and decisions was clarified by regulation approved July 1, 1920 (47 L.D. 418). This regulation provided that a landowner could hold rights to the use of water for more than one tract of patented land at one time if the aggregate area of such tracts upon which construction charges had not been paid in full did not exceed 160 acres. This was subsequently further expounded when by letter dated July 16, 1943, the then Secretary of the Interior advised the Secretary of Agriculture that farm units having gone to patent lose their farm unit identity and become private lands. As such, the basic 160-acre limitation is applicable.

Another problem has centered around the effect of payment in full of construction charges. Instructions issued in connection with two cases in 1913 (42 L.Ď. 542, 543), stipulated that even after issuance of patent and after payment of all construction charges, no person could receive water for project lands in excess of 160 acres. This was based on an interpretation of the language of section 3 of the 1912 act, supra, "nor in any case in excess of 160 acres" as an overall limitation effective even after payment of construction charges. An opinion rendered on July 1, 1914, by Will R. King, Chief Counsel of the Reclamation Service, was approved by the first Assistant Secretary on July 22, 1914 (43 L.D. 339). It was there decided that the quoted phrase was qualified by the phrase "before final payment of all installments of building and betterment charges," and the proviso was thus construed to permit the furnishing of water for land on which payment in full had been made of construction charges, even where more than 160 acres of such land was owned by one person. This construction was applied in a number of instances of landowners holding in excess of 160 acres who had paid construction charges against said lands in full.

Thereafter, a number of repayment contracts were entered into with water users' organizations containing provisions which provided that either individual payout or payout of the total contractual obligation would relieve the lands from the acreage limitation provisions of law. Some contracts containing such provisions were approved by the Congress pursuant to the provisions of section 7 of the Reclamation Project Act of August 4, 1939 (53 Stat. 1187), while others were not required to be presented to the Congress. Later, however, it was held in Solicitor's Opinion M-36457 dated July 10, 1957, that individual payout of construction charges was ineffective as a means of attaining relief from the acreage limitation provisions of law.

Subsequent to that opinion, a comprehensive review of reclamation law was made with the specific objective of resolving the effect of payout of the joint-liability obligation, of the entity, on the continued applicability of acreage limitation provisions of law. This review resulted in Solicitor's Opinion M-36634 dated December 26, 1961.

That opinion held that the requirement of section 46 of the act of May 25, 1926 (44 Stat. 636, 649; 43 U.S.C. 423e), relative to agreement by large landowners to dispose of excess lands at predetermined prices as a condition to receiving water for such lands, applies to lands held as excess at the time of the repayment or water service contract (i.e., preexisting excess lands) and as to such preexisting excess lands, the requirement could not be avoided by advance or accelerated payout. Payment, the opinion held, was a relevant consideration

only in connection with the effect of the excess land limitation on excess land acquired subsequent to the repayment or water service contract. As to the excess lands in the latter category, the opinion held that if, by the time payout occurs, a general pattern of family sized ownerships has been established, it is within secretarial discretion at that time, to release such lands from further applicability of the excess land limitations.

The pertinent question with respect to subsequently acquired excess lands may be summarized as "When payout occurs, has a general pattern of family sized ownerships been established?" If it has, then the release from further limitation would be within secretarial discretion. Ordinarily, this would not be the case if payout occurs in the earlier years of a project. Conversely, and assuming faithful administration and observance of the recordable contracts and the excess land limitations generally in the interim, it is to be expected that in later years, as for example, after the usual 40-year payout period for a repayment contract, conditions would be such as to permit use of such a determination compatibly with the underlying objectives of the reclamation law.

In light of the foregoing opinion and the contractual instances mentioned, it would appear that when a form of contract, containing either individual or total obligation payout provisions, has actually been placed before the Congress and that form of contract has been approved by act of Congress for use in the specific situation involved, the language would be construed as effective in accordance with its terms. On the other hand, where a contract purporting to follow the reclamation law as it applies generally contains such provisions, early payout of the district obligation or of individual obligations would not, in the light of the two opinions, operate to eliminate the application of the excess land limitations. As for those contracts executed prior to the December 26, 1961, opinion, which contain no provisions as to the effect of payout, termination of excess land limitations will not automatically follow from payout in full of the obligation according to its terms, but will depend upon the circumstances. Thus, each case will need to be examined to determine whether the purpose of the applicable legislation has been achieved before specific holdings are considered to be in violation of the law or not.

In this same regard, it must be noted that there are policy factors to consider in setting a course of departmental action. First, negotiations are underway for definitive contracts on the Kings and Kern River projects looking toward arrangements under which a judicial determination may be had of the soundness of the conclusions in Solicitor's Opinion M-36634. During the progress of these negotiations, and if they are successful, then during the pendency of the ensuing litigation, the Department does not propose to seek to terminate or abridge deliveries in any existing cases where payout has occurred. Second, at the conclusion of such litigation, if it upholds the position taken by the opinion, the judicial decision itself can be expected to have the effect of bringing about compliance in a substantial degree without further administrative action. In any event, the policy will not be one of enforcement to exact penalties, but rather one of administering the benefits of reclamation for those who are entitled to them.

It is recognized that the foregoing portion of this presentation has digressed from the basically chronological sequence in which various actions and policy implementations have been discussed. This was felt to be necessary in order to adequately present the full complexity of the payout considerations which originally came into prominence in consideration of section 3 of the 1912 act, supra.

Reverting again to the 1912 act, it should be mentioned that, while section 3 contained provisions for forfeiture of lands in certain prohibited excess categories, there is no evidence to indicate that forfeiture was ever invoked.

By section 12 of the 1914 act (act of Aug. 13, 1914; 38 Stat. 686), the Secretary of the Interior was directed to require the owners of private lands to dispose of those lands in excess of the prescribed farm unit. For this purpose, landowners were required to convey excess lands to a trustee who was to convey to a third person at a price not in excess of that fixed by the Secretary, with provision for forced sale within a fixed period after issuance of public notice. A maximum selling price per acre was fixed for entire projects rather than for individual tracts. Since the trust deeds did not control sales to middlemen who were in turn free to sell without restriction, the plan was not successful in accomplishing its purpose.

Trust deeds executed pursuant to section 12 of the 1914 act were often not enforced for another reason. Section 11 of the same act authorized the Secretary, prior to issuance of public notice on any project, to "furnish water to any entryman or private landowner thereunder until such notice was given" on a rental basis. The effect of this section was to permit indefinite postponement in giving the public notice provided for by section 4 of the 1902 act formally opening the project and establishing charges. Since the various trust deeds and contracts for the sale of excess lands which had been executed in favor of water users' associations did not require the sale of the land until after the issuance of public notice, the withholding of such notice had the effect of postponing the date when it would be necessary for the owner to dispose of his excess lands. Furthermore, by authorizing the furnishing of water on a rental basis to "any entryman or private landowner," section 11 was construed as permitting the furnishing of water on a rental basis to excess as well as nonexcess land. The lack of effective administrative procedures to carry out the provisions of the 1914 act resulted in the enactment by the Congress of the more definitive requirements of section 46 of the 1926 act (act of May 25, 1926).

Prior to 1914 violations of the excess land restrictions were brought to light through the system of water-right applications and supplemental applications, and through the system of accounts kept by Government officials with the individual landowner. By a series of congressional enactments beginning with the act of May 15, 1922 (42 Stat. 541), the system of direct dealings with individual water users was to a large extent eliminated and in time water-right applications were dispensed with upon the substitution of joint-liability contracts. Similarly, the transfer of operation and maintenance to water users' organizations, with corresponding authority to designate such organizations as fiscal agents to collect project charges, resulted in the assumption, to a degree, of certain administrative responsibilities by such water users' organizations.

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Thus, under the impetus of legislative enactments, especially the act of December 5, 1924 (43 Stat. 672, 702), and the act of May 25, 1926 (44 Stat. 636), administration of a number of projects constructed prior to 1926 was transferred to irrigation districts and water users' organizations. Responsibility for collecting charges has been delegated to water users' organizations whenever such procedure proved to be practicable of efficient accomplishment and, on many projects, operation and maintenance has been turned over as well. On a number of projects constructed prior to 1926, where public notice had never been issued, there had been no compulsion for landowners, even including those who had executed trust deeds, to subdivide their holdings. As a result, it was found that in some instances the abandonment of the water-right application system had resulted in the inclusion of all areas susceptible of service by the project regardless of the qualifications of the owner with reference to excess holdings. Where irrigation districts had been formed, excess land was frequently brought into the district along with other project land by the court decrees confirming the district organization.

A further result of the abandonment of the system of direct dealings between project officials and the individual water users was that the machinery for bringing to light violations of the excess land restriction resulting from land transfers and the corresponding machinery for enforcing those restrictions were not fully effective. In many contracts the provision delegating enforcement of excess land restrictions was in the form of a general undertaking on the part of the organization to deliver water only in accordance with the provisions of reclamation law. In other contracts the provision was in a more definite form of an undertaking to deliver water to no more than 160 acres in single ownership. In a few contracts the undertaking on the part of the district was merely in the form of an agreement to comply with rules and regulations made by the Secretary of the Interior to carry out the intent of reclamation laws.

Since the enactment of section 46 of the 1926 act, a general transition has taken place in the provisions carried in water service and repayment contracts entered into with water users' organizations. It is now the uniform practice to incorporate specific provisions stipulating the procedural steps that will prevail in treating with the excess land problem in any contract where excess lands are known to exist within the boundaries of the contracting entity at the time of contract execution. In instances where no excess ownerships exist as of the date of contract execution, delivery of water is permitted by said contract only to not more than 160 irrigable acres in single ownership or to not more than 320 irrigable acres held by husband and wife as community property, tenancy in common, etc., except as otherwise permitted by the acts of July 11, 1956, and September 2, 1960, supra. Consistent with the foregoing, administration of section 46 of the 1926 act, therefore, concerns itself essentially with the relationships between the United States and those contracting entities wherein excess lands eligible for recordable contract coverage exist. In such instances, the repayment or water service contract provides that each owner of land in excess of 160 irrigable acres, or 320 in the case of husband and wife, will be required within a certain period of time after notice by the United States to designate that portion of his total land area which is to be considered as his nonexcess entitlement

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for which he can receive project water within the basic limitation prescribed by law. Should the owner fail to make such designation, the irrigation district, and then the Secretary successively, make such designation. It is then provided that the owner may not receive water for his excess land until he has executed a recordable contract with the United States whereunder he agrees to dispose of the land upon terms and conditions satisfactory to the Secretary of the Interior and at prices fixed by the Secretary on the basis of app made without reference to any increment of value due to Federal reclamation. In some instances, a definite period following either execution of the repayment of water service contract, or in other instances the initial availability of water, is stipulated within which the owner of excess lands is required to execute such recordable contracts. In other instances, the excess-land owner is permitted to execute such recordable contracts at any time as a prerequisite to securing project water and may thus defer such action indefinitely if such suits his purpose. Notwithstanding such deferral, irrigation district assessments in most instances continue to be levied against such excess lands whether or not water is used. It is further noted that while the period afforded under recordable contract provisions for the landowner to make the agreed disposition has varied from 3 to 10 years, it has more generally been set at the latter figure.

A further refinement of this aspect of recordable contracting procedures has been employed in some recent repayment contract negotiations on a limited number of projects where no extensive precedent setting prior contractual relationships have heretofore been entered into with water-user organizations. Under this refinement excess-land owners are afforded the opportunity to enter into recordable contracts at any time within the 10-year period following the announcement of availability of project water to the district, or irrigation block within the district if such have been designated. Correspondingly, the power of attorney to make disposition of such lands on behalf of the excess-land owner vests in the Secretary of the Interior at the termination of that same 10-year period.

Irrespective of the various above noted periods afforded excessland owners in which to enter into recordable contracts it was held in Solicitor's Opinion M-36613 dated July 18, 1961, that section 46 of the act of May 25, 1926, supra, does not authorize execution of such a contract covering land acquired after execution of a water service or repayment contract between the United States and the contracting organization. Accordingly, where such after acquired ownerships may be involved, except where the act of May 11, 1956 (70 Stat. 524), is applicable, project water cannot be furnished to such after acquired lands in the hands of the excess owner. To secure project water, it is necessary that the lands be disposed of to an eligible owner.

It should further be noted that section 46 of the 1926 act, supra, additionally requires, as an antispeculation measure, that until onehalf the construction charges against any excess land, not covered by recordable contract, have been fully paid, no sale shall carry the right to receive project water unless and until the purchase price involved is approved by the Secretary.

The excess-land owner who has executed a recordable contract covering his excess holding is entitled to receive project water there