EP 1165-2-1
30 Jul 99
the Federal marketing agency out of revenues realized from sale of the
power (allocated OMRR&R costs will be funded by the Corps and repaid
to the U.S. Treasury out of the revenues also). In the event the
development is undertaken without such a sponsor, all allocated
hydroelectric power costs will be funded by the Corps and ultimately
repaid to the U.S. Treasury out of the power revenues collected by the
Federal marketing agency. (See paragraphs 16-3 and 16-9.)
6-7. Municipal and Industrial Water Supply (Section 103(c)(2) of WRDA
1986). For new construction of Corps multiple purpose projects in
which municipal and industrial (M&I) water supply is one of the
purposes (including unstarted projects previously funded for
construction, resumptions, and separable elements of ongoing projects)
all separable and joint costs allocated to that purpose must be
provided by a non-Federal water supply sponsor during the period of
construction. The sponsor is also responsible for the share of
project OMRR&R costs allocated to M&I water supply. These costs are
to be paid as they are incurred or in lump sum after completion of the
work involved. The sponsor should be encouraged to establish a
sinking fund in order to cover the replacement and rehabilitation
costs when the occasion should arise. Non-Federal cost sharing and
repayment arrangements required in connection with M&I water supply
functions of completed Corps projects are discussed in paragraph 18-2.
6-8. Agricultural Water Supply (Section 8 of the FCA of 1944 and
Section 103(c)(3) of WRDA 1986). When irrigation storage is included
in a Corps reservoir pursuant to Section 8 of the Flood Control Act of
1944 (see paragraph 18-2.i), costs allocated to the irrigation purpose
are funded by the Corps and ultimately repaid to the U.S. Treasury by
the non-Federal users in conformity with reclamation law, under
contract arrangements with the Department of the Interior. Section 8
authority is used only in the 17 western states to which reclamation
law applies. Section 103(c)(3) of WRDA 1986 provides that non-Federal
interests are to be responsible for 35 percent of costs (joint and
separable) allocated to agricultural water supply purposes in a Corps
project, to be paid during the period of construction, and for the
allocated OMRR&R costs as they are incurred. Section 103(c)(3)
applies to irrigation water outside the 17 western states and to other
agricultural water supply functions in all areas. The non-Federal
cost sharing requirements for agricultural water supply provided
pursuant to this section are subject to the ability-to-pay provision
in Section 103(m) of WRDA 1986,as amended by Section 202(b) of WRDA
1996. Related rules for applying an ability-to-pay test have not been
formulated; policy questions should be addressed to HQUSACE (CECW-AA).
6-9. Recreation (Section 103(c)(4) of WRDA 1986). Cost sharing
pursuant to Section 103(c)(4) of WRDA 1986 as applicable to
recreational navigation improvements is covered in paragraph 6-4.c.
The following policies are applicable to recreational elements of
other Corps projects.
a. Investment Costs. The non-Federal share of the costs
assigned to recreation, is 50 percent of the separable costs, to be
paid during the construction period. Non-Federal sponsors must also
provide all LERRD assigned to the recreation purpose and insure the
performance of all necessary relocations. The value of these
contributions is counted as part of the 50 percent non-Federal share
of separable recreation costs.
6-10
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