# Ivanhoe Irrigation District v. All Parties & Persons

> California Supreme Court · January 24, 1957 · 47 Cal. 2d 597

URL: https://www.frixlaw.com/law-library/cases/9883546

## Case

- **Full name:** The IVANHOE IRRIGATION DISTRICT, Plaintiff and Appellant, v. ALL PARTIES AND PERSONS, Etc., Defendants; COURTNEY McCRACKEN Et Al., Respondents; THE PEOPLE, Defendant and Appellant
- **Court:** California Supreme Court
- **Decided:** January 24, 1957
- **Citations:** 47 Cal. 2d 597; 306 P.2d 824; 1957 Cal. LEXIS 293
- **Precedential status:** Published
- **Opinion:** Dissent by Gibson
- **Judges:** Roy A. Gustafson
- **Cited by:** 45 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Reversed on other grounds by Ivanhoe Irrigation District v. McCracken, 357 U.S. 275 (1958).
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9883546

## Opinion text

GIBSON, C. J.
I dissent.
The holding of the majority opinion, which invalidates the 160-acre water limitation and other vital provisions of the contract between Ivanhoe Irrigation District and the United States Government, undermines the very foundation of federal reclamation policy and threatens to end the flow of federal funds into this state for reclamation and irrigation purposes at a time when the need for rapid development of our water resources is most critical. In reaching its conclusion the majority ignores the Irrigation District Federal Cooperation Law of this state, relies on a statutory provision relating to the apportionment of water by districts which is inapplicable to water from a federal project, and enunciates a trust theory with respect to the ownership of water which has no basis in existing law, is unsound in principle, and will prove a serious obstacle in the resolution of state-wide problems involving the distribution and utilization of available water supplies for domestic and industrial purposes, the irrigation of land, and the production of power.
The Central Valley Project, which is now nearing completion, is a federal undertaking being built under the provisions *649 of the national reclamation laws. Since the passage of the Federal Reclamation Act in 1902, the federal statutes have imposed a limit on the amount of irrigation water from federal projects which will be sold to any one landowner, namely, sufficient water to meet the needs of 160 acres of land. In California, by reason of our community property law, the limitation has been interpreted as allowing a man and wife to buy sufficient water to supply 320 acres. (Graham, “The Central Valley Project: Resource Development of a Natural Basin” (1950), 38 Cal.L.Rev. 588, 608-611.) The restriction is not a limit on the amount of land a person may own. There is nothing in the governing federal statute, section 46 of the Omnibus Adjustment Act of 1926, which compels an individual who owns more than 160 acres to sell any of his land as a condition to receiving water sufficient for 160 acres. (44 U.S. Stat. 649, 43 U.S.C.A. § 423e (Supp. 1955).) He may retain all his land, receiving federal project water for the first 160 acres and irrigating the remainder with whatever other water may be available. It is only where he elects to request delivery of federal project water for the portion of his land in excess of 160 acres that he may be compelled to dispose of the excess land within a period of time fixed by the Secretary of the Interior. (See Graham, op. cit., 38 Cal.L.Rev. at pp. 606-608.)
The suggestion that the limitation may not have been intended to apply to lands held in private ownership prior to construction of a reclamation project flies in the face of specific language in the statute of 1902, which provides that no right to the use of water “for land in private ownership shall be sold for a tract exceeding 160 acres to any one landowner. . . .” (32 U.S. Stat. 389, 43 U.S.C.A. §431 .) Subsequent enactments contain similar provisions making specific reference to lands in private ownership. (36 U.S Stat. 926 (1911), 43 U.S.C.A. §524 ; 37 U.S. Stat. 266 (1912), 43 U.S.C.A. §544 ; 38 U.S. Stat. 689 (1914), 43 U.S.C.A. §418 ; 44 U.S. Stat. 649-650 (1926), 43 U.S.C.A. § 423e (Supp. 1955); see Graham, op. cit., 38 Cal.L.Rev. at p. 616.) The Omnibus Adjustment Act of 1926 expressly requires that contracts between the federal government and irrigation districts shall contain the acreage limitation as a condition to delivery of water from a federal project. (44 U.S. Stat. 649-650, 43 U.S.C.A. § 423e (Supp. 1955).) Thus the water limitation in the Ivanhoe contract follows the requirement of the federal *650 statute, and, unless the statutory limitation may properly be construed as inapplicable in California, or is declared unconstitutional, or is removed from the law by congressional action, the representatives of the federal government would have no power to negotiate a new contract without it.
Local irrigation districts are authorized by state law to enter into contracts with the federal government for a water supply on terms required or authorized by federal law. Direct authority for the action of the Ivanhoe district is found in the California Water Code which, since its adoption in 1943, has contained a chapter known as the Irrigation District Federal Cooperation Law (§ 23175 et seq.), most provisions of which are based on statutes originally enacted in 1917 (Stats. 1917, eh. 160). Section 23195 provides: “Districts may cooperate and contract with the United States under the Federal Reclamation Act of June 17, 1902, and all acts amendatory thereof or supplementary thereto or any other act of Congress heretofore or hereafter enacted permitting cooperation.” No delegation of legislative power is involved, and the state law clearly authorizes a contract which includes the provisions of the Federal Omnibus Adjustment Act of 1926. Section 23196 of the Water Code authorizes districts to contract with the United States for a water supply and for acquisition and operation of works for irrigation.
With respect to the delivery, distribution, and apportionment of water among irrigators, section 23197 provides that district contracts with the federal government may include provisions for “(a) Delivery and distribution of water for the land in the district under the relevant acts of Congress and the rules and regulations established thereunder. . . ,” and section 23200 provides, “All water, the right to the use of which is acquired by a district under any contract with the United States shall be distributed and apportioned by the district in accordance with the applicable acts of Congress, the rules and regulations of the Secretary of the Interior thereunder, and the provisions of the contract, ...” (Italics added.)
The majority takes- the position that sections 23197 and 23200 must be construed as referring only to federal acts which do not conflict with state law and that the 160-acre limitation in the contract is invalid because it assertedly conflicts with section 22250 of the state Water Code which provides that water shall be apportioned ratably to each landowner on the basis of the last assessment against his land for *651 district purposes. 1 The only reasonable interpretation of sections 23197 and 23200 is that the Legislature intended to authorize irrigation districts to enter into contracts with regard to the delivery, distribution, and apportionment of federal project water under the terms imposed by Congress as a condition to participation of the federal government in such contracts. The substance of section 22250 is contained in statutes enacted long before there was any water limitation in the federal reclamation law and before this state adopted the Irrigation District Federal Cooperation Law, the express purpose of which was to enable irrigation districts to secure the assistance of the United States Government in obtaining a water supply. Moreover, section 22250 is a general provision governing the distribution of irrigation water by districts, and it is obviously qualified by the more recent provisions in sections 23197 and 23200 which relate specifically to the distribution and apportionment of federal project water under contracts between irrigation districts and the United States. As we have seen, sections 23197 and 23200 authorize the acquisition of a supply of water from the United States and direct that such water shall be distributed and apportioned by the district in accordance with the applicable acts of Congress, the rules established thereunder, and the provisions of the contracts. It follows that section 22250 cannot prevail here in the face of the water limitation which is required by the federal statute and which is thus authorized by sections 23197 and 23200.
It should also be noted in considering the effect of section 22250 that the statute should not be interpreted as fixing the exclusive method of apportioning available water among landowners in all irrigation districts in the state. Section 22250 appears in part 5 of division 11 of the Water Code relating to the powers and purposes of irrigation districts, and, to be at all intelligible, it must be read in connection with the provisions in part 5 and elsewhere relating to the financing by a district of the cost of constructing, maintaining and operating an irrigation system. Aside from incidental *652 sources of revenue, there are two major methods of financing a district irrigation system under the Water Code: (1) ad valorem assessments on land in the district (§ 25500 et seq.; see § 25503); and (2) tolls charged to district irrigators for water delivered and other services (§ 22280 et seq). Where all district costs are financed by levying ad valorem assessments on district land, the formula for water apportionment set out in section 22250 is clearly applicable and, when coupled with a provision such as section 22251 authorizing a landowner to assign any or all water apportioned to him, is reasonable. (Fallbrook Irr. Dist. v. Bradley (1896), 164 U.S. 112, 162-163 [ 17 S.Ct. 56, 64 , 41 L.Ed. 369 ].) But, once an irrigation system is in operation and the district, as it may, finances a share or all of its expenses by means of charging rates or tolls to actual water users, it seems clear that the formula for water apportionment in section 22250 is not intended to apply.
The uncertainties and inequities of the assessed-land-value formula for water apportionment were discussed in Willard v. Glenn-Colusa Irr. Dist. (1927), 201 Cal. 726, 741-743 [ 258 P. 959 ], where this court upheld the constitutionality of a 1911 statute providing that, “In lieu (either in part or in whole) of levying assessments, ’ ’ irrigation districts have the power to raise all or part of the cost of operating and maintaining an irrigation system by means of charging rates or tolls to actual water consumers. (Cal. Irrig. Dist. Act, § 55, Stats. 1911, p. 516 [now Wat. Code, § 22280] ; see Water Code, § 25655.) It was pointed out that the assessed-land-valuation formula for water apportionment created hardship and uncertainty for owners of land having a relatively low assessed valuation but containing crops which required more water than the land would be entitled to under the formula for water apportionment. "On the other hand, ’’ states the opinion, “by giving to the board of directors [of an irrigation district] the power to raise the whole or a part of the cost of maintenance by tolls . . . every land owner of the district is given an opportunity to the extent of the water supply of the district of securing a definite, certain, and adequate supply of water for his lands. ’ ’ ( 201 Cal. at p. 743 .) While the question of water apportionment was not before the court, the language of the opinion clearly indicates that the formula for apportionment in section 22250 is not applicable in a situation where all or part of the district expenses are paid *653 by means of charging rates or tolls to actual water users rather than by levying an ad valorem tax on district land.
Ivanhoe and most of the other irrigation districts in the state have adopted the practice of defraying costs of maintenance and operation by means of a combined system of levying assessments and charging rates or tolls to actual water users. (See Willard v. Glenn-Colusa Irr. Dist., 201 Cal. at p. 744; Cal. Dept, of Pub. Works, Div. Water Resources, Bull. 21K, “Report on Irrigation Districts of California for the year 1939, ’ ’ pp. 8, 22; ibid., Bull. 21P, ‘ ‘ Report on Irrigation Districts in California, 1944-1950,” appendix.) The services for which tolls and rates may be charged have been gradually extended. (See Wat. Code, § 22280.) Section 25655 provides that revenues derived from such rates or tolls may be spent for “district purposes” generally, and section 25219 authorizes their use to pay principal and interest on construction and refunding bonds. Hence most, if not all, district expenses may ultimately be financed not by assessments but by tolls charged to actual water and power consumers (see Willard v. Glenn-Colusa Irr. Dist., 201 Cal. at pp. 740-741), and the Legislature could not have intended that the water apportionment formula in section 22250 should be applicable under such circumstances.
Even if it be assumed, for the sake of argument, that there is a conflict between section 22250 and the water limitation provisions of the federal statutes, the assertion by the majority that section 8 of the 1902 Reclamation Act provides for the supremacy of state law is untenable. Section 8 provides: “Nothing in this chapter shall be construed as affecting or intended to affect or in any way interfere with the laws of any State or Territory relating to the control, appropriation, use or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this chapter, shall proceed in conformity with such laws. ...” However, as stated in Nebraska v. Wyoming (1945), 325 U.S. 589 , 612, 615 [ 65 S.Ct. 1332 , 89 L.Ed. 1815 ], section 8 will not be construed in every instance to mean that “where Congress has provided a system of regulation for federal projects it must give way before an inconsistent state system.” (Emphasis added.) In the present case it is conceded that all water rights necessary to construction of the irrigation system have been acquired by the federal government in strict compliance with state law. The *654 question before us is how a future supply of water from the completed federal project, water not hitherto available, shall be apportioned among district landowners. The 160-acre water limitation is clearly part of a “system of regulation” for federal projects within the meaning of the language quoted above from Nebraska v. Wyoming and thus appears to fall in that area where section 8 does not compel federal law to give way before inconsistent state legislation; hence, if there is any state-recognized vested right which, in fact, conflicts with the acreage limitation, that right may be taken and compensated for by the federal government under its power of eminent domain. (See United States v. Gerlach Live Stock Co., 339 U.S. 725, 733, 739 [ 70 S.Ct. 955 , 94 L.Ed. 1231 ]; 32 U.S. Stat. 389, 43 U.S.C.A. §421 (Supp. 1955); Rivers and Harbors Act of 1937, § 2, 50 U.S. Stat. 844, 850.) The question of compensation for loss or threatened invasion of a vested water right is not before us.
In holding the Ivanhoe contract invalid, the majority opinion invokes the aid of a “trust” theory assertedly based on general state law. The theory is that unappropriated domestic water is owned by the state in trust for water users and that the federal government can acquire no title to appropriative water rights free of such trust. For reasons hereinafter stated, it is my opinion that the trust theory is erroneous, but, if it be assumed that such a trust exists, it is clear, as indicated above, that there is nothing in the federal water limitation which conflicts with state law, state water policy, or the best interests of the water users of the state, hence nothing which can be held to constitute a breach of trust.
There is no legal basis for the trust theory developed by the majority opinion. The Constitution and statutes of California reserve to the state considerable control over the use to which domestic water shall be put but contain nothing which creates a trust as to such waters. Section 3 of article XIY of the Constitution provides in substance that the water resources of the state must not be wasted, that conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare, and that the right to the use or flow of water from any natural stream or water course in the state is limited to such water as shall be reasonably required for the beneficial use to be served. Sections 104 and 105 of the Water Code provide, in effect, that the state may regulate the use of water in the interest of the people. These and *655 other general regulatory provisions apply to all water and water rights, whether riparian, appropriative or underlying, and whether privately or publicly owned.
The fact is that no declaration of trust is intended or effectuated by these general provisions enunciating water policy and providing for regulation, and they are in no way inconsistent with the existence of full title to water rights in the state or in private persons. While the use to which certain property may be put is controlled by state law, this does not mean that the owner thereof has something less than full title. It adds nothing to the strength and effectiveness of the laws regulating the use of water to say that they give rise to a trust relationship between the state and water users, but, to the contrary, such language threatens to confuse the development of our water law. The very use of the term “trust” draws with it the problem of applying settled trust principles to all water rights in the state, or at least to those acquired by appropriation—a problem which will certainly be attended by much uncertainty and difficulty.
Let us examine the trust theory as applied to the water rights involved in the present proceeding. The United States is acquiring the water rights necessary to completion of the project by means of (1) assignment of applications for appropriation made by the state, (2) applications for appropriation made directly by the United States, and (3) purchase and exchange agreements made by the United States with certain private owners of riparian rights to divert the flow of the San Joaquin River. (Graham, op. cit., 38 Cal.L.Rev. 596-600.) With regard to the first two, which relate to hitherto unappropriated water, even if it be assumed that all unappropriated water and water to which an appropriative right is not fully perfected belongs to the state, the ownership rights of the state do not differ from its rights in other state-owned property. Certainly the state has full title to the water and water rights which belong to it, and the people, acting through their representatives and within the limits of the Constitution, may dispose of it as they see fit. There may be occasions when the state would find it necessary to weigh the interests of a small group of potential water users against those of a much larger group, but it is difficult to see how this would be possible if all water users of the state have equal rights as beneficiaries of the trust, and it would be even more difficult if, as suggested, the water users of a particular district are *656 the sole beneficiaries of a trust in all waters which may ever be brought into the district. Application of a trust theory, in such a situation, would be an obstacle to the development of a water plan otherwise consistent with the best interests of a majority of the people. In the absence of any specific constitutional or statutory provision establishing a trust, it is improper for this court to restrict the power of the state Legislature and the people as a whole by the device of declaring that such a trust relationship exists.
The series of cases beginning with Merchants Nat. Bank of San Diego v. Escondido Irr. Dist., 144 Cal. 329 [ 77 P. 937 ], which are cited in support of the trust theory, are not in point because they deal not with the relationship of the state to domestic waters but rather with the functions of irrigation districts under statutes which, like section 22437 of the Water Code, specifically declared that such a district held its property “in trust” for the purposes of the district.
Nor is there anything in section 102 of the Water Code which supports the trust theory. The section reads, “All water within the State is the property of the people of the State, but the right to the use of water may be acquired by appropriation in the manner provided by law.” Nothing in this language is inconsistent with the view that the state holds and can convey full and complete title to the water rights which it owns. And it is settled that the broad statement, “All water within the State is the property of the people of the State,” has no application to privately owned water or water rights. (San Bernardino v. Riverside, 186 Cal. 7, 29-30 [ 198 P. 784 ].) The court in the San Bernardino case said with respect to this broad language, “Taken literally, this would include all water in the state privately owned and that pertaining to lands of the United States, as well as that owned by the state. It should not require discussion or authority to demonstrate that the state cannot in this manner take private property for public use. . . . The constitution expressly forbids it. (Art. I, § 14.) The water that pertained to or was contained in the lands of the state was already the property of the people when this [statute] was adopted. The statute was without effect on any other property.” ( 186 Cal. 7, at pp. 29-30 .)
With respect to the third method by which the United States is acquiring water rights, i.e., through purchase and exchange agreements made with private owners of riparian *657 rights, it is clear that under the well-recognized principles set forth above such rights are not subject to a trust.
We have been cited to no case which holds that the state or private persons cannot hold full and complete title to water or water rights, and the constitutional and statutory provisions regulating the use of water which are relied on by the majority opinion do not, even by remote implication, require or justify the application of a trust theory in this field. Under existing law water may be used only for beneficial purposes, and all property of the state is held for the benefit of the people and is subject to use and disposition only in their best interest. The application of formal trust principles in this field thus appears to be totally unwarranted. Moreover, the ramifications of the trust theory as applied by the majority are infinite, technical and unpredictable and, as pointed out above, may prove to be a handicap in the future development of the water resources of this state.
The water rights acquired by the United States must, of course, be used in accordance with federal law. Under section 8 of the Reclamation Act appropriations may be made by the federal government, not for its own use, but only for the use of landowners; the right to the use of water acquired under the act shall be appurtenant to the land irrigated, and beneficial use shall be the basis, the measure, and the limit of the right. (Nebraska v. Wyoming (1945), 325 U.S. 589 , 614-615 [ 65 S.Ct. 1332 , 89 L.Ed. 1815 ].)
The suggestion that the 160-acre limitation violates principles of equal protection and due process is without merit. This court cannot, of course, properly enter into a discussion of the wisdom of the limitation or the desirability of having it apply to the farming economy of the central valley in California. These are matters for Congress to determine. The limitation has remained in the federal reclamation law for over 50 years and has survived numerous efforts to eliminate it. 2 (Taylor, “The Excess Land Law: Execution of a Public Policy” (1955), 64 Yale L.J. 477 , 502-503.) It seems clear that the limitation upon the amount of water from a federal irrigation project to be sold to any one landowner creates a reasonable classification in furtherance of the purposes of *658 the federal legislation. The federal government does not propose to recover the entire cost of building the Central Valley Project, and its construction and operation will result in a considerable subsidy to irrigators. 3 They will have the long term use of federal money necessary to finance the construction of dams, storage and distribution systems for their benefit, free of interest, and will bear the ultimate cost of only a small part of the capital outlay allocated to irrigation construction. The water limitation was intended to prevent use of the reclamation service for speculative purposes, and it insures that the irrigators’ subsidy and other benefits of federal irrigation projects will not go in disproportionate share to a few large landowners but will be confined to holders of moderate-size tracts of land sufficient to maintain one family; its purpose, in other words, is to distribute the government benefits in accordance with the greatest good for the greatest number of individuals. (Graham, op. cit., 38 Cal.L.Rev. at 617.) Any vested rights of the landowners which are taken by the federal government must, of course, be compensated for, but the problems of compensation are not within the issues of this proceeding. It should be noted in this connection that none of the landowners in the district has riparian rights or perfected appropriative rights to the waters involved here and that the land of Courtney McCracken, the individual defendant who is opposing confirmation of the contract, is located about 100 miles from the river from which such waters come.
*659 We turn now to a consideration of the effect of the provisions in the Ivanhoe contract relating to the method by which the district irrigators shall reimburse the federal government for a part of the costs incurred in construction of the federal project. As noted earlier, the federal government proposes to recover from irrigators only a portion of the construction costs allocated to irrigation, and the federal reclamation laws now provide two methods by which the United States may recover this amount. Under section 9(d) of the Reclamation Project Act of 1939, based on provisions contained in earlier reclamation laws, an organization of irrigators and the federal government may enter into a repayment contract by the terms of which the government agrees to supply water at a rate to be fixed by the Secretary of the Interior, and the local organization agrees to repay a fixed sum representing its share of total construction costs allocated to irrigation. The Secretary fixes the sum of the organization’s repayment obligation and sets the amount and number of annual installments sufficient to repay the sum within 40 years. It was found that this method lacked flexibility (see note, 38 Cal.L.Rev. 739, 740-741; Maass, op. cit., 38 Cal.L.Rev. 666, 672), and, in 1939, section 9(e) of the Reclamation Project Act created an alternative method for repayment by irrigators of the costs incurred by the federal government in constructing project units other than water distribution works located inside the district. 4 Under contracts authorized by section 9(e) there is no agreement by the irrigators to pay a definite sum within 40 years to cover costs of project construction but, instead, the *660 federal government, under short or long term contracts for a period not exceeding 40 years, agrees to deliver water to the local organization at a rate fixed by the Secretary which is sufficient to include some return to the federal government on construction costs as well as costs of operation and maintenance.
In the present contract, costs incurred by the federal government in constructing a water distributing system inside the Ivanhoe district are covered by a 9(d) type provision. The contract does not contain any express provision for repayment of a share of the costs of constructing portions of the project located outside the district, such as Friant Dam and other units of the Central Valley Project. It provides merely that the United States is to furnish water and the district is to pay for it at, an acre-foot rate to be fixed annually by the Secretary, in no event in excess of $3.50 per acre foot. It is argued that the contract is defective because there is no specific requirement that a definite portion of that rate shall be allocated to repayment of the district’s share of the costs of constructing project facilities outside the district. However, the applicable provisions of section 9(e) must be read into the contract, and they provide that the water rate fixed by the Secretary shall be such as will produce revenue sufficient to cover an appropriate share of annual operation and maintenance costs “and an appropriate share of such fixed charges as the Secretary deems proper, due consideration being given to that part of the cost of construction of works connected with water supply and allocated to irrigation.”
It is obvious under section 9(e) that the water rate to be fixed by the Secretary under the Ivanhoe contract is to include a construction component and that revenue produced in excess of operation and maintenance costs is to be treated as repayment by the district of its share of construction costs, and it is immaterial that the contract does not specifically so direct. Any question as to this interpretation of section 9(e) must now be regarded as settled by a recent statute providing, among other things, that in administering sections 9(d) and 9(e), the Secretary of the Interior shall “credit each year to every party which has entered into or which shall enter into a long-term contract pursuant to said subsection (e) so much of the amount paid by said party on or before the due date as is in excess of the share of the operation and maintenance costs of the project which the Secretary finds is properly chargeable to *661 that party. Credit for payments heretofore made under any such contract shall be established by the Secretary as soon after the enactment of this Act as it is feasible for him to do so. After the sum of such credits is equal to the amount which would have been [sic] for repayment by the party if a repayment contract under subsection (d) had been entered into, which amount shall be established by the Secretary upon completion of the project concerned or as far in advance thereof as is feasible, no construction component shall be included in any charges made for the furnishing of water to the contracting party and any charges theretofore fixed by contract or otherwise shall be reduced accordingly.” (Pub. L. No. 643, 84th Cong., 2d Sess. § 1(3) (July 2, 1956), 70 U.S. Stat. 483-484 (1956).)
It has been suggested that the 9(e) type of contract places the federal government in the role of a utility, a mere seller of water, and that district irrigators can never acquire permanent, appurtenant water rights thereunder. Such reasoning, however, overlooks the clear declaration which has appeared in the reclamation law since its enactment in 1902 that “the right to the use of water acquired under the provisions of this Act shall be appurtenant to the land irrigated, . . .” (32 U.S. Stat. 390, 43 U.S.C.A. § 372 .) It is not reasonable to suppose that anything in the provisions of section 9(e) has in any way altered this basic purpose of the reclamation law. (Cf. Nebraska v. Wyoming, 325 U.S. 589 , 614-615 [ 65 S.Ct. 1332 , 89 L.Ed. 1815 ].) Moreover, it is now expressly directed that the Secretary of the Interior, in administering sections 9(d) and 9(e), shall provide that the other party to any contract entered into pursuant to those sections “shall, during the term of the contract and of any renewal thereof and subject to fulfillment of all obligations thereunder, have a first right ... to a stated share or quantity of the project’s available water supply . . . and a permanent right to such share or quantity upon completion of payment of the amount assigned for ultimate return by the party, subject to payment of an appropriate share of such costs, if any, as may thereafter be incurred by the United States in its operation and maintenance of the project works.” The Secretary is expressly authorized to amend existing 9(e) contracts to make their language conform to this act. (Pub. L. No. 643, 84th Cong., 2d Sess. §§ 1(4), 2 (July 2, 1956), 70 U.S. Stat. 483-484.)
It has also been urged that neither section 9(e) nor the *662 Ivanhoe contract contains a provision authorizing renewal of the water delivery provisions beyond 40 years and that the federal government is, therefore, under no obligation to continue to supply water beyond the 40-year period. The Department of the Interior has construed the reclamation law to mean that construction costs allocated to irrigation may be recovered by means of 9(e) contracts in any reasonable period within the useful life of the project, and the rates presently established for the Central Valley Project are calculated to effect full recovery of the costs of the major units by the year 2009. There is nothing in section 9(e) which requires the recovery of all construction costs within 40 years or which forbids the renewal of water delivery contracts for periods beyond that time. This interpretation must be regarded as settled by the provision recently added to the reclamation law which authorizes the Secretary, if requested by the other party thereto, to amend existing contracts entered into under section 9(e) to include a provision for renewal. The Secretary is also authorized, upon request, to amend existing 9(e) contracts to include a provision contemplating conversion of the 9(e) contract into a 9(d) type repayment contract at a time in the future when the amount remaining due the United States by the other party is so small that it can probably be discharged in annual installments within the period fixed by law for 9(d) contracts, i.e., at present, 40 years. (Pub. L. No. 643, 84th Cong., 2d Sess. §§ 1(1), 1(2), 2 (July 2, 1956), 70 U.S. Stat. 483-484.)
There is no merit in the argument that the contract is defective because it fails to state that, upon repayment of all construction costs, the district shall succeed to whatever title the United States has acquired to property in the district in connection with the project. The contract provides that “Title to all of the Project works, including the distribution system constructed by the United States pursuant to this contract, shall be and remain in the name of the United States until otherwise provided for by the Congress, notwithstanding the transfer hereafter of any such works to the District for operation and maintenance.” This provision is required by the reclamation law. (32 U.S. Stat. 389, 43 U.S.C.A. § 498 .) There is no reason why the parties cannot agree that title to the project works shall remain in the United States after repayment of construction costs. The provision is a reasonable method of assuring that the *663 various properties of the project shall remain devoted to the purposes for which the federal funds were expended, and, in the absence of a showing that the provision violates the Constitution, or a statute or some rule of policy, we should not hold it to be invalid. There is nothing in the contract or in the reclamation law which precludes Congress from transferring title to project property to the district after all terms of the contract are performed, and it will be up to the district to press its claim thereto at such a time. It is not the business of the courts to determine whether the contract provision is a wise one from the standpoint of the district; the question is one of validity.
The conclusions expressed above make it unnecessary to consider whether the Second Validating Act of 1949 (Stats. 1949, p. 1511) is applicable to the contract.
I would reverse the judgment.
Traynor, J., concurred.
Section 22250 of the Water Code provides: “All water distributed by districts for irrigation purposes shall except when otherwise provided in this article be apportioned ratably to each landowner upon the basis of the ratio which the last assessment against his land for district purposes bears to the whole sum assessed in the district for district purposes.” The substance of this section was included in the statutes of 1887, page 34, section 11. It also appears in the statutes of 1897, page 259, section 18.
In three instances Congress specifically exempted certain reclamation projects in Colorado, Nevada and California from the limitation, but all attempts to obtain such an exemption for the Central Valley Project have failed. (Taylor, op. cit., at pp. 502-503.)
That portion of costs allocated to navigation and flood control (approximately 12 per cent of total estimated cost) is nonreimbursable. Of the costs for which the United States will be reimbursed, expenditures allocated to irrigation represent approximately 63 per cent of the total. Of the remainder, costs allocated to municipal and industrial water supply represent approximately 3 per cent of total reimbursable cost; that allocated to power development represents 33 per cent. (See note, 38 Cal.L.Rev. 728, 730, citing H.R. Doc. No. 146, 80th Cong., 1st Sess. 23 (1947).) Federal money expended for irrigation purposes is advanced free of interest over long periods of time, and, in the allocation of repayment obligations under plans formulated by the Bureau of Declamation, irrigators are scheduled to repay the United States only 17 per cent of total reimbursable costs or, stated otherwise, approximately 35 per cent of the costs allocated to irrigation. (Harding, “Background of California Water & Power Problems’’ (1950), 38 Cal.L.Rev. 547, 564.) The difference is proposed to be made up by users of project power and municipal and industrial water who are scheduled to pay rates designed to return approximately 82 per cent of total reimbursable cost. (Harding, op. cit., 38 Cal.L.Rev. at 564; Graham, op. cit., 38 Cal.L.Rev. at 622; Maass, "Administering the C.V.P." (1950), 38 Cal.L.Rev. 666, 672; Note, 38 Cal.L.Rev. 728, 730.)
Section 9(e) of the Reclamation Project Act provides as follows: “In lieu of entering into a repayment contract pursuant to the provisions of subsection (d) of this section to cover that part of the cost of the construction of works connected with water supply and allocated to irrigation, the Secretary, in his discretion, may enter into either shorter long-term contracts to furnish water for irrigation purposes. Bach such contract shall be for such period, not to exceed forty years, and at such rates as in the Secretary’s judgment will produce revenues at least sufficient to cover an appropriate share of the annual operation and maintenance cost and an appropriate share of such fixed charges as the Secretary deems proper, due consideration being given to that part of the cost of construction of works connected with water supply and allocated to irrigation; and shall require payment of said rates each year in advance of delivery of water for said year. In the event such contracts are made for furnishing water for irrigation purposes, the costs of any irrigation water distribution works constructed by the United States in connection with the new project, new division of a project, or supplemental works on a project, shall be covered by a repayment contract entered into pursuant to said subsection (d).” (53 U.S. Stat. 1193, 61 U.S. Stat. 501, 43 U.S.C.A. § 485h(e) (Supp. 1955).)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9883546. Public record. Not legal advice.