MONTANA OPTIONS 



The preceding discussions have identified significant problem areas concerning 

 the addition of hydropower units at Libby Dam and placement of a reregulating dam 

 downstream. Montana can pursue a number of alternative measures in an attempt to 

 ensure that the project represents the best interest of the State. Practically, 

 however, it must be realized that Montana does not, and traditionally has not, 

 played a major role in the planning, authorization, or construction phases of Corps 

 projects--for good reasons. 



The Corps of Engineers has claimed that its navigational servitude rights apply 

 to this project, precluding the need for the Corps to follow any state permit procedures. 

 At Montana statehood, the federal government retained the right to control navigable 

 rivers, primarily for the purpose of interstate commerce. Development of federal 

 water resource projects is one of the rights retained under navigational servitude. 



In addition, federal projects are Congressionally authorized and funded. While 

 Montana's Congressional delegates may influence those decisions, it is obvious that 

 they do not have the full discretionary authority regarding federal projects in the state. 



President Carter's water policy explicitly declares that states must have more 

 control over the planning and construction of federal projects within state boundaries 

 and has instructed federal departments to work more closely with states in developing 

 water resource projects. Significantly, the president is also having legislation 

 drafted that would require states to cost share these projects in the amount of 10 

 percent of construction costs, but not to exceed one-fourth of one percent of the 

 state's annual revenues for projects producing vendible products (hydropower, for 

 example). For most large projects, the percentage of state revenues would apply. 

 Montana's share in such cases would be approximately $500,000 per year. The policy, 

 if implemented through legislation, would give states more control over the develop- 

 ment of federal water resource projects, but it would apply only to projects not yet 

 authorized. If the Corps can successfully defend its claim that the additional units 

 and reregulating facility are authorized, presumably, cost sharing would not apply. 

 If, on the other hand, a summary judgment is issued contrary to that claim, and 

 assuming the Corps then seeks Congressional authorization, cost sharing provisions 

 would probably apply. Cost sharing provisions would probably apply also to the 

 proposed installation of generators in the reregulating dam. 



The Corps has established an Environmental Coordinating Committe for the Libby 

 project so that state and other federal agencies can monitor construction activities 

 and suggest modifications based on environmental concerns. It is apparent to the 

 state members of that committee that few, if any, suggested changes in project con- 

 struction will be accommodated by the Corps. 



The Department of Natural Resources and Conservation has issued an opinion re- 

 garding the applicability of the Montana Major Facility Siting Act to the proposed 

 project. It was determined that the act does not apply to the proposed project under 

 the allegations stated in a petition requesting the state's opinion. Nevertheless, 

 the department is continuing legal research into the matter to determine whether 

 other aspects of the proposed project, should it be authorized, would subject it to the 

 Major Facility Siting Act. 



The following options are based on the assumption that the proposed project is 

 I not Congressionally authorized. 



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