(1) The opportunity cost of employing otherwise 

 unemployed and underemployed workers is equal 

 to their earnings under the without plan conditions. 



(2) Conceptually, the effects of the use of unem- 

 ployed or underemployed labor resources should 

 be treated as an adjustment to the adverse effects 

 of a plan on national economic development. Since 

 this approach leads to difficulties in cost allocation 

 and cost sharing calculations, the effects from the 

 use of such labor resources are to be treated as an 

 addition to the benefits resulting from a plan. 



(3) Beneficial effects from the use of unemployed 

 or underemployed labor resources are limited to 

 labor employed on site in the construction or instal- 

 lation of a plan. This limitation reflects identification 

 and measurement problems and the requirement 

 that national projections are to be based on a full 

 employment economy. 



(4) If the planning region has substantial and 

 persistent unemployment and these labor re- 

 sources will be employed or more effectively em- 

 ployed in installation of the plan, the net additional 

 payments to the unemployed and underemployed 

 labor resources are defined as a benefit. 



(f) Adverse NED effects: t^easurement stand- 

 ards. 



(1) In evaluating NED costs, resource use is 

 broadly defined to include all aspects of the eco- 

 nomic value of the resource. This broad definition 

 requires consideration of the direct private and 

 public uses that producers and consumers are cur- 

 rently making of available resources or are expect- 

 ed to make of them in the future. 



(2) If market prices reflect the full economic 

 value of a resource to society, they are to be used 

 to determine NED costs. If market prices do not re- 

 flect these values, then an estimate of the other 

 direct costs should be included in the NED costs. 



(3) NED costs may reflect allowance for the sal- 

 vage value of land, equipment, and facilities that 

 would have value at the end of the period of analy- 

 sis. 



(g) NED cost categories. For convenience of 

 measurement and analysis, NED costs should be 

 classified as implementation outlays, associated 

 costs and other direct costs. 



(1) Implementation outlays. These are the finan- 

 cial outlays (including operation, maintenance and 

 replacement costs) incurred by the responsible 

 Federal entity and by other Federal or non-Federal 

 entities for implementation of the plan in accord- 

 ance with sound management principles. These 

 costs do not include transfer payments such as re- 

 placement housing assistance payments as speci- 

 fied in 42 U.S.C. 4623 and 4624. 



(2) Associated costs. These are the costs in ad- 

 dition to implementation outlays for measures 

 needed to achieve the benefits claimed during the 

 period of analysis. For example, associated costs 

 would include the cost of irrigation water supply la- 

 terals if they are not accounted for in the benefit 

 estimate. 



(3) Other direct costs. These are the costs of re- 

 sources directly required for a project or plan, but 

 for which no implementation outlays are made. 

 These costs are uncompensated, unmitigated NED 

 losses caused by the installation, operation, mainte- 

 nance, or replacement of project or plan measures. 

 Examples of other direct costs include increased 

 downstream flood damages caused by channel 

 modifications, dikes, or the drainage of wetlands, 

 increased water supply treatment costs caused by 

 irrigation return flows, and displaced public recrea- 

 tion. 



1.7.3 Environmental Quality Account. 



(a) General. 



(1) The EQ account is a means of displaying and 

 integrating into water resources planning that infor- 

 mation on the effects of alternative plans on signifi- 

 cant EQ resources and attributes of the NEPA 

 human environment, as defined in 40 CFR 1507.14, 

 that is essential to a reasoned choice among alter- 

 native plans. Significant means likely to have a ma- 

 terial bearing on the decisionmaking process. 



(2) Beneficial effects in the EQ account are fa- 

 vorable changes in the ecological, aesthetic, and 

 cultural attributes of natural and cultural resources. 



(3) Adverse effects in the EQ account are unfa- 

 vorable changes in the ecological, aesthetic, and 

 cultural attributes of natural and cultural resources. 



(4) A suggested procedure which may be used 

 for evaluating effects included in the EQ account 

 appears in Chapter III of these Guidelines. 



(b) Significant EQ resources and attributes. 



(1) An EQ resource is a natural or cultural form, 

 process, system, or other phenomenon that — 



(i) Is related to land, water, atmosphere, plants, 

 animals, or historic or cultural objects. 



(ii) Has one or more EQ attributes (ecological, 

 cultural, aesthetic). 



(2) EQ attributes are the ecological, cultural, and 

 aesthetic properties of natural and cultural re- 

 sources that sustain and enrich human life. 



(i) Ecological attributes are components of the 

 environment and the interactions among all its 

 living (including people) and nonliving components 



10 



