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.. . . 001525 ( , \ " for:mulate and put in place any n0'" financing and/or: cO!;L-::;har.in:J r:equirements. Information obtained by Ival Goslin in meetings with Carrathers, Congressman Tom Bevill's staff (House appropriations committee, water resources sub-committee), and Congr:cssman Kogovsek during the week of Februar:y 7th confirm this situation. Furthermore, Bevill's staff stated that non-federal financing of specific projects, even if agreed to by a state and Interior, would not be acted upon by Bevill's committee until Congrens establishes requirements for such. The staff indicated that Bevill was looking to Congr:essmen Roe (NJ) and Kazen (TX), in their capacities as chairmen of the water pr:oject authorizing sub-committees in the Public Works and Envir:onment Committee and the Interior and Insular Affairs Committee, respectively, to take the lead in establishing new financing requirements, if any. Based upon Bill McOonald'~ contacts with his countcrpat:"tr; in WESTPO states, it appears thilt ell(~t:"yone has come to esncntially the same conclusions. There appears to be, however, a wide range of opinions on how to proceed. Most states seem to think that the Governors should at least send a courtesy response acknowleging the Secretary's January 25th telegram. I expect Babbitt and Olson to press for this much. Idaho, New Mexico, Wyoming, and Montana seem unwilling to go fur the r than th is for the moment. . Arizona's concerns, as expressed by Wes Steiner, are that the Governors should: (1) acknowledge the need for non-federal financing, (2) provide a united front, and (3) tell Watt they are seeking to develop a WESTPO position. Steiner is afraid that Colorado and Wyoming will "cut their own deals" before the states establish a unified position. He is fearful, I think, that any arrangements Colorado may agree to for its projects will set precedents inimical to the Central Arizona Project (CAP). Thus, he wants to get us to participate in and commit to discussions among the western states in an effort to protect Arizona's interests in CAP, Which he acknowledges they must now finance in part if it is to be finished. We have taken the position that it is premature to exchange positions on cost-sharing. See attachment D (correspondence between Steiner and Pascoe). Recommendation At the request of Governors Babbitt and Olson, the Western States Water Council has prepared a recommended response to Watt's request for comments (attachment E). This will presumably be the starting point for discussions when the WESTPO governors meet. I recommend that you support the letter. It conforms with option 2 above (non-substantive response). This should satisfy MEHORANDur1 -4- 2/22/83