EP 1165-2-1
30 Jul 99
and construction of that element. Betterments desired by non-Federal
sponsors that are related to the basic project and that can be
accommodated in the construction of the basic project, may be approved
for implementation, as part of the project, if non-Federal sponsors
agree to provide any additional costs incurred by the Federal
Government upfront prior to the Government incurring any obligations.
Costs for betterments are not included in the total project cost
estimate or economic evaluation.
(2) Comparable Features. In some projects, construction of the
project and portions of the LERRD constitute approximately the same
work. An example would be a bridge abutment constructed as part of a
flood wall. If a clearly identifiable increase in construction costs
results from these provisions (such as when abutment requirements
exceed flood wall section requirements), the increased cost shall be
included as part of the LERRD responsibilities and non-Federal
sponsors shall contribute an equivalent amount in cash.
e. Emergency Flood Control Authorities. The cost sharing in
Title I of WRDA 1986, as amended, does not apply to emergency
operations and disaster assistance programs pursuant to Section 5 of
the 1941 Flood Control Act (FCA), as amended. Flood control cost
sharing in Title I is applicable to recommendations under the special
continuing authorities provided by Section 14 of the 1946 FCA, as
amended (see paragraph 15-3.c).
f. Ability-to-Pay (Section 103(m) of WRDA 1986,as amended by
Section 202(b) of WRDA 1996). All local cooperation agreements for
flood control projects, for which the cost sharing provisions of WRDA
1986, as amended by WRDA 1996, apply, are subject to the ability of
the non-Federal sponsor to pay. Procedures for applying an
ability-to-pay test were published as a Final Rule in the Federal
Register, 2 October 1989, and are codified at 33 CFR 241. (ER 1165-2-
121). Projects qualify for a reduction in the non-Federal share only
if they meet the conditions of an "income test" (comparison of project
area per capita income to national average) and a "benefit test"
(comparison of one-fourth the benefit cost ratio to the normal
non-Federal cost share requirement). The income test requires the use
of the latest available information, which is perodically published in
ECs by HQUSACE. An amendment to the ability-to-pay rule for flood
control was published in the Federal Register, 26 January 1995. The
amended rule establishes an eligibility for reductions in the non-
Federal cost share using higher cost criteria. Projects which do not
qualify for a reduction under the income and benefits receive
additional consideration under the high cost test. (A proposed Final
Rule further amending the amended ability-to-pay rule to reflect
Section 202(b) of WRDA 1996 is in preparation)
6-6. Hydroelectric Power (Section 103(c)(1) of WRDA 1986). All costs
associated with development of hydroelectric power at the site of a
Corps project are borne, one way or another, by non-Federal sponsors.
Current policy is to encourage non-Federal sponsors to undertake the
development of the power potential at a Corps project under the
Federal Energy Regulatory Commission (FERC) licensing process, and to
pursue Federal development only where such non-Federal activity would
be impractical. In those cases where non-Federal development is
impractical and Federal development is authorized as part of a Corps
multiple purpose project, a non-Federal sponsor is sought who will
agree to provide the share of project development costs (joint and
separable) allocated to the hydroelectric power purpose during the
period of project construction in return for later reimbursement by
6-9
Previous Page
