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\ Such responsibility as the State may have for making water available at the Delta certainly does not apply to the delivery of water through distribution systems beyond that point. It is understood that the State will recover its costs for maintaining adequate supplies of water at the Delta on a uniform price basis. The cost to the State at this point would be the same for all con-tractors but the costs beyond that point will vary greatly. SB 1106 is somewhat ambiguous in referring to the use of bond funds realized as a result of substituting water fund monies. The Section in question refers to these monies being expanded for de­velopment of additional facilities of the State Water Resources Development System to meet local needs and augment the supplies of water in the Delta. The wording may be interpreted, as providing for two unrelated uses. We believe it highly important, there­fore, that the contractors be protected with respect to availa­bility of water at the Delta by having the State agree to use these released funds to meet Delta replenishment requirements. Our Committee proposals are designed to treat all contracting parties alike through having them repay to the State the actual costs for the facilities to get water to each point of delivery to pay in like manner costs for maintenance and operation. It is highly important from the standpoint of Southern Cali­fornia, particularly, that contracts provide for firm capacity rights in the aqueduct system. This, coupled with the obliga­tion of the State to deliver water at the Delta means that the contractor is assured that the capacity for which he has paid will be available to him as and when needed, and cannot be in­vaded for use to deliver water to other parties. We believe it incumbent upon the State to take the necessary precautions to insure that through its taxing power or other sour­ces each contracting agency will be financially able to meet its obligations. While the taxing power may be limited initially there should be reasonable assurance that with an adequate water supply its growth will be in proportion to its obligations. The Chamber is already on record and has advised the Governor of its ideas with respect to acreage limitations. We believe it worthwhile, however, to reaffirm the principle of no restrictions a as to resale uses in connection with contracts. The recommendation with respect to hydro-electric power is quite important to Southern California. Should power generated W. St P. Committee January 7, 1959 Contracts under Page #4 State Water Plan