Markets for Federal Water: Subsidies, Property Rights, and the Bureau of Reclamation

By Richard W. Wahl | Go to book overview

projects, provided that the lease did not "impair the efficiency of the irrigation project." The Warren Act of 1911 provided authority to contract out the excess capacity in irrigation project facilities to permit nonfederal water to be delivered to water users, including those outside the federal project. Similar flexibility was provided for project water supplies by the Miscellaneous Purposes Act of February 25, 1920, which authorized the Secretary of the Interior to contract for water from irrigation projects for purposes other than irrigation, provided that he first obtain the permission of the existing water user associations in the project and provided that the delivery of water for these purposes was not "detrimental to the water service for such irrigation project or to the rights of any prior appropriator." The use of reclamation water was expanded still further by the 1935 act authorizing Parker and Grand Coulee dams ( 49 Stat.1039; 33 U.S.C.540), which provided for flood control and navigation as well as for irrigation and hydroelectric power development at these two locations. Section 9(c) of the Reclamation Project Act of 1939 provided general authority for the sale of hydropower and municipal and industrial water in all reclamation projects and contained provisions allowing water formerly designated for irrigation use to be shifted to municipal and industrial use or to hydropower production, so long as the irrigation uses were protected.

This sequence of legislation indicates recognition of the expanding economic value of federally supplied water in terms of both end use and location of use. In this context, it appears that within the general scope of Reclamation law, there is considerable latitude for voluntary water transfers to accommodate new water demands. However, Bureau of Reclamation contracts with water users require the permission of the federal contracting officer to assign rights under the contract. Therefore, the attitude of the bureau and its field personnel is pivotal when it comes to approval of transfer proposals. Accordingly, this chapter has covered a number of recommendations for changes in bureau administrative policy and contracts, as well as in Reclamation law, for the purpose of facilitating the transfer of water.


References

Anderson Raymond L. 1967. "Windfall Gains from Transfer of Water Allotments Within the Colorado-Big Thompson Project," Land Economics vol. 43, pp. 265-273.

Anderson Terry L. 1983a. Water Crisis: Ending the Policy Drought ( Washington, D.C., Cato Institute).

_____, ed. 1983b. Water Rights: Scarce Resource Allocation, Bureaucracy, and the Environment ( Cambridge, Mass., Ballinger).

-191-

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