but it goes on to state that if the benefits "to whomsoever they may accrue are in excess of the estimated cost," and that is the basis of the justification, and this is the wording of the Congress. So, I do not think there is a definition of who the primary gainer is. A flood to the Missouri, or Mississippi, pretty well affects the poor as well as the rich. Mr. STEELMAN. I am talking particularly about navigation projects, for example.

General KELLY. Well, we would consider, of course, the nature of navigation benefits and, they are based primarily on the overall economic well-being of the country. This would be our judgment. I would say the economic well-being of the country is helpful to

everyone.

Mr. STEELMAN. Well, why can we not assess these cost-benefit ratios, say, on who pays and who benefits, instead of saying the cost-benefit ratio is 1.5 to 1? Why can't we show who owns the land and who will reap the profits from the projects, and why can't we show that the shippers will get free shipping as opposed to the users having to pick up a portion of the charge? It seems to me that that is a more realistic way of computing cost benefits. That is the thrust of my argument.

General KELLY. I am saying the law from the Congress really does not state it that way. The general benefits "to whomever they may accrue"-must be greater than the cost. There is no objection, as far as the corps is concerned, the spelling out the beneficiaries if it is known. It is a very difficult thing to do. In flood control in a large city it is difficult to identify the beneficiaries. It becomes a monumental task. And how far downstream does it go? It is not a simple problem.

Mr. STEELMAN. Why are the users of these navigation projects, for example, not required to pick up a portion of the cost? Why do we provide absolutely free shipping and charge no tolls?

General KELLY. Basically, this is the decision of the Congress, sir. Mr. STEELMAN. In other words, your response is that the Congress excludes users' fees?

General KELLY. This is my understanding, though I do not have the law with me. This is the law that we operate under, sir.

Mr. STEELMAN. The law reads that there shall be no users' fees applied to navigation projects?

General KELLY. Perhaps I could provide for the record the precise wording of the law.

Mr. STEELMAN. OK. I would appreciate that.

[By letter of March 29, 1973, General Kelly submitted the following data on navigation cost-sharing:]

NAVIGATION COST-SHARING

Commercial navigation facilities.-The Nation's economic growth has long been recognized as dependent, in part, upon its system of waterways and harbors. National interest in and support for improvement of commercial navigation facilities was evidenced even prior to establishment of the Union. In 1787, 2 years before the adoption of the Constitution, the Northwest Ordinance was passed, representing the first national declaration of navigation development policy. That act, subsequently reenacted by the first Congress in 1789, declared the navigable waters leading into and between the St. Lawrence and the Mississippi Rivers to be common highways and forever free. It also reflected concern for the development of an effective commercial transportation system between the interior and the eastern seaboard. The framers of the Constitution sought

to encourage interstate commerce by extending the concept of free use of navigable waters to include harbors and entrance channels, through the Commerce Clause of the Constitution.

Federal navigation improvements stem from legislative actions by Congress under the Commerce Clause. The costs of navigation projects constructed by the Corps of Engineers are shared between Federal and non-Federal interests in accordance with general provisions of river and harbor laws; the specific requirements of acts authorizing the projects; and administrative guidance. Congress authorized early projects for navigation commerce at Federal cost. Repeated authorization of specific work and projects developed a body of policy precedent for cost sharing of such projects to facilitate the movement of commerce. Because of the general or widespread nature of the benefits resulting from improved movement of commerce, it is long-established cost-participation policy that the Federal Government bears all costs of construction, operation, and maintenance of general navigation facilities for commercial navigation projects. General navigation facilities are defined to cover canalization works, including locks and dams, for inland waterways; and for harbors a safe entrance channel protected by breakwaters or jetties if needed, protected anchorage basins, turning basins, and major interior access channels leading to the anchorage basin or locally provided berthing area.

Beyond the Federal investment in general navigation facilities, other major expenditures have been required to achieve the benefits of improved shipping technology and larger, more efficient cargo vessels. Only when adequate marine terminal facilities have been provided (including piers and wharfs; mechanical handling equipment; transit sheds, warehouses and other storage areas; and service roadways and railroad tracks), so that business may be efficiently transacted between ship or barge and shore, does a harbor or waterway become a part of a functioning transportation system. Provision of these latter facilities is a non-Federal responsibility. Additionally, non-Federal interests are required to provide, in connection with basic harbor and channel work, necessary lands, easements, and rights-of-way; spoil disposal areas; necessary alterations to or relocations of utilities; share the cost of bridge modifications; and to dredge vessel berthing areas.

Section 2 of the River and Harbor Act of June 5, 1920, provides that the Chief of Engineers in recommending navigation improvements shall make a determination of the general versus the special interest in an improvement, and shall recommend an appropriate sharing of costs between Federal and non-Federal interests. Pursuant to this authority, recommendations for Federal participation in navigation undertakings varies from zero to 100 percent for general navigation facilities, depending upon the nature of the services rendered and the incidence of benefits. For example, the Corps of Engineers will not recommend any Federal cost participation, establishment, or expansion of a Federal project where the improvement would be for the exclusive future use of a single beneficiary. Where one beneficiary would be served initially, but other users may be prospective, projects may be recommended but the initial beneficiary may be required to participate in costs of project construction and maintenance.

Tolls. By law, no tolls or operating charges shall be levied upon or collected from any vessel, dredge, or other water craft for passing through any lock, canal, canalized river, or other work for the use and benefit of navigation, now belonging to the United States or that may be hereafter acquired or constructed. This prohibition is contained in 33 U.S.C. 5. The prohibition against tolls was established in the River and Harbors Appropriation Act of 1884 and has not been substantially changed since that date. The only exceptions to the nontoll rule are the Panama Canal and the St. Lawrence Seaway. The River and Harbor Act of July 13, 1902 provided that any improvements thenceforth to be constructed under non-Federal auspices on navigable waterways also had to be operated on a tollfree basis.

Recreational boat cost sharing policy.-By act of February 10, 1932 (47 Stat. 42, 33 U.S.C. 541), the Congress expanded the definition of waterborne commerce to "include the use of waterways by seasonal passenger craft, yachts, houseboats, fishing boats, motorboats, and other similar watercraft, whether or not operated for hire."

In view of the special nature of recreational benefits, it has been Corps of Engineers practice to recommend Federal cost participation of not more than onehalf of the first cost of general navigation facilities serving recreational traffic. Non-Federal interests bear one-half the construction cost of general navigation

facilities and provide all lands, easements, right-of-way; a public wharf open to all on equal terms if needed for proper project functioning; and dredging at entire local cost in berthing areas and minor access channels thereto, as well as providing necessary policing and other services. Congress has authorized a number of projects in accordance with this cost-sharing arrangement. In February 1970, the President established the administrative policy that projects for recreational boating must also include agreement by non-Federal interests to assume responsibility to perform, or contribute the cost of performance of, that part of the project operation and maintenance allocable to recreation.

Mr. STEELMAN. On page 2, the second paragraph, you say:

Second, we have been striving to improve all aspects of our public communication procedures, particularly in conjunction with survey reports.

The court in the Wallisville project case-with which you are familiar, I am sure-agreed that you had done a good bit to improve your communication procedures, especially in a public relations sense; and the specific wording of the court was that the Corps of Engineers had engaged in supersalesmanship tactics, insofar as selling the benefits of the Wallisville project.

Has the corps taken a look at the court decision and do you intend to do anything to improve the objectivity of the corps, as far as presenting the benefits of these projects to the public?

General KELLY. We are certainly looking at the decision, sir, and we would hope that we would continue to improve our service to the community.

Mr. STEELMAN. Well, has this been a problem in other areas? Have you ever been charged, especially by a court, with superselling a project?

General KELLY. Sir, I am sure we have been charged in other areas. Mr. STEELMAN. Have you taken any steps to improve upon this performance?

General KELLY. I am not saying, sir, that we would necessarily agree with that accusation. I am saying that we constantly review our procedures. We make errors and we make mistakes. I think we conscientiously try to address those problems. It is a very difficult situation to be required by our legislation to conduct public hearings. We must make known our position and we must report to the Congress our recommendations. We cannot equivocate. We make a decision and then have to make public that decision. We must hold public hearings and, in so doing, we are publicizing and endeavoring to get across what our study reflects to the most people possible. Then, hopefully, they will state their reactions to it and if it is unfavorable-if the project is not supported-then, hopefully, that project would never be built.

Mr. STEELMAN. Does the corps see itself as a theoretically objective party in these decisions?

General KELLY. We would hope so, sir. We are commissioned by the Congress to report to you, or to the committee that gives us this authorization, our evaluation of a project which has been requested in every case by the local area. The resolution is passed by the Congress for us to make a study. Thus, the Congress first authorizes a study; then it must each year appropriate the money for us to conduct the study, and having completed the study, we then review it and provide it to the Congress for their evaluation.

After their evaluation, and assuming they determine that it is a viable and worthwhile project, then they authorize it for construction,

and each subsequent year they must review it and appropriate money for it. We act as best we can as the reporter of information to the Congress.

Mr. STEELMAN. So, it is not your intent to be a supersalesman? If that has been the case, is it the fault of one particular district and not the intent of the Secretary of the Army or the corps?

General KELLY. I would not like to leave the intimation that I am agreeing with your statement about a particular district, sir. I would like to say that it is not our intent.

Mr. STEELMAN. It is not your intent to be supersalesmen?
General KELLY. No, sir, it is not.

Mr. STEELMAN. On page 4, you make reference to the question of flood plain management. Are you looking more and more to that as a feasible alternative to channelization?

General KELLY. The nonconstructural approach, sir, is very definitely, in certain conditions, the best solution. But it is just not very viable in highly developed urban areas. There it is too late. Realistically, you are not going to get people to move off the bank of the river, at least as we see it. But, flood plain management has great merit and we are endeavoring-in fact we are right now pushing our program very close to the ceiling on the amount of money which we are authorized to spend. I believe it is about $11 million we are putting into flood plain management services this year, and we consider this to be a very important program. It is one which really is a corollary to other efforts. It is the nonstructural approach to flood plan management.

Mr. STEELMAN. Is this research money or actually

General KELLY. No. Study money is the best way to describe it. In other words, we do surveys for cities to show where a flood-say a 100-year flood-would cover the map. This shows where the water level would be and we would then recommend that if this area is due to be developed, the locality put in zoning which would preclude construction of certain types of buildings in this area. Or if there must be construction, you make the bottom floor for garages or open storage. It is not construction money. It is study and advice money. We also provide HUD certain information and studies under this

program.

Mr. STEELMAN. Could you furnish for the record, then, General, and also for my purposes, a copy of whatever you have done of a descriptive nature in your flood plain management efforts?

General KELLY. Yes, sir, not in detail, I presume, but the basic program?

Mr. STEELMAN. Yes.

General KELLY. Yes, sir.

[By letter of March 29, 1973, General Kelly submitted the following statement and table on the Corps of Engineers' flood plain management services program:]

FLOOD PLAIN MANAGEMENT SERVICES PROGRAM

Description.-The Corps of Engineers Flood Plain Management Services Program has grown out of the original authority given to the Secretary of the Army in the Flood Control Act of 1960 for preparing flood hazard information at the request of States and communities. Subsequent amendments have both increased program expenditure limits and expanded the services authority, so that it now

provides a full range of flood plain related technical and planning services to Federal as well as non-Federal requesters.

The three major functions of the program are flood plain information report preparation and distribution, provision of technical services and guidance, and the development and distribution of guides, and pamphlets. Flood plain information (FPI) reports are fairly standardized presentations in text and graphics of the aspects of flooding and flood plain conditions needed by States and communities in flood plain planning. Currently a little more than 50 percent of program funds go toward preparation of these reports. Technical services include interpretation of data, information on individual building sites and short reaches of stream and coast, reports on special problems and in some cases long reaches that have not been covered by FPI reports, advice on flood plain regulations and uses and on adjustments to flooding such as structural flood proofing. Guides and pamphlets and the needed supporting studies focus on flood problems and the needs of both the Corps field offices and the public. The reports and services are provided through the 47 Corps of Engineers division and district offices and the guides and pamphlets mainly through the Office of the Chief of Engineers.

To a large extent, the technical services activities have been geared to the Increasing demands for flood hazard information on individual sites proposed for building or sale, or for short reaches of stream or coast under increasing developmental pressure. A major influence has been Executive Order 11296 which was issued following the Presidential Task Force Report on Federal Flood Control Policy in 1966 (House Doc. 465). In Executive Order 11296, which calls for an end to uneconomic, hazardous and unnecessary use of flood plains by Federal agencies, the Secretary of the Army was designated as the primary source of information for other agencies. Since then the number of responses to requests for information and other services has been increasing at an accelerating rate with about one-third coming directly from Federal agencies. Requests from non-Federal sources seeking grant and loan assistance have undoubtedly also been prompted by the Executive Order. Of the more than 2,200 requests from Federal agencies during fiscal year 1972, roughly one-third were from the Federal Housing Administration and another one-third from five other agencies the Economic Development Administration, the Army (including postal construction), the General Services Administration, and the Departments of Health, Education, and Welfare, and Transportation.

The current expenditure ceiling on the Flood Plain Management Services program is $11 million annually. The amount requested in the fiscal year 1974 budget will use up nearly all of this authority.

1 Numbers shown are a count of uses by report localities, within places involved where information was a basis for action.

2 About directly to other Federal agencies, largely per Executive Order 11296. Not tabulated.

These activities have held about the same level throughout the reporting period. A number of informational handouts have been prepared and widely distributed; economic-planning studies supported; and substantive works prepared and distributed on flood proofing and flood plain regulations.