OCR Text |
Show 205 share of the annual operation and maintenance cost and an appropriate share of such fixed charges as the Secretary deems proper, due consideration being given to that part of the cost of construction of works connected with water supply and allo- cated to irrigation." Payment must be made yearly in advance of delivery of water. A unique feature of the 1939 Act is its optional basis for calculating annual repayment contract installments. It ap- plies to projects on which there are construction charges pay- able to the United States. Known as the "normal and percentages plan," it permits variable payments based on the percentage of normal crop returns by which annual returns exceed or are less than normal returns.310 Its operation has been explained by the Commissioner of Reclamation as fol- lows: 311 The normal and percentages plan operates in this way. Each year a census of crop returns is taken. The nor- mal returns for each year will be determined by look- ing over the annual returns of that year and the 12 preceding years and throwing out the returns of the 3 low years. This will be done to prevent unusually poor crop years from being reflected in the average that makes up the normal. The average of the remaining 10 years is the normal returns. Against this normal re- turns for the year there will be compared the annual returns of the current year. If the annual returns are 25 percent less than the normal returns, then a reduction of twice that percentage, that is 50 percent, will be made in the installment of that year. For every 1 per- cent that the current year's crop returns are lower than the normal for that year, there would be a 2 percent reduction in the installment. A floor, below which reductions could not go, is 15 percent of the installment. Following the war years with their high crop values, Con- gress in 1945 amended the formula for computing the annual 810 §§ 4, 9(d) (5), 53 Stat. 1189,1196, as amended, 43 U. S. 0. 485c, 485h(5). m Hearings before the House Committee on Irrigation and Reclamation on H. R. 6773 and H. R. 6984, 76th Cong., 1st sess., p. 24 (1939). |