Nationwide Permits for Wetlands Projects: Issues and Regulatory Developments

Order Code 97-223 ENR

CRS Report for Congress

Received through the CRS Web

Nationwide Permits for Wetlands Projects:

Issues and Regulatory Developments

Updated February 2, 2005

Claudia Copeland

Specialist in Resources and Environmental Policy

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Nationwide Permits for Wetlands Projects:

Issues and Regulatory Developments

Summary

General permits issued by the U.S. Army Corps of Engineers authorize various

types of development projects in wetlands and other waters of the United States.

These permits authorize activities that are similar in nature and are judged to cause

only minimal adverse effect on the environment. The Corps uses general permits to

minimize the burden of its regulatory program: they authorize landowners to proceed

with a project without having to obtain individual permits in advance.

Nationwide permits are one type of general permit. They authorize a number

of categories of activities throughout the nation (such as minor dredging projects and

bank stabilization projects) and are valid only if the applicable conditions are met.

Nationwide permits, which currently number 43, are issued for five-year periods and

thereafter must be renewed. They were most recently reissued in total in January

2002, but actions to issue or modify smaller numbers of them also were taken since

the previous full reissuance in 1996. The current program has few strong supporters,

for differing reasons. Developers say that it is too complex and burdened with

arbitrary restrictions. Environmentalists say that it does not adequately protect

aquatic resources. At issue is whether the program has become so complex and

expansive that it cannot either protect aquatic resources or provide for a fair

regulatory system, which are its dual objectives.

Coordinating implementation of the nationwide permits between federal and

state governments raises a number of issues. Of particular concern to states is

tension over their authority to certify that the nationwide permits will not violate

water quality standards. If a state denies this certification, the Corps does not

necessarily consider the state’s action sufficient cause to deny issuance of the federal

permit. This effectively forces states to accept the federal permit or take steps to

condition individual projects, a resource-intensive burden that could be avoided if the

Corps treated a state denial as a permit veto, states say.

Recent congressional interest in wetlands permit regulatory programs has been

evident in oversight hearings and in connection with specific provisions of

appropriations bills to fund the Corps’ regulatory program. For the last several

Congresses, there has been a stalemate over legislation that would comprehensively

reform and streamline wetlands regulatory law and which could, if enacted, modify

the nationwide permit program. During this time, no consensus has emerged on

whether or how to legislatively reform overall wetlands policy. Congressional

involvement in these issues could arise again as a result of reissuance of the

nationwide permits in 2002 and federal court rulings that invalidated the Corps

regulation of excavation activities and affected the Corps’ overall regulatory

program. This report will be updated as warranted by developments.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Permit Reissuance in 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Nationwide Permit 26 - Background and Controversies . . . . . . . . . . . . 4

Reissuance of Nationwide Permit 26: 1996 Modifications and

More Controversy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Replacement Permits for NWP 26 in 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Regional Conditioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Comments and Reactions of Stakeholders . . . . . . . . . . . . . . . . . . . . . . . 9

Lawsuits Challenging the Replacement Permits . . . . . . . . . . . . . . . . . 11

Reissuance of All Nationwide Permits in 2002 . . . . . . . . . . . . . . . . . . . . . . 11

300 Linear-foot Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Mitigation Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Surface Mining Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Fills within the 100-year Floodplain . . . . . . . . . . . . . . . . . . . . . . . . . . 15

State Coordination Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Other Issues Concerning Nationwide Permits . . . . . . . . . . . . . . . . . . . . . . . 17

Defining Minimal Effects and Assessing Cumulative Impacts . . . . . . 17

Uncertainty Due to Overturning the Tulloch Rule . . . . . . . . . . . . . . . . 18

Congressional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Nationwide Permits for Wetlands Projects:

Issues and Regulatory Developments

Introduction

Federal laws require government approval prior to beginning any work in or

over navigable waters of the United States which affects the course, location,

condition or capacity of such waters, or prior to discharging dredged or fill material

into U.S. waters. Regulatory programs which implement these laws are administered

through permits issued by the U.S. Army Corps of Engineers (the Corps), which

shares responsibility with the Environmental Protection Agency (EPA), under the

authority of the Clean Water Act, the Rivers and Harbors Act, and the Marine

Protection, Research and Sanctuaries Act.

The Corps’ regulatory process involves both general permits for actions by

private landowners that are similar in nature and will likely have a minor effect on

wetlands, and individual permits for more significant action. A nationwide permit

is a form of general permit which authorizes a category of activities throughout the

nation and is valid only if the conditions applicable to the permit are met. These

permits are issued under authority of section 404(e) of the Clean Water Act. They

cover categories of activities that are similar in nature and will cause only minimal

adverse effect on the environment, both individually and cumulatively. At issue in

this program is the balance of two objectives: providing regulatory protection to

ensure minimal impacts on aquatic resources, and providing a fair and efficient

regulatory system. For several years, however, interest groups of differing

perspectives have criticized the program and increasingly question whether either

objective is being achieved, much less both objectives.

Nationwide permits, which currently number 43, are issued for five-year periods

and thereafter must be renewed. They were most recently reissued in total in January

2002, but actions to issue or modify smaller numbers of them also were taken since

the previous full reissuance of the permits in 1996. Controversies about the program

are reflected especially in one of the nationwide permits, Permit 26, which authorized

discharges in headwaters or isolated waters (but did not cover specific categories of

activities, as do other nationwide permits). First issued in 1977, Permit 26 was

criticized by environmentalists who contended that it resulted in a significant loss of

wetlands acreage. In 1996, the Corps reissued this permit but greatly reduced its

scope, leading to criticism by landowner and developer groups who said it would be

more burdensome for permit applicants. In 2000, the Corps withdrew Permit 26 and

replaced it with five new permits, but criticism of specific nationwide permits,

including those that replaced Permit 26, and the program as a whole has not

diminished.

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The nationwide permit regulatory program has drawn Congress’ attention

several times in the recent past. In 1997, House and Senate committees held

oversight hearings to review several issues and controversies. In 1999 and again in

2000, congressional appropriators directed the Corps to take certain actions

concerning its overall regulatory program, and nationwide permits in particular.

This report describes and reviews the recent history of the nationwide permit

program and discusses several major issues, including program complexity,

coordination with states, assessing cumulative impacts of the program, and effects

of federal court decisions concerning regulation of excavation activities.

Background

General permits, including nationwide permits, are a key means by which the

Corps seeks to minimize the burden and delay of its regulatory program: they

authorize a landowner or developer to proceed with the covered activity without

having to obtain an individual, site-specific permit in advance. They are intended to

allow certain activities to proceed with little delay or paperwork. According to Corps

data, from FY1996-99, general permits entailed average processing time of 14 days,

in contrast with individual permits which, on average, took 107 days of processing

and evaluation, once an application was complete. Approximately 63,000 activities

per year (representing 84% of the Corps’ regulatory workload) were authorized by

nationwide and other general permits. While some require advance notification to

the Corps or state natural resource agencies, many only require after-the-fact

notification. The following are examples of nationwide permits:1

Placement of aids to navigation approved by, and installed according

to, U.S. Coast Guard requirements (nationwide permit 1);

! Activities related to construction and maintenance of authorized

outfall structures (nationwide permit 7);

! Stream or river bank stabilization activities necessary to prevent

erosion (nationwide permit 13);

! Minor dredging, that is, dredging of no more than 25 cubic yards as

part of a single and complete project (nationwide permit 19);

! Activities associated with restoration or enhancement of wetlands

and creation of wetlands and riparian areas (nationwide permit 27);

! Discharges of dredged or fill material due to construction or

expansion of a single-family home (nationwide permit 29); and

! Discharges for construction or expansion of recreational facilities

(nationwide permit 42).

!

Many nationwide permits have specific conditions and terms (such as acreage

limitations and requirements for advance notification to the Corps or other agencies).

In addition, a number of general conditions apply to some or all nationwide permits.

1

The full text of the current nationwide permits and related general conditions, issued in

January 2002 and discussed in this report, are available online at

[http://www.usace.army.mil/inet/functions/cw/cecwo/reg/nationwide_permits.htm].

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These include, for example: no activity may cause more than a minimal adverse

effect on navigation; no activity may jeopardize a threatened or endangered species;

discharges into spawning areas and migratory waterfowl breeding areas must be

avoided, to the maximum extent practicable; and discharges of dredged or fill

material must be minimized or avoided through mitigation to offset more than

minimal impacts on the aquatic environment, to the maximum extent practicable.

Permit Reissuance in 1996

The Corps first issued regulations for general permits in the mid-1970s, and

Congress codified the concept in amendments to the Clean Water Act in 1977 (P.L.

95-217). Nationwide and other general permits2 are valid only for a period of five

years, as is the case with other Clean Water Act permits. They were reissued as a

group in November 1991, taking effect in January 1992. In accordance with that

renewal schedule, the Corps reissued the existing 37 nationwides and 2 new ones on

December 13, 1996, with an effective date of February 11, 1997 (61 Federal Register

65873-65922). With the exception of nationwide permit 26 (discussed below), all

were scheduled to expire on February 11, 2002, unless otherwise modified, reissued,

or revoked. Of the existing permits, the agency reissued 25 with no change and

modified 12. It also modified five of the general conditions (out of 22) which apply

to all permits and added two new general conditions.

The Corps had several substantive purposes behind modifying the permits. One

was the need to better ensure that permits have minimal adverse effects, especially

on isolated wetland areas. A second was the need to better regionalize the program,

by emphasizing that Corps officials (38 district and 11 division engineers) should

condition nationwide permits on a local basis with limitations which reflect

differences in aquatic ecosystem functions and values that exist across the nation.

A third was the need to conform several existing permits to a broadened definition

of “discharge” adopted by the Corps in 1993 related to regulation of excavation

activities (see discussion below, “Uncertainty Due to Overturning the Tulloch Rule.”)

Prior to the 1991 reissuance, the nationwide program involved little

individualized review of these permits, as the guiding criteria was that covered

activities impose so minimal an environmental impact that the full review given

2

Section 404(e) of the Act authorizes the Corps to promulgate general permits on a regional,

state, or nationwide basis. The Corps’ regulations authorize the issuance of general permits

on a regional (sub-state) or statewide basis by district or division engineers, rather than

headquarters, which issues the nationwide permits. The Corps uses the general permit

authority to authorize statewide general permits covering activities in states that are deemed

to have sufficient state regulatory authority. These statewide general permits (programmatic

general permits, or PGPs) function as a substitute for full state program authorization to

administer the 404 program. Depending on the core state program, state PGPs may

encompass all wetlands regulation in a state, certain waters only, or certain types of

regulated activities. Once a PGP is approved, the Corps suspends permit activity in lieu of

the authorized state or sub-state entity, although the Corps retains the right to override the

PGP and issue a federal permit in individual cases. Thus, in addition to 43 nationwide

permits, the Corps has authorized approximately 400 regional general permits (RGPs) and

50 PGPs.

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individual permits is not warranted. In the 1991 program revisions, however, district

engineers were given greater authority to modify, suspend, or revoke nationwide

permits for specific activities, and division engineers were authorized to exercise

discretionary authority to revoke applicability of specific nationwide permits in high

value aquatic areas and to then require individual permits for the activity. Further,

preconstruction notification (PCN) was required for several of the nationwide

permits, and when such notice is required, the applicant must provide a wetlands

delineation, as well. Advance notification is intended to give the Corps time to

determine that the adverse effects of the discharge or activity will be minimal. The

district engineer generally has 30 days to notify the person of approval to proceed or,

instead, of the need to obtain an individual permit; thereafter, the applicant may

proceed.

Even with those changes, the nationwide permits did not attract significant

controversy when they were reissued in 1991. More attention and more controversy

focused on the Corps’ process of reissuing the permits in 1996, much of it centering

on nationwide permit 26 (NWP 26), which was added to the program in 1977 and

expanded in 1982.

Nationwide Permit 26 - Background and Controversies. Nationwide

permit 26 authorized discharges of pollutants in headwaters or isolated waters, that

is, nontidal waters with a flow rate of less than 5 cubic feet per second, or nontidal

waters which are neither part of nor adjacent to a surface water system. Prior to

reissuance in 1996, the filling authorized by this nationwide could affect no more

than 10 acres of waters, including wetlands, and required preconstruction notification

( PCN) to the Corps if it would affect from 1 to 10 acres. Discharges affecting less

than 1 acre required no advance notification or wetland delineation. Headwaters and

isolated waters are areas which many people have difficulty identifying as wetlands,

because they may appear dry for much of the year or lack the types of vegetation

commonly associated with wetlands. Yet, they meet criteria developed by scientists

and wetland delineators of areas that are, in fact, wetlands (criteria concerning

characteristic hydrology, soil, and vegetation), and are increasingly recognized as

providing important functions within entire aquatic ecosystems.

Permit 26 had been controversial for several reasons. Unlike other nationwide

permits, it did not authorize specific activities, such as minor dredging or bank

stabilization. Instead, it authorized discharges to certain types of waters, based on

acreage and lack of hydrologic connection to navigable waters. Environmental

groups had long been concerned that this nationwide permit was overly broad, could

be abused by applicants through segmenting of projects, and could result in large

amounts of unmonitored wetland losses. Many believed that the permit was illegal,

because it violated the Clean Water Act’s requirement that activities covered by

nationwide permits are “similar in nature.”

Industry groups, including developers and landowners, viewed NWP 26 as an

important mechanism for minimizing regulatory burdens on small businesses and

other permit applicants. According to Corps’ statistics, residential development was

the major type of activity authorized by NWP 26, comprising about 25% of all NWP

26 authorizations. Transportation activities were the next largest category,

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comprising about 20% of all NWP 26 authorizations.3 Without general permits,

including NWP 26, landowners would face delays in project development and

increases in costs. From the perspective of these groups, NWP 26 was valuable for

much the same reason that the permit was controversial with environmentalists: it

authorized discharges to types of waters and was not restricted to specific activities.

According to Corps’ statistics, by the mid-1990s, between one-quarter and onethird of all nationwide permits authorized annually were for NWP 26 activities.

Corps’ data indicated that 75% of all environmental impacts resulting from all of the

nationwide permits were authorized under this one permit.4

Reissuance of Nationwide Permit 26: 1996 Modifications and More

Controversy. Prior to reissuance of the nationwide permits in 1996, environmental

groups and other protection advocates, including federal and state natural resource

agencies, pressed for repeal or modification of NWP 26. They argued that the Corps

was unable to fully account for the environmental impact of NWP 26 either

individually or cumulatively, because of poor recordkeeping and monitoring, and

therefore the Corps could not support a conclusion that the effects of nationwide

permits were not significant.

The Corps acknowledged criticism that it lacked data with regard to the use of

NWP 26 and its impact, yet said that based on available statistics and considering

required on-site mitigation, the Corps had received more wetlands acreage than had

been lost by use of the permit.5 Nevertheless, in response to such long-standing

criticisms and to what Corps officials said was increased understanding of the

ecological importance of isolated and headwater wetlands, the Corps modified this

permit in 1996 in order to ensure that in the future, no more than minimal adverse

effects occur, both individually and cumulatively.

The Corps modified NWP 26 in two major respects. First, it reduced the

acreage limits to cover discharges to nontidal headwaters and isolated waters no

larger than 3 acres and to require advance notification by the applicant if the

discharge affects 1/3-acre or more (compared with 10-acre and 1-acre thresholds

previously). Discharges affecting more than 3 acres were required to obtain

individual project authorization (compared with the previous 10-acre limit). Second,

the Corps reissued this permit only for two years, intending to replace NWP 26 with

3

Department of the Army, Corps of Engineers. “Proposal to Issue and Modify Nationwide

Permits.” 63 Federal Register 36041. July 1, 1998.

4

Presentation by Michael Davis, Deputy Assistant Secretary of the Army for Civil Works,

at the Environmental Law Institute, Feb. 4, 1997.

5

In FY1995, 13,837 activities were authorized by NWP 26, impacting 5,020 acres of

wetlands. The Corps says it received approximately 5,909 acres of mitigation for these

impacts, yielding a mitigation ratio of 1.15:1. (61 FR 65892). In addition, however, Corps

districts estimate that another 20,000 NWP 26 activities were accomplished without a

requirement for reporting to the Corps (i.e., they affected areas of less than 1 acre), and the

total acreage impacted, as well as whether any mitigation occurred, is unknown (61 FR

65894). Further, these data provide no information about the long-term quality of the

mitigation.

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activity-based permits similar, perhaps, to those authorized in NWP 29 (construction

of single-family residences that impact less than ½-acre of wetlands or waters of the

United States).

The Corps itself summarized the responses by groups who opposed modifying

NWP 26 and narrowing its scope.

Numerous commenters expressed the view that the NWP has worked well,

that there is no evidence to indicate that it is resulting in more than minimal

adverse effects and that the loss or further limiting of NWP 26 would result in

increased regulatory burdens on the public, less regulatory certainty,

unacceptable work load increases for the Corps, increased processing times,

project delays, and an overall lessening of the regulatory program’s ability to

protect waters of the United States. (61 FR 65890, December 13, 1996)

Considering these views, the Corps determined that, “for fair, effective, and efficient

implementation of the Corps regulatory program” (61 FR 65893), it was necessary

to have a general permit such as NWP 26, yet because of the ecological importance

of isolated and headwater wetlands and the potential for adverse impacts by NWP 26,

the agency reissued this permit in a “more restrictive and environmentally sensitive

form during the two-year phaseout.” (61 FR 65891)

On the issue of increased workload, the Corps estimated that the lower acreage

limits in the revised permit would require the agency to process approximately 500

additional individual permits per year, a 10% increase over FY1996. Industry

sources said that an additional 1,000 individual permit reviews was a more accurate

estimate. On the other hand, the Corps further estimated that if NWP 26 were totally

eliminated and all such projects were subject to individual project review and

verification, the agency’s workload would increase seven-fold, an increase that

“would render the program ineffective and would be a disservice to the American

public and overall environmental protection.” (61 FR 65894) Industry groups also

were concerned that the Corps would not be able to issue replacement permits for

NWP 26 within two years. An industry coalition, led by homebuilders, challenged

the reissued NWP 26, arguing that it was too restrictive and had not been subject to

adequate public review. Complying with a court order in that case, in November

1997, the Corps agreed to reopen the comment period on phasing out NWP 26

(National Association of Home Builders v. U.S. Army Corps of Engineers, 97-464

D.D.C.). In the mean time, however, the Corps was working on activity-specific

permits to replace NWP 26, as it had indicated intent to do in December 1996.

Replacement Permits for NWP 26 in 2000

As announced in 1996, in March 2000, the Corps issued several new activitybased permits to authorize specific categories of activities, replacing the approach in

NWP 26 which was based on acreage and particular geographic types of waters

(headwaters and isolated wetlands).6 The final replacement permits published on

6

The Corps went through a lengthy proposal and public comment process before the

replacement permits were issued in March 2000. Permits to replace NWP 26 were proposed

(continued...)

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March 9, 2000,7 authorized five specific activity-based permits, modified several

existing NWPs and general conditions, and added two new general conditions. They

became effective June 7, 2000. The five new permits apply to the following

activities:

Residential, commercial, and institutional developments, including

construction of building pads, building foundations, and attendant

features (NWP 39).

! Reshaping of existing serviceable drainage ditches constructed in

non-tidal waters in a manner that benefits the aquatic environment

or improves water quality (NWP 41).

! Recreational facilities (facilities with low environmental impact such

as playgrounds, campgrounds, biking and hiking trails). It may be

used for the construction or expansion of recreational facilities that

are integrated into the existing landscape (NWP 42).

! Stormwater management facilities (such as stormwater management

ponds or detention basins) involving construction or maintenance of

such facilities (NWP 43).

! Aggregate and hard rock mineral/mining activities with minimal

adverse effects on the aquatic environment (primarily commercial

sand, gravel, stone, and hard rock metals and minerals) (NWP 44).

!

The replacement permits were limited to work in non-tidal waters of the United

States and would not authorize work in tidal waters (those subject to the ebb and flow

of the tide) or in non-tidal wetlands contiguous to tidal waters (i.e., wetlands

connected by surface waters to tidal waters and located landward of the high tide

line). Thus, their geographic reach was potentially broader than NWP 26, which was

restricted solely to activities in headwaters and isolated wetlands. The Corps

believed that removing the headwaters restriction would help reduce confusion by

eliminating the need to determine where the median flow of a waterbody is less than

5 cubic feet per second (i.e., the threshold determining areas where NWP 26 could

be used). All but the new permit for reshaping of existing drainage ditches (NWP

41)8 were limited to activities that do not cause the loss of greater than ½ acre of nontidal waters (compared with the 3-acre maximum in NWP 26) or more than 300

linear feet of streambed. Even with that size limitation, several of these permits

require preconstruction notification to the Corps for impacts of greater than 1/10 acre

to ensure that any activity that potentially may have more than minimal adverse

effects on the aquatic environment is reviewed on a case — by-case basis.

6

(...continued)

July 1, 1998; additional changes were proposed October 14, 1998. Further modifications

were proposed July 21, 1999. The Corps received nearly 12,000 public comments on these

proposals leading to final action early in 2000. NWP 26 was extended several times in order

to remain in effect until final action on the replacement permits occurred.

7

U.S. Department of the Army, Corps of Engineers. “Proposal to Issue and Modify

Nationwide Permits; Final Notice.” 65 Federal Register 12818, Mar. 9, 2000.

8

“We have not imposed a ½ acre limit on NWP 41 because it only authorizes activities that

benefit the aquatic environment.” 65 Federal Register 12825.

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Several of the new permits (residential, commercial, and institutional activities;

recreational facilities; and stormwater management facilities) required compensatory

mitigation to offset unavoidable losses of waters of the United States. Compensatory

mitigation may be provided through restoration, enhancement, or creation of aquatic

habitats; preservation of adjacent open or green space; land trusts; or mitigation

banks.9 Specific compensatory mitigation requirements are determined by district

engineers on a case-by-case basis, but the basic Corps concept was that there should

be a minimum requirement of an acre-for-acre (1:1) wetland replacement as

compensatory mitigation for all activities requiring preconstruction notification.

Greater than a 1:1 ratio can be required to adequately replace aquatic resource

functions and values lost as a result of NWP-authorized activities.

The new general conditions adopted in March 2000 limit the use of nationwide

permits for projects within critical resource waters, and for permanent above-grade

wetland fills within the 100-year floodplain as defined by the Federal Emergency

Management Agency (FEMA). Critical resource waters are those designated as

having particular environmental or ecological significance (such as designated

marine sanctuaries and state natural heritage sites). Regarding the 100-year

floodplain, the Corps said it sought to ensure that the nationwide permit program

discourages further development that would reduce the flood storage capacity of the

floodplain, but not create undue constraints or costs on the regulated public, unless

necessary to improve the aquatic environment.

Regional Conditioning. As with the previous nationwide permits, Corps

officials retained the authority to apply special conditions to use of any of the

proposed new permits or even to revoke use of specific permits in aquatic

environments of particularly high value or in specific geographic areas. Indeed, the

Corps expected that its district and division engineers would utilize a significant

amount of regional conditioning to ensure effective protection at the local level of

wetlands and other water resources (regional conditioning cannot be used to make

an NWP less restrictive). The purpose of regional conditioning is to consider local

differences in aquatic resource functions and values to ensure that nationwide permits

do not authorize activities with more than minimal adverse effects on the aquatic

environment. Regional conditions might include distinct watersheds or waterbodies

where certain nationwide permits should be suspended or revoked, thus requiring

landowners to obtain individual project-specific permits; reducing the acreage

thresholds in certain types of waters; or adding notification requirements for all

permitted work in certain watersheds. The permits issued in March 2000 provided

a new and somewhat more formal approach than in the past to developing appropriate

conditions in each Corps District, providing explicitly for public input and

coordination with federal resource agencies. Regional conditioning occurred prior

to the date the nationwide permits became effective (i.e., June 7, 2000).

9

“A mitigation bank is a site where wetlands or other aquatic resources are restored, created,

enhanced, or preserved to provide compensatory mitigation in advance of the authorized

impacts. The entity that developed the mitigation bank provides these aquatic resources in

return for payment from the permittee.” 63 Federal Register 36045, July 1, 1998.

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However, regarding increased use of regional conditioning to strengthen

permits, some environmental groups were skeptical that the Corps would be able to

attach meaningful conditions, while developers had the opposite concern — that

restrictions imposed by Corps regions would be unduly burdensome.10

The Corps also modified six existing permits to increase the number of activities

authorized by them. For example, NWP 40 was expanded to authorize certain

discharges associated with agricultural activities which are necessary for increasing

agricultural production and constructing farm buildings. One of the goals of NWP

40 is to reduce duplication between the Corps and the Natural Resources

Conservation Service (which implements wetlands programs under federal farm law)

and provide some regulatory relief to agricultural producers. However, to ensure that

authorized activities will have minimal adverse effects, like other nationwide

permits, NWP 40 restricts the types of agricultural activities and sets acreage limits

(in terms of discharges into wetlands) allowable under the permit.

Further, the Corps lowered the acreage limit for NWP 29, which authorizes

single-family housing activities, from ½ acre to 1/4 acre in non-tidal waters, — i.e.,

discharges associated with construction or expansion of a single-family home and

attendant features may not cause the loss of more than 1/4 acre of non-tidal waters

or wetlands. This permit is used by the person who will use the house as a personal

residence, not by contractors or developers who offer a house for sale upon

completion. The change to this permit was the result of a lawsuit against the Corps

which had challenged the issuance of NWP 29 and was intended to assure than NWP

29 authorizes only those single family housing activities with minimal adverse effects

on the aquatic environment. (Alaska Center for the Environment v. West, No. A96245 CV (D. Alaska, April 30, 1998))

Comments and Reactions of Stakeholders. The Corps received

comments both in support and in opposition to the permits to replace NWP 26, with

environmental groups and industry groups criticizing many aspects, generally from

opposite perspectives. The Corps summarized these differing views in a July 1999

Notice:

Members of environmental groups and development groups were typically in

opposition to the proposed new and modified NWPs. The environmental

community opposed the proposed NWPs, asserting they would allow too much

impact on the aquatic environment. The development community opposed the

proposed NWPs, asserting they are too restrictive on the regulated public.11

Throughout the development of the replacement permits, the Corps stated that

its goal was to improve protection of aquatic resources, while ensuring that those

activities with truly minimal adverse impacts on the aquatic environment are

authorized in an efficient manner by a general permit:

10

“Six New Classes of Activities Covered Under Proposed Corps Replacement Permits.”

Daily Environment Reporter, June 25, 1998, No. 122, p. AA-1.

11

64 Federal Register 39257, July 21, 1999.

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To achieve this goal [of fair, flexible and effective federal wetlands protection

programs], the Corps regulatory program must continue to provide effective

protection of wetlands and other aquatic resources and avoid unnecessary

impacts to private property, the regulated public, and the environment. These

proposed NWPs will more clearly address individual and cumulative impacts to

the aquatic environment, ensure that those impacts are minimal, address specific

applicant group needs, and provide more predictability and consistency to the

regulated public.12

However, reactions by interest groups and stakeholders to the new and modified

permits issued in 2000 suggested that many believed the Corps was far from

achieving its intended goal. Developers indicated that the proposal would do little

to help groups such as homebuilders, since much of their activity occurs in isolated

or headwater wetlands, which were included in NWP 26 but would not be included

in the activity-specific permits. In addition, industry said that, by barring use of the

permits in tidal waters, many activities that could benefit from simplified procedures

of general permits (such as construction or expansion of residential and commercial

developments) would, instead, require individual permits. Environmental groups, on

the other hand, criticized the permits because they expanded the types of wetlands

that could be filled and expanded the types of authorized activities. In the Notice

accompanying the final permits, the Corps acknowledged the widespread criticism.

Nevertheless, the Corps believed that, through the ½ acre limit and the limitations on

the construction of developments in 100-year floodplains, the new and modified

NWPs provided substantial additional protection of the aquatic environment.

An issue of concern to industry since 1996, when the Corps announced that

NWP 26 would be eliminated, was how the agency would manage the increased

workload, including potentially greater numbers of individual permits to be

processed, and what delay applicants would encounter. In industry’s view, the

greater complexity of the NWP program, resulting from the replacement and

modified permits, meant that more applicants would be required to seek individual

permits, thus increasing applicants’ costs and time delays. The Corps acknowledged

that there would be substantial impact on the regulated public and an increase in

permit evaluation time. It estimated that the new permits would cost permit

applicants about $32 million per year and would result in a 20% increase in the

number of applicants requiring individual permits annually.13 The Corps also

acknowledged that there would be substantial increases in its own workload and

estimated that it would need an additional $6 million in FY2001 to accommodate the

added workload.14 The Corps did receive $8 million more in funding in FY2001 for

its regulatory program and $2 million more in FY2002, but these increases have

mainly been used to maintain services, not meet new programmatic needs.

12

63 Federal Register 36041, July 1, 1998.

13

U.S. Department of the Army, Corps of Engineers. “Final Notice of Issuance and

Modification of Nationwide Permits; Correction.” 65 Federal Register 14255, Mar. 16,

2000.

14

U.S. Department of the Army, Corps of Engineers. “Questions and Answers, Nationwide

Permits, March 6, 2000.” Text of this fact sheet is available at

[http://www.usace.army.mil/inet/functions/cw/cecwo/reg/press/qanda.pdf].

CRS-11

Recognizing that its workload would increase, the final permits increased from

30 to 45 days the period for Corps officials to review those permits for which

applicants must submit preconstruction notification (a permit is automatically

authorized, if the Corps fails to act within that time period).

Lawsuits Challenging the Replacement Permits. On the same day that

the final replacement and modified permits were published, an industry group

challenged the permits in court (National Association of Home Builders v. U.S. Army

Corps of Engineers, Civil Action No. 1:00CV00379 TPJ, D.D.C., filed March 9,

2000). The lawsuit contended that the Corps exceeded its authority by imposing

broad restrictions through the NWP program and that the program no longer is the

streamlined permitting approach intended by Congress when it authorized general

permits in 1977.

Lawsuits also were filed by two other groups. A challenge brought by the

National Stone Association said the Corps violated the Clean Water Act by asserting

jurisdiction over excavation activities (National Stone Association v. U.S. Army

Corps of Engineers, Civil Action No. 1:00CU00558 TPJ, D.D.C.). Another brought

by the National Federation of Independent Business Legal Foundation said the

replacement permits did not consider the impact on small businesses (NFIB v. Corps

of Engineers, No. 1:00CV01404, D.D.C.). These cases are still pending.

Reissuance of All Nationwide Permits in 2002

In August 2001, with the approaching expiration of the 1996 nationwide

permits, the Corps proposed to reissue those and others both issued and modified

since 1996 (including the 2000 replacement permits for NWP 26) in order to put all

43 nationwide permits in the program on a unified five-year schedule. According to

the Corps, the proposal was intended to simplify permits for activities that have no

more than minimal effect on the environment, add additional requirements to

enhance aquatic protection, increase flexibility for Corps field staff to target

resources where most needed, reduce unnecessary burdens on the regulated public,

while retaining the key protections that were added in the March 2000 replacement

permits.15

The proposals raised controversies and criticism from environmental advocates

and some other federal agencies, including EPA and the U.S. Fish and Wildlife

Service. Environmental groups said that the proposal would substantially weaken

protection of the nation’s wetlands and streams. On the other hand, industry groups

said that the proposal involved only minor changes. These changes offer some

benefits, they believe, but any such benefits are more than offset by problems with

the 2000 replacement permits, which developers and other groups continue to

oppose, saying that the permits impose arbitrary and burdensome restrictions.

Following a public comment period, the nationwide permits were reissued in January

2002, essentially as proposed in August, with an effective date of March 18, 2002.

The Corps’ action modified nine existing permits and six existing general conditions

15

U.S. Department of the Army, Corps of Engineers. “Proposal to Reissue and Modify

Nationwide Permits.” 66 Federal Register 42069, August 9, 2001.

CRS-12

and added one general condition.16 The 2002 permits emphasized that, like the 1996

and 2000 permits, the NWP program will rely greatly on regional conditioning to fit

the national program to local watersheds. A district engineer can either add special

conditions to the NWP authorization or exercise discretionary authority to require an

individual permit. This flexibility continues to cause various concerns among

stakeholders, with some environmentalists arguing that more restrictive national

standards on the NWPs should be imposed instead of relying upon a discretionary

authority process. Some in industry believe that the discretionary authority results

in greater complexity and less predictability for regulated entities.

Four specific issues raised the most critical opposition. Controversies over

these issues are likely to persist.

300 Linear-foot Prohibition. One of the most significant changes in the

reissued permits affects development activities along streams. Several of the 2000

permits that had replaced NWP 26 included a prohibition limiting the permits to

development activities affecting 300 linear feet or less of a streambed; projects

affecting larger areas would not qualify for a nationwide permit. The Corps believed

that this restriction had resulted in requiring individual permit review for many

projects that involve no more than minimal adverse effects on the aquatic

environment. In the January 2002 reissuance, the Corps modified this prohibition for

nationwide permits 39 (residential and commercial developments), 40 (agricultural

activities), 42 (recreational facilities), and 43 (stormwater management facilities) to

allow Corps districts to issue case-by-case waivers to the 300 linear-foot limit for

discharges affecting intermittent streams (streams that only have flowing water

during certain times of the year, when groundwater provides water for stream flow).

As reissued, the prohibition remains in effect for perennial streams which have

flowing water year-round. The Corps decided that this limitation on perennial

streams was necessary to ensure that losses result only in minimal adverse effects,

since significant impacts are more likely to occur in perennial than in intermittent

streams.

The modification concerning the 300 linear-foot prohibition was needed, the

Corps said, to add flexibility to the permit process, by allowing district engineers to

authorize activities that have minimal adverse effect on the aquatic environment. It

is not intended to relax aquatic protection, the Corps said, but is intended to allow the

Corps to focus limited resources more intensively on areas where impacts are likely

to be more than minimal. Opponents of the modification argued that the waiver

would lead to severe stream destruction from construction, agricultural and other

activities. Some said that the 300 linear-foot limit gives predictability to the

regulated community and state agencies and that the waiver authority would result

in decisionmaking variations between Corps districts and even within the same

district. The Corps disagreed and said that district engineers will use their knowledge

of the local aquatic environment to make case-by-case determinations whether a

waiver is applicable.

16

U.S. Department of the Army, Corps of Engineers. “Issuance of Nationwide Permits.”

67 Federal Register 2020, January 15, 2002.

CRS-13

Mitigation Requirements. As the Corps stated in August 2001, although

minimal adverse effects are anticipated for the nationwide permit program, the use

of NWPs may still affect the aquatic environment. Therefore, general condition 19

describes how district engineers will require compensatory mitigation to offset the

authorized impacts. Compensatory mitigation can be accomplished through the

restoration, creation, enhancement, and/or preservation of aquatic resources, either

by the permittee’s individual project, or the use of mitigation banks or other

consolidated mitigation efforts. Mitigation requirements incorporated in the

nationwide permit program have become more specific over time, especially since

1996, and are viewed by environmental protection advocates as critically important.

Before reissuance in 2002, this general condition required one-for-one

mitigation of adverse impacts to wetlands with a stated preference for restoration of

wetland impacts over preservation (see discussion on page 8).17 In January, the

Corps revised the mandate to allow a case-by-case waiver of this requirement in

cases where the Corps determines that some other form of mitigation, such as

establishment of vegetated buffers, is more appropriate. The intention of the change,

the Corps said, was to have a more ecologically and watershed-based approach to

mitigation. In the agency’s view, the one-for-one acreage requirement was too

restrictive, in that it focused solely on wetlands but did not allow the Corps to

mitigate aquatic impacts to streams and other non-wetland aquatic resources.

Because the Corps regulates the entire aquatic environment, not just wetlands, it said,

mitigation should consider the entire aquatic environment, as well. The Corps said

that it will require mitigation for impacts based on a watershed approach, often

involving a mix of vegetated buffers and other mitigation in non-wetland areas.

Thus, for example, a district engineer might authorize a project with impacts on a

particular wetland and require mitigation within the overall aquatic environment of

the particular watershed involved but not wetland-acre-for-wetland-acre mitigation.

This approach, the Corps said, allows district engineers to require the mitigation for

project impacts that best protects the aquatic environment.18

Environmentalists strongly opposed this change, saying that it effectively

ignores the principle of “no net loss” of wetlands which has been a goal of national

wetlands policy since 1990. In response, Corps officials said that under the revision,

project applicants must ensure that wetland functions are replaced and that the “no

net loss” goal be met on an acreage basis within a Corps district.19 Environmental

groups also argued that the Corps is too quick to look towards mitigation as the

answer for development activities affecting wetlands and should focus on avoiding

impacts as a first priority. They point out that numerous recent studies, including a

17

The policy preference for restoration derives from the fact that preservation does not

provide new acres and thus cannot compensate for wetlands loss on an acreage basis.

18

U.S. Department of the Army, Corps of Engineers. “Issuance of Nationwide Permits.”

67 Federal Register 2063-2067, January 15, 2002.

19

U.S. Department of the Army, Corps of Engineers. “U.S. Army Corps of Engineers

clarifies inaccuracies in wetlands permit reporting.” Press release, Jan. 16, 2002.

CRS-14

June 2001 report of the National Research Council,20 show that mitigation is not fully

successful and does not compensate for wetlands lost to permitted fills. They assert,

and the Corps acknowledges, that the Corps’ data collection and assessment of

mitigation projects must be improved in order to evaluate impacts. Thus, reducing

mitigation requirements that already are recognized as unsuccessful and are poorly

tracked is insupportable, according to critics. The Corps has said that it is taking

steps to address database and monitoring problems.

Surface Mining Activities. Nationwide permit 21 authorizes discharges

from surface coal mining activities which result in no more than minimal impacts

(site-specifically and cumulatively) to the aquatic environment. There is no acreage

limit or threshold for a project to use this permit. The Corps reissued NWP 21 with

two changes intended to strengthen environmental protection for projects authorized

by the permit. First, the reissued permit requires the Corps to determine appropriate

mitigation in accordance with nationwide permit general conditions, rather than

relying primarily on less restrictive state-required mitigation established under the

Surface Mining Control and Reclamation Act, as had previously been the case.

Second, the revised permit requires explicit authorization before the activity can take

place, rather than only requiring preconstruction notification, as in the past.

Critics were less focused on these changes than on the basic permit itself,

because they have long contended that the permit authorizes disposal of coal mining

waste material which buries streams with overburden material, thereby disturbing the

natural stream processes and water quality in entire watersheds and resulting in

permanent loss of habitat. According to that view, mitigation cannot sufficiently

compensate for these impacts, and any use of this permit is inconsistent with ensuring

“minimal adverse effects” on the aquatic environment.

Further contributing to controversy over NWP 21 is the fact that in recent years

the Corps has allowed the use of this permit to authorize mountaintop mining

activities in several Appalachian states (e.g., West Virginia and Kentucky). This

practice involves removing the tops of mountains to expose and remove underlying

coal seams. Upon completion of the coal removal, some amount of the waste rock

is placed back on the top of the mountain, while the majority is disposed in nearby

valleys where streams and wetlands are filled with the excess mining waste.

Environmentalists have sought to strengthen regulation of mountaintop mining, if not

halt it altogether, in part by arguing that the practice should be regulated under more

stringent Clean Water Act provisions than section 404, which authorizes the

nationwide permit program. So far, protection advocates have been unsuccessful in

their efforts. The Corps continues to assert that use of NWP 21 for surface mining

and mountaintop mining activities avoids and minimizes impacts to the extent

practicable and that adequate mitigation can be used to determine that a project has

minimal effects. These activities, the Corps believes, can result in a “substantial

improvement in downstream water quality and aquatic habitat within a watershed.”21

20

National Academy of Science, National Research Council. Compensating for Wetland

Losses under the Clean Water Act. Washington, 2001. 267 p.

21

U.S. Department of the Army, Corps of Engineers. “Issuance of Nationwide Permits.”

(continued...)

CRS-15

Citizen groups recently have filed lawsuits seeking generally to halt the Corps’

use of Nationwide Permit 21 for mountaintop mining operations. In the first such

case, a federal district court ruled that NWP 21 violates the Clean Water Act by

authorizing activities that have more than minimal adverse environmental effects

(Ohio Valley Environmental Coalition v. Bulen, S.D. W.Va., Civ. Action No. 3:03228, 7/8/2004). The court barred the Corps from using NWP 21 to authorize new

mountaintop mining in southern West Virginia and ordered the Corps to revoke

previous authorization for 11 operations. In January 2005, three Kentucky groups

filed a lawsuit to extend the West Virginia decision to Kentucky valley fills.22

Fills within the 100-year Floodplain. As discussed above, in 2000 the

Corps established a general condition for the nationwide permit program limiting

activities within the 100-year floodplain as defined by FEMA. In the reissued

permits, the Corps modified a portion of this general condition to delete a mandate

that permittees document that the project meets FEMA approved requirements and

delete a requirement for preconstruction notification to the Corps for certain activities

occurring in the 100-year floodplain. Environmental critics argue that the

modification now will permit development in ecologically sensitive floodplain areas.

The Corps said it believed that requiring applicants to comply with FEMA

requirements is just as effective as also requiring applicants to document their

compliance and that the changes to this general permit condition would not reduce

the floodplain restrictions adopted in 2000.

State Coordination Issues

Implementation of the Corps’ regulatory program, including the nationwide

permits, requires considerable coordination between federal and state governments.

For one thing, many states (and some localities) administer their own wetlands

management and protection programs which vary in the way wetlands are defined

and the activities that may or may not take place within or near regulated wetlands,

and officials attempt to minimize duplication and overlap.

More important, however, is a coordinating responsibility given to states under

section 401 of the Clean Water Act. This provision requires states to certify that a

proposed project seeking a federal license or permit, such as a section 404 permit,

will not violate a state’s water quality standards.23 In addition, states and territories

that operate management programs under the Coastal Zone Management Act are

required to provide concurrence that the activity is consistent with the state’s coastal

zone management (CZM) program. Review under the 401 water quality certification

process or CZM concurrence is an important means by which states ensure that their

water quality concerns will be considered in federally licensed activities.

21

(...continued)

67 Federal Register 2043, January 15, 2002.

22

For additional information, see CRS Report RS21421, Mountaintop Mining: Background

on Current Controversies, by Claudia Copeland.

23

States also may waive 401 certification, which is effectively the same as issuing an

unqualified certification.

CRS-16

It is Corps practice to allow a period of time following publication of final

nationwide permits for states to review them before the permits take effect. This

gives states time to determine if they will certify compliance with water quality

standards, certify conditional compliance (requiring the applicant to take additional

protective steps), or deny certification. Conditions placed as a result of 401

certification or CZM concurrence by a state automatically become part of a

nationwide permit in that state. Some of the modifications in the 1996 permits were

endorsed by many states (changes to narrow the scope of NWP 26, for example),

because they were considered to be more protective than the previous permit. In

those cases, states provided 401 certification, and projects authorized by the

nationwide permit could proceed without additional state restrictions. However,

some states favored modifications to other permits which the Corps did not adopt,24

and in those instances, states declined to provide 401 certifications.

Following issuance of permits to replace NWP 26 in March 2000, the Corps

gave states a longer period than normal (90 days rather than 60 days) for states to

carry out their 401 certification and CZM consistency reviews. Sixteen states denied

water quality certification for the replacement permits, and several states revoked the

½-acre limit in the new permits in favor of more restrictive requirements. State

review of the 2002 permits is underway.

An issue of long-standing concern to states is the fact that, if a state denies 401

certification or CZM concurrence because the project (under either a general or

individual permit) would violate water quality standards, the Corps does not

necessarily consider the state’s action sufficient cause to deny issuance of the federal

permit. When this happens in the case of nationwide permits, the state is forced

either to accept the permitted activity, as authorized by the Corps, or to expend its

resources to review the project separately and issue a 401 certification with

conditions specific to that project. States would like the Corps to treat a 401 denial

as a veto. The Corps may deny the permit (withdrawing its applicability in a state),

but will not always do so. The Corps’ position is that denial of state water quality

certification for a nationwide permit does not necessarily mean that unacceptable

adverse effects will occur on a case-by-case basis, and the Corps prefers that the

burden of conditioning or restricting the project at that point be with the state.

This tension over state and federal responsibilities does not exist under other

Clean Water Act permits. For example, under the Act’s discharge permit program

for industrial and municipal sources (the National Pollutant Discharge Elimination

System program in section 402 of the Act), if a state denies 401 water quality

certification, EPA insists on changes to the project until it gains 401 certification.

24

For example, many states have opposed NWP 29, the single-family residence nationwide

permit: 17 states denied 401 certification when NWP 29 was issued in 1995, because the

permit was inconsistent with state water quality standards or other state wetlands

management activities. While the Corps modified this permit in the 1996 revisions (by

requiring a “no fill” buffer between the project site and any free-flowing stream), it did

retain the permit and did not further modify it in response to requests that the ½-acre limit

be reduced or that the permit be withdrawn. Sixteen states denied certification of this permit

following its reissuance in 1996.

CRS-17

One option is for states to seek approval of a programmatic general permit

(PGP; see discussion in footnote 2), if the state is qualified and has sufficient

regulatory authority. The Corps would then suspend federal permitting, and there

would be less question over state water quality or other requirements. This is the

case in Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island,

states with PGP programs which replace the federal nationwide permits. Another

option is for states to seek authorization for full assumption of the 404 program, a

more complicated process than PGP approval, and only Michigan and New Jersey

have done so. However, not all states are interested or in a position to seek PGP

approval or full program authorization. Thus, even though the Corps has stated its

intention to work in partnership with states, most states will continue to conduct 401

certification reviews of nationwide and other wetlands permits, and it is likely that

conflicts over water quality certification will persist.

Other Issues Concerning Nationwide Permits

The nationwide permits issued since 1996 have raised a number of additional

issues. For example, the program is intended to balance a desire for administrative

simplicity and reduced regulatory burden, on the one hand, with protecting aquatic

resources, including wetlands. Yet, some question whether a number of

administrative requirements of the permits, such as advance notification to the Corps

and other agencies, written verification of permit compliance, and opportunities for

regional conditions, are tilted too much in the direction of protecting aquatic

resources and not enough in the direction of regulatory relief, while also making the

nationwide permit program unduly complicated.

As one example, industry groups were particularly concerned that the 1996

permits restricted the use of multiple nationwide permits for a single project (a

practice referred to as “stacking”). Previously, many applicants could use nationwide

permits in combination to speed authorization of their activities. However, the Corps

determined that this often results in unintended cumulative impacts because of

increased acreage being affected. Thus, the Corps prohibited stacking of some

permits and required prior notification to the Corps for most others, to allow officials

to determine whether it is appropriate to combine nationwide permits, or whether the

activity should be evaluated under an individual permit. In 2000, the Corps modified

the general condition which restricts stacking to clarify that more than one NWP can

be used to authorize a single and complete project, provided that the acreage loss of

waters does not exceed the highest specified acreage limit for the NWPs.

Defining Minimal Effects and Assessing Cumulative Impacts. Other

observers have been critical that, while the Corps has made environmentally

strengthening improvements to many of the nationwide permits since 1996, it has not

addressed a number of outstanding concerns. For example, the Corps declined to

define what is “minimal effects.” The agency also declined to require mitigation of

wetlands losses, as opposed to expressing a preference for it, and declined to require

that mitigation be done on-site. On these points, the Corps’ general position is that

it is not appropriate to define or dictate these matters on a nationwide basis, because

what constitutes minimal adverse environmental effects or adequate compensatory

action for wetlands loss can vary widely from state to state and watershed to

watershed.

CRS-18

Environmentalists have urged the Corps to conduct a cumulative impact analysis

of the nationwide permit program. The agency declined to do so, contending that the

permits do not constitute a major federal action having a significant effect on the

human environment, since Corps data on the usage of permits suggest that the

adverse effects, even cumulatively, are less than minimal. Thus, the agency said it

is not required to prepare an Environmental Impact Statement under provisions of the

National Environmental Policy Act, nor is a cumulative impact analysis warranted.

In February 1998, environmental groups brought suit against the Corps for failure to

fully evaluate the effects of the nationwide permit program. The lawsuit contended

that the Corps should have examined the effects of the nationwide permits on

threatened and endangered species and their habitat before reissuing them in 1996

and should have consulted with the U.S. Fish and Wildlife Service and/or the

National Marine Fisheries Service on the effects on listed species (Natural Resources

Defense Council v. West, 98-0560 VR, N.D. Calif., filed February 11, 1998). Partly

in response to this litigation, the Corps announced in June 1998 that it would prepare

a programmatic environmental impact statement (PEIS) on the nationwide permit

program and would consult with the other federal resource agencies, although the

Corps continues to hold that the program has no significant impact on the

environment or on endangered species.25 The Corps views voluntary preparation of

this PEIS as part of its commitment to ensure that the nationwide program authorizes

only activities with minimal individual and cumulative environmental effects. A

draft PEIS was issued in July 2001,26 and the Corps said at the time that a final PEIS

would be issued early in 2002. This has not yet occurred.

The approach taken by the Corps in preparing the draft PEIS was to consider

several possible regulatory alternatives to the nationwide permit program as a whole,

such as replacing the general permit program with standard individual permits or

regional general permits. It then compares impacts of these regulatory alternatives

on aquatic resources, on permit applicants, and on Corps administration. Some

groups had urged the Corps to prepare an environmental impact assessment of

individual current nationwide permits including impacts on wetlands functions and

values, since some permits may have greater environmental impact than others, but

the agency did not do so. This concern was raised in connection with permit

reissuance. Before the permits were revised in January 2002, the Association of State

Wetland Managers and the Coastal States Organization urged the Corps to delay

reissuance pending completion of the PEIS, since it may present information

supporting modification of the NWPs.27

Uncertainty Due to Overturning the Tulloch Rule. The status of some

existing Corps permits and aspects of its wetlands regulations was made uncertain

by a federal court ruling in January 1997. In this case (American Mining Congress

v. U.S. Army Corps of Engineers, No. 93-1754 SSH (D.D.C.)), the U.S. District

25

U.S. Department of the Army, Corps of Engineers. “Finding of No Significant Impact

for the Nationwide Permit Program.” June 23, 1998.

26

U.S. Department of the Army, Corps of Engineers. “Draft Nationwide Permits

Programmatic Environmental Impact Statement,” July 31, 2001.

27

“States Urge Corps to Suspend Plans to Revise Wetlands Permits.” Inside EPA, July 6,

2001: p. 15.

CRS-19

Court for the District of Columbia overturned regulations issued by the Corps and

EPA in 1993 which had extended the scope of the wetlands regulatory program to

include certain landclearing and excavation activities. The Corps and EPA issued

these regulations as part of the settlement of a lawsuit brought by environmental

groups over the agencies’ failure to regulate discharges associated with excavation

(North Carolina Wildlife Federation, et al. v. Tulloch, Civil No. C90-713-CIV-5-BO

(E.D.N.C. 1992)). At issue was whether “fallback” from dredging activities

constituted pollution, under the Clean Water Act.

The federal district court ruled that, in issuing the rules that resolved the Tulloch

case, the agencies had exceeded their authority under the Clean Water Act. The 1993

rules revised the definition of “discharge” to clarify that discharges or redeposit

associated with mechanized landclearing or excavation are subject to regulation. The

federal district court ruled that, in issuing the rules that resolved the Tulloch case,

the agencies had exceeded the authority of the Act by requiring permits from persons

who engage in wetland excavation activities which result in “incidental fallback” of

dredged material, because excavation is not defined as a regulated activity under the

Act. The court said that

the appropriate remedy for what the agencies now perceive to be an imperfect

statute, however, is Congressional action; defendants’ authority is limited to

adopting regulations that effect the will of Congress as expressed in the

statute...The Court finds that the Tulloch Rule exceeds the scope of the agencies’

statutory authority and, accordingly, declares it invalid and sets it aside. (slip

opinion at 25)

Following the district court’s ruling in January 1997, the Corps and EPA issued

guidance to field staff regarding the federal government’s authority to regulate certain

excavation activities in wetlands. Staff were directed not to take administrative or

enforcement actions related solely to the “incidental fallback” of dredged or fill

material in wetlands. According to the guidance, such activities would include

dredged material that falls from a dredge bucket as it is raised up through the water

column, but would not include ditching activities where the excavated material is

sidecast into U.S. waters; the latter would require a permit. Other activities would

require case-by-case examination to determine whether they are affected by the

ruling. One example of this type cited in the guidance is channelization and the

reconfiguring or straightening of streams.28

Corps officials and environmentalists viewed the ruling as a major setback for

the regulatory program. The government argued that the case has important

implications for the scope and effectiveness of the entire CWA section 404 permit

program, since the Tulloch Rule was adopted to close a significant loophole that had

allowed developers to degrade waters without obtaining a 404 permit. However, a

government appeal of the ruling was rejected by the U.S. Court of Appeals for the

D.C. Circuit (National Mining Association v. U.S. Army Corps of Engineers, 975099, D.C. Cir., June 19, 1998). That court found that the Tulloch Rule’s

28

Army Corps of Engineers, EPA Guidance Regarding Regulation of Activities in Light of

American Mining Case, Issued April 11, 1997.

Text available at

[http://www.wetlands.com/fed/tulloch3.htm].

CRS-20

“overriding purpose appears to be to expand the Corps’ permitting authority to

encompass incidental fallback and, as a result, a wide range of activities that cannot

remotely be said to ‘add’ to the waters of the United States.” The court said it would

give “considerable deference” to an effort by the Corps to draw a line between

incidental fallback on the one hand, and re-deposits which are subject to regulation

on the other hand, but that the Tulloch Rule drew no such line. The appeals court

upheld a nationwide injunction that the district court had issued against enforcement

of the Tulloch Rule. Government requests for rehearing of the appeals court’s

decision also were rejected, and the government did not seek Supreme Court review.

According to the Corps, some excavation activities do come under section 404

jurisdiction, despite the overturning of the Tulloch Rule. While discharges

associated with “incidental fallback” are excluded by these court decisions, other

excavation activities that result in redeposits of dredged material into U.S. waters,

other than incidental fallback, (such as replacement of an aquatic area with dry land)

require a section 404 permit. They may be authorized by nationwide permits if they

comply with the terms and limits of those permits. On May 10, 1999, the Corps

published a final rule to conform the regulatory definition of “discharge of dredged

material” with the judicial decisions.29

At the same time, the Corps announced that it would initiate a rulemaking to

more clearly delineate the scope of Clean Water Act jurisdiction over redeposits of

dredged material into U.S. waters. This occurred in January 2001, when the Corps

and EPA issued a rule to clarify the types of activities that are likely to result in a

discharge of dredged material subject to CWA section 404.30 The rule states that

ditch digging, dredging, and other excavation using heavy equipment typically create

more than incidental fallback and result in a discharge of dredged material. In the

view of the agencies, the use of heavy equipment for excavation or landclearing

disrupts enough material to assume that the activity will cause a discharge of dredged

material that would be deposited on surrounding wetlands or downstream areas.

Under the rule, unless project-specific evidence shows that the activity results in only

incidental fallback, it will be considered a regulable discharge of dredged material.

In issuing this rule, EPA and Corps officials were concerned that, since June

1998, large-scale developments had caused water quality degradation and at least

20,000 acres of wetlands loss with no permit review. Environmental groups

supported the rule, but industry groups said it conflicts with prior court decisions.

29

U.S. Department of the Army. Corps of Engineers. “Revisions to the Clean Water Act

Regulatory Definition of ‘Discharge of Dredged Material.’” 64 Federal Register 25120,

May 10, 1999.

30

U.S. Department of the Army, Corps of Engineers, and Environmental Protection Agency.

“Further Revision to the Regulatory Definition of ‘Discharged of Dredged Material;’ Final

Rule.” 66 Federal Register 4550, Jan. 17, 2001. The rule was issued by the outgoing

Clinton Administration. After reviewing the new rule, the Bush Administration announced

in April 2002 that it would allow the regulation to take effect without modification.

Regulated industries are displeased with the new rule, and two groups filed lawsuits

challenging it.

CRS-21

Several nationwide permits can be used to authorize certain activities associated

with excavation. These include, for example, NWP 31, dealing with maintenance of

existing flood control projects; NWP 18, concerning minor discharges of dredged or

fill material; and NWP 7, authoring maintenance excavation of outfall structures. In

addition, 1996 modifications to several nationwide permits were made to conform

to the 1993 regulations (for example, NWP 12, concerning discharges in connection

with utility line construction, was modified to authorize mechanized landclearing

necessary for installation of utility lines). Under the federal court rulings about the

Tulloch Rule, no permit is required if there is only “incidental fallback” from such

activities, but if not, these general permits may be used, so long as the activities have

minimal adverse environmental effects. Corps officials believed that the rulings

which overturned the Tulloch Rule had no direct effect on the nationwide permit

program, but they drew more attention to the Corps’ overall regulatory program and

debate over the scope of its authority to regulate. One uncertainty concerns which

excavation activities remain subject to section 404, based on case-by-case evaluations

that are now required, and what role nationwide permits will play in authorizing

those activities.

Congressional Interest

Congressional interest in legislation to revise the wetlands regulatory program

has been apparent for several years, as groups have pursued proposals intended to

simplify and streamline permitting and revise federal and state roles in permitting.

(For additional information, see CRS Issue Brief IB97014, Wetlands Issues.) None

has focused specifically on nationwide permits. During the mid-1990s, overall

wetlands policy was a major component of debates on the Clean Water Act and was

partly the reason that no comprehensive clean water legislation was enacted. Interest

groups were unable to reach consensus on whether legislative reform is needed and,

if so, how far it should extend. In May 1995, the House passed legislation to

reauthorize the Clean Water Act (H.R. 961) that, in part, would have significantly

amended the wetlands permit program in section 404, but not the general permit

provisions of the law. It would have required that landowners be compensated if a

federal agency action under section 404 diminishes the fair market value of property

by 20% or more. It also would have established a wetlands classification system

nationwide, allowing for differential regulatory procedures; in areas deemed least

ecologically valuable, no permit would be required. The changes contained in H.R.

961 were opposed by environmentalists and the Clinton Administration. The Senate

did not take up Clean Water Act legislation during the 104th Congress, and no

comprehensive legislative activity has occurred since then.

The controversies that surrounded debate on H.R. 961 led many observers to

believe that future wetlands reform efforts might focus on narrower, strategic

revisions, rather than comprehensive proposals. For example, proposals might

include exempting categories of activities below a certain threshold (less than 1 or

2 acres, for example) from regulation or clarifying the scope of authorized state

general permit programs. Revision of the nationwide permits and the 1997-98

federal court decisions concerning regulation of excavation activities could be

impetus for congressional action. So far, no such proposals have been offered.

CRS-22

Congress has shown interest in these issues, however. In April 1997, the House

Transportation and Infrastructure Subcommittee on Water Resources and

Environment held an oversight hearing on the developments concerning nationwide

permits and the federal district court ruling concerning the Tulloch Rule. In June

1997, the Senate Environment and Public Works Subcommittee on Clean Air,

Wetlands, and Private Property held a similar hearing. At both hearings, witnesses

representing developers and other groups subject to wetlands regulation expressed

concern about impacts of the overall wetlands regulatory program, and a number

were critical of the 1996 changes to the nationwide permit program, saying that the

changes would be costly and could result in project delays. Administration witnesses

supported the modifications, saying that the changes will allow the Corps to

implement a more fair, flexible, and effective program which is appropriately

responsive to environmental protection needs. At the Senate hearing, other public

witnesses supported the 1996 changes to NWP 26, discussed the need to regulate

excavation activities, and criticized the federal district court’s ruling concerning the

Tulloch Rule.

Interest in these topics recurred in the 106th Congress, focusing on changes to

nationwide permit 26. Regulatory issues first were addressed in P.L. 106-60, the

FY2000 Energy and Water Development Appropriations bill. As approved by the

House in July 1999, this bill (H.R. 2605) included a provision to require the Corps

to submit a study on the workload impact and compliance costs of replacement

permits for NWP 26 by December 30, 1999. Landowner and developer groups

supported the provision, contending that the costs and impacts should be better

identified before revised permits were issued, but the Clinton Administration

opposed it, saying that the study was unnecessary and, even with a December 30

deadline, would increase wetlands loss in the nation by delaying issuance of

replacement permits. The final bill modified the House language by directing the

Corps to study the workload impacts and costs of compliance of the proposed

replacement permits, but dropped language that would have required submission of

a report to Congress before publication of final permits.

Congress addressed the issue of the activity-specific permits issued in 2000 in

connection with the FY2001 funding bill for the Corps, but it did not attempt to

modify or rescind the permits themselves. Congress included legislative language

in P.L. 106-377, the FY2001 Energy and Water Development Appropriations Act,

directing the Corps to improve the analysis and increase information available to the

public regarding the costs of the nationwide permit program and permit processing

times. This bill was enacted in October 2000 (after the effective date of the

replacement permits that were issued in March 2000). It directed the Corps to revise

its cost estimate of the nationwide permits program, based on the final replacement

permits; prepare a plan to manage the additional workload of these permits; provide

quarterly program performance reports and annual reports on two specific Corps

divisions; and provide improved information on permit applications and the

functioning of the administrative appeals process.

There were no similar provisions in the FY2002 funding bill for the Corps or

subsequent appropriations acts.

CRS-23

In the future, renewed attention to these issues could occur as part of

reauthorization of the Clean Water Act, should it be a legislative priority, or

separately, as it did in the FY2000 and FY2001 appropriations process.

Congressional interest also could arise as a result of lingering concerns about

regulation of excavation activities (specifically, the 2001 revision of the Tulloch

Rule) or issues related to the package of nationwide permits revised in 2002.