IE 3 105% 1’_Ci‘—}.\8/2.1 . ‘ .' .. .. U ‘ h ‘ J‘: ‘V ‘ V‘ ’ - ".“ Q . . ‘ « - V ‘ Q ' -_ A ,‘~‘ . "" ' “ ‘ F . ’ " ~ . V ‘ fr‘;-; 1‘ ‘\“ . ‘ 4 . ‘IR 8 ~_ nn .. V‘ 4‘ : I‘ , 1:‘. ; ~ @OnL;.S H11; :3. ’ u3m@fl$‘49$ *‘x;‘*saif 3; .=; E 1. Sajn ][: . 3 law L '”’«& 4qQ» ‘ %m~ CONGRESSIONAL ARESEARCH SERVICE ‘ am IullamflifiylflijfimmugjiimgigjWmma WATER SUPPLY FOR URBAN AND NON-URBAN AREAS ISSUE BRIEF NUMBER IB8lO58 AUTHOR: Simmons, Malcolm M. Environment and Natural Resources Policy Division THE LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM DATE ORIGINATED O3/31/81 DATE UPDATED O8/27/81 FOR ADDITIONAL INFORMATION CALL 287-5700 0831 CRS- l IB8lO58 UPDATE-O8/27/81 ISSUE DEFINITION 97th Congress may take a Congresses because of new The water resources development issue in the different course from that of the past two pressures for water development across the Nation. The problem is both urban and non-urban. The urban aspect is largely associated with the adequacy of drinking water supplies; this problem has been exacerbated by recent drought, particularly in the northeastern cities whose water supplies were dangerously with the drought associated West, where The non-urban aspect is low earlier in the year. Southeast, Midwest, and agricultural areas of the conditions now threaten some areas. The agriculture of the west is also threatened by the increasing pressure for energy development and defense development (e.g., MX missile) which is straining existing water resources. The principal issue is whether Congress should pursue the traditional "structural" methods popular over a decade ago to meet water demands for urban and non-urban contexts, or whether the non-structural" approaches made popular during the 1970s would be a better method of solving many water supply problems. The structural methods are typified by large dam and inter-basin transfer projects, and the non-structural methods by demand reduction approaches such as pricing, conservation, and wastewater reuse. The structural approaches became unpopular to many because of the scarcity of new, unused cost-effective sites, because of concern over‘ the environmental iamage, and because of the rising costs and energy utilization of many of these projects. other related issues are whether the Federal programs to conserve water in irrigated agriculture the user of more than 90% of the water in water-scarce regions of the West are sufficient inducement to conserve water and therefore free up water for other uses, and whether Congress should develop a Federal program to better manage and conserve the Nation's ground water resources. At the present time, ground water management is mostly in the hands of the State governments, and serious depletion problems are occurring in the Great Basin (Ogallala Aquifer), the Rio Grande region, the Colorado River Region, and parts of southern California and Arizona. A final issue is whether the Federal capability to respond to intermittent drought emergency is sufficient. BACKGROUND AND POLICY ANALYSIS Water availability to urban and non-urban areas is a critical issue. Urban areas in the Northeast experienced dangerously low water supplies earlier in the year. Because of a shortage of municipal and industrial water supplies in northern New Jersey, the New York metropolitan area, and the Boston metropolitan area, urban officials started to develop strenuous conservation efforts. While the Northeastern drought has subsided, some weather experts have predicted that more drought may occur some predicting drought conditions could extend into the mid-1980s. Western areas, some just ecovering from the effects of the l976-1977 drought, are now facing similar water supply problems due to irrigated agriculture, which consumes most of the water. The West has only started to deal with the pending demands of energy and defense development superimposed on the existing agricultural water shortage problems. many. CRS- 2 IB8l058 UPDATE-08/27/8l About 85% of Americans are expected to live in urban areas by the year 2000, and many water experts are predicting water shortages in these regic before that time. The General Accounting Office has stated that cities will have to use water more efficiently and find new sources of water in the near future. Superimposed on these developing long-term water supply problems for urban areas are the intermittent water supply problems produced by the Northeastern drought of early l98l. The increasing demand for water to support domestic energy resource development and defense development such as the MX missile system is adding to a water scarcity problem in many parts of the West. This demand is especially threatening to agriculture, which in the critical water-scarce regions of the West where many of the energy deposits are found and where the Federal Government proposes to locate the MX missile, consumes over 90% of the region's water resources. Increasing water requirements have led to an overdrafting of ground water in many parts of the country -- particularly in the Great Basin (Ogallala aquifer), the Colorado River region, and parts of Arizona and southern California. Overdrafting is not a problem if done on an interim basis in times of drought, but continual overdrafting will lead to reduced surface water flows, salt water intrusion in coastal areas, increased energy consumption to pump from deeper wells needed to reach the declining water table, the added expense of having to dig deeper wells, and, in extreme cases, land subsidence. » A problem related to excessive ground water use is ground water contamination; contaminated ground water is just about as useless as deplet or non-existent ground water. The cost of treating contaminated ground water is often prohibitive. Unfortunately, the ground water in many of the regions in the Northeast, especially those near urban concentrations, was contaminated in the past and continues t0 be contaminated today. But ground’ water contamination is not strictly an urban phenomenon: many agricultural areas (such as the San Gabriel Valley in California) have also been contaminated. The traditional method for alleviating water supply and water quality problems in a particular region was the construction of large dams to trap water during the high flow season or the transfer of water into the region from other regions which had abundant supply. During the past decade. however, these approaches became unpopular. During the last four years, there has not been an omnibus water project authorization enactment for new projects, and the 95th Congress extended for another ten years a moratorium on the Federal study of inter-basin transfers. Much of the activity of the Carter Administration focused on the reform of the so-called pork barrel politics of water resources development and the development of a national water policy. Through actual and threatened veto of water project authorization and appropriations bills, the Carter Administration focused water project development on only the projects it considered most worthy. An important component of the promised new national water policy was the "non-structural" conservation approach. President Carter stated that conservation would be the "keystone" of national wat “ policy. The non-urban water problems facing the West result largely because of the high consumption of the available water resources by irrigated agriculture. In light of the increasing demands from other use sectors, a basic question CRS- 3 IB8lO58 UPDATE—O8/27/Bl facing western agriculture is whether energy and defense developers, who areI capable of paying a far higher price for water than can irrigators, will buy out agricultural water rights, and thus diminish the Nation's agricultural output, or whether irrigated agriculture will be able to conserve sufficient amounts of water to accommodate the water needs of agriculture as well as those of the new competing users. Some efforts are now underway through the Bureau of Reclamation (Interior Department) and the Soil Conservation Service (Agriculture Department) to conserve water in irrigated agriculture and perhaps to free up more water for the new demands. If sufficient water is not freed up for these new demands, then transfer of water rights into the new use sectors may become necessary. A variety of Federal, State, and interstate institutions, however, buttress the agricultural economy and make the transfer of water rights to other use sectors difficult. The principal Federal law involved is the Reclamation Act of 1902. In State laws, western prior appropriation principles make, water conservation difficult, and fragmentation of decision-making authority may impede the transfer of water rights. Finally, interstate compacts have in some instances posed obstacles for the transfer of water rights. A final difficulty for Western water availability is legal uncertainty about Indian and Federal reserved water rights. Because of this legal uncertainty, extensive quantification of these water rights has not occurred. Until this quantification occurs in each region, neither the traditional users nor the new users can be sure of how much water is available to them. "Structural" v. "Non-structural" Solutions to Water Supply Problems In developing solutions to present and future water supply problems, onel issue which the Congress would face is what mix of structural and non—structural projects is appropriate for a particular region. Structural solutions -- such as construction of water storage projects and importation of water from a water-rich region to a water-scarce region -— were the traditional approaches to alleviating water scarcity before the last decade. During the last decade, concern about the environmental damage these structural projects might cause, coupled with the rising costs of such projects and the fact that many of the most cost—effective projects had already been constructed at the best sites, led many to re-evaluate the structural solutions. Non—structural approaches -- such as conservation of water and demand reduction -— have received increasing attention. with the increasing demands on scarce water resources in both urban and non-urban areas, Congress may have to evaluate the appropriateness of both these approaches. Structural solutions, on the one hand, generally are longer-term but more environmentally disruptive. Non-structural solutions, on the other hand, generally are more temporary but less costly and less environmentally disruptive. The west and the Southwest developed an extensive infrastructure of *tructural water storage and distribution projects before the past decade. rhe Northeast and North Central regions, where annual precipitation was much higher, did not develop such extensive structural solutions. The five-year drought of the l960s in the Northeast, when 28% of the region's population was subjected to restrictions in water use, indicated that consideration of more water storage and distribution projects is important. The environmental CRS- 4 IB8lO58 UPDATE-O8/27/81 concern of the last decade led to the careful evaluation of many structure“ projects which could have provided the necessary management tool for urbr and non-urban water supplies in all parts of the country. Because of this concern over structural projects, only one major water supply project was constructed in the three Northeastern metropolitan areas most critically affected by the five-year 1960s drought. In the West, the perceived potential threat to the environment of the donor region and the fear of inadequate compensation to the donor region were among the reasons for legislative roadblocks to the Federal study of inter-basin transfers. The types of projects for management of water supplies most acceptable from the environmental perspective have .been non-structural projects not disruptive to the environment. Demand reduction is an example of this approach. Pricing is one mechanism for demand reduction: an increase in price of water will generally be an inducement to use water less; adoption of water conservation techniques and devices is another example of the demand reduction approach. Certain types of structural projects which only minimally disrupt the environment have been acceptable from the environmental perspective. One example is a series of small-scale dams instead of one larger=scale dam. Another is the interconnection of existing water supply systems to provide better water service capability to drought-stricken areas. A final example is the treatment of river water Previously thought unsuitable for reuse. Inter-basin Transfer Inter-basin transfer of water was one of the traditional methods f alleviating water supply and water quality problems both in urban and non—urban areas. The importation of water from other regions with more water could provide additional water supply when local water storage is maximized. Various factors, however, contributed to inter-basin transfer projects‘ falling into disfavor. One of the most important was concern for the environment of the region supplying the water: transportation of water out of the donor region could change the ecology of the region. The extent of this ecological change would vary, depending upon such factors as the natural precipitation of the area, existing supplies and existing demands for water in the donor region, the volume of water, and the season when this water is transported out of the donor region. Other factors were the increasing costs of such transfer and the fear of inadequate compensation on the part of the donor region. - The strong feelings of many interest groups to inter-basin transfers of water led to a congressional moratorium on the Federal study of such projects. This moratorium was contained in the 1968 Colorado River Basin Project Act (P.L. 90-537). The Bureau of Reclamation Dam Safety Act of 1978 (P.L. 95-578) extended this moratorium for another ten years. While there was much political opposition to inter=basin transfers when the first moratorium was enacted, certain water experts considered such projects politically and economically feasible if water developers observe certain rules. The National Water Commission published these rules in 1973: l. The proposed project should be the least-cost method of acquiring the needed water supply. 2. The benefits generated by the transfer in the receiving area should exceed the full costs of the 10. ll. l2. l3. CRS- 5 IB8lO58 UPDATE'O8/27/81 transfer plus the net benefits which that water would have generated in the donor region. The net productivity of the project should be compared to that of alternative investment opportunities. not just regional project. net than the economic development, development alone, must justify the In other words, the project should result in economic gains in benefited areas which more offset net economic losses in other areas of country. National economic beneficiaries of an inter-basin transfer should the full project costs allocable to the purposes for which they benefit, including compensation to the donor region of the costs of foregone opportunities resulting from the water transfer. The Pay Full project costs for which beneficiaries pay~ include total reimbursable costs of construction and the reimbursable operation and maintenance costs. The repayment period should not exceed the economic life of the project, and the interest rate used in the repayment schedule should not be lower than the cost of the Federal Government of long-term borrowing at the time of construction. Allocation of costs of construction in, and compensation to, the donor region should be in proportion to the benefits each State or local government receives. Allocation of costs of canals, aqueducts, and pumping in receiving areas should be in proportion to the actual expenses incurred in bringing the water to each benefited State or local government. Benefited State and local governments should assess individual direct beneficiaries in proportion to the project cost attributable to each. The amount of monetary compensation to the donor region for the net losses incurred should be determined by Congress after consideration of estimates furnished by the donor region, the beneficiaries of the project, and the Federal agencies involved in the planning and evaluation of the project. Evaluation of inter-basin transfer project proposals should be the responsibility of an independent board of review. All inter-basin transfer proposals should be CRS- 5 IB8lO58 UPDATE-O8/27/81 carefully evaluated in accordance with environmental legislation in force at the time of the proposal. Source: National water Commission. "Water Policies for the Future." Final report to the President and to the Congress of the United States. Washington, U.S. Govt. Print. Off., 1973. p. 317-333. Federal Response to the 1976-77 Drought A review of the Federal response to the 1976-1977 drought in the West may be helpful to the Congress in assessing the Northeastern drought of early 1981 and devising a response to such droughts affecting urban areas in the future. Besides the urban orientation of the drought in the Northeast as compared to the agricultural orientation of the 1976-77 drought in the West, a major consideration in the Northeastern drought was that the infrastructure of water distribution systems existing in the West does not exist in the East, thereby eliminating an important management tool. The Bureau of Reclamation has developed this infrastructure, primarily for the distribution of irrigation water, since it was authorized to do so by the 1902 Reclamation Act. The 1976-77 drought created serious water problems for much of the Nation, but the areas most seriously affected were the agricultural regions of the West and, to a lesser extent, municipalities in the West. During 1977, about two-thirds of the counties in the Nation were classified as disaster areas The Federal response to this drought crisis fell into two categories: ( assistance designed to prevent damage before it occurred, through short-term actions to augment water supplies; and (2) assistance in the form of loans to farmers for production losses, and the provision of working capital to farmers and other businessmen until conditions returned tO normal. Four‘ agencies had primary responsibility for carrying out these programs: the Small Business Administration and the Departments of Agriculture, Commerce, and Interior. The four agencies provided over $5 billion in loans and grants to drought victims during fiscal years 1976 through 1978, and about $1 billion of this amount was for short-term emergency actions to augment water supplies. The six western States of California, Oregon, Idaho, Nevada, and Arizona received just over $9.5 billion in drought assistance (Source: U.S. General Accounting Office. Federal Response to the 1976-1977 drought: what should be done next? Report by the Comptroller General of the U.S. (CED-79-26). January 31, 1979. PP i-ii.) The most immediate and effective drought assistance occurred through. supplemental appropriations t0 existing drought _emergency assistance programs. In 1977, more than 40 Federal programs administered by 16 agencies‘ offered drought relief in the form of loans, grants, indemnity payments, and other forms of assistance to State and local governments, households, farms and private businesses. The six most important programs were: Community Drought Relief, administered by the Economic Development Administration (EDA) of the Commerce Department; Drought Emergency Program, administered by the Interior Department's Bureau of Reclamation; CRS- 7 IB8lO58 UPDATE-08/27/81 Emergency Fund Program, administered by the Bureau; Emergency Loan Program, administered by the Department of Agriculture's Farmer Home Administration (FmHA); Community Program Loans, administered by FmHA; and Disaster Loan Program, administered by the Small Business Administration (SBA). Aside from supplemental appropriations, the Congress responded to the drought and to President Carter's proposals on drought relief with two pieces of legislation: the Community Drought Relief Act of 1977 (P.L. 95-31) and the Emergency Drought Act of 1977 (P.L. 95-18). The Community Emergency Drought Relief Act of 1977 provided temporary authority to the Secretary of Commerce to facilitate emergency actions to lessen the impact of the 1976-77 drought. Through the Economic Development Administration (EDA), the Secretary of Commerce administered an emergency assistance program of loan and grants to carry out short-term actions in drought-affected communities. The Act authorized $225 million for these. purposes, but only $175 million was appropriated. of this $175 million, $109 million was used for loans and $66 million for grants. The Emergency Drought Act provided authority to appropriate $100 million for the Secretary of the Interior to augment, utilize, and conserve water .supplies for irrigation farming affected by the drought. The Bureau of Reclamation developed three programs to carry out this legislation: A "water bank" through which the Secretary of the g Interior could temporarily divert water supplies into drought areas. The Federal Government would subsidize the purchase of this water from willing sellers by the amount above the purchase price in normal years. The augmentation of water supplies by permitting water user organizations to undertake construction projects, such as digging wells and laying pipelines. Studies to identify opportunities to augment, utilize, or conserve water supplies and evaluate potential facilities to mitigate future droughts. The Emergency Drought Act also authorized the use of $30 million from the Bureau's emergency fund to defray expenses incurred because of the drought. The General Accounting Office has identified four problems in the Federal response to the 1976-77 drought regarding the timeless of the programs: Some drought programs were enacted and/or carried out too late to have much effect in augmenting water supplies; Inadequate standards for determining the worthiness of projects meant many projects were funded that had little, if any, effect in mitigating the drought; CRS- s IB81058 UPDATE-08/27/81 Drought victims were treated in an inconsistent, inequitable, and confusing manner because of the differences in program criteria used to determine loan eligibility and repayment requirements; and Inadequate coordination among the agencies resulted in overlapping areas of responsibility and duplication of effort. Source: U.S. General Accounting Office. Federal Response to the 1976-77 Drought: What Should be Done Next? (Ced—79-26). January 13, 1979, pp. i-ii. Although the initial Federal response to the 1976-77 drought, through supplemental appropriations to existing drought relief programs and the later responses of the voluntary water bank program and emergency assistance program, provided some form of relief to drought—stricken farm areas, the extensive crop losses led to the largest claims ever made on agricultural disaster assistance programs. The drain of funds to alleviate these drought losses focused attention on the inadequacies of the farm aid programs, and eventually led to a new approach to drought disaster relief through expanding and strengthening the Federal crop insurance program and phasing out other drought disaster loans where the amended Federal crop insurance program could provide the same coverage. The principal legislation for these changes was the Federal Crop Insurance Act of 1980 (P.L. 96-365). Although the Congress did not appropriate the $49 million requested for carrying out the program in FY81, the program appears to have the potential to respond to the criticisms of the previous droug. response strategy where the existing programs were often .viewed as inequitable, duplicative, and administratively cumbersome. The 1980 Act, in conjunction with amendments to related laws, consolidated four major disaster assistance programs: (1) Federal Crop Insurance; (2) Disaster Payments“ Programs, administered by the Agricultural Stabilization and Conservation Projects; (3) Emergency Loans, administered . by the Farmers Home Administration (FmHA); and (4) Disaster Loans, administered through the Small Business Administration. The Federal Crop Insurance Act of 1980 substantially extends coverage of the existing Federal crop insurance program. The Act increases the capital stock in the Federal Crop Insurance Corporation from $200 million to $500 million, extends crop coverage from 28 to over 400, and farming operations coverage from 150 counties to 3000 counties nationwide; and raises the basic insurance premium coverage from 30% to 65% of the value of the average yield of crop. Many have viewed the Disaster Payments Program (DPP) administered by the Agricultural Stabilization and Conservation Service as a form of "free" insurance for the growers of wheat, feedgrains, cotton, and rice. Growers of these four commodities could acquire additional protection beyond the basic insurance premium coverage of 30% provided by Federal crop insurance. Through utilization of both these programs, farmers of these four commodities could obtain from insurance claims close to the full cost of production for these four commodities in the 150 counties covered by the Federal cr insurance program. The 1980 Federal Crop Insurance Act eliminated thi- inequitable and duplicative coverage by including the four commodities in the Federal Crop Insurance Program whose coverage now extends to all counties and to 65% of the average crop yield. The old DPP will probably continue in 1981, however, because of procedural difficulties in the 1980 Act. CRS- 9 IB8lO58 UPDATE-O8/27/Bl The Emergency Loan Program administered by the FmHA provides guaranteed or insured loans to farmers to cover losses resulting from natural disasters such as drought. In order to qualify for such loans, a farmer must have tried unsuccessfully to obtain a loan at 5% interest. The program was abused by many farmers and investors who were not eligible but nevertheless obtained the Federally subsidized loan. (See "Consideration of amendment offered by Rep. Madigan to Consolidated Farm and Rural Development Act." Congressional Record, Oct. 24, l979: H9637.) The l980 Consolidated Farm and Rural Development Act (P.L. 96-438) corrected these abuses, limiting the amount of ithe loans and maximum permissible indebtedness to qualify for the loans. After l982, farmers will no longer be able to acquire these loans, but instead will have to cover losses through the Federal Crop Insurance Program. A loan program similar to the FmHA loans exists through the Small Business Administration (SBA), although the eligibility requirements for the SBA loans are less stringent. The lower eligibility requirements resulted in large numbers of applicants for the loan program and a straining of the program's financial resources. To alleviate this situation, Congress passed legislation (P.L. 96-302) which required farmers seeking disaster loans through SBA to first apply through FmHA. If the applicant eventually does not receive a loan through SBA, the repayment schedule and interest rate charged will be according to FmHA policy. Carter Administration As part of its reform of national water policy, the Carter Administration attempted to develop a national water policy and break the so-called pork barrel politics of water resources development and fund only what it considered the most worthy projects. Much of the early Administration activity focused on the review of controversial water projects and recommendations as to their continuation or deletion. The 95th Congress, while initially agreeing somewhat with the Administration policy towards water projects, sought not only to revive many of the projects the President recommended be deleted, but also to fund new projects. In the 96th Congress, the Administration continued to review water projects and recommend the discontinuation of some, but also recommended the investigation of the feasibility of certain new projects. The President's May l3, 1977, environmental message to Congress initiated a review of national water policy. The product of this review, the "Issue and Options Papers," was published in the Federal Register of July of 1977. After review of the "Issue and Options Papers," the President announced to the Congress his water Policy Initiatives on June 6, l978. The initiatives were designed to Improve planning and efficient management of Federal water resource programs to prevent waste and to permit necessary water projects which were cost-effective, safe, and environmentally sound. Provide a new national emphasis on water conservation. Enhance Federal-State cooperation and improved State water resources planning. CRS-l0 IB8lO58 UPDATE-O8/27/Bl Increase attention to environmental quality. other than recommendations on controversial water projects, specific action taken by the Administration consistent with the Initiatives were the promotion of bills restructuring the Water Resources Council to provide an independent review function for water projects, changing the cost ‘sharing formulas for Federal water projects, and development of “full funding" of water projects in lieu of "incremental" funding. Water Resources Council. The Congress generally was not receptive to the Carter Administration's attempts to restructure the Water Resources Council to include _an independent review function for water projects. The Administration indicated that the independent review was not a policy review, but rather a technical review, and that ranking or limiting the number of projects would not occur. The Congress was concerned that the independent review would overlap with existing functions at the Office of Management and Budget and the water project construction agencies. Congress never authorized the independent review function of the Water Resources Council. Furthermore, the existence of the Water Resources Council, with or without the independent review function, became controversial. Throughout the Carter Administration, the Congress would authorize and appropriate funds for the Council only on a year-to-year basis and only at the eleventh hour. cost-sharing. The Congress was more receptive to the idea of reform of cost-sharing for water projects. Existing policy was a "patchwork guilt" of different formulas which vary not only from agency to agency, but also from program to program and from one purpose to another. For example, the Federa share of the irrigation component of a multi-purpose project constructed by the Bureau of Reclamation would be different from the Federal share of the hydroelectric power component of a multi-purpose project constructed by the Corps of Engineers. Some critics have argued that this system has produced" an inequitable distribution of costs among direct beneficiaries and the general taxpayer. These critics further argued that increasing the non-Federal cost share of the project not only would produce a more responsible selection of the most worthwhile projects buy also would hold down Federal expenditures for water projects. The principal proposals for reform of the existing cost-sharing system were contained in S. l24l. The bill established a new system where States would follow a uniform rule for cost-sharring -- 25% for the construction costs, and 50% for the operation and maintenance costs. Although not the same as the cost-sharing contained in the Domenici/Moyhihan bill (S. 1241), the Carter Administration made its own recommendations regarding cost-sharing. These recommendations were for the States to pay a higher percentage of existing construction costs than existing cost-sharing arrangements. In the case of projects with vendible outputs (such as projects with water supply, irrigation, power, and recreation benefits), the State should pay 10% more, and in the case of projects without vendible outputs, the State should pay 5% more. Block Grants. Another proposal evaluated by the 96th Congress was the block grant approach to water project development, which according *‘ proponents would overcome the alleged inequitable distribution of wat project funds among the various States. The proposal was similar to the existing method for the allocation of construction funds for municipal wastewater treatment, and was contained in S. 1241, the Domenici/Moyhihan bill. The bill would have established a $4 billion construction fund for the CRS-ll IB8lO58 UPDATE-O8/27/8l Federal share of projects chosen for construction from State priority lists. she formula for allocation was based primarily on population and area of States. Criticism of the proposal focused on the new pattern of State beneficiaries of Federal water which would result from the allocation formula, and the components of the formula. Regarding the latter, critics recommended that factors beyond State size and population, such as State need, be considered. Full Funding. The Carter Administration attempted to replace "incremental" funding of water projects with "full" funding. Full funding would finance, in one lump sum, all projects to completion. Under the existing system of incremental funding, Congress authorizes projects for funding one year at a time. The Carter Administration believed that full funding of water projects would impose a greater financial accountability on water project development. President Carter's budget proposal for FY79 advocated the full funding approach to water project development. The amended FY79 budget proposal included full funding for 26 Corps of Engineers and Water and Power Resources Service projects and 25 small watershed project starts for the Soil Conservation Service. Although the House Budget Committee report accompanying the First Budget Resolution for FY79 endorsed the President's proposal of full funding and urged the House to accept the concept, the Congress did not carry out the full funding proposals. Reagan Administration In his "Economic Recovery Package" released Feb. l7, l98l, President ieagan proposed an ll% reduction in the construction programs of the Corps of Engineers, the Bureau of Reclamation and the Soil Conservation Service. This reduction will not delay the realization of hydroelectric, municipal water supply, navigation, or other urban flood control features, but will defer some less critical parts of projects such as the development of recreation’ areas and some rural flood control and irrigation deliveries. only about 70 of the more than 300 projects nor underway will experience any delay. The delays in bringing "non-critical" features online will average 2 years, and will reduce Federal expenditures by $1.6 billion over the next 5 years. For more information, see IB8lO93 -- Water Resources Development: Budget Restrictions. LEGISLATION H.R. 3432 (Howard et al.) Amends the water Resources Planning Act of 1974 to revise the authority relating to the planning and evaluating water resources projects. Introduced March 5, I981. S. 1095 (Abdnor) Amends the l965 Water Resources Planning Act to establish a National Board of Water Policy, an Office of water Programs, and river basin commissions for *ater resources management, research and development, and the implementation sf a national water resources policy. Introduced May 4, l98l. Reported to the Senate from the Committee on Environment and Public Works (S.Rept. 97-120). S. 621 (Domenici) CRS-l2 IB8lO58 UPDATE-O8/27/Bl Provides for Federal-State cooperation concerning water resourc development through the Water Resources Council. Requires block grant Federal and non-Federal cost-sharing, where non-Federal entities pay for 25% of construction costs and 50% of operation and maintenance costs. Amends the water Resources Planning Act to provide an independent water Resources Council. Introduced Mar. 5, l98l. CHRONOLOGY OF EVENTS O2/17/Bl —— In his "Economy Recovery Package", President Reagan proposed an ll% reduction in budgets of water project construction agencies. 06/06/78 -- President Carter presented his Federal Water Policy Initiatives to Congress. O7/25/77 —- Water Resources Council promulgated the second part of ?lssueVand“Options Papers" in the Federal Register. O7/15/77 —- Water Resources Council promulgated the first part of "Issue and Options Papers" in the Federal Register.