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2\33s the position of the states that administration of water rights is the province of the appropriate state agencies, and that in the event of con- flict over interpretation of rights, state courts should have primary juris- diction. But even if the drafters of the proposed legislation disagree with this approach, it must be conceded that the draft bill's utter failure to address the above issues with non-federal uses. C. The proposed legislation does not provide for compensation for state- derived rights destroyed or imparied by the exercise of federal reserved rights. Contrary to the recommendation of both the Public Land Law Review Com- mission21 and the National Water Commission,22 the draft bill fails to provide compensation to state water ri~],t holders whose rights are damaged by the exer- cise of federal reserved rights. As might be expected, the drafters justify this on page 24 of the "Explanatory Statement" by arguing that: liThe historical facts, the legal consequences thereof, and the court decisions and acts of Congress above reviewed rather plainly demonstrate that for much longer than since the decision in Arizona v. California state administrators and appropriators should have been cognizant of the existence of the United States water rights not based on state law, whether they acknowledged them or not." Neither the legislative history of the acts under which lands were reserved, nor an examination of the cases prior to Arizona v. California in 1963, nor the formal policy and actual practice of public land agencies in acquiring water rights for reserved lands support this conclusion. Thus, the Public Land Law Review Commission, after obtaining an exhaustive legal study on the doctrine concluded that: "Prior to the Supreme Court decision in Arizona v. California cited above in 1963, no water user could have been on actual or constructive notice of the existence of such ran implied' federal water right. The same is true of the state adminis- trative agencies since as a matter of formal policy and actual practice, the public land agencies generally adhered to state law in acquiring water rights for reserved lands prior to 1963.,,23 . There is also a fumdamental issue of fairness involved in the drafters. argument. Even if the government were not required to pay compensation, should it not do so in the interest of justice? For years, the federal government emphasized and encouraged the settlement and development of the western lands under the homestead, public sale, and other settlement and disposal laws. In effect, the land was "given away", but this resulted in increasing the gross national product and promoting the national welfare.24 These early federal 21. Public Land Law Review commission, One Third of the Nation's Land 146 (1970). 22. National Water Commission, Water Policies For The Future, 461 (1973). 23. Public Land Law Review Commission, One Third of the Nation's Land 149 (1970). 24. See F.J. Trelease, Water Rights of Various Levels of Government -- States' Rights vs. National Powers, 19 Wyo. L.J. 189, 200-202 (1965). (21)