B-166506.OM, MAY 1, 1980

B-166506.OM, MAY 1, 1980

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

GENERAL COUNSEL - MILTON J. SOCOLAR:

WHILE SCOPING THE SUBJECT ASSIGNMENT, WE FOUND THAT ALTHOUGH THE CORPS OF ENGINEERS HAD REGULATIONS WHICH CALL FOR ADDITIONAL COST SHARING WHEN THERE ARE A LIMITED NUMBER OF PROJECT BENEFICIARIES OR WHEN "WINDFALL BENEFITS" ACCRUE TO LIMITED INTERESTS, THEY SELDOM REQUIRE ANY ADDITIONAL LOCAL CONTRIBUTIONS. WE ALSO FOUND THAT THEIR POLICIES GOVERNING ADDITIONAL LOCAL COST SHARING ARE BASED ON GENERAL STATEMENTS IN LEGISLATION DATING BACK AS FAR AS 1920, DESIGNED TO ADDRESS NATIONAL CONCERNS AND PRIORITIES VASTLY DIFFERENT FROM THOSE FACING THE NATION TODAY. AFTER REVIEWING THE LEGISLATIVE HISTORY FOR LOCAL FLOOD PROTECTION AND NAVIGATION PROJECTS, WE FOUND THE LEGISLATIVE BASIS SUPPORTING THEIR CURRENT POLICIES VAGUE AND DATED. WE QUESTION THE BASIS FOR SOME OF THE CORPS' CURRENT POLICIES AND NEED AN OPINION FROM YOUR OFFICE ON THE VALIDITY OF THEIR POSITION.

THE FOLLOWING PAGES SUMMARIZE THE CORPS' CURRENT POLICY FOR ADDITIONAL LOCAL COOPERATION FOR FLOOD PROTECTION AND NAVIGATION PROJECTS; THEIR LEGISLATIVE BASIS FOR EACH OF THESE POLICIES; AND OUR ANALYSIS OF THE LEGISLATIVE HISTORIES WHICH SUPPORT THEIR POLICIES.

NAVIGATION PROJECTS

THE FEDERAL GOVERNMENT GENERALLY PAYS FOR THE CONSTRUCTION AND MAINTENANCE OF ALL COMMERCIAL NAVIGATION PROJECTS AS LONG AS PROJECT BENEFITS ARE GREATER THAN PROJECT COSTS AND THE PROJECT WILL HAVE "MULTIPLE USERS". THE CORPS DEFINES MULTIPLE USE AS TWO OR MORE BENEFICIARIES. HOWEVER, FEDERAL PARTICIPATION CAN ALSO BE RECOMMENDED FOR PROJECTS WHICH INITIALLY SERVE ONLY ONE USER IF THERE IS A REASONABLE PROSPECT THAT ANOTHER USER WILL LOCATE THERE IN THE FUTURE (THE LOCAL SPONSOR MUST MAKE ANNUAL PAYMENTS UNTIL A SECOND USER IS FOUND). THE CORPS' BASIS FOR THIS POLICY IS SECTION 2 OF THE 1920 RIVER AND HARBOR ACT, WHICH REQUIRED 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."

THE LANGUAGE IN SECTION 2 OF THE ACT DESCRIBES THE TYPE OF BENEFITS INVOLVED - NATIONAL VS. LOCAL. THE 1920 COMMITTEE REPORT ON THE BILL INCLUDES A REFERENCE TO CASES WHERE LOCAL INTERESTS WILL OBTAIN SUBSTANTIAL DIRECT BENEFITS FROM IMPROVEMENTS AND IN THESE CASES, IT WAS FELT THAT THE INTERESTS IMMEDIATELY BENEFITED SHOULD SHARE DIRECTLY IN THE EXPENSES INVOLVED.

THE CORPS, HOWEVER, HAS TRANSLATED THIS LANGUAGE TO MEAN THAT TWO OR MORE BENEFICIARIES INDICATE THAT THE PROJECT PRODUCES NATIONAL AS OPPOSED TO LOCAL BENEFITS, AND AS LONG AS THERE IS MULTIPLE USE, ADDITIONAL LOCAL COST SHARING IS INAPPROPRIATE. WE QUESTION THE BASIS OF THE CORPS' CURRENT POLICY AND BELIEVE THAT THE NATURE OF PROJECT BENEFITS (LOCAL, REGIONAL, OR NATIONAL) WOULD BE BETTER CRITERIA FOR IDENTIFYING PROJECTS WHERE ADDITIONAL LOCAL CONTRIBUTIONS SHOULD BE REQUIRED.

QUESTION:

DOES THE CORPS "MULTIPLE USE" POLICY CONFORM WITH THE INTENT OF SECTION 2 OF THE 1920 RIVER AND HARBOR ACT (ADDITIONAL LOCAL CONTRIBUTIONS WHEN THERE IS A HIGH PERCENTAGE OF LOCAL BENEFITS)?

FLOOD CONTROL

THE FEDERAL GOVERNMENT ALSO GENERALLY PAYS FOR THE CONSTRUCTION OF ALL FLOOD CONTROL PROJECTS. THE CORPS CURRENTLY REQUIRES LOCAL COST SHARING WHEN "OBVIOUS WINDFALL BENEFITS" ACCRUE FROM A PROJECT TO LIMITED SPECIAL INTERESTS, BUT HAS NOT DEFINED THESE TERMS. CONSEQUENTLY, EACH DISTRICT OFFICE INDEPENDENTLY DETERMINES WHEN ADDITIONAL LOCAL CONTRIBUTIONS ARE APPROPRIATE. A CORPS OFFICIAL TOLD US THAT THEIR POLICY IS BASED ON A STATEMENT IN THE 1936 FLOOD CONTROL ACT WHICH DECLARED FLOOD CONTROL TO BE A "FEDERAL ACTIVITY AND IN THE INTEREST OF GENERAL WELFARE ... IF THE BENEFITS TO WHOMSOEVER THEY MAY ACCRUE ARE IN EXCESS OF THE ESTIMATED COSTS, AND IF THE LIVES AND SOCIAL SECURITY OF PEOPLE ARE OTHERWISE ADVERSELY AFFECTED."

AFTER REVIEWING THE LEGISLATIVE HISTORY, WE FOUND THAT THE 1936 FLOOD CONTROL ACT WAS PART OF A COMPREHENSIVE PLAN OF PUBLIC IMPROVEMENTS DESIGNED TO RELIEVE UNEMPLOYMENT DURING THE DEPRESSION OF THE 1930'S. CONGRESS APPROPRIATED $4.8 BILLION FOR THE WORKS PROJECT ADMINISTRATION (WPA) TO AID UNEMPLOYED PERSONS THROUGH PUBLIC WORKS PROJECTS. WE BELIEVE THAT THE CIRCUMSTANCES SURROUNDING THE REQUIREMENTS FOR LOCAL COOPERATION ESTABLISHED IN 1936 MAY NOW BE OUTDATED BY THE CHANGING NATIONAL POLICIES CONCERNING WATER RESOURCES DEVELOPMENT AND CHANGES IN THE STATES' ROLE. FOR EXAMPLE, IN 1936 THE NATION'S MAJOR CONCERNS WERE THE RELIEF OF UNEMPLOYMENT AND THE DEVELOPMENT OF A NATIONAL FLOOD PROTECTION SYSTEM. TODAY, THE MAJOR NATIONAL CONCERNS CENTER AROUND CONSERVATION, THE ENVIRONMENT, ENERGY SELF-SUFFICIENCY, AND INCREASED STATE AND LOCAL PARTICIPATION IN WATER RESOURCE PROJECTS.

WE ALSO QUESTION THE VALIDITY OF THE CORPS POLICY TO REQUIRE ADDITIONAL LOCAL PARTICIPATION ONLY WHEN "OBVIOUS WINDFALL BENEFITS" ACCRUE FROM A PROJECT TO LIMITED SPECIAL INTERESTS. IN THIS SITUATION, THE NUMBER OF BENEFICIARIES WOULD APPEAR TO BE IMMATERIAL - WHY SHOULD A LARGE NUMBER OF PROJECT BENEFICIARIES BE ENTITLED TO "OBVIOUS WINDFALL PROFITS." WE FEEL THAT IF THERE ARE SPECIFICALLY IDENTIFIABLE BENEFICIARIES WHO WILL PROFIT - OVER AND ABOVE AMOUNTS ATTRIBUTABLE TO FLOOD DAMAGE PREVENTION - OR IF A FLOOD CONTROL PROJECT WILL PROTECT ONLY A FEW BENEFICIARIES (RELATIVE TO TOTAL PROJECT COSTS) THE LOCAL SPONSOR SHOULD BE REQUIRED TO MAKE ADDITIONAL CONTRIBUTIONS.

QUESTIONS:

RIGHT NOW, IT LOOKS LIKE THE TONE OF OUR REPORT MIGHT BE THAT TIMES AND CONDITIONS HAVE CHANGED, AND ONE OF THE MAJOR PURPOSES OF THE 1936 FLOOD CONTROL ACT (TO RELIEVE UNEMPLOYMENT) IS NO LONGER THE DRIVING FORCE BEHIND THESE PROJECTS. IS OUR CONCLUSION VALID, THAT A MAJOR PURPOSE OF THE ACT WAS TO RELIEVE UNEMPLOYMENT AND THAT PROJECTS AUTHORIZED BY THE ACT WERE FUNDED (AT LEAST IN PART) WITH WPA MONEY?

DOES THE ACT SUPPORT THE CORPS POLICY OF REQUIRING ADDITIONAL LOCAL PARTICIPATION ONLY WHEN "OBVIOUS WINDFALL BENEFITS" ACCRUE FROM A PROJECT TO LIMITED SPECIAL INTERESTS?

ON AUGUST 30, 1979, 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 A VERBAL EVALUATION OF THE VALIDITY OF THE CORPS' CURRENT POLICIES - IN LIGHT OF THEIR LEGISLATIVE BACKGROUND - AND TO PROVIDE HIS CANDID REACTION TO THE POSITIONS WE ARE CONSIDERING ON THESE ISSUES BY THE WEEK OF SEPTEMBER 24, 1979. 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 (693- 8287) AT THE CORPS AUDIT SITE.

INDORSEMENT

DIRECTOR, CED

RETURNED. YOUR SENIOR GROUP DIRECTOR'S FIRST QUESTION IS CONCERNED WITH NAVIGATION PROJECTS. SPECIFICALLY, DOES THE CORPS OF ENGINEERS (CORPS) "MULTIPLE USE" POLICY CONFORM WITH THE INTENT 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. AS YOUR STAFF DESCRIBES THE CORPS' POLICY, WE DO NOT THINK IT DOES.

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

"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."

THIS PROVISION WAS ADDED BY THE SENATE COMMITTEE ON COMMERCE WITH THE FOLLOWING EXPLANATION:

"THE TIME HAS COME FOR GREATER LOCAL COOPERATION IN MAKING THE RIVER AND HARBOR IMPROVEMENTS. IN SOME SECTIONS OF THE COUNTRY SUBSTANTIAL CONTRIBUTIONS ARE BEING MADE BY LOCALITIES BENEFITED IN CONNECTION WITH ACTUAL NAVIGATION WORKS. THEY ORGANIZE THEMSELVES INTO PORT DISTRICTS AND LEVY TAXES TO AID IN THIS WORK. THIS SHOULD BE DONE GENERALLY THROUGHOUT THE COUNTRY. IT WILL RESULT IN GREATER ECONOMY AND MORE CARE IN THE SELECTION OF PROJECTS. IN MANY CASES LOCAL BENEFITS ARE EVEN GREATER THAN NATIONAL BENEFITS. WHERE LOCAL BENEFITS CAN BE APPROXIMATELY MEASURED THERE IS NO GOOD REASON WHY THE COMMUNITY SHOULD NOT TAKE CARE OF THE SAME. THIS AMENDMENT LOOKS TO THE PRESENTATION OF THE FACTS TO CONGRESS ALONG WITH THE JUDGMENT OF THE EXPERTS TO AID IN DETERMINING WHAT LOCAL COOPERATION, IF ANY, SHOULD BE HAD, AND IT IS HOPED THAT THIS WILL DEVELOP A GENERAL POLICY THAT WILL GO A LONG WAY TOWARD STIFLING THE 'PORK BARREL' SLOGAN AND FALLACY." S. REP. NO. 513, 66TH CONG. 2D SESS. 7 (1920).

A SUPPORTER OF THE AMENDMENT, SENATOR KING, MADE THE FOLLOWING COMMENTS IN COLLOQUY ON THE SENATE FLOOR:

"*** WHY SHOULD WE NOT ASK THE STATE OR THE COMMUNITY TO MAKE APPROPRIATIONS FOR THESE RIVERS AND HARBORS, AT LEAST APPROPRIATIONS AMOUNTING TO 50 PER CENT OF THE AMOUNT ASKED OF THE PARENT GOVERNMENT? IT IS A GREAT HARBOR, NATIONAL IN ITS OPERATIONS, RELATING TO THE ENTIRE COUNTRY, I CAN UNDERSTAND THAT IN A CASE OF THAT KIND THE LOCAL COMMUNITY MIGHT PERHAPS BE IMMUNE FROM CONTRIBUTION AND NO EXACTION SHOULD BE MADE OF IT; BUT WHERE A LITTLE STREAM IS BROUGHT TO THE ATTENTION OF CONGRESS AND AN APPROPRIATION IS ASKED FOR IT, A STREAM WHICH IS LOCAL IN CHARACTER, THE BENEFITS OF WHICH ARE LOCAL, PROVINCIAL, LIMITED TO THE PEOPLE WHO LIVE ALONG ITS BANKS OR IN CLOSE PROXIMITY TO IT, THERE IS NO REASON IN THE WORLD WHY THE FEDERAL GOVERNMENT SHOULD BE CALLED UPON TO BEAR THE BURDEN OF DEVELOPING THAT STREAM IF IT IS TO BE DEVELOPED AT ALL." 59 CONG. REC. 6137 (1920).

FROM OUR REVIEW, WE THINK THAT THE PURPOSE OF THE STATEMENT OF SPECIAL OR LOCAL BENEFITS, OR GENERAL OR NATIONAL BENEFITS, AND OF ANY REQUIRED LOCAL COOPERATION, IS TO SECURE LOCAL FINANCIAL PARTICIPATION WHERE THERE ARE DIRECT LOCAL BENEFITS. THE SENATE REPORT RECOGNIZED THAT THIS KIND OF DETERMINATION COULD NOT BE MADE WITH PRECISION - THE APPROXIMATE MEASUREMENT OF LOCAL BENEFITS WOULD BE SUFFICIENT. SENATOR KING'S COMMENTS AFFORD SOME GUIDANCE. WILL THE IMPROVEMENTS DIRECTLY BENEFIT IN WHOLE OR IN PART THOSE LIVING OR WORKING IN THE LOCALITY?

THE SUBMISSION STATES THAT THE CORPS HAS EQUATED "MULTIPLE USERS" WITH GENERAL OR NATIONAL BENEFITS SO THAT AN IMPROVEMENT IS CONSIDERED A LOCAL BENEFIT ONLY IF THERE IS JUST ONE USER. NO CONTRIBUTION IS REQUIRED OF TWO OR MORE USERS. THIS RULE OF THUMB APPEARS INAPPROPRIATE. BY ITS TERMS, THE RULE DOES NOT PROVIDE FOR CIRCUMSTANCES WHERE A BENEFIT IS SUBSTANTIALLY LOCAL REGARDLESS OF THE NUMBER OF USERS, OR WHERE AN IMPROVEMENT IS OF DIRECT NATIONAL IMPORTANCE ALTHOUGH THERE IS BUT ONE LOCAL USER. A PROJECT COULD PRESUMABLY HAVE BOTH NATIONAL AND LOCAL SIGNIFICANCE AND, IN THAT CASE, CONGRESS APPEARS TO WANT SOME LOCAL CONTRIBUTION.

WHILE SECTION 2 LITERALLY ONLY REQUIRES THE INCLUSION IN A SURVEY REPORT OF THE RESULTS OF THE COGNIZANT AGENCY'S FINDINGS OF LOCAL OR NATIONAL BENEFITS, AND OF ANY REQUIRED LOCAL COOPERATION, ITS PURPOSE IS TO SECURE LOCAL CONTRIBUTIONS IN PROPER CIRCUMSTANCES. IN ANSWER TO YOUR STAFF'S FIRST QUESTION, THEREFORE, THE CORPS' "MULTIPLE USE" POLICY AS DESCRIBED IN THE SUBMISSION, WHICH THE CORPS HAS BEEN FOLLOWING FOR MANY YEARS, IS NOT IN VIOLATION OF THE LAW. HOWEVER, IT DOES APPEAR TO RUN COUNTER TO THIS PURPOSE OF SECURING LOCAL CONTRIBUTIONS.

THE SECOND QUESTION IS CONCERNED WITH FLOOD CONTROL PROJECTS. IS THE STATUTORY FRAMEWORK FIRST ESTABLISHED IN 1936, OUTDATED IN VIEW OF CHANGING NATIONAL POLICIES CONCERNING WATER RESOURCES DEVELOPMENT AND CHANGES IN STATES' ROLE? SPECIFICALLY, WAS THE NEED TO CREATE JOBS DURING THE DEPRESSION A MAJOR PURPOSE OF THE ACT? THE ANSWER IS YES, BUT IT WAS NOT THE ONLY PURPOSE, NOR DO WE THINK THAT THE NATIONAL FLOOD CONTROL POLICY IS NECESSARILY OUTDATED BECAUSE OF CHANGES IN THE ECONOMIC CLIMATE OF THE COUNTRY.

SECTION 1, CHAPTER 688, OF THE ACT OF JUNE 22, 1936, POPULARLY KNOWN AS THE FLOOD CONTROL ACT OF 1936, 49 STAT. 1570, CODIFIED AT 33 U.S.C. SEC. 701A (1976), DECLARES THAT:

"*** IT IS THE SENSE OF CONGRESS THAT FLOOD CONTROL ON NAVIGABLE WATERS OR THEIR TRIBUTARIES IS A PROPER ACTIVITY OF THE FEDERAL GOVERNMENT IN COOPERATION WITH STATES, THEIR POLITICAL SUBDIVISIONS, AND LOCALITIES THEREOF: *** THAT THE FEDERAL GOVERNMENT SHOULD IMPROVE OR PARTICIPATE IN THE IMPROVEMENT OF NAVIGABLE WATERS OR THEIR TRIBUTARIES, INCLUDING WATERSHEDS THEREOF, FOR FLOOD-CONTROL PURPOSES IF THE BENEFITS TO WHOMSOEVER THEY MAY ACCRUE ARE IN EXCESS OF THE ESTIMATED COSTS, AND IF THE LIVES AND SOCIAL SECURITY OF PEOPLE ARE OTHERWISE ADVERSELY AFFECTED."

SECTION 3 OF THE ACT, PROVIDES IN PERTINENT PART: "THAT HEREAFTER NO MONEY APPROPRIATED UNDER AUTHORITY OF THIS ACT SHALL BE EXPENDED ON THE CONSTRUCTION OF ANY PROJECT UNTIL STATES, POLITICAL SUBDIVISIONS THEREOF, OR OTHER RESPONSIBLE LOCAL AGENCIES HAVE GIVEN ASSURANCES SATISFACTORY TO THE SECRETARY OF WAR THAT THEY WILL (A) PROVIDE WITHOUT COST TO THE UNITED STATES ALL LANDS, EASEMENTS, AND RIGHTS-OF-WAY NECESSARY FOR THE CONSTRUCTION OF THE PROJECT, EXCEPT AS OTHERWISE PROVIDED HEREIN; (B) HOLD AND SAVE THE UNITED STATES FREE FROM DAMAGES DUE TO THE CONSTRUCTION WORKS; (C) MAINTAIN AND OPERATE ALL THE WORKS AFTER COMPLETION IN ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE SECRETARY OF WAR:"

THE FLOOD CONTROL ACT OF 1936 - "*** REPRESENTS THE FIRST COMPREHENSIVE EFFORT DEFINITELY TO ESTABLISH A FEDERAL POLICY WITH RESPECT TO FLOOD CONTROL THROUGHOUT THE UNITED STATES, AND CONTAINS THE FIRST GENERAL LEGISLATION HAVING THIS PURPOSE IN VIEW. *** THE COMMITTEE *** HAS HELD THAT GENERAL LEGISLATION PROVIDING FOR FEDERAL PARTICIPATION IN FLOOD- CONTROL PROJECTS SHOULD INCLUDE A REQUIREMENT FOR A SUBSTANTIAL MEASURE OF LOCAL CONTRIBUTION IN VIEW OF THE LOCAL BENEFITS WHICH ARISE FROM THE COMPLETED PROJECTS AND TO INSURE THAT NO MEASURE IS UNDERTAKEN WITHOUT THE FULL COOPERATION OF LOCAL INTERESTS." SEN. REP. NO. 1963, 74TH CONG., 2D SESS. 1-2 (1936).

THIS ACT WAS CONSIDERED AT A TIME OF GREAT UNEMPLOYMENT. THE HOUSE HEARINGS DISCLOSED THAT MORE THAN 80 PER CENT OF THE COSTS OF CONSTRUCTION CONSISTED OF LABOR EXPENSES. SEE H.R. REP. NO. 1223, 74TH CONG., 1ST SESS. 1 (1935). THE SENTIMENT WAS EXPRESSED IN THE CONGRESS THAT PROJECT CONSTRUCTION WOULD BE A PROFITABLE WAY TO EMPLOY PEOPLE SO THAT "AFTER THE RELIEF MONEY HAS BEEN EXPENDED WE WOULD HAVE SOMETHING TO SHOW FOR IT ***." (HEARINGS ON H.R. 6803 BEFORE THE HOUSE COMMITTEE ON FLOOD CONTROL, 74TH CONG., 1ST SESS. 22 (1935).)

DISCUSSION ON THE HOUSE FLOOR INDICATED THE UNDERSTANDING THAT THE SOURCE OF MONEY FOR FLOOD CONTROL PROJECTS AUTHORIZED PURSUANT TO THE ACT WOULD BE FROM WORKS PROGRESS ADMINISTRATION (WPA) FUNDS ALREADY APPROPRIATED FOR THE PUBLIC WORKS ADMINISTRATION. SEE 79 CONG. REC. 14154 (1935). SECTION 9 OF THE ACT PROVIDED THAT PERSONS EMPLOYED ON SUCH WORKS WOULD BE PAID FROM FUNDS AVAILABLE TO THE WPA.

A BROAD NATIONAL POLICY OF FEDERAL FINANCIAL SUPPORT FOR FLOOD CONTROL PROJECTS WAS ENUNCIATED FOR THE FIRST TIME IN THE FLOOD CONTROL ACT OF 1936. UNDER THAT ACT, THE FEDERAL GOVERNMENT WOULD PAY FOR CONSTRUCTION COSTS, BUT OTHER ASSOCIATED EXPENSES, SUCH AS LAND ACQUISITION, WOULD BE BORNE BY POLITICAL SUBDIVISIONS OR OTHER RESPONSIBLE LOCAL AGENCIES. THE LOCAL CONTRIBUTION WAS INCLUDED AFTER EXTENSIVE DEBATE - THOSE IN FAVOR ARGUING THAT THIS WOULD BE A WAY OF INSURING THE NECESSITY FOR THE PROJECTS AND THEREFORE REDUCING THE "PORK BARREL" ASPECT OF FLOOD CONTROL PROJECT CONSTRUCTION, AND THOSE WANTING THE FEDERAL GOVERNMENT TO PAY THE ENTIRE COST CONTENDING THAT THE LOCAL COMMUNITIES COULD NOT AFFORD THE EXPENSE.

THE ACT AUTHORIZED THE CONSTRUCTION OR SURVEY PRIOR TO CONSTRUCTION OF MANY FLOOD CONTROL PROJECTS. THEY WERE TO BE FUNDED IN MAJOR PART FROM APPROPRIATIONS FOR THE PUBLIC WORKS ADMINISTRATION, AND CARE WAS TAKEN THAT THE PROJECTS WOULD QUALIFY FOR THIS FUNDING SO AS TO PROVIDE JOBS IN VARIOUS PARTS OF THE COUNTRY. WHILE THE EMERGENCY NATURE OF THE LACK OF JOBS CERTAINLY WAS A CONSIDERATION IN THE CONGRESSIONAL DELIBERATIONS, THERE WAS ALSO A STRONG NATIONAL INTEREST IN FLOOD CONTROL. THIS WAS PARTICULARLY TRUE SINCE THE NEW NATIONAL POLICY CONTEMPLATED THAT DAMS WOULD BE CONSTRUCTED PRIMARILY FOR FLOOD CONTROL PURPOSES. THE GREAT COSTS OF RESERVOIR AND DAM CONSTRUCTION, AS WELL AS THE FACT THAT THEY WERE OFTEN UPSTREAM AT SUBSTANTIAL DISTANCES FROM THE AREAS TO BE PROTECTED, ALSO WERE FACTORS IN ADOPTION OF THIS POLICY.

BASED ON THE LACK OF LOCAL COMMUNITY PARTICIPATION IN FLOOD CONTROL PROJECTS AUTHORIZED IN THE 1936 ACT, THE LOCAL CONTRIBUTION, REQUIRED BY SUBSECTIONS 3(A), (B) AND (C) WERE DROPPED FOR DAM AND RESERVOIR PROJECTS BY THE ACT OF JUNE 28, 1938, CH. 795, 52 STAT. 1215, POPULARLY KNOWN AS THE FLOOD CONTROL ACT OF 1938 (33 U.S.C. SEC. 701C-1 (1976)).

THIS ADDS UP TO A POLICY OF FEDERAL PAYMENT OF THE ENTIRE OR MAJOR COSTS OF FLOOD CONTROL PROJECTS. WHILE THE VAST UNEMPLOYMENT ASSOCIATED WITH THE DEPRESSION CERTAINLY WAS A MAJOR FACTOR IN THE SELECTION OF THE MANY PROJECTS TO BE AUTHORIZED AND WAS AN IMPORTANT CONSIDERATION IN PASSAGE OF THE 1935 ACT, WE CANNOT SAY THAT BUT FOR THE DEPRESSION, THE NATIONAL FLOOD CONTROL POLICY WOULD NOT HAVE BECOME LAW. THEREFORE, WE DO NOT THINK THAT THE UNEMPLOYMENT SITUATION PREVALENT AT THE TIME OF THE 1936 ACT SUPPORTS THE VIEW THAT THE CURRENT POLICY IS OUTMODED.

THE LAST QUESTION CONCERNS THE CORPS' POLICY OF REQUIRING ADDITIONAL LOCAL PARTICIPATION IN FLOOD CONTROL PROJECTS. THE SUBMISSION STATES THAT ADDITIONAL PARTICIPATION IS REQUIRED ONLY WHEN "OBVIOUS WINDFALL BENEFITS" ACCRUE TO LIMITED SPECIAL INTERESTS BUT THAT IN THIS SITUATION THE NUMBER OF BENEFICIARIES IS IMMATERIAL. IT QUESTIONS WHETHER THE FACT THAT THERE IS A LARGER NUMBER OF BENEFICIARIES OF "OBVIOUS WINDFALL BENEFITS" IN A PARTICULAR PROJECT MEANS THAT THE BENEFICIARIES SHOULD BE EXEMPT FROM THE CORPS' PARTICIPATION REQUIREMENT. WE ARE ASKED SPECIFICALLY WHETHER THE 1936 FLOOD CONTROL ACT SUPPORTS THIS CORPS POLICY.

THE 1936 ACT DECLARES THAT THE FEDERAL GOVERNMENT COULD PROPERLY PARTICIPATE IN A FLOOD CONTROL PROJECT "IF THE BENEFITS TO WHOMSOEVER THEY MAY ACCRUE ARE IN EXCESS OF THE ESTIMATED COSTS, AND IF THE LIVES AND SOCIAL SECURITY OF PEOPLE ARE OTHERWISE ADVERSELY AFFECTED." OUR REVIEW OF THE LEGISLATIVE HISTORIES OF THE 1936 AND 1938 FLOOD CONTROL ACTS DOES NOT SHOW THAT ANY SPECIFIC CONSIDERATION WAS GIVEN TO THE RECEIPT OF EXTRAORDINARY BENEFITS BEYOND THOSE WHICH NORMALLY RESULT FROM THE GREATER SECURITY AFFORDED BY IMPROVED FLOOD CONTROL. WHILE THERE WAS MUCH DISCUSSION ABOUT THE EXTENT OF LOCAL CONTRIBUTIONS, THESE WERE UNDERSTOOD TO MEAN "NOT CONTRIBUTIONS BY ABUTTING PROPERTY OWNERS, BUT CONTRIBUTIONS BY STATES AND LOCAL SUBDIVISIONS OF STATES." REMARKS OF SENATOR OVERTON, ONE OF CONFERENCE MANAGERS ON THE BILL WHICH BECAME THE 1938 FLOOD CONTROL ACT. 83 CONG. REC. 8615 (1938).

WE DO NOT BELIEVE THAT THE RECEIPT OF "OBVIOUS WINDFALL BENEFITS" BY ONE OR A VERY SMALL NUMBER OF BENEFICIARIES IS IN PRINCIPLE DIFFERENT FROM THE RECEIPT OF SIMILAR BENEFITS BY A LARGER GROUP OF PERSONS, SINCE THE NATURE OF THE BENEFIT RECEIVED, AND NOT THE NUMBER OF BENEFICIARIES IS AT THE HEART OF THE MATTER. THE RECEIPT OF A BENEFIT OF EXTRAORDINARY WORTH EITHER BY A FEW PERSONS OR BY A LARGE GROUP OF PEOPLE WAS NOT CONTEMPLATED BY THE 1936 AND 1938 FLOOD CONTROL ACTS AND IS NOT DISCUSSED IN THE LEGISLATIVE HISTORY. ACCORDINGLY, NEITHER OF THESE ACTS SUPPORTS THE CORPS' DISTINCTION BETWEEN "LIMITED SPECIAL INTERESTS" RECEIVING WINDFALL BENEFITS AND A LARGER NUMBER OF FLOOD CONTROL PROJECT BENEFICIARIES RECEIVING SIMILAR BENEFITS.