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Reclamation projects funded by the federal government are generally intended to be reimbursed through the sale of project water. The Washoe Project Act (Act), 43 U.S.C.S. § 614 et seq., however, unlike other reclamation project authorizations, does not prohibit the Secretary of the Interior (Secretary) from constructing the project until repayment contracts for the project have been entered into. The Act merely prohibits the secretary from delivering project water for reimbursable uses without first obtaining a repayment contract. Section 2(a) of the Act, 43 U.S.C.S. § 614a(a); 43 U.S.C.S. § 485h(c).
The Carson-Truckee Water Conservancy District and Sierra Pacific Power Company (appellants) filed an action seeking a declaratory judgment that the Secretary of the Interior (Secretary) violated the Washoe Project Act, 43 U.S.C.S. § 614 et seq., in refusing to sell water from the Stampede Dam and Reservoir on the Little Truckee River for municipal and industrial (M & I) use in Reno and Sparks. The state sought a determination that the Secretary was required to obtain a water permit to operate the dam; and tribe intervened in the action on behalf of the secretary. The trial court ruled that the Endangered Species Act (ESA), 16 U.S.C.S. § 1531 et seq., required the Secretary to give priority to conserving two species of fish; that the Secretary was required to sell water not needed to fulfill his obligations to the tribe under ESA; and that the Secretary's finding that there was no excess water to sell was supported by substantial evidence. Appellants challenged the judgment of the trial court.
Did the Washoe Project Act require the Secretary to sell water that remained after the fulfillment of the obligations under the ESA?
The Court held that the Washoe Project Act did not require the Secretary to sell water remaining after he fulfilled his trust and Endangered Species Act obligations, but merely prohibited him from selling water for reimbursable use without first obtaining a repayment contract. Accordingly, the Court affirmed the judgment in part and vacated the part of the judgment holding that the Secretary was required to sell the water in question.