B EXECUTIVE OFFICE OF THE PRESIDENT, The Honorable the SECRETARY OF STATE. BUREAU OF THE BUDGET, Washington, D.C., September 2, 1959. (Attention: Mrs. E. M. Waskewich, 4188 New State Building.) MY DEAR MR. SECRETARY: This is in reply to Assistant Secretary Macomber's letter of August 4, 1959, transmitting copies of the report that the Department proposes to present to the chairman of the House Committee on Foreign Affairs on H.R. 8080, a bill to authorize the conclusion of an agreement for the joint construction by the United States and Mexico of a major international storage dam on the Rio Grande in accordance with the provisions of the treaty of February 3, 1944, with Mexico, and for other purposes. H.R. 8080, if enacted, would provide for the joint construction of the Diablo Dam and Reservoir on the Rio Grande River by the United States and Mexico. It is considered that the amendment to section 3 of the bill proposed in your report may raise certain legal questions with respect to Federal rights. We have requested the views of the Department of Justice on this matter and will advise you further when these views are received. Subject to your consideration of the views expressed in our letter to the committee, a copy of which is enclosed for your information, and on the understanding that we may wish to supplement this letter when the views of Department of Justice are received, you are advised that the Bureau of the Budget would have no objection to the submission of your report to the committee. It is requested that a copy of this letter accompany your report to the committee. Sincerely yours, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. C Hon. THOMAS E. MORGAN, EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., September 2, 1959. Chairman, Committee on Foreign Affairs, MY DEAR MR. CHAIRMAN: Your committee now has under consideration H.R. 8080, a bill to authorize the conclusion of an agreement for the joint construction by the United States and Mexico of a major international storage dam on the Rio Grande in accordance with the provisions of the treaty of February 3, 1944, with Mexico, and for other purposes. H.R. 8080, if enacted, would provide for the joint construction of the Diablo Dam and Reservoir on the Rio Grande River by the United States and Mexico. The President, in a statement issued jointly with the President of Mexico on February 20, 1959, expressed his agreement with the President of Mexico on the desirability of constructing the Diablo Dam and his hope that an agreement for construction could be concluded as rapidly as possible. However, H.R. 8080 in its present form contains a number of flaws. Those flaws, together with amendments designed to remove them, are described in the attached analysis. Accordingly, the Bureau of the Budget recommends that H.R. 8080 be enacted if amended as recommended in the attached analysis. Sincerely yours, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. ANALYSIS OF AMENDMENTS TO H.R. 8080 RECOMMENDED BY THE BUREAU OF THE BUDGET 1. Section 2 provides that if a power privilege is leased, a report shall be made to the Foreign Relations Committee of the U.S. Senate and the Foreign Affairs Committee of the House of Representatives and such agreements shall not become effective unless approved by these committees. However construed, the constitutional difficulties of this provision are inherent. Viewed as requiring a further legislative action, the section is open to the objection that it involves an unlawful delegation by the Congress to its committees of a legislative function which the Constitution contemplates the Congress itself, as an entity, should exercise. If the approval or disapproval by the committees is considered as not legislative in nature, then there is involved what appears to be an unconstitutional infringement of the separation of powers prescribed in articles I and II of the Constitution. We do not believe that the Congress can validly delegate to one of its committees the power to prevent executive actions taken pursuant to law. To do so in this case would be to divide the responsibility for administering the program between the Secretary of State and the designated committees. Such a procedure would be a clear violation of the separation of powers within the Government and would destroy the lines of responsibility which the Constitution provides. Furthermore, the negotiation and execution of such a leasing contract is a purely executive function. Although the Congress may prescribe the standards and conditions under which executive officials may enter into contracts, it may not lodge in its committees or members the power to make such contracts, either directly or by giving them the power to approve or disapprove a contract which an executive officer proposes to make. It is therefore recommended that section 2 be amended by deleting the language beginning with ": Provided further," at the top of page 3 to the end of the section and by substituting a period. 2. The bill does not require repayment of water supply and irrigation costs. The Bureau of the Budget considers that, as in the case of the Anzalduas diversion dam now under construction, operation of Diablo Dam and Reservoir for irrigation and water supply purposes in the United States should be prohibited unless local interests agree to appropriate repayment of costs allocated to these purposes. We would recommend, therefore, that section 3 of the bill be amended to include the following provision: "Provided, That the dam shall not be operated for irrigation or water supply purposes unless suitable arrangements have been made with the prospective water users for repayment to the Government of such portions of the costs of the dam as shall have been allocated to such purposes by the Secretary of State." 3. Section 4 of H.R. 8080 would limit the costs allocated to power and water conservation to the incremental costs of including these purposes in the project. The Bureau of the Budget believes that allocations of costs to these purposes should be based on a method which assigns an equitable share of joint costs to all major purposes in accordance with established cost allocation procedures. We would recommend, therefore, that the first sentence of section 4 be deleted. 4. The second sentence of section 4 would permit the use of surplus power revenues to reduce any construction costs allocated to the conservation of water. We would recommend that the words "for irrigation" be added after the words "conservation of water" to make it clear that surplus power revenues will not be applied to reduce any costs allocated to domestic, municipal, and industrial water supply. 5. Section 5 of the bill would base the interest rate to be charged for water conservation and power on the average rate paid by the United States on its marketable long-term loans outstanding at the time the first appropriation for construction is made. The Bureau of the Budget believes that interest charges should be computed on the basis of the current average market yield on long-term marketable obligations of the Treasury at the end of the fiscal year preceding the fiscal year in which construction begins. This would bring the interest payments for power and water supply in line with the actual costs to the Treasury of the funds invested in the project. We would recommend therefore that the bill be amended by the substitution of the following language for the language of section 5: "The interest rate applicable to the repayment of costs allocated to power and domestic, municipal, and industrial water supply shall be determined by the Secretary of the Treasury as of the time the first appropriation is made for initiating construction of the project. Such interest rate shall be determined by calculating the average yield to maturity on the basis of the daily closing market bid quotations during the month of June next preceding the fiscal year in which said appropriation is made, on all interest-bearing marketable public debt obligations of the United States having a maturity date of fifteen or more years from the first day of said month, and by adjusting such average annual yield to the nearest one-eighth of one per centum." APPENDIX V RESOLUTION ADOPTED AT THE SEMIANNUAL ASSEMBLY OF THE INTERNATIONAL GOOD NEIGHBOR COUNCIL, EL PASO-JUAREZ, NOVEMBER 1, 1958 Whereas recent flooding on the Rio Grande has again proved the necessity for Diablo Dam as a means of controlling floods, providing additional conservation storage, and minimizing property damage and loss of life; and Whereas the feasibility report of the U.S. Section of the International Boundary and Water Commission has been completed and the State Board of Water Engineers of Texas has recommended this project and the Governor of Texas has given it his approval: Now, therefore, be it Resolved, That the International Good Neighbor Council go on record as supporting immediate authorization and appropriation of moneys by the respective Governments to build this necessary project in order that the danger of future disasters may be averted, and that the fullest and most complete utilization of the waters of the Rio Grande from Fort Quitman to the Gulf of Mexico be realized; and be it further Resolved, That the International Good Neighbor Council recognizes that water users on both sides of the border, both upstream and downstream from the proposed Diablo damsite, must be assured their respective share of the waters of this international stream. 274 X |