TEXT OF PROPOSED SENATE RESOLUTION

S. RES.

Whereas the sense of the Senate, stated in Senate Resolution 281, 84th Congress, is that the Congress will continue to exercise its constitutional powers to encourage the comprehensive conservation, development, and utilization of the land and water resources of the Nation, and that reports to the Congress in support of authorization of such projects should (a) include evaluations made in accordance with criteria prescribed by the Congress, and (b) fully disclose the results of studies and anlyses of the potential utilizations, costs, allocations, payout, and benefits, both direct and indirect; and

Whereas pursuant to said Senate Resolution 281, the Committee on Interior and Insular Affairs and the Committee on Public Works jointly have reported to the Senate that, in order to evaluate projects proposed for authorization, certain information is needed in addition to that regularly submitted by the executive branch in support of proposed projects, such information being related to selection of plans of development, costs, benefits, reimbursements or contributions required of local interests; and

Whereas such information is needed also for consideration by the Senate in connection with legislation to establish policies and criteria regarding allocations of project costs, and for evaluations of project benefits, which policies and criteria the Comptroller General of the United States, the Bureau of the Budget, and the Secretary of the Army have recommended should be established by the Congress; and Whereas the program for conservation, development, and utilization of the land and water resources of the Nation is impaired by delay in the delivery to the Congress of reports on projects proposed for authorization: Now, therefore, be it

Resolved, That it is the sense of the Senate that procedures for evaluation of land and water resource projects should be improved, and that the agencies of the executive branch of the Government responsible for the preparation of reports relative to the authorization of land and water resource projects be, and are hereby, requested to furnish, in connection with such reports, the following information in addition to the data now presented in support of project authorizations:

Information relative to alternative plans for the water resource projects that may reasonably be considered physically feasible of construction consistently with the advice of the Department of the Army, or the Department of the Interior, or the Department of Agriculture. With respect to each potential project, in addition to a description of the project, the information should include, but not be limited to— (1) Estimated costs of construction, operation, maintenance, and replacement.

(2) Benefit-cost ratio calculated from direct tangible benefits and costs.

(3) Description and, to the extent possible, computation of indirect and intangible net benefits including but not limited to (a) protection of life and property; (b) improvement of transportation; (c) conservation of water, soil, and forest resources; (d) wildlife conservation; (e) recreation; (f) abatement of pollution, including salinity; (g) control of sedimentation; (h) maintenance and enhancement of the agricultural, commercial, and industrial economy of the area affected. (4) Physical feasibility and costs of providing capacity in the project works for current needs and future uses that may reasonably be anticipated to develop during the useful life of such project works. (5) Allocations of costs, to be calculated (a) by at least 3 methods, namely, the separable costs-remaining benefits method, the priority of use method, and the incremental cost method; and (b) on at least 2 time periods for amortization, namely, 50 years or the useful life of the facilities, whichever is the lesser, and 100 years or the useful life of the facilities, whichever is the lesser.

(6) Description of the extent to which the Federal, State, and local governmental agencies, and nongovernmental entities have evidenced interest in participating in the construction or operation and maintenance of the potential project, or in obtaining its benefits, including, in the case of electric energy, information relative to the preference status of governmental agencies, municipalities, and cooperatives; and the manner in which it is proposed to accomplish coordination and cooperation, and the estimated Federal costs of such participation. (7) Estimated schedules of repayments of reimbursable costs that would be within the estimated financial resources of the potential use area, such schedules to show also the deferred repayment of the portion of the costs allocated to uses that may be anticipated to develop in the future.

(8) Probable effects of the potential project on State and local governments, including, but not limited to (a) the costs of local government services; and (b) the enhancement or reduction of tax revenues, together with the amount of potential tax revenue that would be foregone by Federal development in lieu of non-Federal development of the project. The estimated amounts of tax revenue enhancement and tax revenue foregone as a result of the project should be shown in calculations of project benefits and costs.

(9) In support of proposed increases in the authorizations of appropriations for continuation of the construction of basinwide projects, proposed schedules of investigations and construction should be supplied, including descriptions of the units to be undertaken, and deviations in schedules of construction supplied in support of prior authorizations.

SEC. 2. That reports on surveys and investigations or project reports relative to the authorization of land and water resource projects should be delivered to the Congress not later than six calendar months after the date on which such reports are circulated to the Federal agencies and to the affected States pursuant to section 1 of the Act of December 22, 1944 (59 Stat. 887). The agencies of the executive branch responsible for preparation of such project reports be, and are hereby, requested to deliver to the Congress such reports not later than six months after they have been submitted for comments to the governors of the affected States.

SEC 3. That authorizations of water resource projects should specify the method by which the allocation of costs shall be determined.

CONSERVATION AND DEVELOPMENT OF LAND AND WATER RESOURCES

Joint report of the Committee on Interior and Insular Affairs and the Committee on Public Works pursuant to Senate Resolution 281, 84th Congress.

I. IMPROVED AUTHORIZATION PROCEDURES NEEDED

Senate Resolution 281, 84th Congress, states the sense of the Senate that the Congress will continue to exercise its constitutional responsibility for the national land and water resources program. A necessary action at this time is to provide the criteria and standards for the authorization of water resources projects. This action is necessary because, in the absence of such standards and criteria, there is a tendency for congressional consideration and action to be limited to the proposals of the executive branch. In recognition of this need, Senate Resolution 281 directed the Committee on Interior and Insular Affairs and the Committee on Public Works jointly to recommend standards and criteria for authorization of projects.

The Congress has, in general, established policies and criteria for the land and water resources program through enactment of specific authorizations. In this manner, modifications and extensions of policy have been evolved by the Congress to meet changing conditions and needs. Possibly, the increased magnitude and technical complexity of the land and water resources program might warrant congressional reexamination or more explicit statement of criteria and requirements. Whenever such reexamination or restatement appears to be needed, it is a proper function of the executive branch so to recommend to the Congress. Regrettably, this course has not been pursued. Instead, the executive branch apparently has instituted changes without congressional approval, and sometimes apparently without informing the Congress that such changes are made.

Project proposals and the supporting justifications that now are submitted for the consideration of the Congress are prepared by the agencies of the executive branch in accordance with the standards established in the Bureau of the Budget Circular A-47. This executive direction, promulgated in 1952 without referral to the Congress, undertook to define and delimit the water resource program. In the application of circular A-47, elaborations and modifications were incorporated in circular A-47, revised. Some or all of this revision. seems to have been adopted by the executive agencies, although circular A-47, revised, has not been formally promulgated. The texts of circular A-47 and A-47, revised, are attached as exhibit 3.

In 1953, the President established a Cabinet-level Advisory Committee on Water Resources Policy, and that committee's report and recommendations were transmitted to the Congress in December 1956. The President stated that he would submit legislative proposals to

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accomplish the purposes recommended by the committee, but such proposals have not been received.

On a number of occasions, the attention of the Senate and of the House of Representatives has been given to the tendency for the Congress to lose, in part, its responsibility for determining the land and water resources program. Two principal causes of this tendency have been pointed out. The first of these is that, in the absence of explicit congressional statement of its requirements, executive definition and delimitation of the program have restricted the proposed projects that are before the Congress for authorization. The second cause of the tendency for the Congress to lose direction of the program is that, in many cases, reports on potential projects are not available for congressional action until after they have been subjected to extensive and lengthy clearances within the executive branch. This situation led to agreement of the Senate to Senate Resolution 281, 84th Congress.

Pursuant thereto, the Committee on Interior and Insular Affairs and the Committee on Public Works jointly recommend improvements in procedures for authorization of land and water resource projects. The improvements are for the purpose of evaluating the proposed projects in accordance with criteria prescribed by the Congress, and for disclosing fully the potential utilizations, costs, allocations, benefits, and other economic factors. The improvements in procedure are for the purpose also of expediting delivery to the Congress of project reports. The need for these recommendations has been disclosed by a review of present procedures made in consultation with the executive branch and with State and local interests. That review reveals inadequacies in present procedures, particularly in connection with project economics and requirements for cost sharing. Provision for comprehensive resource conservation and utilization also are inadequate.

A further need for these recommended improvements in authorization procedures has recently been emphatically demonstrated in the joint hearings on the operation of water and power projects in the upper Missouri River Basin. These hearings disclosed that a serious situation exists because of the inadequacy of the information available to the Congress at the time of project authorization. There now is confusion and uncertainty as to the operating and financial policies governing this great project. There appears to be lack of a common basis for the Bureau of Reclamation and the Corps of Engineers although close coordination of their work is essential. As a result, the people of the seven States lying within the basin, as well as the affected downstream States, are subjected to major hazards to their economy and way of life.

The lack of adequate coordination of the Bureau of Reclamation and the Corps of Engineers in the Missouri River Basin project was most acute on two matters of prime importance to the people of the area. These are (a) the operation of main-stem reservoirs with particular reference to power generation and navigation, and (b) the schedules of rates and service policies relating to distribution of electric power to municipalities and rural electric cooperatives. The Comptroller General of the United States, in his latest audit report on the Missouri River Basin development program, points to the

absence of legislative policies or criteria for the establishment of rates for commercial power. The Comptroller General recommends:

Accordingly, we recommend that the Congress provide policies and criteria to be applied for making allocations of construction costs of multiple-purpose projects, the results of which serve as a basis for establishing rates for commercial power.

Procedures recommended herein relate to the consideration by the Senate of land and water resource projects. These recommendations do not deal with actions within the executive branch. Establishment of standards for use in surveys and investigations is a proper function of the executive branch. Promulgation of the Bureau of the Budget Circular A-47 appears to be directed toward a proper exercise of executive authority. Circular A-47 has, in fact, become a useful manual of planning procedure, and it resulted in the orderly and uniform presentation of project reports. However, the present procedure of presenting to the Congress information on proposed projects only as specified by Circular A-47, and certain informal modifications of it, is an improper limitation on the Congress.

II. RESTRICTION OF CONGRESSIONAL CONSIDERATION

The present procedure for presenting projects impairs congressional consideration of desirable developments, and thus it tends to curtail full resource conservation and utilization. This is illustrated by testimony that, under strict interpretation of circular A-47, no reclamation projects would qualify for authorization. Although this statement may be an extreme example of the effects of circular A-47, it is illustrative of the manner in which the present procedure tends to eliminate worthwhile water resource developments. Obviously, the Senate cannot limit its consideration by criteria that exclude a majorsegment of the water resource program.

Project reports prepared in accordance with circular A-47 and its elaborations tend to exclude desirable water resource projects for the following principal reasons:

1. Circular A-47 does not give adequate recognition to indirect and intangible benefits. In addition to direct monetary benefits, evaluation must take into account the general benefits to an area, and also the intangible and social values of a project. Among the most significant effects of irrigation, as an example, is the development of homes and communities. Recognition of such widespread intangible benefits was recommended by the Missouri Basin Survey Commission composed of distinguished congressional and nongovernmental leadership. It is in accord also with the statement of the Bureau of the Budget in response to Senate Resolution 281:

It is our view that project reports in support of authorization of water resources projects should be required to show a comparision of benefits and costs, and that, as a general principle, the identifiable benefits, estimated on a sound basis, should exceed the costs of the project. This general principle should apply to all types of water resources projects. However, current evaluation concepts place too much emphasis upon the benefit-cost ratio as a basis for project justification, to the exclusion of other equally important considerations involving broad social values. Consequently, we believe that evaluation policies and procedures should be devised to insure that all factors relating to the evaluation of a project are fully disclosed, thereby providing a sound basis for congressional exercise of the judgment which is necessary in the selection of these public undertakings.