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CONGRESS, | HOUSE OF REPRESENTATIVES. I No.

WATER-POWER BILL,

MARCH 21, 1916.-Committed to the Committee of the Whole House on the state

of the Union and ordered to be printed.

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Mr. Adamson, from the Committee on Interstate and Foreign

Commerce, submitted the following

REPORT.

[To accompany S. 3331.)

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The committee on Interstate and Foreign Commerce, to whom was referred the bill (S. 3331) to amend an act entitled “An act to regulate the construction of dams across navigable waters,” approved June twenty-first, nineteen hundred and six, as amended liv the act approved June twenty-third, nineteen hundred and ten, and to provide for the improvement and development of waterways for the uses of interstate and foreign commerce, having considered the same, report thereon with amendment and as so amended recommend

that it pass.

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Amend the bill as follows:

Strike out all after the enacting clause and insert in lieu thereof the following:

That when consent or authority has been or may hereafter be granted by Congress, either directly or indirectly, through any duly authorized official or officials of the United States, to any persons to construct and maintain a dam for water power or other purpose across or in any of the navigable waters of the United States, such dam shall uot be built or commenced until the plans and specifications for such dam and all accessory works, together with such drawings of the proposed construction and such map of the proposed location as may be required for a full understanding of the subject, have been submitted to the Secretary of War and the Chief of Engineers for their approval, nor until they shall have approved such plans and specifications and the location of such dam and accessory works; and after such approval it shall not be lawful to deviate from such plans or specifications either before or after completion of the structure unless the modification of such plans or specifications has previously been submitted to and received the approval of the Secretary of War and the Chief of Engineers. Such plans, specifications, and drawings shall be submitted within two years after the date of approval of the act authorizing the construction.

Sec. 2. That as a part of such approval such conditions and stipulations may be imposed as the Secretary of War and the Chief of Engineers may deem Detessary to protect the present and future interests of the United States

which may include the condition that the persons constructing or maintaining such dam shall construct, maintain, and operate in connection therewith, without expense to the United States, a lock or locks, booms, sluices, or any other structure or structures which the Secretary of War and the Chief of Engineers or Congress may deem necessary in the interests of navigation, in accordance with such plans as they may approve; and also that the persons owning such dam shall convey to the United States, free of cost, title to such land as may be required for such constructions and approaches and shall grant to the United States free water power or power generated from water power for building and operating such constructions; and in such original approval, at the discretion of the Secretary of War and the Chief of Engineers, may be required to maintain and operate such lock without expense to the United States. The Secretary of War shall provide, as a condition of such approval, for the diligent, orderly, and reasonable development and continuous operation of the water power, subject to market conditions, and may provide that the grantee shall at no time contract for the delivery to any one consumer of electrical energy in excess of fifty per centum of the total output, except upon the written consent of the Secretary of War.

Sec. 3. That as a part of said approval, the Secretary of War and the Chief of Engineers shall require that the project adopted and the plans, specifications, and location for any dam shall be such as, in the judgment of the Secretary of War and the Chief of Engineers, shall be best adapted to a comprehensive plan for the improvement of the waterway in question for the uses of navigation and for the full development of its water power and for other beneficial public purposes and best adapted to conserve and utilize in the interests of navigation and water-power development the water resources of the region. As between contesting applicants for approval of plans and specifications hereunder, preference shall be given to that applicant whose plans are best qualified to expedite such development; and as between such contesting applicants, which appear equally well qualified in such respect, preference shall be given to that applicant which has first complied with the laws of the State or States in which such dam is to be constructed.

SEC. 4. That in case of the development, generation, transmission, and use of power or energy under such approval in a Territory, or in two or more States, including leases under section nineteen hereof, the rates, charges, and service for the same to the consumers thereof shall be reasonable and just; and all unjust, unreasonable, or unjustly discriminatory charges, rates, or services are prohibited and declared to be unlawful, and the regulation and control of so much of the service and of charges for service to consumers as constitutes commerce between the States or in such Territory and of the issuance of stock and bonds by the grantee is hereby conferred upon the Secretary of War or committed to such body as may be provided by Federal statute; that in the valuation for rate-making purposes of the property existing under said approval of the project there may be considered any lock or locks or other aids to navigation, and all other capital expenditures required by the United States, but no value shall be claimed or allowed for the rights hereby granted, for good will, or any other intangible value: Provided, That the physical connection of plants or lines for the generation, distribution, and use of power or energy under this act or under approval made hereunder may be permitted, in the discretion of the Secretary of War, but combinations, agreements, arrangements, or understandings, express or implied, to limit the output of electrical energy, to restrain trade, or to fix, maintain, or increase prices for electrical energy or service, are hereby pohibited.

Sec. 5. That as a part of the conditions and stipulations such approval shall provide

(a) For reimbursement to the United States of all expenses incurred by the United States with reference to the projects, including the cost of any investigation necessary for the approval of the plans as heretofore provided, and for such supervision of construction as may be necessary in the interest of the United States.

(b) For the payment to the United States of reasonable charges for the benefits which may accrue to such project through the construction, operation, and maintenance, in and about such streanis, by the United States of headwater improvements of every kind, nature, and riescription, including storage reser. voirs or forested watersheds or land owned, located, or reserved by the United States at the headwaters of any navigable stream for the development, improvement, or preservation of navigation in such stream in which such dam

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may be located. Such charges shall be fixed from time to time by the Secretary.
of War and Chief of Engineers, based upon a reasonable compensation equitably
apportioned among the grantee and others similarly situated upon the same
stream receiving benefits by reason of increase of flow past their water-power
structures artificially caused by such headwater improvements, the total charges
to all such beneficiaries from any such headwater improvement not to exceed
in any one year an amount equal to five per centum of the total investment
rost, in addition to the necessary annual expense of the operation of such head-
water improvement.

(c) That in the construction, maintenance, and operation of any project
under this act for the promotion of navigation, the grantee may, with the
consent of the Secretary of War, use and occupy, when necessary for carrying
out the project, lands acquired by the United States through purchase or con-
denination and any part of the public lands withdrawn by the President from
entry or disposition for the sole purpose of promoting navigation, which the
President may do, as provided in the act entitled "An act to authorize the
President of the United States to make withdrawal of public lands in certain
ases," approved June twenty-fifth, nineteen hundred and ten. For any of such
lands so used the grantee shall pay to the United States such reasonable
charges as may be fixed by the Secretary of War.

SEC. 6. That the right is hereby reserved to the United States to construct, maintain, and operate, in connection with any dam built in accordance with the provisions of this act, a suitable lock or locks, booms, sluices, or any other structures for navigation purposes, and the operation of any navigation facili. ties which shall be constructed as a part of or in connection with any dam built under the provisions of this act, whether at the expense of such grantee or of the l'nited States, shall at all times be subject to such reasonable rules and regulations in the interest of navigation, including the control of the level of the pool caused by any such dam, as shall be made by the Secretary of War and the Chief of Engineers, and in the use and operation of such navigation facilities the interests of navigation shall be paramount to the uses of such (lam by such grantee for power purposes.

Such rules and regulations may include the maintenance and operation by such grantee, at its own expense, of such lights and other signals as may be directed by the Secretary of War and Chief of Engineers and such fishways as shall be prescribed by the Secretary of Commerce, and for failure to comply with any such rule or regulation such grantee shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be subject to a fine of not less than $500 for each month's default, in addition to other penalties herein prescribed or provided by law.

Sec. 7. That the grantee shall commence the construction of the dam and accessory works within one year from the date of the approval herein provided, and shall thereafter, in good faith and with due diligence, prosecute such construction, and shall, within the further term of three years, complete the dam and afterwards shall, within such times as the Secretary of War and the Chief of Engineers shall prescribe, put in commercial operation such part of the ultimate development as the Secretary of War and the Chief of Engineers shall deem necessary to supply the reasonable needs of the then available market, and shall, from time to time thereafter, construct such portion of the balance of such ultimate development as said Secretary of War and Chief of Engineers mar virert and within the time specified by said Secretary of War and Chief of Engineers so as to supply adequately the reasonable market demands until such ultimate development shall be completed; and extensions of the periods herein specified, not to exceed two years, may be granted by the Secretary of War, on recommendation of the Chief of Engineers, when, in his judgment, the public interest will be promoted thereby. In case the grantee shall not commence actual construction within the time herein prescribed, or as extended by the Secretary of War, then the authority as to such grantee shall terminate, and in case any dam and accessory works be not completed within the time herein specified or extended as herein provided, then the Attorney General, upon the request of the Secretary of War, shall institute proper proceedings in the proper district court of the United States for the revocation of said authority, the sale of the works constructed, and such other equitable relief as the case may demaal. as provided for in section fifteen of this act.

SEC. 8. That without the written consent of the Secretary of War no sale or delivery of power shall be made to a distributing company, except in case o" an emergency, and then only for a period not exceeding thirty days, nor shall any approval under this act be assigned or transferred without such written con

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sent: Provided, however, That no grantee under this act shall create any lien upon any power project developed under an approval made under this act by mortgage or trust deed unless approved by the Secretary of War and for the bona fide purpose of financing the business of the grantee. Any successor or assign of such property or project, or of any rights accruing hereunder, whether by judicial sale, foreclosure sale, or otherwise, shall be subject to all the conditions of the approval under which such rights are held, and also subject to all the provisions and conditions of this act to the same extent as though such successor or assign were the original grantee hereunder.

Sec. 9. That the rights granted herein shall continue for a period of fifty years from and after the completion of the dam or lock and dam, and shall be irrevocable except as herein provided, but may be declared null and void upon breach of any of the terms or conditions of approval: Provided, That such approval shall be made within or through any national forest or other reservation only upon a finding by the Secretary of the department under whose supervision such reservation falls that the development will not destroy, materially injure, or be inconsistent with the purpose for which said reservation was created or acquired.

Sec. 10. That at any time after the expiration of said fifty years the United States may terminate the rights hereunder granted upon the giving to the grantee, either before or after the lapse of the period of the grant, of two years' notice in writing of such termination, and may take over the properties which are dependent, in whole or in part, for their usefulness on the continuance of such grant and which may have been acquired by any grantee acting under the provisions of this act, upon condition that it shall pay, before taking possession, first, the actual costs of the dam and locks and all other aids to navigation constructed under the approval of plans and specifications, rights of way, water rights, lands, and interests therein purchased and used by the grantee in the generation and distribution of electrical energy under the grant: and, second, the reasonable value of all other property taken over, including structures and fixtures acquired, erected, or placed upon the lands and included in the generation or distribution plant and which are dependent as hereinabove set forth, such reasonable value to be determined by mutual agreement between the Secretary of War and the grantee or owners of such property, and in case they can not agree by proceedings instituted for that purpose in the United States district court for the district in which said property or some part thereof is situated, but in no case shall the amount exceed the actual cost: Provided, That such reasonable value shall not include or be affected by the value of the franchise or good will or profits to be earned on pending contracts or any other intangible element: Provided further, That in case of war or other emergency to be judged by the Secretary of War the United States shall have the right hereby reserved to requisition and take possession of any or all of said property and operate the same for its own use and benefit as long as the necessity of emergency continues, and compensation for such use and occupation shall be determined and paid as heretofore provided in this section.

SEC. 11. That in the event the United States does not exercise its right to take over, maintain, and operate the properties as provided in section ten hereof the Secretary of War may renew the approval of plans and specifications, either original or modified, upon such terms and conditions and for such periods as may be authorized under the applicable laws that may be in force at that time, or the Secretary of War is authorized, upon the expiration of any grant under this act, to approve terms and conditions under which a new grantee may operate such properties for such periods as applicable laws may then authorize upon the further condition that the new grantee shall pay the original grantee for the properties as provided in section ten of this act.

SEC. 12. That where, in the judgment of the Secretary of War, the public interest requires or justifies the execution by any grantee of contracts for the sale and delivery of water power or electrical energy for periods extending beyond the life of the grant, but for not more than twenty years thereafter, such contracts may be entered into upon the approval of the said Secretary, and thereafter, in the event of the exercise by the United States of the option to take over the plant in the manner provided in either section ten or eleven hereof, the United States or its new grantee shall assume and fulfill all such contracts.

Sec. 13. That the persons constructing, maintaining, or operating any dam or appurtenant or accessory works in accordance with the provisions of this act shall be liable for any damage that may be inflicted thereby upon private

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property, either by overflow or otherwise, and the United States shall in no event be liable therefor. The promotion of navigation for the benefit of interstate commerce being the paramount purpose and consideration for this legislation and the improvement contemplated therein, any grantee hereunder failing to secure necessary property rights, easements, and agreements by contract may acquire all such rights, either to use or damage any dam sites, lock sites, lands, or property of others necessary to the construction, maintenance, or operation of any such dam or diversion structure or of the works appurtenant or accessory thereto by the exercise of the right of eminent domain by condemnation proceedings in the district court of the United States for the district in which such land or other property may be located, or in the State courts. The practice and procedure in any action or proceeding brought for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar actions or proceedings in the courts of the State where the property is situated.

SEC. 14. That in case of the development, generation, transmission, or use of. power or energy under an approval given under this act, including leases under section nineteen hereof, wholly within a State which has not provided a commission or other authority having adequate power to regulate rate, charges, and service to the consumers of electrical energy and the issuance of stock and bonds by public-utility corporations engaged in power development, transmission, and distribution, the control of rates, service, and charges to consumers and stock and bond issues shall be vested in the Secretary of War or committed to such body as may be authorized by Federal statutes until such time as the State shall provide a commission or other authority for such adequate regulation and control: Provided, That the control of the Secretary of War or other Federal authority shall cease and determine as to each specific matter of control described in this section so soon as the State shall have provided a commission or other authority for the regulation and control of that specific matter.

Sec. 15. That any grantee who shall fail or refuse to comply with the lawful order of the Secretary of War, made in accordance with the provisions of this act shall be deemed guilty of a misdemeanor and, on conviction thereof, shall be punished by a fine not exceeding $1,000, and every month such grantee shall remain in default shall be deemed a new offense and subject such grantee to additional penalties therefor; and in addition to said penalties the Attorney General may, on the request of the Secretary of War, institute proper pro(mudings in the district court of the United States in the district in which such structure or any of its accessory works may, in whole or in part, exist, for the purpose of having such violation stopped by injunction, mandamus, or other process; and any such district court shall have jurisdiction over all such proceedings and shall have the power to make and enforce all writs, orders, and decrees necessary to compel the compliance with the requirements of this act and the lawful orders of the Secretary of War and the performance of any condition or stipulation imposed under the provisions of this act; and if the unlawful maintenance and operation are shown to be such as shall require a reFocation of all rights and privileges held under authority of this act, the court may decree such revocation. In case of such a decree, the court may wind up the business of such grantee conducted under the rights in question, and may declare such dam and accessory works to be an unreasonable obstruction to navigation and cause their removal at the expense of the grantee owning or controlling the same, or may provide for the sale of the dam and all accessory and appurtenant works constructed under authority of this act for the further derelopment of water power, and may make and enforce such other and further orders and decrees as equity demands; and, in case of such a sale for the further development of water power, the vendee shall take the rights and privileges and shall perform the duties which belonged to the previous grantee, and shall assume such outstanding obligations and liabilities arising out of the maintenance and operation of such dan and accessory works for power purposes as the court may deem equitable in the premises.

SEC. 16. That the Secretary of War is hereby authorized to examine books and accounts of .grantees and to require them to submit statements, representations, or reports including information as to capitalization, cost of locks, dams, and other aids to navigation, water rights, lands, easements, and other property acquired, production, use, distribution, and sale of power or energy, all of which statements, representations, or reports so required shall be upon oath, unless otherwise specified, and in such form and upon such blanks as the Secretary of War may require; and any person making any

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