SALE OF FERTILIZERS You have some income from the sale of fertilizers? Mr. WAGNER. Yes; we do and the income is used to operate the plant which produces TVA fertilizers. The $7,301,000 is required in addition to this income because of the fact that this is also a research and demonstration activity. It is not a commercial operation although, as we distribute the fertilizers in educational and demonstration programs, we do get payment for them which helps defray the cost of the entire program. Senator HILL. I believe you distribute now in some 42 different States. Mr. WAGNER. Yes, sir. Senator HILL. Demonstration projects. Mr. WAGNER. Fertilizer is distributed in most of our States now in cooperation with a great number of private fertilizer distributors and dealers and in programs that are concurred in and arranged in many instances with the land-grant colleges. Senator ELLENDER. What is the difference between the fertilizer that you make and the commercial fertilizer that is purchased by farmers? FERTILIZER PRODUCTION AND DEVELOPMENT Mr. WAGNER. Generally, Senator Ellender, the fertilizers that we produce are more concentrated than are generally available. Some of them have special qualities to be used on certain soils. There are also new process developments; the processes which we develop are patented, and those processes are available at no cost to the private fertilizer manufacturers. As we introduce new fertilizers in demonstration programs, farmers come to understand their use and develop a demand for them; and ultimately that demand is met by private industry. After a new fertilizer is accepted and produced in this way, TVA moves on to something more advanced. Senator ELLENDER. I notice here your estimate for that, 6 million REHABILITATING THE PLANT Mr. WAGNER. Six million three. That is for the work in rehabilitating the plant which I mentioned earlier. Senator ELLENDER. You say the operation RESEARCH FACILITIES AND DEMONSTRATION EDUCATION ACTIVITIES Mr. WAGNER. The estimate is $7,301,000 for research activities and the cost of the demonstration and education activities over and above the receipts from the sale of fertilizer. Senator ELLENDER. But how much did it cost the Government over and above what you received? Mr. WAGNER. The operating cost is $7,301,000. The capital cost this year which will provide some new facilities is an additional $6,300,000. Senator ELLENDER. Out of Federal funds? PLANT REHABILITATION Senator HILL. But you don't contemplate this $6,300,000 as an annual cost? That gets your plant renovated or rehabilitated or modernized. That is the end of that expense? Mr. WAGNER. That is correct. Mr. SMITH. They were built in World War I. TRIBUTARY AREA DEVELOPMENT PROGRAM Mr. WAGNER. There are funds for continuing our tributary area development program, including a little over $3 million to substantially complete construction of the water control facilities in the Beech River watershed. This program is proceeding very well with substantial local participation and a very nice improvement in the economy of that area. LOCAL PARTICIPATION Senator HILL. You speak of local participation. What are they doing locally? Mr. WAGNER. The local participation includes work on improving the agriculture and forest resources, the development of industry and industrial sites, and developing income from recreation. As to the water control system in the Beech River area, local interests will, as the benefits from this project develop over a period of time, pay back to the TVA and we in turn to the Treasury about $2 million of the cost. WATER CONTROL SYSTEM DESIGN, BEAR CREEK, ALA. There is $215,000 to begin the design of a water control system for Bear Creek in northern Alabama, and there is $1,724,000 to continue construction of a couple of small flood control reservoirs which will help protect Bristol, Tenn. and Va. Those cities are also committed to participate in this program in a number of ways, and private interests are going to do some work to help floodproof some of the buildings in the two towns. LAND BETWEEN THE LAKES RECREATION AREA There is also an item of $6 million for continuing the development of the Land Between the Lakes recreation demonstration project. I described our plans for this project for your committee in considerable detail last year. I think I would only repeat now that we intend to develop this area so as to provide a new kind of recreational resource suited to the needs of our people as the Nation becomes more and more industrial. As more and more people live away from the land and earn their incomes in the factories and offices and municipalities, I think it is generally recognized that we are going to need more opportunities for them to get into the out-of-doors for recreation and for relaxation. This facility is located relatively near to our large population concentrations. About 70 million of our people live within 500 miles of Land Between the Lakes. OUTDOOR CONSERVATION CLASSROOM We would propose also to operate this area as a great outdoor conservation classroom. We believe that as the Nation becomes more and more industrialized and people's ties with the land become less direct, unless we deliberately create opportunities for them to see trees planted, to participate in the planting of trees, to see a forest managed by modern methods, to see erosion scars healed, and to see and understand wildlife in its natural habitat, then we will in a relatively short time lose understanding of our dependence on the land. So, for this reason, we propose to try a number of new ideas in this area to help foster a better understanding on the part of our people and of coming generations of their dependence on the land. This is a project of national importance and national scope. Senator ELLENDER. How much land is involved? TUITION OR ATTENDANCE CHARGES Senator ELLENDER. You conduct that in the nature of a school. Are the participants paid anything for attending? Mr. WAGNER. Well, the funds for this project were made available to us only the first of January this year, so we have been working only 6 months. As to the educational activities, we would expect to develop areas to which people could bring classes from schools in the neighborhood or from schools from over the Nation. People have told us they would bring groups from as far away as New York, to study the botanical and biological sciences, or to get training in the managing and operation of outdoor camp facilities and recreation facilities of this sort. DEVELOPMENT PLANS OF USE OF AREA We have, Senator, a statement which we prepared which describes rather completely our plans for development of the use of this area that I would like to file with the committee if you would like to have it. Senator ELLENDER. I notice last year you were requesting $4 million and you are asking for $6 million this year. Would this be a continuous appropriation, or are you using this money that you are asking for this year to prepare for what you intend during the future? DEVELOPMENT COST Mr. WAGNER. The developmental cost of this project is estimated at between $32 and $35 million, Senator. Senator ELLENDER. Does all that come from the Treasury? Mr. WAGNER. This is an idea which the TVA proposed to the President in 1961. The President referred it to the Department of the Interior for study, and in 1963 the Department of the Interior recommended that TVA undertake this project. The President so recommended to Congress and requested an appropriation for $4 million for 1964 and the appropriation was made by the Congress. BARKLEY RESERVOIR Now, work is well underway. It is proceeding well, we believe. One of the problems here is that the area lies between the Barkley and the Kentucky Reservoirs and Barkley Reservoir will be filled some time next year so we must complete construction that needs to be done in the dry before the Barkley reservoir is filled. FAMILY CAMPING We also have completed one area for family camping accommodating 250 families. It was opened the first of June, and people are now using it. Senator ELLENDER. This camping: Will this camping be free of charge to the people who come there, or will they have to pay a stipend? CHARGES Mr. WAGNER. We contemplate, Senator, that where facilities are provided for exclusive use there would be a charge. This year, we are still constructing in the area, so we have not made charges. We contemplate that ultimately there will be charges for exclusively used facilities. Senator ELLENDER. You think this is in keeping with what we intended to have when TVA was established? Mr. WAGNER. Yes, sir. This project, besides providing a recreational outlet Senator ELLENDER. We have them all over the country, you know. We build them in every dam that we have. Every place where water is retained or wherever there are dikes, why, we have facilities for the people to use. It costs quite a bit of money, for a project of this kind, merely to show things off. Why Mr. WAGNER. It is more than to show things off. It tries some new ideas. PAYMENTS FROM PROCEEDS OBTAINED FROM TVA Senator ELLENDER. I know it is new ideas, but it strikes me as though new ideas ought to be paid out of the proceeds that you obtain from TVA. That was our intention way back, as I understood. We are spending now how much at TVA? What money are you asking us to allocate? Mr. WAGNER. We are asking for a total appropriation of £50.9 million. Senator ELLENDER. Yes. Now, how much will you spend aside from that from moneys that you will obtain through the sale of bonds? EXPENDITURES, SOURCES OF EXPENDITURES, AND POWER PROCEEDS Mr. WAGNER. Our total expenditures including payments to the Treasury will be about $450 million; about $372 million will come from borrowings and power proceeds, about $53 million from appropriations, and about $25 million from nonpower proceeds. Incidentally, Senator, we will pay into the Treasury from ou power proceeds somewhere between $52 and $53 million. Senator ELLENDER. That is the money you owe the Government Mr WAGNER. That includes both a return on the investment in the power facilities and a return of part of the investment. Senator ELLENDER. That is what I mean. Mr. WAGNER. Yes. Senator ELLENDER. It is payment of interest and payment of principal. Mr. WAGNER. It is payment in accordance with the 1959 amendment to the Tennessee Valley Authority Act. STEAMPLANT REPAYMENTS for Senator ELLENDER. Yes. And that includes repayments steamplants that were constructed and purchased, as I remember. Mr. WAGNER. Yes; and the power investment in the hydro, too. Senator ELLENDER. I understand. The power from the hydros is what, about 28 percent of your output? Mr. WAGNER. Now about 27 or 28 percent; that is correct. Senator ELLENDER. And the rest of it is generated from the steamplants? Mr. WAGNER. That is correct. Senator ELLENDER. Financed by the Government? Mr. WAGNER. Originally, appropriations were made for steamgenerating plants but the appropriations made on that account are being repaid, as you said, with interest. We would say with a dividend because the Federal Government continues to own the system. Future expansions except as the Congress might appropriate funds for them, will be financed through the sale of bonds and from power revenues. SELF-SUSTAINING FACILITIES Senator ELLENDER. That is a mighty big facility down there and I hope some day to come that it will be self sustaining. Mr. WAGNER. We believe that it is now self sustaining. Senator ELLENDER. Not if you spend $50 million a year of the Government's money. Mr. WAGNER. The power program sustains itself, Senator. The appropriation we are requesting is for navigation, for flood control, forest development, and for agricultural work. These are the kinds of programs that are supported by appropriations all across the Nation. It happens that in this area they are performed by TVA. It was never intended, to my knowledge, that the power program should pay for the cost of the other programs. BENEFITS OF PROPOSED RECREATION AREA This Land Between the Lakes project is being undertaken under the provisions of section 22 of the Tennessee Valley Authority Act which authorizes demonstrations which will be of use and interest to the surrounding States and the Nation. One of the purposes of the project is to provide the kind of recreational facility, which will serve the requirements of industrial workers. We find more and more people who are interested in locating new industries in an area are concerned about a recreational outlet for their employees. Senator ELLENDER. In other words, these will be an added attraction to bring industry to the area; is that it? |