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Show ment of recreation and wildlife. The amount of the Federal Government's contribution to water resources development should be determined accordingly. In developing power and water supply facil- ities, for example, the only Federal contribution needed may be the advancing of capital on a re- payable basis at the Federal borrowing rate. In land reclamation projects, on the other hand, the assumption, of a substantial portion of the invest- ment by the Federal Government may be re- quired if the public interest in increasing food and fiber production without a rise in prices is suf- ficiently great. Under similar criteria, the Gov- ernment may be justified in assisting navigation as it has other forms of transportation. A searching investigation of the best methods of mitigating flood damage, and of the possibility of local groups contributing to the cost, should be undertaken. The Federal contribution to watershed protection and improved land-use measures could vary among regions. Funds might be advanced for pollution abatement, re- payable with interest, or a combination loan- grant arrangement could be utilized. The basic features of fish and wildlife protection and recre- ation facilities might be built at Federal expense, with operation and maintenance left to the State and local governments (except, of course, in national paiks or forests). Need for Consistent Policy From the foregoing discussion it should be clear that the Nation has no consistent reimbursement policy in relation to water resources development. In general, this situation has developed out of piecemeal legislation and administrative decisions dealing with single projects or with single func- tions within river basins. This procedure has given rise to serious inequities and inconsistencies in reimbursement policy. Today, although substantial unearned incre- ments are axcruing to certain beneficiaries as a result of Federal investment, the trend appears to be in the direction of still lower levels of reim- bursement. This may be justifiable in part on social grounds, but may operate to the detriment of large development programs, which the Com- mission believes are necessary to support the country's expanding economy. Failure to distinguish between nonreimburs- able investment for public benefits and subsidies to special groups produces great confusion and lays all public investment in water resources open to the charge of subsidy. If subsidies are thought necessary or socially desirable to assist disadvan- taged groups or regions, or to promote other public purposes, they should be clearly differen- tiated from nonreimbursable investment and con- sidered on their merits. To clarify the whole situation, reimburse- ment should be accounted for by basins rather than by projects or functions, Government agen- cies, or particularized statutes. The principle of the multipurpose program accounts is con- sistent with the multipurpose approach and is a useful device for handling the accounting and financial operations of a basin development. One further inconsistency in this phase of water resources policy should be eliminated. Only in the case of reclamation projects based on irrigation is a showing of financial feasibility, i. e., full reimbursement (without interest) of total project investment, exclusive of permissible nonreimbursable allocations, required as part of the justification. For other types of projects such as flood control, drainage, and navigation, the only showing required is that of economic feasi- bility, i. e., of benefits exceeding costs. The placing of irrigation projects on the same basis in this particular as other types of water resources projects will eliminate the confusion which has centered around attempts to establish full pay-out for increasingly costly projects and tended to cast doubt on the justification for sound irrigation projects. The test of economic feasi- bility, as set forth in the preceding chapter on evaluation, should be the only one required of all proposed water resources undertakings. This is in accord with the fact that increasingly, irrigation is being undertaken as a part of mul- tiple-purpose projects of considerable magnitude in which the other benefits may be equally im- portant. These projects, in turn, are essential 82 |