditions imposed by D 1422, other than the conditions placed on appropriations, the court has tried to read such conditions in light of the foregoing problems.

ORDER

A. Conditions 1-a and 1-d do not offend congressional objectives pertaining to the impoundment of water behind New Melones Dam for irrigation, domestic and industrial use, fish and wildlife preservation and propagation, and water quality control, and hence are binding upon the United States and its agencies.

B. Conditions 1-b and 1-c do offend congressional objectives pertaining to the impoundment of water behind New Melones Dam for the generation of electrical energy. Any limitation placed upon the federal agencies which would prevent it from diverting up to 2,400,000 afa of unappropriated water when available is not binding upon or enforceable against the United States or its agencies.

In view of the passage of time since D 1422 was announced, it may be necessary for the Board to determine the precise amount of unappropriated water available in the Stanislaus watershed from time to time.

C. Conditions 2 and 3 are invalid to the extent they purport to limit the amount of unappropriated water which the federal agencies may impound for power generation purposes, and any enforcement of these conditions must be modified to conform with the court’s Order in Paragraph B of Part X, supra.

D. Conditions 4, 5, 6 and 7 are consistent with congressional objectives, and are binding on, and enforceable against the United States and its agencies.

E. Condition 8(a) is consistent with congressional intent; hence, it is binding and enforceable against the United States and its agencies. Conditions 8(b) and 8(c) are not consistent with congressional intent, and hence are not binding upon the United States and its agencies.

Nothing contained in this paragraph, however, shall prevent the federal agencies from voluntarily assuming these burdens.

F. Condition 9 is not consistent with the objectives of Congress insofar as the Board’s power to reduce the maximum quantities of water is not tied to the unavailability of unappropriated water.

G. Conditions 10 and 12 are moot.

H. Conditions 11, 13, 14, 15, 16, 18, 19, 20, 21, 22, 23, 24 and 25 are consistent with congressional intent and hence are binding upon the United States and its agencies.

I. Condition 17 addresses a construction feature of the dam itself. Congress clearly intended the Army Corps of Engineers to build the dam according to the Corps plans and specifications. This condition, if not mooted by prior compliance during the actual construction of the dam, is not binding upon the United States or its agencies.

STATE OF CALIFORNIA STATE WATER RESOURCES CONTROL BOARD

DECISION GRANTING PETITION FOR ASSIGNMENT OF APPLICATIONS AND APPROVING APPLICATIONS IN PART.

BY THE BOARD: '

U. S. Bureau of Reclamation, hereinafter referred to as “Bureau” having filed a petition for assignment of Applications 14858 and 14859 and having filed Applications 19303 and 19304 for permits to appropriate unappropriated water; protests having been received; a public hearing having been held before the State Water Resources Control Board commencing on October 26, 1972; applicant, protestants and other persons having appeared and presented evidence; the evidence received at the hearing having been duly considered, the Board finds as follows:

Substance of the Applications

1. (a) Application 14858 is for a permit to appropriate 8,800 cubic feet per second (cfs) by direct diversion, year-round, and 980,000 acre-feet per annum (afa) by storage to be collected from October 1 of