Mr. KAZEN. No, I do not either. Mr. CASEY. Thank you, sir. Mr. KAZEN. I am glad you asked this question. A while ago the Chair referred to 1,900 acres to be developed by this project. I meant 19.200 acres. Mr. MELCHER. Mr. Chairman? Mr. KAZEN. Yes, Mr. Melcher? Mr. MELCHER. One question, Mr. Gibbs, before you leave this testimony. I am assuming, but I do want your assurance, that the water compact agreement between Montana and Wyoming is in effect and will not in any way be altered by this project if it is approved. Mr. GIBBS. You have my assurance, sir. It meets all of the requirements of the Yellowstone compact. The only requirements will be that any water diverted to the project must be allotted against Wyoming's share, and Wyoming's share is much greater than this incre ment. Mr. MELCHER. Thank you, Mr. Chairman. Mr. KAZEN. Are there any further questions? If not, thank you very much, sir. The next witness is Mr. Paul Holtz, field representative representing Senator Clifford Hansen, of Wyoming. Come around, Mr. Holtz. We are glad to see you before the committee this morning. STATEMENT OF PAUL HOLTZ. FIELD REPRESENTATIVE, REPRESENTING SENATOR CLIFFORD P. HANSEN, OF WYOMING Mr. HOLTZ. Congressmen, I apologize, but I do not have additional copies of the Senator's statement. I believe they were mailed and they are probably in transit from Washington, D.C. Mr. KAZEN. They will be made a part of the record when received. Mr. HOLTZ. Thank you, sir. Mr. Chairman, I am pleased to represent Senator Cliff Hansen on these hearings on legislation to authorize the Secretary of the Interior to construct, operate, and maintain the Polecat Bench area of the Shoshone extension union, Missouri River Basin project, Wyoming. Senator Hansen is grateful for the kind invitation extended to him by Congressman Roncalio to present testimony in support of the legislation. Unfortunately, Senator Hansen had prior commitments which have prevented his appearance. He asked that I present his statement, and Í quote. Mr. Chairman, the Polecat Bench Reclamation project is a physical extension of the existing Shoshone project which was planned originally in 1904. In 1919 the concept of extending the Heart Mountain District into the Polecat Bench project first was discussed. As you may know, Mr. Chairman, this project has been on the drawing boards for a long time. I first introduced legislation to authorize the Polecat Bench project in March of 1967. As I recall, this action followed completion of the original feasibility study on the Polecat Bench in 1966. Since that time. I have worked with my colleagues to try to get action on this legislation. It has been a long, slow process. The fact that we now have a report on the project, and these hearings, as well as the Senate hearings which were held earlier this week before the Water and Power Resources Subcommittee of the Senate Interior Committee, is a credit to the merits of Polecat Bench and the community support it has enjoyed. The fact that I received over 100 telegrams and letters of support for the project in connection with the hearings before the Senate Subcommittee, as well as the interest shown here today bears further witness to the support for this project. This is a very important and meaningful factor which should be considered. This Polecat Bench proposal envisions the irrigation of 19,200 acres of high quality lands in northwestern Wyoming presently used for grazing, and would provide the water and related land resources for the establishment of over 80 new farm units. The project's principal features would include the Polecat and Holden Canals, Holden Dam and Reservoir, with a capacity of 9,900 acre feet of water, two small pumping plants with associated electrical facilities, distribution and drainage systems, and recreation facilities. As was the case with the Senate hearings. I suspect much of the discussion today will center around the Department's analysis of the benefits and costs of the project. In this regard, I think it is important to remember the concept behind this project envisions the addition of about 80 new farm units to this area. There is no doubt the project will provide new and increased crop and livestock production, stimulate increased business activities in the area, increase gross and net incomes, provide new employment opportunities on the farms, and in surrounding towns and cities: and with an expanded tax base, provide for new and improved community facilities such as schools, roads, medical facilities, public utilities, recreational faclities, and other benefits. Specifically, this project will increase population in the area about some 270 people on the farm and 800 people in urban areas. The volume of business in the surrounding towns and cities with full development of Polecat Bench would increase about $12.3 million annually. This total includes an expected $4.7 million annual increase in retail and service trades, $1.6 million in processing of the increased agricultural production, and $6 million in total wholesale trade. Mr. Chairman, the project we are considering today is of a major significance. The social and economic benefits of this proposal are to the benefit of the entire area, and state and Nation. I know your House Subcommittee will have a full and fruitful hearing. Let me again express my appreciation for being invited to testify. I wish I could have been in Powell personally to enjoy with all of you the fine hospitality of the Park County residents. Thank you, Mr. Chairman. Mr. KAZEN. Thank you, Mr. Holtz. We sincerely appreciate the Senator sending this statement and your appearing here on his behalf. The committee is well aware that he has been a champion of this project for many years, and we are very happy to receive his testimony. Is there any question from the committee? Mr. RONCALIO. Yes. Thank you. Mr. Chairman. Mr. KAZEN. Mr. Roncalio. Mr. RONCALIO. I would like to thank Senator Hansen personally, and particularly you, his able administrative assistant, for appearing here today and for the statement. Above all, I want to thank him for the foundation work he did, without which we could not have proceeded. and I appreciate his observation that he has received the cooperation and teamwork that has made this possible today. But, above all, I appreciate the facts on the economy in the area that will be stimulated by this $28 million expenditure, and that would warrant this appropriation down the road. Far too often the critics of irrigation and reclamation, especially some of the more newfangled ones, say that the money spent by the project is not warranted by the overall economy. I think these figures you brought out in your statement on what we can add to the tax base, and can add to the processing of crops each year some $6 million illustrate how we can and stimulate the economy of the area. Actually, when we spread this $28 million over the next decade or two, it is probably one of the best investments that Government can make with people in the development of the country. So, I am deeply grateful to you for the statement. Mr. HOLTZ. Thank you, Mr. Chairman. At this point, without objection, we will hold the record'open for any statement that Senator McGee might want to send the committee. (The statement of Senator McGee and letter to Chairman Johnson follow :) U.S. SENATE, COMMITTEE ON APPROPRIATIONS, Washington, D.C., September 25, 1972. Hon. HAROLD T. JOHNSON, DEAR MR. CHAIRMAN: Thank you and the Committee for giving me this opportunity to submit my statement in support of H.R. 1554, a bill introduced in the House by Congressman Roncalio to authorize the construction, operation, and maintainenance of the Polecat Bench area of the Shoshone extensions unit, Missouri River Basin project, Wyoming. As you know, Senator Hansen and I have sponsored a companion bill, S. 124, in the Senate and hearings were held before the Senate Interior and Insular Affairs Committee on September 19, 1972. With your permission, I would like to submit my prepared statement at those hearings for inclusion in the record of the hearings which your Committee held in Powell, Wyoming, on September 23, 1972. I want to take this opportunity to reaffirm my strong support for the Polecat Bench Project. I am convinced that it has broad-based local support, and I am certain that the hearings in Powell reflect this. I compliment Congressman Teno Roncalio for his special effort in arranging for the field hearings so that our local citizens in Park County might have an opportunity to present their testimony for the record. I also want to thank the members of your Committee for making this possible. Your including this letter, together with my prepared statement, in the record will be appropriated. Sincerely Enclosure. STATEMENT OF SENATOR GALE MCGEE GALE MCGEE, U.S. Senator. Mr. Chairman, I wish to first thank the Committee for giving me this opportunity to submit my statement in advance of these hearings. As you know, I have been named by the President to represent the United States Congress in the 27th Session of the United Nations General Assembly which will convene in New York City today. Since I am, therefore, unable to attend in person the hearings on S. 124, I feel especially compelled by this statement to reaffirm my unqualified support for the Polecat Bench Project. For the past several years I have been a cosponsor of this legislation with my colleague from Wyoming, Senator Hansen, who, I might add, has worked with complete dedication and endless effort to obtain a report from OMB so that we might proceed with the consideration of this legislation. Mr. Chairman, S. 124 will authorize the construction, maintenance, and operation of the Polecat Bench area of the Shoshone extensions unit, Missouri River Basin project, Wyoming. The proposal would convert 19,200 acres of semiarid range land into eighty high quality irrigated farm units. There is overwhelming support for this project in Wyoming, not only in Park County, but also in the City of Powell and other communities in the area. The importance of the new economic and social opportunities which will be made available by this project cannot be overemphasized. It will not only make possible the establishment of new farms and new jobs but it will also provide the opportunity for farmers operating in the adjacent Heart Mountain Irrigation District with under-sized farm units to expand their businesses into more profitable enterprises. Aside from the irrigation benefits of the project, we can anticipate the enhancement of public recreation, fish and wildlife benefits and other environmental improvements. Furthermore, a new and additional benefit which we had not earlier contemplated has surfaced. I am advised that recent studies undertaken by the City of Powell indicate a critical and growing need for additional water municipal purposes and that the Holden Reservoir within the Polecat Bench project would be an excellent and available source to meet this need. Much concern has been expressed in recent years over the ever-increasing exodus of rural population to the already crowded urban centers of this Nation. In response to this concern, Congress this year approved a sweeping rural development bill to help stem the tide of urban migration and to aid rural communities in their struggle to survive and to once again prosper. Mr. Chairman, in considering this legislation, I think it is important that we address ourselves to these issues-the needs of rural America and the growing problems of our crowded cities-for a very special reason. The original feasibility study was completed for the Polecat Bench project in 1966, and it showed a direct benefit-cost ratio of more than two to one. Since that time and during the unfortunate delays which we have encountered, inflation has increased the estimated costs of construction and the interest discount rates have been increased from three and one-eighth to five and one-eighth percent. Consequently, it is said that the direct benefit-cost ratio is marginal, if not unfavorable. The point which I am trying to make I believe is obvious. In passing judgment on this legislation and the project which it will create, we must look at the total benefits, including the intangible values that cannot be readily measured in dollars and cents or in terms of only direct benefits and immediate tangible returns. I hope, therefore, that your Committee, Mr. Chairman, and the Members of Congress will look favorably upon this project and consider all of its potential not only for the local citizens and communities of Wyoming but also, in a small way, for the Nation as a whole. The concerned and dedicated citizens from Park County who will testify in support of the Polecat Bench project can express the strong local support and the overriding need for this project much better than I. They are the people who make their livelihood on the land, strive to make their communities a better place in which to live, and who have traveled a great distance at their own expense to plead their case in support of S. 124. I assure you that their testimony has my endorsement and their efforts my full support. At this point I would like to request that a large number of letters and telegrams which I have received in support of the Polecat Bench project be included in the hearing record. These communications are a good sample of the mail which I have received from local constituents over the last four or five years reflecting a broad community support, not only from Park County but also from across the entire State of Wyoming. In closing, I would like to take this opportunity to express my appreciation to the Chairman and members of the Committee for making available the time to hold these hearings during your busy schedules during the few weeks that are left in this Session of Congress. I would also urge the Committee to take prompt and favorable action on this legislation. Thank you. Mr. KAZEN. The next witness is Mr. Floyd Bishop, State engineer, for the State of Wyoming. STATEMENT OF FLOYD BISHOP, STATE ENGINEER, STATE OF WYOMING Mr. BISHOP. Mr. Chairman and members of the committee, I am Floyd Bishop, Wyoming State engineer, and my testimony is presented today on behalf of Gov. Stanley K. Hathaway. Mr. KAZEN. We are indeed happy to receive it, sir. Mr. BISHOP. Governor Hathaway asked me to express his regret over his inability to be here personally today, and also to reaffirm his strong personal support of the Polecat Bench project. The Governor's statement brings out a number of significant points that I think are worthy of the time of the committee, and with your permission, Mr. Chairman, I would like to go through the entire statement. It will take 10 minutes or less. Mr. KAZEN. Without objection, it is so ordered. Mr. BISHOP. In December of 1966, the regional director of the Bureau of Reclamation at Billings, Mont., submitted to the Commissioner of Reclamation his final report on the "Polecat Bench Area, Shoshone Extensions Unit of the Missouri River Basin Project." That report, showing a benefit-cost ratio based on total benefits of greater than 3-to-1, recommended that the plan of development be approved and the project authorized for early construction. Early in 1967, legislation was introduced in the Congress proposing to authorize the project. However, the report of the Bureau of Reclamation was held up within the Department of the Interior and was not approved and released for comments from the other States of the Missouri Basin until April of 1970. Since 1970, the project has been held up by the Office of Management and Budget due to questions of economic feasibilty related to the various proposals to modify the discount rate and change the basic standards for evaluating water resource projects. During this period of more than 5 years delay the benefit-cost ratio has been cut in half and the estimated construction costs have increased more than one-third. It is obvious that the long and unnecessary delays encountered already have hurt this project seriously. Hopefully the delays are now ended and we can proceed expeditiously through the authorization, funding, and construction stages. The most recent evaluation of costs and benefits for the Polecat Bench Area, and these figures were presented at the Senate hearing earlier this week, comes up with a ratio of 1.27-to-1 for total benefits and 0.87-to-1 for direct benefits. It is my understanding that these figures are based on a 1972 cost-index, and that the benefits were updated to reflect current conditions. As the members of this committee are well aware, there has been an extensive effort made in the last 2 years to modify the system of evaluating benefits connected with water projects. The Water Resources Council has proposed a method of evaluation which would take into consideration some of the factors such as environmental and social effects, which are not adequately reflected in current procedures. Even with this new approach there is a serious question that all of the benefits can be adequately identified and quantified. How do you place a dollar value on the benefits resulting from a young Wyoming family staving on the farm and producing food and fiber for the Nation rather than migrating to the overpopulated cities and adding to the unmanageable problems of these congested areas? And there are many other diverse spinoff benefits which result from water project development which defy a dollars and cents analysis. Even though the new Polecat Bench Area evaluation was made under the old system of analysis, it is important to note that total benefits still exceed the costs. Certainly it is more reasonable to judge a project on the basis of total benefits than any 84-684-72 --3 |