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. . . . . 0241 Unlike the Ivanhoe and City of Fresno cases, the issue in Arizona v. California \Vas not limited to a narrON conflict between state law and a particular federal policy expressed in the statute. Instead, the issue was the right of the Secretary in general to ignore state priorities in distributing project water intrastate in favor of sane other scheme. Thus, the problan was raised in the broadest possible form - the authority of the Secretary to exmtravene a fundamental principle of state water law in favor of a federal prupose not even articulated in the Act. In upholding the authority of the Secretary so to act, the Court seemed to have realized the worst fears of the states. In its view, the majority said, "Where the Congress has undertaken a canprehensive project for the improvEment of a great river and for the orderly and benef icial distribution of water, there is no rocm for inconsistent state laws. Where the Secretary's contracts, as her, carry out a congressional plan for the canplete distribution of waters to users, state law has no place." 31/ Nevertheless, tv.D unanswered questions remained. Did the opm~on apply only to the Poulder Canyon Project Act where a canprehensive congressional schane pursuaded the majority that state law must be preempted? And did the opinion apply only to interstate projects? Thus, the status of Section 8 in reclamation projects generally was considered as still in sane doubt. 32/ Proponents of national power contended that federal aChninistration according to federal policies is what Congress wants, and that Section 8 only dernards reference to state law for de:f ini tions of carq::ensable property. Such a position was urged successfully by the federal government before a federal district court in California in 1975. 33/ The trial court ruled that the Bureau must apply to the State Board for a permit to appropriate unappropriated water, as a matter of canity. Ho.vever, the court ruled that the State Board must issue such a permit once it determines, that unappropriated water is available and could not inpose any conditions in such a pemit. The case of United States v. California 34/ or the so-called New Melones case was ultimately reviewed by the Supreme Court where the Court, perhaps for the first time, was afforded an adequate perspective on the problan. To the surprise of many observers, the Supreme Court decided in a 6-3 decision in favor of the states' position, namely that the state IIEY impose any condition on the control, appropriation, use or distribution of water in a federal reclamation project that is not inconsistent with clear cong-ressional directives respecting the project. In re<Jersing, the Supreme Court considered the language in its earlier decisions in Ivanhoe, City of Fresno and Arizona v. California. The Court disavowed that language "to the extent that it would prevent California fran inposing conditions on the permits granted to the United States which are not inconsistent with congressional provisions author- izing the project in question." 35/ The Court concluded that it was clear "that state law was expected to control in tv.D important respects. First, an:i of controlling importance to this case, the Secretary would have to appropriate, purchase, or condemn necessary water rights in strict confomity with state law.... Secorrl, once the waters were released fran the dam, their distribution to individual landowners would again be controlled by state law." 36/ -5- 90.