low-income, ghetto-type communities. A reversal of this trend should receive high priority in government policy. Park County is a rural area consisting primarily of family sized farms and ranches, with small towns that are dependent on agricultural activities. Agricultural production on Polecat Bench will provide a boost to the local economy and will help reverse the disturbing out-migration from this rural area. A very recent phenomenon is the shortage of beef that is now international and could become world wide. Due to rising beef prices, and the fact that farm and ranch operators in this area are basically involved with the beef industry, more land may be dedicated to cattle production than was anticipated in earlier feasibility reports. The irrigated lands of the Polecat Bench Area would expand the capability of cattle feeding operations close to the area where thousands of cattle are raised. The current practice of shipping these local cattle to feed lots in other areas could be reduced and brought closer to home, thereby providing a more efficient operation with obvious economic benefits for the local area. As a result, the irrigation of Polecat Bench will help reduce spiraling meat prices, and for this reason, too, we should encourage this Project. Another commodity that has recently looked promising is malt barley. The finest soil and sophisticated farming practices are required to raise barley of the high quality necessary for malting. I understand that Coors Brewery is exploring the possibilities of a contract with potential Polecat Bench farmers. The argument that this is just another irrigation project aggravating agricultural surpluses does not hold true for Polecat Bench. Other benefits which could evolve from this potential development include the possibility of providing a municipal and industrial water supply for the City of Powell, Wyoming. The city administration recently indicated an interest in obtaining water from Holden Reservoir, a feature of the Polecat Bench Area, as one alternative source for its water supply. The inclusion of municipal and industrial water supply as a purpose would have a significant and favorable effect on the economic analysis. State officials have pointed out, on many occasions, that funding of the Bureau of Reclamation program in Wyoming has been relatively insignificant compared to the massive mineral royalties that Wyoming resources have contributed to the Reclamation Fund. In recent years the contributions from Wyoming to the Reclamation Fund have averaged approximately 10 times the amount of money spent in Wyoming on reclamation projects. Ironically, federal funding for reclamation projects in states not so dependent upon their mineral resources has been far greater than in Wyoming. Using fiscal year 1971 as an example, the contributions to the Reclamation Fund, and the expenditures for reclamation activities in some of our sister states were as follows: In the interest of equity, Wyoming is obviously entitled to reclamation development which would bring expenditures more nearly in line with contributions. In addition to other purposes, the reclamation program was designed to develop renewable resources simultaneously with the depletion of nonrenewable resources. The reality for Wyoming has been far different. Most of our petroleum reserves have now been exported. The uranium and coal resources will undoubtedly be mined as rapidly as economically feasible. The present outlook for development of the State's land and water to replace a dwindling economy when the minerals are depleted is not encouraging. Polecat Bench, when developed, will still be providing a source of income for Park County farmers and ranchers, when Wyoming's mineral resources are no longer producing jobs or tax revenues. The Missouri River Basin Project Act created a Basin Fund, with contributions from power revenues to help reimburse the federal government for its investment in water projects. Wyoming irrigation projects have received very little assistance from this source to date compared to other Missouri River Basin States and the potential for additional Wyoming irrigation projects within the basin is limited. A large part of the revenues being made available to the Missouri River Basin Fund, however, is derived from electric power being generated by water originating in Wyoming. The Polecat Bench Project is one of very few opportunoties whereby Wyoming people can avail themselves of this assistance. Even without considering the inequities in funding Wyoming Reclamation Projects and the limited assistance Wyoming has received from the Missour River Basin Fund, the Polecat Bench proposal is an outstanding irrigation project in its own right. Because of its importance to the State of Wyoming, I an very hopeful that there will be favorable consideration by this subcommittee and that construction will be initiated in the near future on the Polecat Bench Project. Mr. KAZEN. Mr. Bishop, I see where, of this 19,200 acres, the State of Wyoming owns 440 acres. Now, how does the State plan to convert that acreage? Mr. BISHOP. I am not sure I understand your question, Mr. Chairman. The State has taken the position they will cooperate in the irrigation of these lands. The lands will be made available as far as incorporation into the irrigated lands and the units of the project. As to the mechanics of that procedure, I am sorry I am not really awar exactly how that takes place. Mr. KAZEN. Well, would the State still control or retain that land' Mr. BISHOP. No, these lands would be transferred into private ownership. Mr. KAZEN. This is my question. Mr. BISHOP. Yes, sir. There is no question but what the State would be very willing to do that. Mr. KAZEN. All right, sir. Are there any questions? Mr. MELCHER. Yes, Mr. Chairman. Mr. KAZEN. Mr. Melcher. Mr. MELCHER. Mr. Bishop, on the second page of your testimony you are talking about the project has been held up in the Office of Management and Budget due to the question of economic feasibility related to the various proposals to modify the discount rate and change the basic standards for evaluating water resources projects. It is your understanding that the Office of Management and Budget, or other people in the administration, if they have their way, the interest rate for any of these, any reclamation projects will be greatly increased; is that your understanding? Mr. BISHOP. There certainly has been discussion to that effect. It is not a resolved matter at the present time. There has been discussion as to whether the discount rate should be 53% percent, should it be 7 percent, should it be 10 percent. It is my understanding that the reevaluation that has been done by the Bureau of Reclamation on the Polecat Bench project was on the basis of 53% percent. The Wat Resources Council and Office of Management and Budget have not resolved the cuestion of what the discount rate should be for t.. reevaluation of future projects. Mr. MELCHER. What do you and Governor Hathaway think should be done about it? Mr. BISHOP. Frankly, I should qualify my answer by indicating th• the Governor has not really taken a firm position. My personal feel. ing would be that 53% percent is a reasonable discount rate, and or e that still would make it possible to develop some reclamation projects in the West. So, I recognize the desirability of increasing the discount rate to some extent, but something on the order of 5% percent seems reasonable to me. Mr. MELCHER. Well, I am glad to hear you say that, and I hope that Governor Hathaway does too, and I hope he will. Mr. BISHOP. I am sure he will. Mr. MELCHER. I think anybody from the West is going to say that a rate like 7 percent is completely unrealistic for anything we might want to do. It also is unrealistic in light of the fact that the Treasury has been borrowing money for a lot less than 7 percent. I cannot give you the current figures, but the last time I looked at it, and I have to admit it was probably 6 weeks to 60 days ago, that the Treasury's discount rate was less than 5 percent. So, I see no reason to charge us more here in the West for projects that obviously are not only good for our States, our regions, but I think are good for the entire country. I particularly commend you for your statement in this regard. Mr. BISHOP. Thank you, Congressman. Governor Hathaway did submit testimony at the hearings that the Water Resources Council held on this discount rate matter. He did strongly object to the 7 percent figure. As I recall his testimony, he did not state a figure that he would endorse. Mr. MELCHER. Well, I appreciate that from Governor Hathaway very much. Thank you, Mr. Chairman. Mr. KAZEN. Mr. Abourezk? Mr. ABOUREZK. I have no questions. Mr. KAZEN. Mr. Roncalio? Mr. RONCALIO. I have no questions. I think this is an excellent statement. I would like the State engineer to know and the Governor to know I read it all. I know there have been a few pages we have not gotten to, and I think it is just excellent, and I commend you. Thank you very much. Mr. BISHOP. As one closing point, I also have a written statement, or a letter, it really is, from the Wyoming Department of Economic Planning and Development in support of the project, and I would also like to inculde that in the record of the hearing, with your permission. Mr. RONCALIO. Will they not have a spokesman coming later in the day? Mr. BISHOP. It is my understanding they will not have, that this letter represents the statement of the department. Mr. KAZEN. Without objection, the letter will be made a part of the record. (The letter referred to follows:) STATE OF WYOMING, DEPARTMENT OF ECONOMIC PLANNING AND DEVELOPMENT, SUBCOMMITTEE ON IRRIGATION AND RECLAMATION, GENTLEMEN: The Wyoming Department of Economic Planning and Development thank you for holding a field hearing in Powell, Wyoming, on the authorization of the Polecat Bench of the Shoshone extension unit, Missouri River Basin project, Wyoming. The Department welcomes the opportunity to endorse this long awaited legislation. Our predecessor agency, the Wyoming Natural Resources Board supported the enactment of the legislation authorizing the feasibility investigation of the area as provided by the Act of September 7, 1966, (80 Statute 707). Wyoming has been anxiously awaiting the opportunity to reiterate its support of the Polecat Bench Area, following the Reevaluation Statement of March, 1970. The project has withstood the test of reexamination and continues to show feasibility. The addition of 19.200 acres of irrigated land to the present proven Shoshone Project will enhance the opportunity for the area to have a vigorous economy. In behalf of the Wyoming Department of Economic Planning and Development, I urge you to give favorable consideration to the authorization for construction of the Polecat Bench Area, Shoshone extension unit-Misouri River Basin project, Wyoming. Sincerely, Mr. KAZEN. Thank you very much, sir. J. D. BRUNK. Mr. KAZEN. The next witness is Mr. Don Hood, Wyoming State Department of Agriculture. Mr. Hood. STATEMENT OF DON HOOD, WYOMING STATE DEPARTMENT OF AGRICULTURE Mr. Hoop. Mr. Chairman, and members of the subcommittee, I am Donal Hood, executive secretary of the Wyoming Conservation Commission, and my testimony is presented on behalf of the Wyoming Board of Agriculture, the Wyoming State Conservation Commission, the Wyoming Association of Conservation Districts, Cody Conservation District, Powell-Clarks Fork Conservation District, and the Shoshone Conservation District, who give complete support for the approval of the Polecat Bench irrigation project and are in accord with the statement submitted by Mr. Floyd Bishop for the Governor, Stanley K. Hathaway and the State of Wyoming. The local conservation districts which are a legal subdivision of the State government, will be able to assist the local people in the recommendations for proper conservation practices and supply technical assistance through the Soil Conservation Service, USDA, as requested for proper development of these lands, once the project has been approved. We respectfully request the subcommittee to act favorably on the statement submitted for the State of Wyoming on the proposed Polecat Bench project. Thank you. Mr. KAZEN. Thank you very much, Mr. Hood, for your statement. Mr. ABOUREZK. No, just to thank you for a very brief statement. Mr. MELCHER. Well, my only comment is that I am pleased to see what apparently is very fine bypartisan recommendation for the proj ect. And I will direct a question to Teno right now. I am assuming that Senator McGee is strongly in favor of the project, is that correct? Mr. RONCALIO. There is no question of that. Mr. MELCHER. Well, I think this is important to know, that the Gorernor, and the very fine testimony presented on Governor Hathaway's behalf by Mr. Bishop, and Senator Hansen, and Senator McGee, and Congressman Roncalio are all very much in favor of this. I thank you. Mr. RONCALIO. Let me respond to that if I may, Mr. Chairman. Mr. KAZEN. I was going to make the observation that Senator McGee could not be here today, and that was the purpose for leaving a place in the record for his statement when it is submitted. Mr. RONCALIO. Thank you, Mr. Chairman. May I comment further? Mr. KAZEN. You have the floor. Mr. RONCALIO. I would take the responsibility for the fact there is not a representative of Senator McGee here today. We are working very hard and Senator McGee has been given a duty and responsibility over and above the usual. The President of the United States, as all of you know, has asked him to sit with the United Nations and voice a vote at the United Nations for the United States in the Security Council, and that is where the Senator is most of the time, 6, 7 days a week. Consequently it becomes very difficult for us to have the liaison we would have had. I should have had someone here from his staff. I must admit that half a dozen of his staffers are in Wyoming these days, and I apologize that Senator McGee's statement is not in the record now. But I can assure you and my colleagues that he is 100 percent for this project. Mr. KAZEN. If there are no further questions, thank you very much. The next witness is Mr. Don Brosz, university extension irrigation engineer. STATEMENT OF DONALD J. BROSZ, UNIVERSITY EXTENSION IRRIGATION ENGINEER Mr. BROSZ. Thank you Mr. Chairman, and committee members. As per your request, Mr. Chairman, I shall summarize since it is more than one page. For a university faculty member to do this in less than six pages may be a little difficult. Mr. KAZEN. Without objection, your entire statement may be made a part of the record at this point, and you may go ahead and summarize. (The statement referred to follows:) STATEMENT OF DONALD J. BROSZ, EXTENSION IRRIGATION ENGINEER, UNIVERSITY OF WYOMING Mr. Chairman and members of this honorable subcommittee, my name is Don Brosz, Extension Irrigation Engineer with the University of Wyoming, Laramie, Wyoming. I have been on the faculty of the University of Wyoming Agricultural Extension Service since November 15, 1962. Before this time, I served on the faculty of Kansas State University from 1960-1962 and South Dakota State University from 1955-1960, also as Extension Irrigation Engineer. In addition to having the opportunity of working with Wyoming irrigated agriculture through the University, I also serve as secretary of a Wyoming's citizens group interested in water known as the Wyoming Water Development Association. The Association's membership is comprised of people having an interest in the total cross section of Wyoming's water including municipal, recreation. industry, agriculture, fish and wildlife and domestic. The Wyoming Water Development Association has for many years encouraged the development of the Polecat Bench project located near Powell, Wyoming. The Association's 1971 resolution adopted at Convention October 19, reads as follows: "Whereas, the future competition for available water supplies will have a material bearing upon the future welfare of irrigation agriculture in Wyoming; and |