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o 0 1 J j " - 5 - water is furnished by a public utility ia clearly not applicable for the simple reason the united Statea is not acting aa a public utility and would be the last to concede that it is aubject to the obligations which public utilities must aaaume, including the duty to supply water to all who make application wi thin the aervice area upon payment of rates approved by the Public \/tilities Commission. I also believe the court's conclusion to be correct that the contract is invalid because it fails to provide for a permanent water supply or to recognize the right of the water users to receive water beyond ita term. I expressed the view before the trial court that the contract could be considered 85 valid only as a temporary interim contract upon condition that a repayment contract, under which the districts would acquire a permanent water right, be executed as soon as practi- cable. However, the court concluded that because of its limited jurisdiction under the controlling statutee it did not have power to conditionally validate the con- tract Rnd to retain jurisdiction in order to enforce the condition, but must de- clare the contract valid or invalid as it stands. I feel compelled to agree with this conclusion. It also seems evident that a contract by which one party purports to sell water to another for a limited term of years carries the necessary implication that the whole obligation between the partiee is expressed and that there is no further unexpressed duty to deliver water after the expiration of the contraet period. Accordingly, judicial approval of the 9(e) contract, unconditionally, would moet certainly be inconsistent with the law of the State which requirea that under the 51 tuat10n portrayed by the record pennanent rights to the use of water appurtenant to the land, should be recognized and enforced. Therefore I am constrained to dis- agree with the opinion of the Attorney Oeneral that the 9(s) utility contract is "innocuous under State law" and should be validated as an expression of ~ only of the obligation of the United Statee to the water users. In ~ judgment, the concession that the water users are entitled to perpetual service, effect1vely and oonclusively refutes the contention. I believe it is quite clear that Federal law contemplates "a repayment contract" With each contracting distriot, not a succes8ior. of temporary or term contracts. The Attorney General has expressed apprehension that affirmance of the principle that use of utility contracts by the united States ia in violation of State law, would foreclose the State itself Ilfrom employing such contracts in State- owned projects, thus severely restricting the State IS freedom of actionll (see Statement of Attorney General to Membere of Water Project Authority, November 5, 1953, page 16). It is believed the following points dispose of this appreheneion. (1) A determination of what the law ie cannot he based upon what we think it should be or what we would like it to be; such considerations are for the legislature to resolve. (2) A determination that the United States Bureau of Reclamation ia not euthorized to act as a utility in appropriating and diatributing water to project water users would not" as a matter of law, require a similar conclusion with re- spect to the power of the State or a state agency, That question should be dealt with separately and at such tiMe as the necessity therefor arises. It 10 aubmitted that the Authority should give careful consideration to the views of the Legislature with respect to its future action concerning the contract validation casea. Compliance with tha Legislature 'e request contained in SCR 80 would authorize the Principal Attorney for the Di viaion of Water Resourcea and his staff to represent the Authority as a respondent in the Ivanhoe csse before the appellate courts of California and to fully expresa hia views. Thie would not be inconsiatent with the position adopted by the Authority in its resolution of April 28, 1953, for the appellate courts would be info:nned of the position of both the Attorney General and the Principal Attorney. It would also accomplish assurance of presentation of such views before the appellate courts, which the April, 1953, resO~ lution did not do for the reason that permission to appear as amicus curiae is en- tirely within the diacretion of the court and might be denied. A prcceeding to aecure judiCial approval of a 9(e) contract between the United States snd the Santa Barbara County Water Agency is now pending before the District Court of Appeal, Second District. Many of the same iesuea are before th' court for decision as are involved in the Ivanhoe case, Reference 15 made to meJT. randllJll to me from Gavin M. Craig of my staff under date of June 25, 1953, approve.. by me, which was transmitted to the Authority and which summarizes the issues and proceedings in that action. The following recommendation was made therein and is believed to be proper.