72 



Mr. DOOLITTLE. The hearing will reconvene. Mr. Miller is recog- 

 nized. 



Mr. Miller. Gretting swamped by testimony here but, Mr. Moss, 

 in your discussion of contract renewal and terms and conditions, do 

 you include water quantity? 



Mr. Moss. In terms of as part of the right to renew? Yes. 



Mr. Miller. Yes what? 



Mr. Moss. Yes, that the contractor should have a right to renew 

 for the same quantity of water as long as they have shown and con- 

 tinue to show that they can beneficially use that water. Beneficial 

 use should be as is provided for, and state law should be the meas- 

 ure of the right. 



Mr. Miller. So quantity is not one of those that would be nego- 

 tiable at the end of the term absent that showing? 



Mr. Moss. Not unless the contractor wanted to reduce their 

 quantity or increase it, for that matter. 



Mr. Miller. Mr. Graff, can you explain to me the implications 

 of the renewal and the transfer provisions under 1906? 



Mr. Graff. Well, taking renewal first, my understanding is that 

 existing law essentially grants mandatory renewal with minimal 

 qualifications for a 25-year period, but thereafter renewals become 

 discretionary. H.R. 1906, as I understand it, requires mandatory 

 renewals indefinitely or basically in perpetuity. 



As far as transfers are concerned, there are more changes, but 

 the one that is most troubling is the one that eliminates the ability 

 of growers, farmers, ranchers within a district to transfer up to 20 

 percent of that district's water supply without an effective veto on 

 the part of the water district board. 



Mr. Miller. Now, under the one transfer that was applied for, 

 the owner of that operation, that was unchallenged, right, and is 

 currently challenged or has just sort of gone by the wayside? 



Mr. Graff. Well, it is hard to get a complete story about what 

 has happened. I think what has happened is that MWD has gotten 

 cold feet. I am not sure of this because, as I said, you can't get a 

 complete answer, but I believe they are committed to the seller in 

 that case, former Assemblyman Areias, to pay him the amount to 

 which he is entitled. But whether they are going to proceed to com- 

 pletion of the actual transfer is unclear. 



I mean, as you heard Mr. Quinn, they seem to have been intimi- 

 dated by the outcry that resulted from that effort and are now 

 withdrawing to a position where they appear to have given up on 

 the idea of user-initiated transfers. 



Mr. Miller. I mean, that doesn't bode well for the notion of a 

 district veto in terms of facilitating transfers? 



Mr. Graff. Well, I guess they have got sort of a reverse psychol- 

 ogy about it. I mean, I am just trying to read into what they are 

 doing — ^what they think they are doing anyway — is they think, 

 "Well, this got vetoed anyhow so we might as well acknowledge it 

 in the law and give up." 



Mr. Miller. Well, let me just say that — ^well, never mind. 



Mr. Graff. If I might, just to complete my thought, I do think 

 that in the long run if you really want transfers to work as a water 

 management tool, you can't get away from user-initiated transfers. 

 The real conservation incentive and the profit incentive are going 



