Full opinion text
OPINION Before BROWNING, DUNIWAY, and WALLACE, Circuit Judges. BROWNING, Circuit Judge: This action was brought by the United States to determine two questions regarding the application of the reclamation laws, and particularly section 46 of the Omnibus Adjustment Act of 1926, to private lands receiving irrigation benefits from the Pine Flat Dam, a multiple-purpose dam on the Kings River, which flows into the San Joaquin River Basin in the Central Valley of California. Section 46 of the 1926 Act bars delivery of reclamation project water to private land in excess of 160 acres in one ownership unless the owner executes a recordable contract with the Secretary of the Interior obligating him to sell the excess land at a price excluding incremental value resulting from the existence of the project. Section 46 also requires the United States to enter into contracts with irrigation districts organized under state law in the area to be served by the reclamation project. In exchange for the government’s promise to supply water, the districts undertake to reimburse the United States for an allocated portion of the cost of constructing the project and to withhold water from excess lands within their boundaries for which recordable contracts have not been executed. The requirement that the owner of private land within a reclamation project agree to dispose of any excess over 160 acres at ex-project prices was intended to serve much the same purposes as the historic restriction on the amount of public land an entryman may obtain from the United States under the homestead acts, the original reclamation act, and other public land laws. As explained in more detail in Part II of this opinion, these purposes are to open private land to settlement by farmers of modest means, to insure wide distribution of the benefits of the federal investment in the reclamation project, and to prevent private landowners from realizing a disproportionate windfall advantage from enhanced productivity and land values because of the project. Construction of Pine Flat Dam was authorized by the Flood Control Act of 1944, and substantially completed by 1954. Efforts to negotiate repayment contracts pursuant to section 46 for the portion of construction costs allocated to irrigation were unsuccessful. Private owners of excess lands contended that the Flood Control Act of 1944 exempted the Kings River project from the reclamation laws, including section 46. They also contended that even if those laws applied, owners of more than 160 acres of project land could avoid executing a recordable contract for the sale of their excess holdings and receive water for those lands if construction charges were repaid. Opposition to the acreage limitations came primarily from large landowners in the Tulare Lake Basin, a flat, low-lying region. The Basin contains about 20 percent of the one million acres in the Kings River service area — the area supplied with Kings River water from Pine Plat Dam. It includes the bulk of the service area’s more than 280,000 acres of excess holdings. More than 157,000 of the 188,000 acres within the boundaries of the Tulare Lake Basin Water Storage District, which covers most of the Basin, are held in tracts of more than 160 acres. These excess holdings average 2,600 acres each, including one tract of more than 60,000 acres owned by a single company. In 1957, Elmer F. Bennett, Solicitor of the Department of the Interior, formally determined that the reclamation laws were applicable to lands served by Pine Flat Dam, rejecting the landowners’ argument that the Flood Control Act of 1944 exempted Pine Flat from these laws. 65 I.D. 525 (1957). Attorney General William P. Rogers rendered a formal opinion to the same effect in the following year. 41 Op.A.G. 377 (1958). By 1957 Interior Department officials had negotiated a repayment contract with the Kings River Conservation District, a service-area-wide entity created to contract with the United States. On the advice of Solicitor Bennett, 64 I.D. 273 (1957), the Secretary of the Interior declined to sign the contract because it would have relieved individual landowners of the section 46 requirement that they execute recordable contracts to dispose of excess lands if they paid all construction costs allocated to their individual holdings. Negotiations were then resumed between the United States and the various irrigation and water storage districts and canal companies in the Kings River service area. Under contracts proposed in 1961, owners of excess land would have been relieved of the recordable contract requirement if the irrigation district or canal company through which they received project water exercised an option to repay the share of overall construction costs allocated to the landowners served by the district or company. Solicitor Barry concluded that the requirements of section 46 could not be avoided in that manner. 68 I.D. 372 (1961). His opinion on the repayment issue was submitted to the Department of Justice by the Secretary of the Interior and was formally approved by Attorney General Robert F. Kennedy in December 1961. As a result, the proposed contracts were not executed. The United States and the landowners agreed to submit the disputed issues to the courts. Tulare Lake Canal Company entered into a repayment contract with the United States in which it agreed to withhold delivery of project water from all lands in excess of 160 acres in single ownership unless the owner had executed a recordable contract for the sale of the excess land. However, the repayment contract provided that the recordable contract requirement would be void if it were determined in the test case that the Kings River project is exempt from section 46, or that section 46 may be avoided by repayment of construction charges. To enable it to test the latter theory, the Canal Company paid its share of the total irrigation cost of the Pine Flat Dam. The other districts and canal companies in the Kings River service area agreed to be bound by the outcome of the test case. The United States then brought this suit, seeking an injunction prohibiting defendant Tulare Lake Canal Company from delivering “project water” to excess holdings unless the owners executed recordable contracts to sell such excess holdings in accordance with section 46. The district court denied relief. The district court held that the reclamation laws do not apply to the Kings River project, and that, even if they did, owners of excess land receiving water from the Tulare Lake Canal Company were relieved of the recordable contract requirement of section 46 when the company repaid its share of construction charges allocated to irrigation. United States v. Tulare Lake Canal Co., 340 F.Supp. 1185 (E.D.Cal.1972). We disagree with the district court on both issues. We first consider the contention that the Kings River project is wholly exempt from the operation of section 46. I Appellees urge this court to hold that in passing the Flood Control Act of 1944 Congress intended to exclude Pine Flat Dam from the acreage limitations imposed by the reclamation laws. Such a holding (1) could not be reconciled with the holding in Turner v. Kings River Conservation District, 360 F.2d 184 (9th Cir. 1966), which binds this panel; and (2) would be contrary to the intent of Congress underlying the 1944 Act authorizing the construction of Pine Flat Dam. A. Turner v. Kings River Conservation District In Turner this court held as follows (360 F.2d at 192): Section 8 of the Flood Control Act of 1944 authorizes the Secretary of the Interior to operate and maintain structures such as Pine Flat dam “under the provisions of the Federal Reclamation Laws (Act of June 17, 1902, 32 Stat. 388 and Acts amendatory or supplementary thereto),” thus making section 7 of the Reclamation Act of 1902, 32 Stat. 389, 43 U.S.C.A. § 421, applicable to the irrigation features of the Pine Flat project. The strict holding of the court was that section 7 of the 1902 Act, authorizing the Secretary of the Interior to acquire by condemnation rights needed to carry out the reclamation laws, was applicable to the Pine Flat project. As is evident from the passage quoted, however, the premise for this holding was that section 8 of the Flood Control Act of 1944 authorized the Secretary to operate and maintain the Pine Flat project “under the provisions of the Federal Reclamation laws,” which include section 7 of the 1902 Act. Since the “Federal Reclamation laws” also include section 46 of the 1926 Act, the premise of Turner requires a holding that the recordable contract requirement of section 46 also applies to the Pine Flat project. Appellees seek to escape this conclusion by arguing that the quoted passage is not a holding but an assumption, made for the purposes of the decision but not essential to it. An examination of the structure of the Turner opinion and the proceedings relating to the disposition of the petition for rehearing in that ease demonstrates that the court intended to and did hold that the reclamation laws apply to Pine Flat project. In Turner, claimants of rights under state law to use Kings River water on riparian and overlying lands sought to enjoin officials of the Department of the Interior and the Corps of Engineers from operating Pine Flat Dam in such a way as to interfere with these rights. The district court dismissed the action as one against the sovereign without consent. This court concluded that the action could be maintained if the defendant government officers had exceeded their statutory authority. Plaintiffs argued that defendants had exceeded their authority because the 1944 Act, authorizing the construction of Pine Flat Dam, did not authorize the officials to interfere with plaintiffs’ water rights. In answer to this argument we held, in the passage quoted, that the officials did have authority to interfere with plaintiffs’ water rights in operating Pine Flat Dam because, under section 8 of the 1944 Act, Pine Flat Dam was to be operated pursuant to the reclamation laws, and those laws included the power to take private rights conferred by section 7 of the 1902 Act. We went on to hold that no other provision of the 1944 Act excepted Pine Flat Dam from the grant of eminent domain in section 7 of the 1902 Act. Appellees contend that this court merely assumed without deciding that section 8 of the 1944 Act applied to Pine Flat Dam. They point out that plaintiffs had alleged that section 8 applied and that certain provisions of reclamation law invoked by that section prohibited defendant officials from interfering with plaintiffs’ water rights. Appellees argue that since this court was reviewing the dismissal of a complaint for failure to state a claim, it was required to accept these allegations of the complaint as true; and that it did no more. The obvious answer is that while allegations of fact are to be regarded as true, allegations of law are not. See 2A Moore’s Federal Practice ¶ 12.08, at 2267-69. Whether section 8 of the 1944 Act made the reclamation laws applicable to Pine Flat project was a question of law. The resolution of this question of law was essential to the decision of the case. If the defendant officers were not authorized to take plaintiffs’ water rights, they were acting unlawfully and the suit to enjoin their unlawful conduct was not barred as a suit against the United States. This court found the necessary authority to condemn in section 7 of the 1902 Act, and the availability of section 7 of the 1902 Act required the holding that section 8 of the 1944 Act made the reclamation laws applicable to Pine Flat Dam. Moreover, the Turner court was specifically asked to modify its opinion to state that the applicability of the reclamation laws was not decided but only assumed, as appellees in this case now argue. The court refused to do so. As the opinion in Turner was originally filed, the passage quoted above stated that section 8 of the 1944 Act made “all of the provisions and limitations of the Reclamation law applicable to the irrigation features of the Pine Flat project.” Slip opinion at 10. The Kings River Conservation District, among others, filed a “Petition for Rehearing or, in the Alternative, for Modification or Clarification of the Court’s Opinion.” The petition requested the court to modify the passage quoted to indicate that the court was only assuming and not deciding that section 8 of the 1944 Act made reclamation law applicable to Pine Flat. The revision suggested by petitioners was as follows (Petition for Modification at 10-11): If we assume that Section 8 of the Flood Control Act of 1944 authorizes the Secretary of the Interior to operate and maintain structures such as Pine Flat Dam “under the provisions of the Federal Reclamation laws (Act of June 17, 1902, 32 Stat. 388 and Acts amendatory or supplementary thereto),” and thus makes all of the provisions and limitations of the Reclamation law applicable to the irrigation features of the Pine Flat project, the appellee officials would nevertheless be authorized to interfere with appellants’ rights in the manner alleged in the complaint. The court did not adopt the suggested language. The revision the court did adopt, quoted earlier, necessarily involved rejection of the suggestion that the court restate, as an assumption rather than as a holding, the court’s premise that section 8 of the 1944 Act made the reclamation laws applicable to Pine Flat. The court did, however, narrow its conclusion to the precise necessities of the case by substituting “section 7 of the Reclamation Act of 1902” for the broader phrase, “all of the provisions and limitations of the Reclamation law.” The reason is clear. It is apparent that the Turner court had concluded that section 8 of the 1944 Act made all the provisions and limitations of the reclamation laws applicable to Pine Flat, for the opinion initially stated as much and the authorities cited were to that effect. The petition for modification of the Turner opinion also appeared to concede that if section 8 made the reclamation laws applicable to Pine Flat at all, it made those laws applicable in their entirety, including acreage limitations. However, the petition, in a footnote, did reserve the argument that even if reclamation laws were generally applicable to Pine Flat, the provisions regarding acreage limitation were not; and argued that this narrow issue should not be definitely resolved until the court had the benefit of a fuller presentation that would be available in the present litigation, then only recently filed. It is apparent that the purpose of the modifications of the Turner opinion limiting the specific reference to section 7 of the 1902 Act was solely to preserve the opportunity for appellees in this case to make the promised demonstration that although section 8 applies to the Pine Flat Dam, the acreage limitation provisions of the reclamation laws do not. Appellees have not attempted to make this showing. Instead they have argued that the reclamation laws are entirely inapplicable to this project. This position was rejected in Turner Nonetheless, in view of the importance of the question, and the opportunity this case has given to examine it more fully, we have reconsidered the legislative history of the Flood Control Act of 1944 at some length. That re-examination reveals that section 8 was conceived and considered by Congress with the Pine Flat Dam and other nearby projects in the Sacramento-San Joaquin River Basin specifically in mind, and that the application of the excess land provisions to these projects was the principal issue in controversy. The legislative history leaves no doubt that the 160-acre limitation was intended to apply in the Kings River service area. B. Legislative History of Flood Control Act of 1944 In Ivanhoe Irrigation District v. McCracken, 357 U.S. 275, 78 S.Ct. 1174, 2 L.Ed.2d 1313 (1958), the Supreme Court declined to imply an exception to the acreage limitation provision found in section 5 of the 1902 Act, substantially re-enacted in section 46 of the 1926 Act, stating, “Significantly, where a particular project has been exempted because of its peculiar circumstances, the Congress has always made such exemption by express enactment.” 357 U.S. at 292, 78 S.Ct. at 1184, 2 L.Ed.2d at 1326. There is no “exemption by express enactment” of the Kings River project from acreage limitations in the 1944 Act or any other statute. The argument for exemption rests instead upon indirect implications drawn from the text of the 1944 Act and scattered incidents in the legislative history. In light of Ivanhoe and the important public interests underlying the historical policy of acreage limitations in reclamation law, it is questionable whether it would be appropriate to base exemption upon such a foundation. In any event, the legislative history of the 1944 Act demonstrates that an implied exemption would be wholly unjustified. It may be helpful to begin with a brief summary of the legislative history of the 1944 Act as it relates to the Kings River project. Mention should be made at the outset of a significant factor in the historical context in which Congress considered the 1944 Act. A proposal to expressly exempt the Central Valley project from acreage limitations was under consideration by Congress at the time that Congress was considering the 1944 Act. The proposal for express exemption was defeated after vigorous congressional debate. See Ivanhoe Irrigation District v. McCracken, supra, 357 U.S. at 292-93, 78 S.Ct. at 1184, 2 L.Ed.2d at 1326. An almost identical debate took place during consideration of the Flood Control Act regarding whether the reclamation laws, and especially acreage limitations, should be applicable to the Pine Flat Dam and other projects authorized for construction in the Sacramento-San Joaquin River Basin. These projects were to be adjacent to the Central Valley project; the Administration argued they should be integrated into it. Under these circumstances, it is highly unlikely that the same Congress that rejected an express exemption for the Central Valley project intended, sub silentio, to exclude the Pine Flat Dam from acreage limitations. The legislative history confirms that it did not. The proceedings directly concerned with the 1944 Act were marked by a continuing controversy over two distinct issues: (1) whether Pine Flat Dam should be constructed by the Corps of Engineers or the Bureau of Reclamation; and (2) whether the acreage limitation should apply to the project once built. The controversy may fairly be characterized as a power struggle between Kings River water users and the Roosevelt Administration. The water users needed the dam for flood protection and a regulated water flow. They were willing to pay for irrigation benefits, but did not wish to become subject to the reclamation laws, especially acreage restrictions. The Administration, represented by President Roosevelt, Secretary of the Interior Ickes, and Commissioner Bashore of the Bureau of Reclamation, was equally insistent that the acreage restrictions should apply to the Kings River project. The Administration was not willing to accept reimbursement of the costs attributable to irrigation benefits as a substitute for those limitations. In the Administration’s view, the interests of the United States were not merely financial. They included such social purposes as wide dispersion of the public subsidy, avoidance of speculation, and provision of family homes and farms, especially for soldiers who would soon be returning from the war. Both sides of the controversy were exhaustively presented before congressional committees and on the floor of the House and the Senate. Neither side emerged wholly victorious. The California interests prevailed on the issue of which agency should construct Pine Flat Dam — Congress decided that Pine Flat Dam should be built by the Corps of Engineers. They lost on the issue of whether acreage limitations should apply — Congress decided that these limitations should apply to the Kings River project. The California interests emerged from the House with no more than a colorable argument on the latter issue, based upon equivocal statements in committee hearings and floor debate; but the proceedings in the Senate, particularly in the consideration of the conference report, make it clear beyond question that the struggle against acreage limitations was ultimately lost. What is now section 8 of the 1944 Act was redrafted in the Senate to conform to the wishes of the Secretary of the Interior, who was adamant in his insistence that the reclamation laws should apply to the Kings River project. The Senate rejected an amendment specifically designed to exempt dams in the Sacramento-San Joaquin River Basin, especially those on the Kings and Kern Rivers, from the operation of section 8. A colloquy between Senator Overton, floor manager of the bill, and Senator Hill, Acting Majority Leader, at the close of debate on the conference report, was intended to and did remove any doubt that section 8 was applicable to the California projects. Soon after the President signed the Flood Control Bill, California interests attempted to regain their position by securing an administrative determination that the Secretary of War was authorized to negotiate with water users for repayment without regard to reclamation law. Again they lost. The contemporaneous interpretation of the 1944 Act by the President, the Secretary of War, and the Secretary of the Interior was that irrigation uses of the Pine Flat Dam were subject to reclamation law. This has been the consistent interpretation of the 1944 Act by the Department of the Interior since 1944. It was confirmed in 1958 by a formal opinion of the Attorney General. 41 Op.A.G. 377 (1958). We turn to a more detailed consideration of the legislation and administrative background of the 1944 Act. In 1940 both the Corps of Engineers and the Bureau of Reclamation submitted reports to Congress recommending construction of a dam on the Kings River. Specifications for the dam were similar. Both proposals predicted that the flood control and irrigation benefits would be about equal. The proposals differed, however, as to who should build the dam and operate it. The Corps of Engineers proposed that the Corps build the dam and that local interests operate it under regulations prescribed by the Secretary of War. The Bureau of Reclamation proposed that the dam be built and operated by the Bureau. The recommended schedule for payment of allocable irrigation construction costs by water users also differed. The Bureau recommended annual installments to be paid over 40 years (the usual repayment period under reclamation law). The Corps recommended payment of a lump sum representing the discounted present value of the 40 annual installments. President Roosevelt concluded that the project was “dominantly an irrigation undertaking and is suited to operation and maintenance under the reclamation law.” He endorsed the Interior Department’s proposals that the Bureau of Reclamation construct, operate, and maintain the Kings River project and that repayment be made in 40 annual installments under prevailing reclamation policy. Hearings on the proposals were held before the House Flood Control Committee in 1940 and 1941. Local water users opposed the Bureau’s proposal and endorsed that of the Corps of Engineers. The Kings River-Pine Flat Association was especially concerned that Bureau control over release of water might result in interference with their vested water rights. Acreage limitations were not discussed. Out of deference to the President’s position that the Kings River project should be built by the Bureau, this project was not included in the comprehensive flood control bill reported by the House Flood Control Committee in 1941. The committee issued a separate report recommending construction of the dam by the Corps of Engineers, but no further action was taken. Hearings before the House Flood Control Committee resumed in 1943 and continued in 1944. In 1944 President Roosevelt wrote to Congressman Whittington, chairman of the committee, modifying the Administration’s earlier position. The President reaffirmed his view that the Kings River and Kern River projects were predominantly for irrigation and should therefore be built and operated by the Bureau of Reclamation — a view that had been rejected by the committee in its 1941 report. However, the President added a new suggestion, namely, that Congress provide for multiple-agency administration of multiple-purpose projects. The President proposed that whatever agency constructed a multiple-purpose project, each agency having an interest in the project should be given responsibility for administering its interest in accordance with its own legislation and policies. “For example,” the President wrote, “the Bureau of Reclamation in the Department of the Interior should administer, under the Reclamation laws and its general policies, those irrigation benefits and phases of projects built by the Corps of Engineers.” It is important to note that this suggestion was directed specifically to Pine Flat Dam on the Kings River and to the adjacent Kern River project. It provided the basis for the compromise eventually reflected in section 8 of the 1944 Act. Thus, the Administration sought to have the reclamation laws, and especially the excess land provisions, applied to the Kings River and Kern River projects in two ways: by having these projects built and operated by the Bureau of Reclamation or, failing that, by having use of these projects for irrigation administered by the Bureau under the reclamation laws. The Administration failed in its efforts to have Pine Flat Dam constructed by the Bureau; Congress ultimately concluded that the dam should be built by the Corps of Engineers. But it succeeded in its alternative position, securing in section 8 a provision that the irrigation uses of projects constructed by the Corps of Engineers should conform with reclamation law. Commissioner Bashore presented the Administration’s position to the House Flood Control Committee in detailed testimony supplementing the President’s letter. Commissioner Bashore’s presentation was directed specifically to the Kings River and Kern River projects. He repeated the Administration’s position that both projects should be built by the Bureau. He went on to urge, however, that if Congress should decide to authorize construction by the Corps of Engineers, the statute authorizing construction should provide that irrigation benefits of the two projects be administered by the Secretary of the Interior under the reclamation laws. The statutory language suggested by Commissioner Bashore appears in the margin. Commissioner Bashore made it explicitly clear that the purpose of the provision was to make the acreage limitations applicable to the Kings River and Kern River projects. He emphasized the social purposes intended to be accomplished by breaking up the large landholdings in the areas that would be served by these projects— spreading the federal subsidy, preventing speculation, and making it possible for people of limited means to establish farms on irrigated lands on which families could be self-sustaining. He expressly rejected the notion that repayment by water users of the costs of construction allocated to irrigation would be an acceptable substitute for the advancement of these social purposes. All of the objections now raised to application of acreage limitations to the Kings River project were also fully presented to the committee — that all land to be served was in private hands, that local water users had appropriated most if not all Kings River water and had constructed extensive irrigation works in the area, and that no new lands would be brought under irrigation as a result of the project. In order to gain the benefits of federally subsidized flood control and irrigation without subjecting themselves to acreage limitations, the landowners urged the committee to adopt the dominant-interest test originally advocated by the Administration to recognize that the dominant purpose of the Kings River project was flood control, and to provide that it be constructed by the Corps of Engineers and be operated either by the Corps or, preferably, by the water users themselves. The bill reported by the House committee authorized construction of the Pine Flat Dam by the Corps of Engineers, but it also embodied the President’s proposal for joint administration of multiple-purpose projects. Section 5 of the bill provided that the projects should be operated for navigation and flood control purposes in accordance with regulations prescribed by the Secretary of War. Section 6 provided that projects built by the Corps of Engineers should be utilized for reclamation purposes in accordance with regulations prescribed by the Secretary of the Interior. With minor modifications, the language of section 6 followed that proposed to the committee by Commissioner Bashore for the avowed purpose of making acreage limitation provisions of reclamation law applicable to the irrigation features of the Kings River and Kern River projects in the event the committee should decide, as it did, that the construction of these dams should be assigned to the Corps of Engineers. In the course of debate on the floor of the House, Congressman Curtis, a member of the committee, explained section 6 in essentially these terms. Committee Chairman Whittington also described section 6 as a broad grant of power to the Secretary of the Interior to regulate reclamation features of the authorized projects. Each characterized the section as a concession to the Bureau of Reclamation and the Secretary of the Interior. The Administration was still not entirely satisfied. Section 6 of the committee bill provided that water available for reclamation was to be distributed in accordance with regulations prescribed by the Secretary of the Interior, but it did not specifically state that such regulations should conform to reclamation law, as had Commissioner Bashore’s proposal. On April 10, 1944, Secretary Ickes wrote the Director of the Bureau of the Budget expressing concern that the committee bill did not make reclamation law applicable to irrigation uses of water stored behind the dams authorized in the bill. He made it clear that his objection was motivated by a fear that the bill might permit large landowners on the Kings River and Kern River projects to avoid the acreage limitations. During the floor debates on May 9, 1944, Chairman Whittington offered a “perfecting amendment” on behalf of the Food Control Committee, adding to section 6 the express requirement that the Secretary of the Interi- or regulate the use of irrigation waters “under existing reclamation law.” He stated that the amendment was proposed because “some of the friends and spokesmen for reclamation were critical of the language in the bill.” The amendment was adopted. On May 20 the Acting Director of the Bureau of the Budget replied to Secretary Ickes’ letter of April 10, calling attention to this amendment to section 6 and stating, “[T]his change would give the Department of the Interior all the authority necessary.” As the bill left the House, therefore, the overwhelming evidence was that it represented a victory for the Administration’s position that the irrigation uses of the Kings River project and other projects authorized by the bill were to conform to the reclamation laws, and specifically to acre- age limitations, even though the projects were to be built by the Corps of Engineers. All that can be garnered to lend possible support to appellees’ contrary interpretation is language in the committee report and in Chairman Whittington’s remarks on the floor that really consists of nothing more than a sympathetic recitation of arguments advanced by water users against application of the reclamation laws to the Pine Flat project. Subsequent proceedings in the Senate removed any possible doubt as to Congress’ intention to apply acreage limitations to the Kings River project. Hearings before a subcommittee of the Senate Commerce Committee produced the same general conflict of views that had developed in hearings before the House Flood Control Committee. Again California interests were arrayed against the Administration, which was supported by organizations of labor and small farmers. Again the controversy centered upon the application of acreage limitations, particularly to projects in the Sacramento-San Joaquin River Basin, including Pine Flat Dam. Again proponents of acreage limitation pressed the historical purposes served by such provisions — spreading the federal subsidy, avoiding speculation, creating family farms — while opponents again pressed the features of the Kings River and Kern River projects that assertedly made application of acreage limitations inappropriate. Administration spokesmen again sought to have these projects built by the Bureau, rather than the Corps of Engineers, and expressed their disappointment in the House decision to the contrary; but they also reaffirmed the President’s alternative suggestion that water made available for irrigation by projects built by the Corps of Engineers be utilized in accordance with the reclamation laws, including acreage limitations. The issue was never in doubt. The subcommittee was obviously impressed with the experience and skill of the Corps of Engineers in building and operating dams for effective flood control. On the other hand, this same subcommittee had recently demonstrated its adherence to enforcement of acreage limitations in federally subsidized irrigation projects by rejecting the proposal that the Central Valley project be exempted from such limitations. Moreover, on the earlier occasion this same subcommittee had advanced as a solution to the apparent dilemma the very approach that was reflected in section 6 of the House bill — that is, that the Corps of Engineers be authorized to construct these multiple-purpose projects, but that irrigation features of such projects be utilized in conformity with the reclamation laws. It was inevitable that members of the subcommittee would suggest that the same approach be adopted in connection with Pine Flat and other nearby projects. Both Secretary Ickes and Commissioner Bashore appeared before the subcommittee. Both made it clear that at the heart of the conflict were the efforts of owners of large tracts of land in California projects, including the Kings River project, to escape the acreage limitation and antispeculation provisions of the reclamation laws. Both urged the subcommittee to reject these efforts. Both accepted section 6 of the House bill as intended to make the reclamation laws, including acreage limitations, applicable to irrigation uses of projects authorized by the Act, but both suggested modification of the language to accomplish this purpose more effectively. During the hearings Secretary Ickes had written to the chairman of the Senate Commerce Committee: I regard section 6 of the bill as intended to provide for the application of the Federal reclamation laws to projects having irrigation possibilities. . . . However, the provisions of this section are not entirely apt in their relation to the various technical features of the Federal reclamation laws. Secretary Ickes amplified these views in his testimony before the Senate committee: [Section 6] as it now stands provides for the application of the Federal reclamation laws to the irrigation features of Army reservoir projects. However, it is not drafted in a way that ties in with the basic provisions of the reclamation laws in all pertinent respects. For example, it speaks of those laws as though they involved merely the imposition of regulations, whereas in truth they are largely designed to authorize a system of contractual relationships. It disregards the problem of allocating costs for multiple-purpose facilities serving other uses in addition to irrigation. And it overlooks the special laws relating to Indian irrigation developments. Hence, I believe that this section should be rephrased in a way that would eliminate possible future uncertainties with respect to its precise meaning and operation. The Secretary’s first concern, one particularly relevant here, is understandable. The mechanism adopted by section 46 of the 1926 Act for accomplishing the antimonopoly and antispeculation objectives of acreage limitations was to direct the Secretary of the Interior to include in repayment contracts with irrigation districts provisions under which the districts were required to withhold water from owners of excess lands who had not executed recordable contracts agreeing to sell that excess land at ex-project prices. This enforcement mechanism, based upon contractual relationships, replaced the prior method of enforcement through regulations governing water right applications. The regulatory scheme therefore did not apply to projects built after the passage of the 1926 Act. Yet section 6 of the House bill was couched entirely in terms of the Secretary’s power to prescribe regulations, rather than the Secretary’s power to enter into contracts. Though technical, the deficiency was obviously significant. The revision proposed by the Secretary met the problem by broadening the language of section 6 to provide that dams were to be utilized for irrigation purposes “only in conformity with the provisions of this section,” that is, “under the provisions of the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388, and acts amendatory thereof or supplementary thereto)” — which of course included the 1926 Act. The subcommittee adopted the essence of the Secretary’s recommended modification of section 6; it is reflected in the language of section 8 as reported to the Senate, and as finally enacted. There can be no doubt, on this record, that in proposing section 8 the Senate subcommittee intended to adopt the Administration’s position that the reclamation laws, and specifically acreage limitations, should apply to irrigation uses of all projects authorized by the bill, including the Kings River project, even though the projects were to be built by the Corps of Engineers. On the floor of the Senate a final attempt was made to bar application of acreage limitations to the California projects authorized by the 1944 Act, but it was turned back. The President and Secretary Ickes persisted in their efforts to have projects in the general Central Valley area, including Pine Flat Dam, built by the Bureau of Reclamation rather than the Corps of Engineers, as the House bill provided. However, they welcomed the provision in section 8 making reclamation laws applicable to irrigation features of dams built by the Engineers. Each specifically mentioned the acreage limitations in connection with that section. Secretary Ickes warned that an effort would be made to amend or delete section 8 on the floor of the Senate. The challenge anticipated by Secretary Ickes appeared in the form of two amendments proposed by Senator O’Mahoney of Wyoming. One sought to amend section 6 of the bill reported by the Senate committee to authorize the Secretary of War to contract for the storage of water for any beneficial use in any reservoir constructed by the War Department, “on such terms and conditions as he may deem reasonable.” Objection was immediately raised that this would permit the Secretary of War to sell water for irrigation use on such terms and conditions as he chose, and thus would “change the basis of the reclamation law.” Senator Hatch stated that the amendment would permit “the Army Engineers ... to supply water . entirely removed from . . . the acreage limitations and the other basic foundations of our irrigation law.” The second O’Mahoney amendment sought to make two changes in section 8 as reported by the Senate committee. It would have deleted the provision in section 8 that dams and reservoirs under the jurisdiction of the Secretary of War could be utilized for irrigation only in conformity with section 8, and thus with the reclamation laws; and it would have made section 8 inapplicable “to any dam or reservoir heretofore or hereafter constructed which supplements any existing locally operated irrigation system or other locally operated water facilities.” A letter from Secretary Ickes, in opposition to these proposals, pointed out the effect of the two amendments proposed by Senator O’Mahoney: “[T]he projects included in the bill for the great Central Valley area of California (Sacramento-San Joaquin River Basin, p. 31, H.R. 4485) would supplement some existing locally operated irrigation systems. Those projects, therefore, would be left subject only to section 6 which, as the Californians would have it amended, disregards the Federal reclamation laws while placing the Corps of Engineers in the irrigation field.” Senator Overton, chairman of the Senate subcommittee, also opposing the amendment, advised the Senate that section 8 had been included “at the request of the Secretary of Interior, and at his very earnest insistence,” and “word for word as recommended by the Secretary of the Interior.” Senator Hayden moved that both amendments be referred to the Committee on Irrigation and Reclamation, on the ground that they would alter existing reclamation law and therefore should be considered by the committee with jurisdiction over that subject matter. The motion was adopted. The disposition of the O’Mahoney amendments reflects the Senate’s understanding that, under section 8, the reclamation laws, and specifically acreage limitations, would apply to utilization of water for irrigation on projects authorized for construction by the Corps of Engineers in the Sacramento-San Joaquin River Basin, including Pine Flat Dam on the Kings River. If this had not been so the proposed amendments would have served no purpose. The amendments were rejected precisely because they would have changed reclamation law, which both sides assumed to be applicable to such projects as section 8 read. This conclusion was reaffirmed the following day in the course of Senate consideration of a proposal by Senator Murray of Montana to transfer “all functions, powers, duties, and projects” of the Secretary of War with respect to water conservation reservoirs in the west to the Secretary of the Interior, thus completely ousting the Secretary of War from these activities. Senator Murray based his proposal in part upon a desire to assure “that the Federal reclamation laws, with their various provisions for the development of family-size farms and the prevention of speculation in lands, should be made applicable to all reservoir projects in the west.” Senator Murray continued, “If the policy of the family-size farm . . . is to be accomplished, then these projects must be built, operated, and maintained by the Bureau of Reclamation under the reclamation laws.” In response, Senator Overton assured the Senate that Senator Murray’s objectives with respect to the application of reclamation law to irrigation in projects authorized by the bill would be achieved under section 8, which would make reclamation law applicable to the irrigation features of projects constructed by the Engineers. Senator Overton made this point with specific reference to projects in the Sacramento-San Joaquin River Basin. After referring to the President’s suggestion that the federal agency with the dominant interest in a particular project should construct it, Senator Overton continued: The able junior Senator from Montana has made considerable comment in reference to the Sacramento and San Joaquin Rivers and the Central Valley, in California. The principle to which I have just referred was carried out in respect to the projects contained in the bill which were authorized for those streams. The testimony shows, I think rather conclusively, that the projects herein authorized to be constructed by the Army engineers are ones in which flood control predominates over irrigation. Of course, the Senate will understand that, insofar as irrigation is concerned, all surplus water which can be used for irrigation is turned over to the Department of the Interior, and the method of irrigation and the operation of the irrigation works are under the control of the Department of the Interior. Senator Overton also informed the Senate that the Corps of Engineers “had absolutely no objection whatsoever to the irrigation and power amendments [sections 8 and 5] which were suggested by the Secretary of the Interior . . . and were subsequently incorporated in the pending bill. The engineers stated that they were perfectly willing ... to turn over to the Bureau of Reclamation the distribution of all surplus water held back by the dams constructed by them, the distribution of which would come under the reclamation law, or would follow whatever method Congress might determine upon.” Senator Murray’s amendment was then rejected. The Senate adopted the committee’s proposed substitution of the present section 8 for section 6 of the House bill. The Senate version was accepted by the conference committee, and enacted into law with minor modifications not pertinent here. During the brief Senate debate on the conference report, Senator Overton, the flood manager of the bill, and Senator Hill, the Acting Majority Leader, engaged in the following colloquy for the express purpose of removing any possible doubt as to the applicability of section 8 to the Kings River project: Mr. HILL. There still seems to be confusion on the part of some Senators with reference to the application of reclamation laws in regard to some of these projects. I heard the distinguished senior Senator from Louisiana, when the bill was under consideration, and I think he made it very clear. However, I wish to ask this question: Is it not a fact that section 8 of this bill, as agreed to in conference, makes some reclamation laws applicable to the handling of irrigation water of any of the projects, including California projects, where it is found that irrigation may be carried out? I ask the Senator in charge of the bill whether it is not a fact that the President wanted the California projects in this bill constructed under the Bureau of Reclamation so that the water policies would conform to reclamation laws? Mr. OVERTON. The Senator is correct with respect to the projects in the so-called Central Valley of California. The President wrote me and the chairman of the subcommittee in this regard. However, in view of the fact that the Senate amendment made not only the California projects but all such projects subject to irrigation laws, and in view of the fact that the House concurred in this action by agreeing to section 8 of the Senate bill, I am sure that the President will feel that we have met the problem that he raised. Section 8 of the bill clearly places reclamation uses of water from these projects under the Secretary of the Interior and under the applicable reclamation laws. No project in this bill which may include irrigation features is exempted from the reclamation laws. Mr. HILL. I thank the Senator. Mr. OVERTON. The Senate amendment made not only the California projects, but all such projects subject to the irrigation law. In view of the fact that the House concurred in that action by agreeing to section 8 of the bill, I am sure the Senator from Alabama will feel that we have met the question which he has raised. As I stated a while ago, section 8 of the bill clearly places reclamation uses of waters from all projects authorized in this bill under the Secretary of the Interior, and under the applicable reclamation laws. The report of the House conferees, though in general terms, also made it clear that section 8 reflected the wishes of the Secretary of the Interior with respect to the application of reclamation law to utilization of multiple-purpose projects for irrigation. There is nothing in the brief House debate on the conference report to contradict this interpretation or the more explicitly expressed views of Senators Hill and Overton. Appellees’ general response to this overwhelming evidence of congressional purpose contrary to their position is to ignore it. In a variety of ways appellees press the argument that Congress did not intend that reclamation law, and particularly acreage limitations, would apply to the Kings River project because the dominant need for Pine Flat Dam was flood control, a matter within the special expertise of the Corps of Engineers; because private irrigation facilities were already in existence in the project area and no additional irrigation facilities were to be constructed; because the water of the Kings River had been completely appropriated and no additional water would be made available by the project; and because the project would bring no additional arid land under irrigation. The obvious difficulty with this argument is that it is contrary to the whole tenor of the legislative history. As has been seen, the legislative struggle was waged on precisely this ground. The very considerations appellees now advance were pressed upon Congress. Congress deliberately decided that while the Corps of Engineers should build Pine Flat Dam on the Kings River and control its operation for flood control, Pine Flat and all other multiple-purpose dams thereafter constructed should be utilized for irrigation under the provisions of the reclamation laws. This was the very purpose of section 8; it was adopted with the Kings River project and other nearby projects specifically, and primarily, in mind. Viewing the conflict in the broader perspective of the reclamation program as a whole, any other outcome would have been surprising. The reclamation program is not primarily one of bringing arid lands under irrigation for the first time. Congress was advised as early as 1924 that one of the first projects approved under the 1902 Act, if not the first, was the Salt River project in Arizona, in which nearly all of the land was privately owned and under irrigation through a system of private canals. The function of the federally financed reclamation reservoir was to furnish water storage needed to conserve and regulate the existing water supply. Six other similar projects were also called to Congress’ attention. At this early date, Congress was warned, “It seems certain that the aid of the Government will be sought in the future to rescue meritorious but distressed private projects . . . .” The forecast was accurate. The number of instances in which the federal project supplemented existing irrigation steadily increased. In 1961 it was estimated that 60 percent of the total reclamation acreage fell in this category. In the Madera Irrigation District, one of the projects involved in the Ivanhoe Irrigation District litigation, 85,000 of a total of 112,000 acres had been developed for irrigation before the federal project was authorized. The opinion in Ivanhoe takes note of the fact that there was widespread preproject reclamation and irrigation development before lands were brought within the Central Valley project. 357 U.S. at 283, 78 S.Ct. at 1179, 2 L.Ed.2d at 1321. So general is this phenomenon that a recent commentator has stated, “reclamation today generally supplies only supplemental water.” In most of the respects in which appellees seek to distinguish the Kings River project from other projects Congress has made subject to the reclamation laws, therefore, the Kings River project is not an exception, it is the rule. Appellees assert, however, that the Kings River project is unique in the respect that all of the water of the Kings River had been appropriated, and the project therefore would produce no “new” or “surplus” water. Appellees’ factual premise is questionable, but if it were not, it would not follow that the project does not confer substantial benefits justifying imposition of acreage limitations. The Corps of Engineers and the Bureau of Reclamation agreed that approximately half of the costs of Pine Flat Dam were allocable to irrigation benefits, resulting principally from regulation of the river flow. There would be no inherent unfairness in applying acreage limitations in these circumstances. The federally financed reservoir confers substantial economic benefits upon the landowners by making water available when it otherwise would not be. The price at which excess lands must be sold will include the whole of any value attributable to pre-existing irrigation facilities and water rights; only the increase in value attributable to the federal project itself will be excluded. If in the case of the Kings River project the increment is small, as appellees contend, the price appellees will receive for their excess lands will be only slightly below full market price; if it is large the difference will, and should be, concomitantly substantial. In any event, as with all of the other distinguishing features relied upon by appellees, Congress was fully apprised of the almost complete appropriation of Kings River water under existing agreements, and was urged not to authorize construction and operation of Pine Flat Dam by the Bureau under the reclamation laws for this reason, among others. Nevertheless, Congress decided that acreage limitations should apply. Appellees go so far as to suggest that application of acreage limitation provisions to the Kings River project would be impractical, even absurd, and Congress cannot be thought to have intended this result. The President of the United States, the Secretary of the Interior, and the Commissioner of the Bureau of Reclamation repeatedly urged Congress to provide that the Kings River project and those adjacent to it should be built, maintained, and operated by the Bureau of Reclamation in full compliance with the reclamation laws, including acreage limitations. It is unlikely that a position so insistently pressed by the persons most knowledgeable and in highest authority in the executive branch would be as questionable as appellees suggest. At the very least, Congress could reasonably conclude that what these men urged as required by the public interest and the historical reclamation policy was not illogical or absurd. And of course it was not. Appellees discuss only Tulare Lake Basin —which, they say, has no dwellings or economic source of domestic water, is subject to periodic flooding involving economic risks too great for small farmers to bear, and still has an erratic water supply. Assuming all of this, Tulare Lake Basin is not the Kings River project. The Basin includes just over 200,000 acres; the Kings River project contains 1,065,000 acres. No one suggests that it would be impracticable to apply acreage limitation provisions to the project land outside the Basin. Indeed, more than 80 percent of this land is now in individual ownerships in tracts of 160 acres or less. Presumably Congress rested its decision upon the feasibility of acreage limitation in the project as a whole, not the Basin alone, and properly so. But even as to the Tulare Lake Basin, appellees’ argument is unsound. The lack of on-site housing and domestic water supply is irrelevant. Since 1910 Bureau regulations have provided that the statutory residence requirement is satisfied if the owner lives within 50 miles of his land; a glance at a map will reveal the presence of many communities within this distance of Tulare Lake Basin. Only a small part of Tulare Lake Basin is still subject to frequent flooding. If events were to establish that small individual operations were not practicable on land subject to this residual flood risk, or as to which the water supply may still be too erratic, leasing or consolidation of ownerships would no doubt follow. Congress may well have recognized that even if these adjustments occurred, substantial public interests would have been served by initial breakup of excess holdings at nonspeculative prices. The value of the increased productivity of the land and the substantial nonreimbursable flood control subsidy would have been widely distributed rather than accruing to the few who happened to own large tracts of land when the dam was built. An opportunity would have been afforded for persons of modest means to purchase a small tract of land and establish a farm under the improved water conditions. Even if this should prove infeasible, the changes that did occur would at least reflect the benefits provided by the project; the agricultural economy that emerged would not be dictated by a landownership pattern that existed prior to the substantial public investment. Appellees argue that section 8 is inapplicable to the Kings River project because section 10 of the Act authorized this project “substantially in accordance with the plans contained in House Document Numbered 630,” the report submitted by the Corps of Engineers. Appellees point out that this report recites the various characteristics of the Kings River service area and its water rights along the lines set out above, and, further, that the report says nothing to indicate that acreage limitations were to be imposed. But it is also true that there is nothing in the legislative history to support appellees’ premise that if Pine Flat Dam were built on Kings River by the Corps of Engineers in accordance with its plan, section 8 would not apply to the project. The legislative history is precisely to the contrary. Appellees also contend that the language of section 8 itself excludes the Kings River project. They argue that the third sentence of section 8 (on which the United States’ argument for application of reclamation law to the Kings River project rests) is modified by the first two sentences of section 8; and, therefore, that reclamation law applies to dams operated under the direction of the Secretary of War only if the conditions of the first two sentences are satisfied, including the condition that additional works be constructed by the government for irrigation purposes. No such works were built on the Kings River project; ergo, section 8 does not apply. This interpretation would make the third sentence wholly redundant. As the legislative history demonstrates, this sentence was intended to convey a great deal of meaning. Its message is clear from a careful reading of all three sentences, even without resort to the legislative history. The whole of section 8 applies, of course, only to projects that are being operated under the direction of the Secretary of War. The first two sentences deal with situations in which additional works are required to realize the irrigation potential of such a project. In these cases a feasibility determination must be made by the Secretary of War, and authorization for construction of the additional works must be obtained from Congress. Such additional works are then to be constructed, operated, and maintained by the Secretary of the Interior under the reclamation laws. The third sentence is general in coverage; it provides that all dams operated under the direction of the Secretary of War are to be utilized for irrigation only in conformity with the section, i. e., under the reclamation laws; thus bringing under those laws dams for which no additional irrigation facilities are required. The legislative history verifies the correctness of this interpretation. In Judge Stone’s succinct analysis before the Senate subcommittee, section 8 prescribes “that where there are irrigation benefits in a flood control reservoir, or if there are other facilities