Chapter II— National Economic Development (NED) 



Procedures 



Section I— General 



2.1.1 Purpose. 



(a) The NED procedures in this chapter are for 

 Federal administrative purposes and do not create 

 any substantive or procedural rights in private par- 

 ties. 



(b) This chapter provides procedures for evaluat- 

 ing NED effects of alternative plans. 



(1) When an alternative procedure provides a 

 more accurate estimate of a benefit, the alternative 

 estimate may also be shown if the procedure is 

 documented. 



(2) Steps in a procedure may be abbreviated by 

 reducing the extent of the analysis and amount of 

 data collected where greater accuracy or detail is 

 clearly not justified by the cost of the plan compo- 

 nents being analyzed. The steps abbreviated and 

 the reason for abbreviation should be documented. 



(3) Proposals for additions to or changes in the 

 procedures in Chapter II may be made when an 

 agency head determines that the new technique 

 will improve plan formulation and evaluation. These 

 proposals are to be submitted to the Water Re- 

 sources Council for review and approval for inclu- 

 sion in Chapter II. Procedures that represent 

 changes in established policy are to be referred to 

 the Cabinet Council on Natural Resources and En- 

 vironment for its consideration. 



would have significant beneficial or adverse effects; 

 or (2) a period not to exceed 100 years. Appropri- 

 ate consideration should be given to environmental 

 factors that may extend beyond the period of analy- 

 sis. 



(d) Benefit stream— Vne pattern of expected 

 benefits over the period of analysis. 



(e) OM&R costs— \he expected costs over the 

 period of analysis for operation, maintenance, and 

 replacement necessary to maintain the benefit 

 stream and agreed-upon levels of mitigation of 

 losses to fish and wildlife habitats. 



(f) Discount rate—\he rate established annually 

 for use in evaluating Federal water projects. 



2.1.3 Calculating net NED benefits in average 

 annual equivalent terms. 



Net NED benefits of the plan are calculated in 

 average annual equivalent terms. To perform this 

 calculation, discount the benefit stream, deferred 

 installation costs, and OM&R costs to the begin- 

 ning of the period of analysis using the applicable 

 project discount rate. Installation expenditures are 

 brought forward to the end of the period of installa- 

 tion by charging compound interest at the project 

 discount rate from the date the costs are incurred. 

 Use the project discount rate to convert the present 

 worth values to average annual equivalent terms. 



2.1.2 Conceptual basis. 



Compare project NED benefits and costs at a 

 common point in time. Present the following infor- 

 mation: 



(a) Installation period— W\e number of years re- 

 quired for installation of the plan. If staged installa- 

 tion is proposed over an extended period of time, 

 the installation period is the time needed to install 

 the first phase. 



(b) Installation expenditures— Vne dollar expenses 

 expected to be incurred during each year of the in- 

 stallation period. 



(c) Period of analysis— Vne time horizon for pro- 

 ject benefits, deferred installation costs, and oper- 

 ation, maintenance, and replacement (OM&R) 

 costs. Use the same period of analysis for all alter- 

 native plans. The period of analysis is the time re- 

 quired for implementation plus the lesser of (1) the 

 period of time over which any alternative plan 



2.1.4 Definitions. 



Terms used in these guidelines are defined as 

 follows: 



Agricultural drainage. (1) The rehabilitation and 

 improvement of existing drainage systems or the 

 construction of new drainage systems to improve 

 the efficiency of cropland, woodland, and grassland 

 by lowering the water level in areas in which agn- 

 cultural production has been limited by naturally 

 high water tables, normal precipitation or normal 

 tide action, seepage, or excess irngation water. 



(2) Drainage projects include measures for sur- 

 face drainage, the removal of excess water above 

 the surface of the ground; and subsurface drainage, 

 the removal of excess water below the surface of 

 the ground. Drainage projects involve watershed or 

 subwatershed areas composed in whole or in part 

 of lands drained or proposed to be drained. The 

 boundaries of the water problem area may consist 



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