[Code of Federal Regulations]
[Title 33, Volume 3]
[Revised as of July 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 33CFR241.5]
[Page 330-332]
TITLE 33--NAVIGATION AND NAVIGABLE WATERS
CHAPTER II--CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY
PART 241--FLOOD CONTROL COST-SHARING REQUIREMENTS UNDER THE ABILITY TO PAY PROVISION--Table of Contents
Sec. 241.5 Procedures for estimating the alternative cost-share.
(a) Step one, the benefits test. Determine the maximum possible
reduction in the level of non-Federal cost-sharing for any project.
(1) Calculate the ratio of flood control benefits (developed using
the Water Resources Council's Principles and Guidelines--ref.
Sec. 241.3(b)) to flood control costs for the project based on the
discount rate which the Corps is currently using to evaluate projects.
Costs include operations and maintenance as well as first costs. Divide
the result by four. For example, if the project's (or separable
element's) benefit-cost ratio is 1.2:1, the factor for this project
equals 0.3. If a project has been authorized for construction without a
benefit-cost ratio calculated in accordance with the Principles and
Guidelines, determination of the ratio is a prerequisite for
consideration under the ability to pay provision.
(2) If the factor determined in Sec. 241.5(a)(1), when expressed as
a percentage, is greater than the standard level of cost-sharing, the
standard level will apply.
(3) If the factor determined in Sec. 241.5(a)(1), when expressed as
a percentage, is less than the standard level of cost-sharing, projects
may be eligible for either a reduction in the non-Federal share to this
``benefits based floor'' (BBF), or for a partial reduction to a share
between the standard level and the BBF, as determined by the procedures
in step two, Sec. 243.5. In no case however, will the non-Federal cost-
share be less than five percent.
(b) Step two, the income test. Projects may qualify for the full
amount of the reduction in cost-sharing calculated in Step one, or for
some fraction of the reduction in cost-sharing, depending on a measure
of the current economic resources of the project area and of the state
or states in which the project is located.
(1) To assure consistency, the calculations in Sec. 241.5(b) (2) and
(3) will be performed by HQUSACE and distributed to all FOA's via
Engineering Circulars. The information will be updated and distributed
to HQUSACE and to the field as soon as new data are available. The
procedures may be verified for any single county or state using the
sources cited.
(2) For each of the three latest calendar years for which
information is available, determine the level of per capita personal
income in the state in
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which the project beneficiaries are located, and compare this to the
national average of per capita personal income. Source: Dept. of
Commerce, Bureau of Economic Analysis, as published yearly in the April
Survey of Current Business. (If the project beneficiaries are located in
Alaska or Hawaii, divide the per capita personal income figure by one
plus the percentage used in the Federal Government's cost of living pay
differential for Federal workers who purchase local retail and who use
private housing, employed in Anchorage, AK or Oahu, HI as contained in
References Sec. 241.3(c) and (d).) Determine the state's per capita
personal income as an index number in comparision to the national
average (U.S.=100), and calculate the three year average of the state's
index number.
(3) For each of the three latest calendar years for which
information is available, determine the level of per capita personal
income in the county where the project beneficiaries are located (the
``project area''), and compare this to the national average of per
capita personal income. Source: Dept. of Commerce, Bureau of Economic
Analysis, as published yearly in the April Survey of Current Business.
(If the project beneficiaries are located in Alaska or Hawaii, divide
the county's per capita personal income figure by one plus the
percentage used in the Federal Government's cost of living pay
differential for Federal workers who purchase local retail and who use
private housing, employed in Anchorage, AK or Oahu, HI.) Calculate the
index for the county's per capita personal income to the national
average (U.S.=100), and calculate the three year average of the county's
index number.
(4) When the project area, as determined by the location of the
project's beneficiaries, includes more than one county, calculate a
composite project area index by taking a weighted average of the county
index numbers, the weights being equal to the relative levels of
benefits received in each county. When the project area includes more
than one state, the state index for the project should be calculated
using the same weighting technique.
(5) Calculate an ``Eligibility Factor'' for the project according to
the following formula:
EF=a-b1 x (state factor)-b2 x (area factor).
If EF is one or more, the project is eligible for the full reduction in
cost-share to the benefits based floor. If EF is zero or less, the
project is not eligible for a reduction. If EF is between zero and one,
the non-Federal cost-share will be reduced proportionately to an amount
which is greater than the BBF but less than the standard non-Federal
cost-share in accordance with the procedures described in paragraph
Sec. 241.5(c) of this part. The values of a, b1 and
b2 will be determined by HQUSACE. The parameter values will
be based on the latest available data and set so that 20 percent of
counties have an EF of 1.0 or more, while 66.7 percent have an EF of 0
or less. These values will be adjusted periodically as new information
becomes available. Changes will be published in Engineering Circulars.
The values will be set so that b2=2 x b1, giving
local income twice the weight of state income.
(6) Since estimates (available from the Bureau of Economic Analysis)
of per capita personal income for Puerto Rico, Guam and other U.S.
territories are well below the national average, the eligibility factor
for projects in these areas is administratively established to be equal
to 1.
(7) For flood control projects sponsored by Native American tribes
or villages, the EF shall be calculated using information on tribe or
village income as a replacement factor for both the area and state
factor (that is multiply the replacement income factor by both
b1 and b2 and subtract each from a in the equation
in Sec. 241.5(b)(5)). The replacement factor will be tribe or village
income as a percentage of the national average for the equivalent
definition of income (for example a Tribe's median family income as a
percentage of the median family income for all U.S. families). The data
should be the latest available information. It is acceptable, but not
required that the data be obtained from the Bureau of the Census,
American Indians, Eskimos and Aleuts on Identified Reservations and
[[Page 332]]
in Historic Areas of Oklahoma (Excluding Urbanized Areas), part 1, Table
10, or General Social and Economic Characteristics--United States
Summary (1980), Table 252. Since both sources contain information for
Native Americans living on reservations, rather than all Tribe or
Village members, the sources should be used only when appropriate, or
when no better information is available.
(c) Application of the Ability to Pay Formula to the Basic Cost-
sharing Provisions of Section 103. If a flood control project has a BBF
which is less than the standard cost-share and an EF which is greater
than zero, the non-Federal cost-share will be reduced. The alternative
non-Federal share will be calculated and reported to the nearest one
tenth of one percent. The actual reduction is determined by applying the
ability to pay formula to the basic flood control cost-sharing
provisions of section 103 of Pub. L. 99-662, 33 U.S.C. 2213, as follows:
(1) When EF 1, non-Federal cost-share = BBF
(2) For structural projects covered by section 103(a), when 0 EF 1:
(i) If LERRD equals or exceeds 45 percent:
non-Federal cost-share=50-EF x (50-BBF)
(ii) If LERRD exceeds 20 percent but is less than 45 percent:
non-Federal cost-share=(LERRD+5)-ER x [ (LERRD+5)-BBF ]
(iii) If LERRD is less than 20 percent:
non-Federal cost-share=25-EF x (25-BBF)
(3) For non-structural projects covered by section 103(b), when 0 EF
1:
non-Federal cost-share = 25-EF x (25-BBF)
(4) In no case however, can the non-Federal share be less than five
percent, even if the calculation made in Sec. 241.5(c) (1),
(2), or (3) results in a smaller number.
(5) Note: LERRD equals the costs of lands, easements, rights-of-way,
relocations, and dredged material disposal areas expressed as
a percentage of total project costs. The BBF and numerical
terms in the equations above are also expressed as
percentages.
(d) Additional consideration for high cost projects. For any project
where the normal non-Federal share exceeds 35 percent, and the per
capita non-Federal cost (i.e., normal non-Federal share of total
construction costs divided by the population in the sponsor's geographic
jurisdiction) exceeds $300, the non-Federal share under the ability to
pay provision will be either LERRD's (i.e., no cash requirement) or 35
percent, whichever is greater. If LERRD's exceed 50 percent, the non-
Federal share remains at 50 percent. Projects which qualify under the
benefits and income tests will receive the reduction under the high cost
criteria only if the high cost criteria results in a greater reduction
in the non-Federal cost share.
[54 FR 40581, Oct. 2, 1989, as amended at 60 FR 5134, Jan. 26, 1995]