Flood Control Cost-Sharing Requirements Under the Ability To Pay Provision

DEPARTMENT OF DEFENSE

Department of the Army

Corps of Engineers

33 CFR Part 241

Flood Control Cost-Sharing Requirements Under the Ability To Pay

Provision

AGENCY: U.S. Army Corps of Engineers, DOD.

ACTION: Final amended rule.

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SUMMARY: This document presents the final rule partially implementing

section 103(m) of Public Law 99-662, 33 U.S.C. 2213, which directs the

Secretary of the Army to reduce the non-Federal cost-share of flood

control and agricultural water supply projects under an ``ability to

pay'' determination. This amended rule applies only to flood control

projects. Guidelines for agricultural water supply projects have not

been promulgated.

EFFECTIVE DATE: January 26, 1995.

ADDRESSES: Headquarters, U.S. Army Corps of Engineers, Washington, DC

20314-1000.

FOR FURTHER INFORMATION CONTACT:

Donald L. Barnes (202) 272-0120.

SUPPLEMENTARY INFORMATION: A final rule for flood control projects

implementing Section 103(m) of Public Law 99-662, 33 U.S.C., was

published in the Federal Register (54 FR 40578), October 2, 1989. A

proposed amended rule was published in the Federal Register (59 FR

32670), June 24, 1994, allowing 60 days for review and comment. The

proposed amended rule was in accord with the discretionary language

contained in Section 201 of Public 102-580. The single response to the

request for comments indicated support for an amended rule.

The final amended rule modifies the ability to pay determination

for flood control projects to establish an eligibility for reductions

in the non-Federal cost share using high cost criteria. Under this

amended rule, when the normal non-Federal share is high (i.e.,

exceeding 35 percent) and when the normal per capita non-Federal cost

of Construction exceeds $300, adjustments can be made to the standard

non-Federal share based on these high cost considerations.

Specifically, when both criteria are exceeded, the non-Federal share

under the ability to pay provision will be either the requirement for

lands, easements, rights-of-way, relocations, and disposal areas

(LERRD's, i.e., no cash requirement) or 35 percent of the total project

cost, whichever is greater. If LERRD's exceed 50 percent, the non-

Federal share remains at 50 percent. This additional procedure does not

change the benefits and income tests of the existing rule. Projects

which would qualify for a reduction under the existing final rule, will

receive a reduction from the high cost criteria, only if it provides a

greater reduction than available under the benefits and income tests.

Periodic updating of the non-Federal per capita cost of

construction will be accomplished and distributed to HQUSACE and to the

field as soon as new data are available.

Background

In accordance with direction prescribed by Section 201 of the Water

Resources Development Act of 1992, the Department of the Army conducted

a study of the current ability to pay regulations for flood control

projects. This study found, that while non-Federal cost shares for most

structural flood control projects were less than 35 percent, in some

cases (16 percent of the projects in a sample group studied), the non-

Federal shares exceeded 35 percent, due to the high cost for LERRD. In

addition, while for a majority of projects the non-Federal per capita

cost of construction (total non-Federal share of construction costs

divided by the population included within the geographic jurisdiction

of the non-Federal project sponsor) was less than $300, a significant

number (34 percent of the sample studies) had per capita non-Federal

costs that exceeded that amount. Given these circumstances, we

concluded that there should be an adjustment in the normal non-Federal

cost share based upon the high cost criteria.

The single response to the proposed amended rule was fully

supportive of the recommended procedure for projects with high non-

Federal cost shares.

Executive Order 12866 and Regulatory Flexibility Act

This rule is not a major rule within the meaning of Executive Order

12866, because it is not likely to result in: (1) An annual effect on

the economy of $100 million or more; (2) a major increase in costs or

prices for consumers, individual industries, Federal, State, or local

government agencies, or geographic regions: or (3) significant adverse

effects on competition, employment, investment, productivity,

innovation, or on the ability of United States based enterprises to

compete with foreign based enterprises in domestic or export markets.

Pursuant to 5 U.S.C. Section 605(b), I hereby certify that this

rule will not have a significant economic impact on a substantial

number of small entities. Furthermore, the number of entities affected

by this rule is small, and it imposes few, if any, administrative

burdens of any sort on small entities.

List of Subjects in 33 CFR Part 241

Community facilities, Flood control, Intergovernmental relations,

Water resources.

For purposes set out in the preamble, 33 CFR Part 241 is amended as

follows:

PART 241--FLOOD CONTROL AND COST SHARING REQUIREMENTS UNDER THE

ABILITY TO PAY PROVISION

1. The authority for part 241 is revised to read as follows:

Authority: Sec. 103(m), Pub. L. 99-662, 100 Stat. 4082 (33

U.S.C. 2201 et seq.), as amended by Sec. 201, Pub. L. 102-580, 106

Stat. 4797 (33 U.S.C. 2201 et seq.)

2. Sections 241.1 through 241.3 are revised to read as follows:

Sec. 241.1 Purpose.

This rule gives general instructions on the implementation of

section 103(m) of the Water Resources Development Act of 1986, Public

Law 99-662, as amended by section 201 of the Water Resources

Development Act of 1992, Public Law 102-588, for application to flood

control projects.

Sec. 241.2 Applicability.

This rule applies to all U.S. Army Corps of Engineers Headquarters

(HQUSACE), elements and Major Subordinate Commands and District

Commands of the Corps of Engineers having Civil Works Responsibilities.

Sec. 241.3 References.

References cited in paragraphs (f) thru (i) may be obtained from

USACE Pub. Depot, CEIM-SP-D, 2803, 52d Avenue, Hyattsville, MD 20781-

1102. References cited in paragraphs (d) and (e) may be obtained from

the National Information Services, 5285 Port Royal Road, Springfield,

VA 22161. References (a), (b) and (c) may be reviewed in your local

library or by writing your local Congressperson. [[Page 5134]]

(a) Water Resources Development Act, 1986, Public Law 99-662, 100

Stat. 4082, 33 U.S.C. 2201 et seq.

(b) Water Resources Development Act 1992, Public Law 102-580, 106

Stat. 4797, 33 U.S.C. 2201 et seq.

(c) U.S. Water Resources Council, Economic and Environmental

Principles and Guidelines for Water and Related Land Resources

Implementation Studies, March 10, 1983.

(d) Office of Personnel Management, FPM Bulletin 591-30.

(e) Office of Personnel Management, FPM 591-32.

(f) U.S. Army Corps of Engineers, Engineer Regulation 1165-2-29.

(g) U.S. Army Corps of Engineers, Engineer Regulation 1165-2-121.

(h) U.S. Army Corps of Engineers, Engineer Regulation 1165-2-131.

(i) U.S. Army Corps of Engineers, Engineer Regulation 405-1-12.

3. Section 241.5 is amended by adding paragraph (d):

Sec. 241.5 Procedures for estimating the Alternative Cost Share.

* * * * *

(d) Additional consideration for high cost projects. For any

project where the normal non-Federal share exceeds 35 percent, and the

per capita non-Federal cost (i.e., normal non-Federal share of total

construction costs divided by the population in the sponsor's

geographic jurisdiction) exceeds $300, the non-Federal share under the

ability to pay provision will be either LERRD's (i.e., no cash

requirement) or 35 percent, whichever is greater. If LERRD's exceed 50

percent, the non-Federal share remains at 50 percent. Projects which

qualify under the benefits and income tests will receive the reduction

under the high cost criteria only if the high cost criteria results in

a greater reduction in the non-Federal cost share.

Sec. 241.6 [Amended]

4. In Sec. 241.6(a), the abbreviation ``LCA'' is revised to read

``PCA''.

5. In Sec. 241.7, the terms ``Local Cooperation Agreement'' and

``LCA'' are revised to read ``Project Cooperation Agreement and ``PCA''

respectively. In addition, this section is amended by revising

paragraph (c)(2), and the first sentence of paragraph (e)(2) as

follows:

Sec. 241.7 Application of test.

* * * * *

(c) * * *

(2) An exhibit attached to the Project Cooperation Agreement (PCA)

will include the Benefits Based Floor (BBF) determined in

Sec. 241.5(a): the Eligibility Factor (EF) determined in Sec. 241.5(b):

If the Eligibility Factor is greater than zero but less than one, the

estimated standard non-Federal share; the formula used in determining

the ability to pay share as described in Sec. 241.5(c)(1) through

(c)(4); and a display of the non-Federal cost share under the high cost

criteria described in Sec. 241.5(d).

* * * * *

(e) * * *

(2) The non-Federal sponsor will be required to provide a cash

payment equal to the minimum of five percent of estimated project

costs, regardless of the outcome of the ability to pay test, unless any

or all of the five percent cash requirement is waived by application of

the high cost criteria described in Sec. 241.5(d). * * *

* * * * *

Kenneth L. Denton,

Army Federal Register Liaison Officer.

[FR Doc. 95-1733 Filed 1-25-95; 8:45 am]

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