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)f~~': :t, UU~. . - 1)0 \-:y,1-"'I / to lands which become excess when ac- quired by foreclosure or other process of law, by conveyance in satisfaction of mortgage, by inherita.nce, or by devise subject to the following conditions: (1)' Delivery is allowed' only for a period of up to 5 years from the date of acquisi- tion. Thereafter, delivery of water shall cease until the land is transferred to an eligible nonexcess owner. (2) The right to such temporary water deliveries is not transferable. (3) During the period of temporary water delivery, the land may be disposed of W nonexcess status without requiring price approval. (4) If the lands are not disposed of during the 5-year period, they-become ineligible to receive project water until trans- ferred to an eligible landowner at an approved price. Price approval will be required until one-half of the total con- struction costs allocated to irrigation have been paid in regular scheduled in- stallments' on the total construction ob- ligation to which the _lands are 'subject. (5) Such lands are not eligible to be placed under recordable contract. (c) Lands acquired by surviving spouse.-Nonexcess lands which become "excess in the ownership- of a' surViving spouse upon the death of a husBand or . wife may receive project water so long as the surviving spouse does not re- marry. (1-) The right to such temporary water deliveries is not transferable. (2) Prlar to remarriage, the surviving spouse may dispose of such land to an eligible buyer without forfeiting the right of the land to .receive project water, and with- out obtaining price approval if such ap- proval is no longer required under ! 426.9(bl. . (d) Excess lands _owned by states, po- litical subdivisions, and Agencies there- of.-Such lands are eligible for- project water subject to the following condi- tions: (1) Excess lands are exempt from the acreage limitation provisions so long as they are farmed primarily in the di- rect furtherance of a non-revenue-pro- duclng'public function, as determined by the Secretary of the Interior. (2) Excess lands used for a purpose other than that set forth in paragraph (d) (1) of this sec- tion may receiv~ project water if a valid recordable contract, requiring the sale _of such lands within 10 years from the date of such contract has been executed under terms and conditions satisfactory to the Secretary but without limitation upon selling price. (3) Lands not under re- cordable contract or farmed as a pUblic function as provided In paragraph (d) (1) of this section may be leased until July 7, 1995, to lessees whose fee lands in combination with the leased State lands do not exceed the lessees' nonexcess en- titlement. The sale price of such land shall not reflect value that can be attrib- uted to the construction of the project. (e) Lands administered or controlled ~y Federal Agencies.-If project water is delivered to lessees on Federal lands for farming purposes, the lessee shall be bound by the same acreage limitations as -a landowner. ' PROPOSED RULES ~ 426.6 Lands not eligible to receive project benefits. (a) ExCess lands not covered by a re- cordable contract shall not be considered eligible to receive water from a project unle~s exempt from acreage limitation bylaw. (b) Land- acquired into excess status after the announced date of initial avail- ability of project water thereto is not eli:" gible to be placed under recordable contract. (c) Excess lands may not be acquired subject to a recordable contract and con- tinue to receive project water by virtue of that contract except that, in the dis- cretion of the Secretary, land involun- tarily acquired by inheritance, foreclo- sure, or other 'operation of law, may re- tain the remaining eligibility provided in the recordable contract upon execu- Uon of an assumption agreement in a form approved by the Secretary. ~ 426.7 Types of land ownership. Reclamation law imposes no restric- tion on the amount of land' that may be owned by an individual or group of indi- v~duals. The law restricts only the por- tIon of land to which project warer may be delivered or which may benefit from - project facilities. For purposes of admin- istering the acreage limitation provisions the eliglbllity of lands is determined by the status of. the owner or owners. After these regulations become effective, the Secretary will approve the sale of excess lands, at a price not reflecting project benefits and established by appraisal as described in ~426.12, only to prospective owners W40 comply with the following forms of ownership. (a) Single ownerships.-(l) - A single eligible nonexcess owner holds title to land in a sole and separate ownership. (2) A corporation composed of a single 'eligible nonexcess owner holds title to land in a l'jole and separate ownership. (b) Multiple ownerships.-Ownerships including but not limited to tenancies i~ common, joint tenancies', and tenancies by the entirety, must comply with the following in order to hold more than 160 acres: (1) A family relationship must exist among all persons having a bene- ficialinteres~ in the property, and (2) all persons havmg such beneficial interest must qualify as an eligible nonexcess owner. (c) Partnerships.-A partnership must comply with the fOllowing in order to hold more than 160 - acres: (1) a fam- ily relationship must exist among all the partners, (2) each partner must qualify as an eligible nOll'excess owner, and (3) each partner has a right to partition or alienate his share of the property. (d) Corporations.-A corporation must comply with the follOWing in order to hold more than 160 acres: (1) A fam:'" ily relationship must - exist among all the shareholders, and (2) each shareholder must qualify as an /eligible nonexcess owner. (e) Trusts.-Multiple benefIciary trusts may be utilized to hold up to one ',-:.. 43047 nOliexcess entitlement. of land receiving project water per beneflciary provided: (1) A family relat~onship exists among all beneficiaries. (2) Each beneficiary qualifies as an eligible nonexcess owner. , (3) The trustee is uirrelated to the . trustor or the beneficiaries and is not an employee of the trustor. (4) The trust is irrevocable and constitutes a grant of all ownership, dominion, and control over a specifically described parcel of land. (5) The trust property consists solely of the land granted. (6) The trust document identifies each person who is a benefici- ary and prescribes the undivided interest of each in the trust property. which un- divided interest in no event shall repre- sent a share in the total corpus of the trust greater than the ratio of one non- excess entitlement to the total acreage of the trust. (7) The trustee named receives only compensation for management services, and neither acquires any in- terest of a beneficiary nor transacts in . his individual capacity any business with the trust. Any attempt to do either shall be void. (8) The trustee makes periodic distribution of net retums from opera- tions to beneficiaries in proportion to their undivided interests in the trust property. (9) If at any time the undi- vided interest of a beneficiary represents. an area of land excess to that which he might hold as a nonexcess owner, the trustee shall designate a specific tract of the land in the trust equivalent to such excess. In -the absence of such designa- tion, all land in the trust shall be deemed excess so long as that situation continues to exist. If a beneficiary acquires other land not in the trust which, together with his beneficial interest, exceeds that which he may hold as a nonexcess owner, the land not in the trust shall to the ex- tent of such excess be - deemed excess land. (10) Each beneficiary or guardian has the right. at his option, to a partition within- the trust of his interest in the trust. ~ 426.8 Leases, No person or legal entity shall be en- titled to lease more than 160 acres of land served by. federal water prOvided pursuant to the reclamation laws. Each leasE;! of lands served by federal water must be filed with the District, which shall-maintain a flle for public inspec- tion and report to the Department _ an- nually on the outstanding leases of lands within the District served by federal water. ti 426.9 Nonexcess land. Au owner holding only nonexcess land may receive project water without desig- nating his nonexcess holdings. (a) Designation.-(1) An excess ~and- owner must designate the land that is en_ titled to receive project water &S non- excess land in accordance with the clis- trlct contract with the United states. If he_ or she fails to do so within the speci- fled time, the district shall make the designation and if it fails to do so, the Secretary will make the designation. (2) A landowner- may, with' the consent of FEDERAL REGISTER, VOL. 42, NO. 165-THURSDAY, AUGUST 25, 1977 \