[Code of Federal Regulations]

[Title 33, Volume 3]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 33CFR241.7]



[Page 342-343]

 

                TITLE 33--NAVIGATION AND NAVIGABLE WATERS

 

 CHAPTER II--CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, DEPARTMENT OF 

                                 DEFENSE

 

PART 241_FLOOD CONTROL COST-SHARING REQUIREMENTS UNDER THE ABILITY TO 

PAY PROVISION--Table of Contents

 

Sec.  241.7  Application of test.



    (a) A preliminary ability to pay test will be applied during the 

study phase of any proposed project. If the ability to pay cost-share is 

lower than the standard share, the revised estimated cost-share will be 

used for budgetary and other planning purposes.

    (b) The official application of the ability to pay test will be made 

at the time the Project Cooperation Agreement (PCA) between the Corps of 

Engineers and the Non-Federal sponsor is signed. For structural flood 

control projects, the standard level of cost-sharing will not be known 

until the end of the project (since the standard level as specified in 

section 103(a), 33 U.S.C. 2213, includes LERRD). In this case, if the 

Eligibility Factor is greater than zero but less than one, the ability 

to pay non-Federal share will be determined using estimated costs.

    (c) The PCA for all projects subject to the ability to pay test will 

include a ``whereas'' clause indicating the results of the test. If the 

project is eligible for a lower non-Federal share:

    (1) The revised share will be specified in the PCA (there will be no 

recalculation of this share once the PCA is signed).

    (2) An exhibit attached to the Project Cooperation Agreement (PCA) 

will include the Benefits Based Floor (BBF) determined in Sec.  

241.5(a): the Eligibility Factor (EF) determined in Sec.  241.5(b): If 

the Eligibility Factor is greater than zero but less than one, the 

estimated standard non-Federal share; the formula used in determining 

the ability to pay share as described in Sec.  241.5(c)(1) through 

(c)(4); and a display of the non-Federal cost share under the high cost 

criteria described in Sec.  241.5(d).

    (d) If at the time of project completion, the standard non-Federal 

share based on actual costs is less than the ability to pay share 

specified in the PCA, the standard share will apply.

    (e) For structural projects. (1) If the standard LERRD plus cash 

requirement exceeds the ability to pay cost-share, the Federal 

Government will make any necessary adjustments in expenditures in the 

following order: First, paying any cash requirement in excess of five 

percent of total project costs (if any) that would, under standard cost-

sharing, have been the responsibility of the non-Federal sponsor; 

second, making payments for LERRD; and third, providing for 

reimbursement at the end of construction. Federal payments for LERRD 

will be made only after the non-Federal payment for LERRD reaches a 

percentage of total project costs equal to the ability to pay non-

Federal cost-share less the five percent cash requirement. If such 

arrangements are necessary, the PCA should be prepared to reflect 

agreement on the best manner available for acquisition of those LERRD 

over the limiting percentage, or for reimbursing the sponsor upon 

completion of construction.

    (2) The non-Federal sponsor will be required to provide a cash 

payment equal to the minimum of five percent of estimated project costs, 

regardless of the outcome of the ability to pay test, unless any or all 

of the five percent cash requirement is waived by application of the 

high cost criteria described in Sec.  241.5(d). The project sponsor 

shall make cash payments during construction at a rate such that the 

amount of non-Federal payments in each year, as a percentage of total 

non-Federal cash payments, equals the



[[Page 343]]



amount of Federal expenditures (including sunk pre-construction 

engineering and design costs as a first year Federal construction 

expenditure) as a percentage of total Federal expenditures. Total 

Federal expenditures include cash payments for construction and if 

necessary (due to ability to pay considerations), for LERRD, and for 

reimbursement to the non-Federal sponsor. Total Federal expenditures for 

the purpose of this calculation, do not include expenditures which allow 

the non-Federal sponsor to defer payment of the non-Federal share under 

the provisions of this rule.

    (f) For non-structural projects, reductions in the non-Federal cost-

share as a result of the ability to pay test will not affect the 

procedures for determining the non-Federal and Federal payment 

schedules. For non-structural projects, no specific cash payments during 

construction are required by law.



[54 FR 40581, Oct. 2, 1989, as amended at 60 FR 5134, Jan. 26, 1995]