Incidence of flood costs analysis provides justification for the imposition of land-use restrictions in flood plains in Minnesota. The analysis indicates that governmental units were the ultimate bearers of nearly half the flood costs in the Minnesota River Basin in the 1965 and 1969 floods. Government units have a substantial, justifiable interest in keeping flood costs down. Flood damage potential will continue to rise over time unless land use controls are instituted. Moreover, government costs are likely to make up an even larger proportion of flood costs in the future, with the advent of Federal flood insurance and an expanded Federal role in the provision of disaster relief. Therefore, thorough and vigorous enforcement of the 1969 Flood Plain Management Act is recommended. In areas where neither evacuation nor structural protection is economically feasible, land-use restrictions alone will have to suffice to curtail flood losses. The beneficiaries of structural flood control works ought to be assessed for a fair share of the costs of such works. This policy is not so crucial for existing flood plain developments, but is important for areas where new developments are permitted.