B-199126.OM, MAY 28, 1980

B-199126.OM: May 28, 1980

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OFTEN MAINTAIN WATER RESOURCE PROJECTS WHICH SOMETIMES HAVE ONLY ONE PRIMARY BENEFICIARY. WE BELIEVE THAT THE CORPS POLICY REGARDING LAND ENHANCEMENT RESULTING FROM DREDGED MATERIALS PLACED ON LOW LYING LAND IS INCONSISTENTLY APPLIED ONLY TO NAVIGATION PROJECTS. WE BELIEVE IT IS ALSO APPLICABLE TO OTHER PROJECT PURPOSES. ALSO THE CORPS' 50 PERCENT COST SHARING POLICY FOR DRAINAGE BENEFITS IS CONSIDERED SYNONYMOUS WITH ITS POLICY FOR LAND ENHANCEMENT BENEFITS. CORPS OF ENGINEERS LAND ENHANCEMENT CAUSED BY DREDGED MATERIAL DISPOSAL THE CORPS REQUIRES THAT NON-FEDERAL INTEREST CONTRIBUTE AN AMOUNT EQUAL TO 50 PERCENT OF THE ESTIMATED LAND ENHANCEMENT BENEFITS WHICH ACCRUE WHEN DREDGED MATERIAL IS PLACED ON DESIGNATED DISPOSAL SITES.

B-199126.OM, MAY 28, 1980

SUBJECT: COST SHARING AND REPAYMENT ARRANGEMENTS FOR FEDERALLY ASSISTED WATER RESOURCE PROJECTS WITH A LIMITED NUMBER OF BENEFICIARIES (CODE 080460) EVALUATION OF LEGISLATIVE BASIS FOR LOCAL COOPERATION

GENERAL COUNSEL - MILTON J. SOCOLAR:

DURING THE SUBJECT REVIEW WE FOUND THAT BOTH THE CORPS OF ENGINEERS (CORPS) AND SOIL CONSERVATION SERVICE (SCS) FINANCE, CONSTRUCT, AND OFTEN MAINTAIN WATER RESOURCE PROJECTS WHICH SOMETIMES HAVE ONLY ONE PRIMARY BENEFICIARY, PROVIDE ONLY SPECIAL LOCAL BENEFITS, OR ALLOW THOSE LOCATED AROUND A PROJECT TO REAP TREMENDOUS BENEFITS IN THE FORM OF LAND ENHANCEMENT OR INCREASED EARNING POTENTIAL - AT THE EXPENSE OF THE U. S. TAXPAYER. THEY SELDOM REQUIRE ADDITIONAL LOCAL CONTRIBUTIONS TOWARD PROJECT COST TO COMPENSATE FOR THESE SPECIAL BENEFITS.

THE CORPS HAS POLICIES WHICH REQUIRE ADDITIONAL LOCAL CONTRIBUTIONS FOR PROJECTS THAT PROVIDED SPECIAL OR LOCAL BENEFITS, HOWEVER, WE FOUND THESE REQUIREMENTS VAGUE AND INCONSISTENTLY APPLIED. FIRST, WE BELIEVE THAT THE CORPS POLICY REGARDING LAND ENHANCEMENT RESULTING FROM DREDGED MATERIALS PLACED ON LOW LYING LAND IS INCONSISTENTLY APPLIED ONLY TO NAVIGATION PROJECTS. WE BELIEVE IT IS ALSO APPLICABLE TO OTHER PROJECT PURPOSES. ALSO THE CORPS' 50 PERCENT COST SHARING POLICY FOR DRAINAGE BENEFITS IS CONSIDERED SYNONYMOUS WITH ITS POLICY FOR LAND ENHANCEMENT BENEFITS.

IN ADDITION TO THE CORPS, WE REVIEWED THE SOIL CONSERVATION SERVICE'S COST SHARING POLICIES FOR WATER RESOURCE PROJECTS. WE FOUND THAT SCS DOES NOT REQUIRE ADDITIONAL LOCAL CONTRIBUTIONS FOR PROJECTS PROVIDING SPECIAL BENEFITS BECAUSE ITS ENABLING LEGISLATION - WATERSHED PROTECTION AND FLOOD PREVENTION ACT OF 1954 - DID NOT SPECIFICALLY ADDRESS SPECIAL BENEFICIARY SITUATIONS.

THE FOLLOWING PAGES SUMMARIZE THE CORPS' AND SCS'S POLICIES FOR ADDITIONAL LOCAL COOPERATION FOR WATER RESOURCE PROJECTS, THEIR LEGISLATIVE BASIS FOR EACH OF THESE POLICIES, AND OUR ANALYSIS OF THE LEGISLATIVE HISTORIES WHICH SUPPORT THEIR POLICIES.

CORPS OF ENGINEERS

LAND ENHANCEMENT CAUSED BY DREDGED MATERIAL DISPOSAL

THE CORPS REQUIRES THAT NON-FEDERAL INTEREST CONTRIBUTE AN AMOUNT EQUAL TO 50 PERCENT OF THE ESTIMATED LAND ENHANCEMENT BENEFITS WHICH ACCRUE WHEN DREDGED MATERIAL IS PLACED ON DESIGNATED DISPOSAL SITES. HOWEVER, THE CORPS ONLY REQUIRES THIS IN CONNECTION WITH NAVIGATION PROJECTS. THIS MATERIAL OFTEN INCREASES PROPERTY VALUES AT AND AROUND THE DISPOSAL SITES. CORPS OFFICIALS STATED THAT SUCH LAND ENHANCEMENT IS CONSIDERED TO BE A SPECIAL OR LOCAL BENEFIT AS DESCRIBED IN SECTION 2 OF THE 1920 RIVER AND HARBOR ACT. THE ACT REQUIRES THE CORPS TO INCLUDE IN THEIR FEASIBILITY STUDIES "*** A STATEMENT OF SPECIAL OR LOCAL BENEFITS WHICH WILL ACCRUE TO THE LOCALITIES AFFECTED *** AND A STATEMENT OF GENERAL OR NATIONAL BENEFITS, WITH RECOMMENDATIONS AS TO WHAT LOCAL COOPERATION SHOULD BE REQUIRED, IF ANY, ON ACCOUNT OF SUCH SPECIAL OR LOCAL BENEFITS."

HOWEVER, LAND ENHANCEMENT FROM DREDGED MATERIAL DISPOSAL CAN ALSO OCCUR IN RELATION TO PROJECT PURPOSES OTHER THAN NAVIGATION. FOR EXAMPLE, A FLOOD CONTROL PROJECT THAT REQUIRE DEEPENING AND STRAIGHTENING OF CHANNELS ALSO PRODUCES LARGE QUANTITIES OF DREDGED MATERIAL.

THE CORPS APPLIES THE ABOVE POLICY ONLY TO NAVIGATION PROJECTS AND IGNORES SIMILAR SITUATIONS WHICH OCCUR IN CONNECTION WITH OTHER PROJECT PURPOSES SUCH AS FLOOD CONTROL. WE QUESTION THIS INCONSISTENT APPLICATION OF SECTION 2 OF THE 1920 RIVER AND HARBOR ACT, WHICH APPLIES TO THE FEASIBILITY STUDIES FOR ALL PROJECTS. WE BELIEVE THAT THE CORPS POLICY ON LAND ENHANCEMENT CAUSED BY DREDGED MATERIAL DISPOSAL SHOULD BE APPLIED WHENEVER THE SITUATION OCCURS REGARDLESS OF THE PROJECT PURPOSE.

QUESTIONS

(1) DOES THE 1920 RIVER AND HARBOR ACT LIMIT COLLECTING ADDITIONAL CASH FROM LOCAL INTERESTS FOR SPECIAL OR LOCAL BENEFITS (SPECIFICALLY LAND ENHANCEMENT OF SPOIL DISPOSED SITES) TO NAVIGATION PROJECTS?

(2) DOES THE 1920 RIVER AND HARBOR ACT IN ANY WAY PROHIBIT SUCH A COLLECTION IN CONNECTION WITH OTHER PROJECT PURPOSES SUCH AS FLOOD CONTROL?

DRAINAGE BENEFITS AND LAND ENHANCEMENT BENEFITS CONSIDERED SYNONYMOUS

THE FLOOD CONTROL ACT OF 1944 (SECTION 2) STATES THAT FLOOD CONTROL SHOULD BE CONSTRUED TO INCLUDE MAJOR DRAINAGE IMPROVEMENTS AND OFFICIALLY BROUGHT SUCH IMPROVEMENTS WITHIN THE SCOPE OF CORPS ACTIVITIES. THE CORPS' IMPLEMENTING REGULATIONS REQUIRES LOCAL SPONSORS TO CONTRIBUTE AN AMOUNT EQUAL TO 50 PERCENT OF ALL PROJECT BENEFITS ATTRIBUTABLE TO DRAINAGE AS THE LOCAL SHARE FOR THIS PURPOSE. THE CORPS ALSO HAS A POLICY WHICH REQUIRES THAT LOCAL SPONSORS CONTRIBUTE CASH FOR WINDFALL-TYPE (LAND ENHANCEMENT) BENEFITS OF "UNCONSCIONABLE" MAGNITUDE.

CORPS OFFICIALS CONSIDER THE TWO TYPES OF BENEFITS - DRAINAGE AND LAND ENHANCEMENT - TO BE SYNONYMOUS AND ASSUMES THAT ALL LAND ENHANCEMENT BENEFITS ARE ATTRIBUTABLE TO DRAINAGE. THIS RESULTS IN REQUIRING ADDITIONAL LOCAL CONTRIBUTION FOR ONLY ONE TYPE OF BENEFIT.

THE FIRST PROJECT TO INCLUDE MAJOR DRAINAGE AS A PROJECT PURPOSE WAS THE CENTRAL AND SOUTHERN FLORIDA PROJECT. DURING THE CORPS ECONOMIC ANALYSIS, THEY ASSUMED THAT ALL DRAINAGE BENEFITS WERE REFLECTED IN THE LAND-USE (LAND ENHANCEMENT) BENEFITS AND DID NOT OTHERWISE ATTEMPT TO CALCULATE THE AMOUNT OF DRAINAGE BENEFITS. FURTHER, IN A LATER COST SHARING REPORT, THE CORPS STATED THAT THE RECOGNITION OF INCREASED-LAND USE BENEFITS AS SYNONYMOUS WITH DRAINAGE BENEFITS WAS AN ADMINISTRATIVE (AS OPPOSED TO LEGISLATIVE) REQUIREMENT.

QUESTION

IS THERE LEGISLATIVE BASIS IN THE FLOOD CONTROL ACT OF 1944 FOR THE CORPS 50 PERCENT COST SHARING POLICY FOR DRAINAGE PROJECTS? FURTHER, IS THERE LEGISLATIVE BASIS FOR ASSUMING THAT DRAINAGE BENEFITS ARE SYNONYMOUS WITH LAND ENHANCEMENT BENEFITS?

SOIL CONSERVATION SERVICE

THE SOIL CONSERVATION SERVICE DOES NOT REQUIRE ADDITIONAL LOCAL CONTRIBUTIONS FOR PROJECTS WITH SPECIAL BENEFITS. SCS OFFICIALS BASE THIS POLICY ON THE FACT THAT THEIR ENABLING LEGISLATION - THE WATERSHED PROTECTION AND FLOOD PREVENTION ACT OF 1954 - DID NOT SPECIFICALLY ADDRESS SPECIAL BENEFICIARY SITUATIONS. HOWEVER, THE ACT DID GIVE THE SECRETARY OF AGRICULTURE THE DISCRETION TO ESTABLISH "EQUITABLE" COST SHARING ARRANGEMENTS BETWEEN LOCAL AND FEDERAL INTERESTS. FURTHER, THE LEGISLATIVE RECORDS REVEAL THAT CONGRESS DISCUSSED THE MEANING OF EQUITABLE AND AGREED, THAT IN MOST CASES, A 50-50 COST SHARING BETWEEN FEDERAL AND LOCAL INTERESTS WOULD BE EQUITABLE.

QUESTION

DOES THE FACT THAT THE WATERSHED PROTECTION AND FLOOD PREVENTION ACT OF 1954 IS SILENT CONCERNING PROJECTS WHICH PROVIDE SPECIAL LOCAL BENEFITS, PROHIBIT SCS FROM REQUIRING ADDITIONAL LOCAL CONTRIBUTION IN THOSE SITUATIONS? FURTHER, IS THE SECRETARY OF AGRICULTURE WITHIN HIS DISCRETIONARY AUTHORITY TO CONSIDER SPECIAL LOCAL BENEFITS IN DETERMINING "EQUITABLE" COST SHARING ARRANGEMENTS FOR WATERSHED PROJECTS?

ON MAY 20, 1980, WE DISCUSSED THESE ISSUES WITH MR. STAN FEINSTEIN OF YOUR STAFF AND GAVE HIM COPIES OF THE LEGISLATIVE HISTORIES WE DEVELOPED FOR THE ACTS DISCUSSED ABOVE. HE TENTATIVELY AGREED TO REVIEW THE PERTINENT POLICIES AND GIVE US AN INFORMAL EVALUATION BY JUNE 20, 1980. HE ALSO AGREED TO PROVIDE A WRITTEN CONFIRMATION OF HIS EVALUATION AT A LATER DATE. IF YOU HAVE ANY QUESTIONS OR NEED ADDITIONAL INFORMATION, PLEASE CONTACT LEE GOATLEY ON FTS: 827-6621 AT THE NORFOLK REGIONAL OFFICE OR RUTH ANN HARROLD ON 343-7611 AT THE WATER SITE.

INDORSEMENT

DIRECTOR, CED

RETURNED. IN OUR MEMORANDUM OF MAY 1, 1980, B-166506-O.M., IN REPLY TO CED'S FIRST QUESTION, WE REVIEWED THE LEGISLATIVE HISTORY OF SECTION 2 OF CHAPTER 252 OF THE ACT OF JUNE 5, 1920, 41 STAT. 1009, 1010, WHICH MADE APPROPRIATIONS FOR RIVER AND HARBOR IMPROVEMENTS. WE CONCLUDED THAT WHILE THE CORPS OF ENGINEERS'"MULTIPLE USE" POLICY FOR NAVIGATION PROJECTS DOES NOT VIOLATE THE LAW, IT DOES APPEAR TO RUN COUNTER TO THE PURPOSE OF SECURING LOCAL CONTRIBUTIONS.

YOUR TEAM DIRECTOR'S FIRST AND SECOND QUESTIONS ARE CONCERNED WITH THE APPLICABILITY OF SECTION 2 TO OTHER TYPES OF PROJECTS. DOES THIS SECTION REGARDING THE COLLECTION OF ADDITIONAL CASH FROM LOCAL INTERESTS FOR SPECIAL OR LOCAL BENEFITS (SPECIFICALLY, LAND ENHANCEMENT OF SPOIL DISPOSAL SITES) APPLY ONLY TO NAVIGATION PROJECTS? DOES SECTION 2 PROHIBIT SUCH COLLECTION IN CONNECTION WITH OTHER PROJECT PURPOSES SUCH AS FLOOD CONTROL? OUR ANSWER TO QUESTION ONE IS YES AND TO THE SECOND QUESTION, NO. SEPARATE LEGISLATION PROVIDES FOR SIMILAR CONSIDERATIONS OF LOCAL CONTRIBUTIONS FOR FLOOD CONTROL PROJECTS.

THE PERTINENT PORTION OF SECTION 2, CODIFIED AS 33 U.S.C. SEC. 547 (1976), IS AS FOLLOWS:

"EVERY REPORT SUBMITTED TO CONGRESS IN PURSUANCE OF ANY PROVISION OF LAW FOR A SURVEY, IN ADDITION TO OTHER INFORMATION WHICH THE CONGRESS HAS DIRECTED SHALL BE GIVEN, SHALL CONTAIN A STATEMENT OF SPECIAL OR LOCAL BENEFIT WHICH WILL ACCRUE TO LOCALITIES AFFECTED BY SUCH IMPROVEMENT AND A STATEMENT OF GENERAL OR NATIONAL BENEFITS, WITH RECOMMENDATIONS AS TO WHAT LOCAL COOPERATION SHOULD BE REQUIRED, IF ANY, ON ACCOUNT OF SUCH SPECIAL OR LOCAL BENEFIT."

OUR REVIEW OF THE PERTINENT LEGISLATIVE HISTORY DEMONSTRATES THAT THIS PROVISION, CONTAINED IN THE 1920 RIVER AND HARBOR APPROPRIATION ACT, WAS UNDERSTOOD TO APPLY TO THE NAVIGATION PROJECTS NORMALLY ENCOMPASSED IN SUCH LEGISLATION. NUMEROUS REFERENCES ARE MADE TO "RIVER AND HARBOR" AND "NAVIGATION." FOR EXAMPLE, SENATOR JONES, CHAIRMAN OF THE COMMITTEE ON COMMERCE WHICH REPORTED ON THE RIVER AND HARBOR APPROPRIATON BILL MADE THE FOLLOWING COMMENTS DURING SENATE DISCUSSION:

"WE HAVE INSERTED A PROVISION IN THE BILL WHICH REQUIRES THE ENGINEERS, IN SUBMITTING THEIR REPORTS, TO POINT OUT AS CLEARLY AND FULLY AS THEY CAN THE LOCAL BENEFITS WHICH WILL COME FROM SUCH AN IMPROVEMENT, TOGETHER WITH THEIR RECOMMENDATIONS AS TO THE CONTRIBUTIONS THAT SHALL BE MADE BY LOCALITIES. I BELIEVE THAT WILL RESULT IN VERY GREAT GOOD AND VERY GREAT IMPROVEMENT ALONG THE LINES OF PROPER RIVER AND HARBOR APPROPRIATIONS." 59 CONG. REC. 5779 (1920).

SECTION 2 IS CODIFIED AS 33 U.S.C. SEC. 517 (1976). IT APPEARS IN CHAPTER 12 (RIVER AND HARBOR IMPROVEMENTS) OF TITLE 33 - NAVIGATION AND NAVIGABLE WATERS. WHILE THE SECTION BY ITS TERMS IS NOT RESTRICTED TO NAVIGATION PROJECTS THE LEGISLATIVE HISTORY OF THE PROVISION MAKES IT CLEAR THAT SECTION 2, CODIFIED AS SEC. 547 OF TITLE 33, U.S.C. WAS INTENDED TO BE LIMITED IN APPLICATION TO NAVIGATION PROJECTS. SINCE THIS IS SO (AS WE WILL SEE BELOW, THERE ALREADY WAS A SOMEWHAT SIMILAR PROVISION FOR FLOOD CONTROL PROJECTS WHEN SECTION 2 WAS ENACTED) IT APPEARS TO US THAT THIS SECTION SHOULD NOT BE APPLIED TO OTHER KINDS OF PROJECTS. ACCORDINGLY, QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE AND QUESTION 2 IN THE NEGATIVE.

IN POSING THE PRECEDING QUESTIONS YOUR TEAM DIRECTOR REFERRED TO FLOOD CONTROL PROJECTS WHERE LAND ENHANCEMENT RESULTS FROM THE DEPOSITING OF DREDGED MATERIAL. AS TO FLOOD CONTROL PROJECTS, SECTION 3, CHAPTER 144 OF THE ACT OF MARCH 1, 1917, 39 STAT. 948, 950-51, (33 U.S.C. SEC. 701 (1976)), PROVIDES IN PERTINENT PART AS FOLLOWS:

"THAT ALL THE PROVISIONS OF EXISTING LAW RELATING TO EXAMINATIONS AND SURVEYS AND TO WORKS OF IMPROVEMENT OF RIVERS AND HARBORS SHALL APPLY, SO FAR AS APPLICABLE, TO EXAMINATIONS AND SURVEYS AND TO WORKS OF IMPROVEMENT RELATING TO FLOOD CONTROL. AND ALL EXPENDITURES OF FUNDS HEREAFTER APPROPRIATED FOR WORKS AND PROJECTS RELATING TO FLOOD CONTROL SHALL BE MADE IN ACCORDANCE WITH AND SUBJECT TO THE LAW GOVERNING THE DISBURSEMENT AND EXPENDITURE OF FUNDS APPROPRIATED FOR THE IMPROVEMENT OF RIVERS AND HARBORS.

"IN THE CONSIDERATION OF ALL WORKS AND PROJECTS RELATING TO FLOOD CONTROL WHICH MAY BE SUBMITTED TO THE BOARD OF ENGINEERS FOR RIVERS AND HARBORS FOR CONSIDERATION AND RECOMMENDATION, SAID BOARD SHALL, IN ADDITION TO ANY OTHER MATTERS UPON WHICH IT MAY BE REQUIRED TO REPORT, STATE ITS OPINION AS TO (A) WHAT FEDERAL INTEREST, IF ANY, IS INVOLVED IN THE PROPOSED IMPROVEMENT; (B) WHAT SHARE OF THE EXPENSE, IF ANY, SHOULD BE BORNE BY THE UNITED STATES; AND (C) THE ADVISABILITY OF ADOPTING THE PROJECT."

OTHER PROVISIONS OF THIS LEGISLATION AUTHORIZED FEDERAL FUNDING FOR FLOOD CONTROL PROJECTS ON THE MISSISSIPPI AND SACRAMENTO RIVERS. SECTION 3 HAD THE PURPOSE OF PROVIDING A MECHANISM UNDER WHICH FLOOD PROBLEMS ASSOCIATED WITH OTHER RIVERS COULD BE EXAMINED AND REPORTED ON BY THE CORPS OF ENGINEERS PURSUANT TO CONGRESSIONAL AUTHORIZATION. A REPORT BY THE NEWLY ESTABLISHED HOUSE COMMITTEE ON FLOOD CONTROL EXPLAINED THAT -

"IN REPORTING UPON EXAMINATIONS MADE FOR THE PURPOSE OF IMPROVING STREAMS FOR NAVIGATION, THE BOARD OF ENGINEERS FOR RIVERS AND HARBORS IS REQUIRED TO STATE ITS OPINION AS TO THE ADVISABILITY OF ADOPTING THE PROJECT, AND OCCASIONALLY IS CALLED UPON ALSO TO GIVE ITS OPINION AS TO WHAT SHARE OF THE COST SHOULD BE BORNE BY LOCAL INTERESTS. THE COMMITTEE BELIEVES THAT THIS RULE SHOULD BE UNIVERSAL IN FLOOD CONTROL EXAMINATIONS AND HAS, THEREFORE INCLUDED THIS REQUIREMENT *** AND HAS ADDED THERETO THE FURTHER REQUIREMENT THAT THE BOARD STATE ITS OPINION AS TO WHAT FEDERAL INTEREST, IF ANY, IS INVOLVED IN THE PROPOSED IMPROVEMENT." H.R. REP. NO. 616, 64TH CONG. 1ST SESS. 6 (1916). BY VIRTUE OF THIS PROVISION WHICH WAS ENACTED ABOUT 3 YEARS BEFORE THE 1920 RIVER AND HARBOR APPROPRIATION ACT BECAME LAW, REPORTS MADE BY THE BOARD OF ENGINEERS FOR RIVERS AND HARBORS INCLUDE INFORMATION ABOUT COSTS TO BE PAID BY LOCAL INTERESTS AND THOSE TO BE PAID BY THE U. S. GOVERNMENT, SIMILAR TO THAT REQUIRED FOR NAVIGATION PROJECTS.

ADDITIONALLY, UNDER THE FIRST PART OF SECTION 3, FUTURE FLOOD CONTROL APPROPRIATIONS ARE MADE SUBJECT TO THE LAW GOVERNING RIVER AND HARBOR APPROPRIATIONS, WHICH SINCE 1920 HAS INCLUDED THE REQUIREMENTS NOW CONTAINED IN 33 U.S.C. SEC. 547 REGARDING REPORTS SUBMITTED TO THE CONGRESS. ACCORDINGLY, LIKE CONSIDERATIONS APPLY TO LAND ENHANCEMENT RESULTING FROM DREDGED MATERIAL DISPOSAL INCIDENT TO A FLOOD CONTROL PROJECT.

THE THIRD QUESTION DEALS WITH THE FLOOD CONTROL ACT OF 1944. YOUR TEAM DIRECTOR WISHES TO KNOW IF THE ACT REQUIRES THE CORPS' 50% COST SHARING POLICY FOR DRAINAGE PROJECTS. THE SECOND PART OF THE QUESTION ASKS WHETHER LAND ENHANCEMENT IS THE ONLY TYPE OF BENEFIT FOR WHICH ADDITIONAL NON-FEDERAL FUNDS MAY BE REQUIRED IN DRAINAGE PROJECTS. THE ANSWER TO BOTH PARTS OF THE QUESTION IS NO, AS EXPLAINED BELOW.

SECTION 2, CHAPTER 665, OF THE ACT OF DECEMBER 22, 1944, POPULARLY KNOWN AS THE FLOOD CONTROL ACT OF 1944, 58 STAT. 887, 889, CODIFIED AS 33 U.S.C. SEC. 701A-1 (1976), STATES IN PERTINENT PART:

"THAT THE WORDS 'FLOOD CONTROL': AS USED IN SECTION 1 OF THE ACT OF JUNE 22, 1936, SHALL BE CONSTRUED TO INCLUDE CHANNEL AND MAJOR DRAINAGE IMPROVEMENTS, ***."

AS INDICATED IN REPLY TO THE SECOND QUESTION IN OUR MAY 1, 1980, MEMORANDUM TO WHICH WE PREVIOUSLY MADE REFERENCE, SECTION 1 OF THE 1936 ACT FOR THE FIRST TIME DECLARED A BROAD NATIONAL POLICY OF FEDERAL FINANCIAL SUPPORT FOR FLOOD CONTROL PROJECTS. OUR REVIEW OF THE 1944 ACT REVEALS NO ATTEMPT TO ESTABLISH A SEPARATE OR SPECIFIC STANDARD FOR THE AMOUNT OF PERCENTAGE OF LOCAL CONTRIBUTIONS FOR MAJOR DRAINAGE PROJECTS. THE THRUST OF THE APPLICABLE PROVISION OF THE ACT WAS TO EXPRESSLY INCLUDE DRAINAGE AS A FLOOD CONTROL METHOD. IT DID NOT SET UP ANY SPECIAL LOCAL CONTRIBUTION STANDARD INCIDENT TO THIS ACTION. THE CORPS COULD SEEK MORE OR LESS THAN THE 50 PERCENT NOW EMBODIED IN ITS POLICIES.

THE LEGISLATIVE HISTORY OF THE FLOOD CONTROL ACT OF 1944 SHOWS THAT DRAINAGE WAS CONSIDERED TO BE AN INTEGRAL PART OF FLOOD CONTROL BY SPEEDING THE FLOW OF WATERS SO THAT STREAMS COULD HANDLE THE VAST VOLUME OF WATER WHICH CAUSED FLOODING, OFTEN AT SPRINGTIME.

IT WAS RECOGNIZED THAT THE IMPROVED DRAINAGE WOULD ALSO PERMIT OTHERWISE PRODUCTIVE AND RICH SOIL TO BE RID OF WATER SATURATION AND THUS BECOME EXTREMELY PRODUCTIVE. THEREFORE, SUCH LAND WOULD BE ENHANCED IN VALUE. SEE REMARKS OF CONGRESSMAN MCKENZIE, 90 CONG. REC. 4218-19 (1944). APPEARS THAT LAND ENHANCEMENT IS CLOSELY ASSOCIATED WITH MAJOR DRAINAGE PROJECTS AND WOULD ORDINARILY CONSTITUTE THE SOLE OR MAJOR SPECIAL BENEFIT FOR WHICH ADDITIONAL LOCAL CONTRIBUTIONS WOULD BE REQUIRED. WHILE THERE IS NO LEGISLATIVE MANDATE TO CONCLUDE THAT THE SPECIAL BENEFITS RESULTING FROM MAJOR DRAINAGE PROJECTS ARE LIMITED TO LAND ENHANCEMENT, IT APPEARS THAT NORMALLY LAND ENHANCEMENT IS THE SPECIAL BENEFIT RESULTING FROM SUCH PROJECTS. HOWEVER, WE SEE NO REASON WHY CONTRIBUTIONS MIGHT NOT BE OBTAINED FOR OTHER SPECIAL BENEFITS, IF ANY, IN APPROPRIATE CIRCUMSTANCES.

CONSEQUENTLY, OUR ANSWER TO BOTH PARTS OF QUESTION THREE IS IN THE NEGATIVE, FOR THE REASONS STATED.

THE LAST QUESTION CONCERNS THE SOIL CONSERVATION SERVICE'S (SCS) POLICY OF NOT REQUIRING ADDITIONAL LOCAL CONTRIBUTIONS FOR PROJECTS WITH SPECIAL BENEFITS. THE TEAM DIRECTOR ASKS IF THE SCS IS PROHIBITED FROM REQUIRING SUCH CONTRIBUTIONS BECAUSE THE ENABLING LEGISLATION - THE WATERSHED PROTECTION AND FLOOD PREVENTION ACT OF 1954 - DOES NOT SPECIFICALLY ADDRESS THIS MATTER. ALSO, HE WISHES TO KNOW IF THE SECRETARY OF AGRICULTURE UNDER THE DISCRETIONARY AUTHORITY PROVIDED BY THE ACT MAY CONSIDER SPECIAL LOCAL BENEFITS IN DETERMINING EQUITABLE COST SHARING ARRANGEMENTS FOR WATERSHED PROJECTS. THE ANSWER IS NO TO THE FIRST PART OF THE QUESTION, AND YES TO THE LATTER PART.

THE WATERSHED PROTECTION AND FLOOD PREVENTION ACT, CHAPTER 656 OF THE ACT OF AUGUST 4, 1954, 68 STAT. 666, AUTHORIZES THE SECRETARY OF AGRICULTURE TO COOPERATE WITH THE STATES AND LOCAL ORGANIZATIONS IN THE PLANNING AND CARRYING OUT OF WORKS OF IMPROVEMENT TO PROTECT THE WATERSHEDS OF RIVERS AND STREAMS FROM EROSION, FLOODING AND SEDIMENT DAMAGES.

SECTION 4 OF THE ACT, AS AMENDED, IS CODIFIED AT 16 U.S.C. SEC. 1004 (1976) AS FOLLOWS:

"THE SECRETARY SHALL REQUIRE AS A CONDITION TO PROVIDING FEDERAL ASSISTANCE FOR THE INSTALLATION OF WORKS OF IMPROVEMENT THAT LOCAL ORGANIZATIONS SHALL -

"(2) ASSUME (A) SUCH PROPORTIONATE SHARE, AS IS DETERMINED BY THE SECRETARY TO BE EQUITABLE IN CONSIDERATION OF NATIONAL NEEDS AND ASSISTANCE AUTHORIZED FOR SIMILAR PURPOSES UNDER OTHER FEDERAL PROGRAMS, OF THE COSTS OF INSTALLING ANY WORKS OF IMPROVEMENT, INVOLVING FEDERAL ASSISTANCE (EXCLUDING ENGINEERING COSTS), WHICH IS APPLICABLE TO THE AGRICULTURAL PHASES OF THE CONSERVATION, DEVELOPMENT, UTILIZATION, AND DISPOSAL OF WATER OR FOR FISH AND WILDLIFE DEVELOPMENT, RECREATIONAL DEVELOPMENT, GROUND WATER RECHARGE, WATER QUALITY MANAGEMENT, OR THE CONSERVATION AND PROPER UTILIZATION OF LAND."

SECTION 4(2) AS ORIGINALLY ENACTED IN 1954, PROVIDED THAT LOCAL ORGANIZATIONS SHALL:

"ASSUME SUCH PROPORTIONATE SHARE OF THE COST OF INSTALLING ANY WORKS OF IMPROVEMENT INVOLVING FEDERAL ASSISTANCE AS MAY BE DETERMINED BY THE SECRETARY TO BE EQUITABLE IN CONSIDERATION OF ANTICIPATED BENEFITS FROM SUCH IMPROVEMENTS: ***"

ACCORDING TO H.R. REP. NO. 1140, 83D CONG., 2D SESS. 3 (1954),

"THE PLANNING AND INSTALLATION OF THESE UPSTREAM PROGRAMS AND PROJECTS SHOULD BE A COOPERATIVE MATTER BETWEEN THE FEDERAL GOVERNMENT, THE STATES, LOCAL GOVERNMENTAL AGENCIES, MUNICIPALITIES, AND PRIVATE CITIZENS AND GROUPS OF CITIZENS. EACH SHOULD BEAR, INSOFAR AS POSSIBLE, AN EQUITABLE PROPORTION OF THE COST BASED ON ANTICIPATED BENEFITS."

CHAIRMAN HOPE OF THE HOUSE AGRICULTURE COMMITTEE IN DISCUSSING THIS REPORT BEFORE THE HOUSE OF REPRESENTATIVES STATED THAT:

"THE BILL ITSELF DOES NOT SET UP ANY FORMULA FOR THE MATCHING OF FUNDS. IT WILL DEPEND UPON *** AN EQUITABLE PROCEDURE AND THE PART THAT WILL BE BORNE BY THE FEDERAL GOVERNMENT AND THE STATES AND THE LOCAL COMMUNITIES WILL BE BASED UPON THE CONDITIONS THAT EXIST AS FAR AS ANY PARTICULAR PROJECT IS CONCERNED. BUT THE COMMITTEE HAS HAD IN MIND THAT, OVERALL IT WILL BE ABOUT A 50-50 PROPOSITION, THE FEDERAL GOVERNMENT STANDING 50 PERCENT OF THE COST AND THE STATES AND LOCAL COMMUNITIES 50 PERCENT." 100 CONG. REC. 3135 (1954).

IN SENATE REP. NO. 1620, 83D CONG. 2D SESS. 3 (1954) IT WAS STATED THAT:

"YOUR COMMITTEE GAVE CONSIDERATION TO PROVIDING A MORE DEFINITIVE STATUTORY FORMULA FOR COST SHARING, BUT DETERMIMED THAT A DEFINITE FORMULA COULD NOT BE DEVISED WHICH WOULD BE EQUITABLE IN ALL CASES AND THAT DISCRETION WOULD HAVE TO BE LEFT IN THE SECRETARY."

THE REPORT WENT ON TO INDICATE APPROVAL OF THE NONFEDERAL CONTRIBUTION IN 65 WATERSHEDS, WHICH WAS EXPECTED TO REPRESENT MORE THAN 50 PERCENT OF THE TOTAL PROJECT COSTS.

SECTION 4(2) OF THE WATERSHED PROTECTION AND FLOOD PREVENTION ACT WAS AMENDED BY SECTION 103, TITLE I, OF THE FOOD AND AGRICULTURE ACT OF 1962, 76 STAT. 605, 609, TO PROVIDE FOR A LOCAL PROPORTIONATE SHARE DETERMINED BY THE SECRETARY TO BE EQUITABLE IN CONSIDERATION OF NATIONAL NEEDS AND ASSISTANCE AUTHORIZED FOR SIMILAR PURPOSES UNDER OTHER FEDERAL PROGRAMS. THIS CHANGE IS INCORPORATED IN THE CURRENT CODIFICATION AT 16 U.S.C. SEC. 1004(2)(A) REFERRED TO ABOVE.

THE PURPOSE FOR THE AMENDMENT WAS EXPLAINED IN S. REP. NO. 1787, 87TH CONG., 2D SESS. 28 (1962):

"IT CHANGES THE CRITERIA FOR FEDERAL PARTICIPATION FOR ALL PURPOSES, OTHER THAN FLOOD PREVENTION AND MUNICIPAL OR INDUSTRIAL WATER SUPPLY, FROM THE PRINCIPLE OF 'CONSIDERATION OF NATIONAL NEEDS AND ASSISTANCE AUTHORIZED FOR SIMILAR PURPOSES UNDER OTHER FEDERAL PROGRAMS.' PUBLIC RECREATION, FOR EXAMPLE, CANNOT BE RELATED TO DIRECT IDENTIFIABLE BENEFICIARIES, IT WILL BE PROVIDED FOR THE GENERAL PUBLIC. MOREOVER, COST SHARING FOR THIS PURPOSE SHOULD BE REASONABLY COMPARABLE WITH THAT PROVIDED UNDER OTHER FEDERAL PROGRAMS."

FROM THE FOREGOING, IT APPEARS THAT SECTION 4(2) OF THE WATERSHED AND FLOOD PROTECTION ACT, AS AMENDED, CONTEMPLATES THAT THE SECRETARY OF AGRICULTURE WILL DETERMINE THE SHARE TO BE PAID BY LOCAL INTERESTS IN CONNECTION WITH A PROJECT TO BE CONSTRUCTED UNDER THIS ACT. THE SECRETARY HAS DISCRETION TO DECIDE WHAT AMOUNTS, IF ANY, ARE TO BE PAID IN VIEW OF THE LOCAL AS OPPOSED TO NATIONAL BENEFITS. A RIGID FORMULA WAS REJECTED IN FAVOR OF SECRETARIAL DETERMINATION BASED ON THE EQUITIES OF A SPECIFIC SITUATION, ALTHOUGH THE TOTAL CONTRIBUTION BY LOCAL INTERESTS WAS GENERALLY EXPECTED TO BE APPROXIMATELY 50% OF PROJECT COST. WHILE THE AMOUNT OF THE LOCAL CONTRIBUTION, IF ANY, IS DISCRETIONARY WITH THE SECRETARY, THE DETERMINATION ITSELF APPEARS TO BE REQUIRED SINCE THE ACT STATES THAT THE SECRETARY "SHALL REQUIRE AS A CONDITION TO PROVIDING FEDERAL ASSISTANCE *** THAT LOCAL ORGANIZATIONS SHALL *** ASSUME SUCH PROPORTIONATE SHARE, AS IS DETERMINED BY THE SECRETARY TO BE EQUITABLE

SECTION 4(2) DIRECTS THE SECRETARY TO DETERMINE AN EQUITABLE LOCAL CONTRIBUTION "IN CONSIDERATION OF NATIONAL NEEDS AND ASSISTANCE AUTHORIZED FOR SIMILAR PURPOSES UNDER OTHER FEDERAL PROGRAMS." IT DOES NOT SPECIFICALLY DIRECT THE SECRETARY TO REQUIRE LOCAL CONTRIBUTIONS FOR PROJECTS WITH SPECIAL BENEFITS. HOWEVER, IN ASSESSING THE EQUITIES INVOLVED IN ESTABLISHING THE LOCAL CONTRIBUTION, THE SECRETARY MAY CLEARLY CONSIDER THE SPECIAL BENEFITS WHICH THE PROJECT WILL CONFER. IT FOLLOWS THAT WHERE THERE IS A FINDING THAT AN "ADDITIONAL" CONTRIBUTION RELATING TO THE SPECIAL BENEFITS SHOULD BE OBTAINED, THE SECRETARY ACTING THROUGH SCS HAS THE AUTHORITY TO DO SO "AS A CONDITION TO PROVIDING FEDERAL ASSISTANCE FOR THE INSTALLATION OF WORKS OF IMPROVEMENT." ACCORDINGLY, THE FIRST PART OF THE LAST QUESTION IS ANSWERED IN THE NEGATIVE AND THE SECOND PART OF THE QUESTION IN THE AFFIRMATIVE.