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<br />Bulletin 16().9S Public Review Draft <br /> <br />003JG7 <br /> <br />Appendix 2A. Institutional Framework for Allocating <br />and Managing Water Resources in California <br /> <br />routinely implements the public trust doctrine through regulations and through terms and <br />conditions in water rights permits and licenses. <br />Federal Power Act <br />The Federal Power Act created a federal licensing system administered by the Federal <br />Energy Regulatory Commission and requires that a license be obtained for nonfederal <br />hydroelectric proj ects proposing to use navigable waters or federal lands. The act contains a <br />clause modeled after'a clause in the Reclamation Act of 1902, which disclaims any intent to <br />affect state water rights law. <br />In a number of decisions dating back to the 1940s, the U.S. Supreme Court held that <br />provisions of the Reclamation Act and the Federal Power Act preempted inconsistent provisions <br />of law, Decisions under both acts found that these clauses were merely "saving clauses" which <br />required the United States to follow minimal state procedural laws or to pay just compensation <br />where vested nonfederal water rights are taken, <br />In California v, United States (1978), however, the U.S. Supreme Court overturned a <br />number of earlier Supreme Court decisions which found that the Reclamation Act substantially <br />preempts state water 'law. It held that the Reclamation Act clause requires the USBR to comply <br />with conditions in state water rights permits unless those conditions conflict with "clear <br />Congressional directives." In California v. FERC (1990), commonly referred to as the Rock <br />Creek Decision, the U.S. Supreme Court rejected California's argument that the Federal Power <br />Act clause required deference to state water law, as the Reclamation Act did. The Supreme Court <br />distinguished between the two acts, finding that the Federal Power Act envisioned a broader and <br />more active oversight role than did the Reclamation law. The Federal District Court case of <br />Sayles Hydro Association v. Maughan (1993), reinforced this view by holding that federal law <br />prevents any state regulation offederally licensed power projects other than determining <br />proprietary water rights. <br />In 1994, the U,S. Supreme Court issued a decision referred to as the Elkhorn decision or <br />Tacoma decision (PUD No, 1 of Jefferson County and City of Tacoma v. Washington <br />Department of Ecology). The court held that a state minimum instream flow requirement is a <br />permissible condition of a Clean Water Act Section 401 certification, in response to a proposal to <br />construct a hydroelectric project on the Dosewallips River. Pursuant to Section 401 of the Clean <br /> <br />2A-5 <br />