7(b) of S. 14 would require that new purchasers of land after Janu-
ary 1, 1978, would have to farm the land for 10 years before leasing
it (subject to hardship exceptions). We support this provision and
would adopt it. Section 7(c) would phase in application of new acre-
age limitations to leased land for a period of the expiration of an
existing base, or 10 years, whichever is shorter. We would revise the
requirement to phase in all applicable limitations to lessees of leased
land for a period of 5 years or the expiration of an existing lease,
whichever is longer. Phase in of new limitations for lessors would be
determined, of course, by rules applicable to owners, previously
discussed.

 CONTRACT APPROVALS AND EXEMPTION FROM ACREAGE LIMITATIONS
 S. 14, Section 6, would apply a blanket exemption from acreage
 limitations to all landholdings upon completion of the repayment
 required by the terms of any contracts with the Secretary relating to
 project water for agricultural use.
 The case of United States v. Tulare Lake Canal Co. (553 F. 2d 1093;
 9th Cir., 1976), ruled that provisions in contracts between the Bureau
 of Reclamation and water-user organizations containing so-called
 "payout clauses," which exempt water-user organizations from the
 reclamation excess land laws upon payment of their contract obliga-
 tions, are invalid. Twenty-two contracts containing such provisions
 had previously been ratified by the Congress, and it is the Department's
 view that such ratification has removed for those contracts the objec-
 tion found in Tulare Lake.
 Our amendments would provide Congressional ratification of exist-
 ing district contracts containing so-called "payout" clauses.
 We do not support "payout" contracts as a matter of Departmental
 policy. During a brief phase in the administration of the reclamation
 program in the early 1950's, "payout" contracts were accepted policy
 and a number of such contracts were written. Because contracts con-
 taining payout clauses were signed in good faith by the districts con-
 cerned and had been approved by an opinion of the Solicitor, and
 because payout provisions were reduced to a binding written contract
 in some cases, we believe they should be honored. We would not sign
 any more such contracts.
 We would clarify in the bill and retain the discretion that now exists
 for the Secretary to grant acreage exemptions upon payment of a
 district's obligation over the full term if the Secretary finds that a
 pattern of family farms has been established. We would not honor
 any representations not reduced to a contract. To do so would set a
 very dangerous precedent, would cause serious administrative difficul-
 ties, and would be inconsistent with the Tulare Lake decision. Nor do
 we support recognition of representations to individual farmers. This
 would result in the inequitable and anomalous situation where farmers
 who have failed to comply are given a break while neighboring farm-
 ers in the same district who have complied all along would be required
to continue to comply.
 About sixty-five district contracts have not been ratified to remove
the problem posed by the recent Tulare Lake decision. The bill would
attempt to cure that defect in those outstanding contracts by supply-