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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.

RECENT REGULATORY AND JUDICIAL DEVELOPMENTS ON WETLANDS

TUESDAY, APRIL 29, 1997

U.S. House of Representatives,

Subcommittee on Water Resources and Environment,

Committee on Transportation and Infrastructure

Washington, DC.

    The subcommittee met, pursuant to notice at 10:00 a.m. in room 2167, Rayburn House Office Building, Hon. Sherman Boehlert (hairman of the subcommittee) presiding.

    Mr. BOEHLERT. Good morning. Welcome to this morning's session of the Water Resources and Environment Subcommittee.

    Last week we began our series of hearings on the Clean Water Act, focusing on infrastructure and funding issues. Today we continue with a hearing on one of the most controversial and complex environmental issues confronting the Nation: wetlands protection under Section 404 of the Clean Water Act.
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    Wetlands have been called many things. To some they are simply swamps. To others, they are water meadows. National policy has shifted from one extreme to the other as well. Decades ago, it was the policy to drain wetlands so as to encourage agricultural production and development.

    Over the years, the policies have shifted. Increasingly, policy makers, regulators, scientists and citizens have begun to recognize the many practical functions and inherent values of these unique areas where land and water meet. For example, the Clean Water Act and other laws and regulations now seek to protect, restore and maintain wetlands, although their effectiveness is seriously questioned by some, and their stringency and fairness is criticized by others.

    The debate continues to this day, unfortunately, with extreme views being staked out on each side. The debate in the last Congress, based on large part on anecdotes and rhetoric, resulted in gridlock. Many, fearing the legislative changes contemplated at the time, were pleased with the stalemate.

    Stalemate, however, should no longer be a win-win situation for anyone. Recent events compel players on both sides of the debate to talk in earnest about improving the statute. Closing loopholes, increasing protections and improving the fairness and effectiveness of the Corps of Engineers and EPA's programs, a regulatory program that so many love to hate.

    This hearing focuses on recent regulatory and judicial developments, specifically, the December 1996 reissuance of the Nationwide Permitting program and the January 1997 Federal court case invalidating the so-called Tulloch rule or excavation rule. The Tulloch case in particular emphasizes the need for Congress to not only review the current program but to clarify, strengthen and improve it.
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    As the judge said in this instance, the only appropriate forum for changing what the agencies view as an imperfect statute is Congress itself. We can't turn our back on our responsibility.

    Our witnesses today will give us a variety of perspectives. Michael Davis, representing the Corps of Engineers and Robert Wayland, representing the EPA, will tell us why the agencies did what they did and what they're doing now. Other witnesses will focus on the real-world impacts of the Tulloch rule, the phase-out and restriction of Nationwide Permit number 26 and other cutting edge issues.

    While some of the controversial issues and ghosts from the past remain, there is some reason to be optimistic about wetlands protection legislation today. There is a growing awareness of the need to adopt and promote the no net loss goal, and to look at not only Section 404 reforms, but also incentive based programs involving various agencies. In addition, mitigation banking, while controversial to some, is becoming a widely accepted approach in many watersheds as a way to protect and restore wetlands, while providing greater flexibility.

    Finally, I would note that despite the controversial nature of wetlands, this subcommittee fully intends to debate and legislate on a bipartisan basis. For example, the Chairman, Mr. Shuster, the Ranking Democrat, Mr. Oberstar have joined with Mr. Borski and me in writing a letter to various groups and officials urging them to discuss Clean Water Act issues, including wetlands, and to search for middle ground and consensus. This is certainly a good sign that all parties are interested in reauthorizing the Clean Water Act, and in particular the wetlands permitting program.
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    Now it's my pleasure to turn to the ranking member of the subcommittee, my good friend and colleague from Pennsylvania, Mr. Borski.

    Mr. BORSKI. Thank you very much, Mr. Chairman, and thank you for holding today's hearing.

    Today's hearing focuses upon two aspects of the wetlands programs conducted by the Corps of Engineers and the Environmental Protection Agency, the Nationwide Permit program and the recent invalidation of the excavation rule. I know that the Chairman serves my desire that we preserve and protect our wetlands resources. And both issues can have a major impact on the ability of the Nation to achieve that goal.

    The single issue of the Clean Water Act has caused more controversy within this committee than has the implementation of the wetlands program under Section 404. Feelings run deep and the rhetoric surrounding the program is too often characterized by myth than by fact. I hope that today's discussion will be based upon the facts and not the tales of abuse that often have little basis in fact, but which make for great stories.

    Let's talk about some of the facts. Over one-half of the Nation's wetlands no longer exist as functioning wetlands, largely because of the direct activity of man, through flooding, filling, draining and other alterations of the hydrology. Yet, where we have preserved our wetlands, they continue to provide enormous wealth to the Nation. Wetlands support an $11 billion commercial fishing industry and $10 billion annually in outdoor recreation, just to observe and photograph water fowl and other wetland-dependent species of birds.
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    Wetlands filter pollutants and improve water quality, saving costs associated with construction of additional treatment capacity. They also serve to temper coastal storms and can provide Mother Nature's most effective form of flood control.

    For example, the Charles River Natural Valley Storage Project in Massachusetts consists of preservation of wetlands rather than the construction of extensive flood control facilities. Annual costs for the project average $617,000, while annual benefits average $2.1 million. By one estimate, destroying all these wetlands could result in flood losses of $17 million. This demonstrates the real economies of wetlands preservation.

    Mr. Chairman, the issue before the subcommittee today shows the diversity of opinion on wetlands protection. The Nationwide Permit program, particularly number 26, will be criticized for both being too expansive and allowing the loss of wetlands, and yet will also be criticized for being much too restrictive and allowing for the filling of those same wetlands.

    Perhaps when the criticism comes from both sides of an issue the resolution of the issue is getting closer to an acceptable middle. Mr. Chairman, I hope that we can work together away from the rhetoric, working from a basis of science and fact and sound public policy to develop modifications to the wetlands program which will fulfill both the near-term goal of no additional loss of wetlands and a longer term goal of enhancing the Nation's quality and quantity of wetlands.

    I look forward to hearing today's testimony.

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    Mr. BOEHLERT. Thank you very much for an excellent statement, Mr. Borski.

    Is there anyone else? Mr. Boswell?

    Mr. BOSWELL. Thank you, Mr. Chairman.

    I don't have a prepared statement to make, but I too appreciate that you're taking the trouble and the time to do this hearing. It's a very important issue. To protect and preserve is something that we all want to do.

    And I would just hope, being a newcomer here, but also being a farmer and producer and a person that has been involved in this at another level, at the State level for some time, I think this is a time for us to have a liberal application of common sense. And if we need to preserve and protect by taking land out of production that's been in production and been the livelihood of a farmer or rancher or whoever, and we take that step, then we ought to be willing to come forth with the compensation to make up for it in some degree.

    So I would hope that we would keep those things in mind and kind of walk in the other person's shoes a little bit as we go through this process. And if we'll do that, then chances are we can come together and do something that will be good for the country and for those out there that affects their very lives and also the lives of those in the future.

    Thank you very much.

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    Mr. BOEHLERT. Thank you, and I think that all of us, no matter where we may find ourselves on the philosophical scale, could agree with your suggestion that we have a liberal dose of common sense.

    The distinguished vice chairman of the subcommittee, Mr. Thune.

    Mr. THUNE. Thank you, Mr. Chairman.

    I appreciate very much, too, the opportunity to learn more about the recent regulatory and judicial developments for wetlands. The wetlands issue is a major concern of landowners, farmers, businesses and I think a lot of ordinary citizens throughout the United States.

    In fact, there are probably very few Federal issues that are more critical to South Dakota property owners and small communities than Federal wetlands policy. And my view is that the current wetlands law is too broad, it's causing a lot of problems throughout the country. And I think we've all heard those horror stories.

    And I would simply say as well that I think that we need to approach this issue with a good dosage of common sense. A lot of South Dakota farmers and small business owners have been faced with fines of thousands of dollars for inadvertent, unintentional violations.

    And I think the legal overkill on the penalties and fines are going to force a lot of farmers and young business people out of business. That's something, obviously, that we would want to see stopped. And so I think the wetlands issue is going to be important to the people in my State, obviously, and the people in the entire Nation. I think we need to find a way to address this problem, and I look forward to working with you and the members of the committee to do just that.
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    Mr. BOEHLERT. Thank you very much, Mr. Thune.

    Mr. Boswell, you probably noticed, it's already been amended from a liberal dose of common sense to a good dose of common sense.

    [Laughter.]

    Mr. BOEHLERT. Mr. Johnson.

    Mr. JOHNSON. Thank you very much, Mr. Chairman.

    First of all, let me say, I couldn't agree with you more that stalemate is not a solution here, and doing nothing is also a decision, but not a very good one. I have also heard in my home town from environmentalists and home builders at home. I'm pleased that both are here today to give us more input into this obviously intransigent issue. And like Mr. Boswell and Mr. Thune, I also hear about the impact, want to hear about the impact on agriculture as it relates to my State.

    I just returned by train from Philadelphia, at the Volunteerism Summit. Looking out the window as we rolled by many wetland areas along that route, and I couldn't help but think of what was coming up in this committee today and its impact on the bogs and swamps and other wetlands that I witnessed along the side of the train route from Philadelphia to Washington. I think it's going to have a big impact here, and I look forward to what that route will look like in the future.
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    I look forward to hearing some great testimony today. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much. Dr. Ehlers?

    Mr. EHLERS. Thank you, Mr. Chairman.

    Just a few comments. First of all, I think the most important aspect to recognize is the value of wetlands. I think many of the citizens of America have forgotten that wetlands are the central issue in all the arguments we've had about property rights and the right to use one's property as one wishes.

    There's no question about the value of wetlands in terms of flood control, in terms of sportsmen's activities and basically, and most important, as providing the base for the food chain that sustains the aquatic populations, not only in the rivers, but also in the lakes and the oceans. I think we have to start with that premise, that wetlands are extremely important and valuable. We have to preserve them.

    I come from a State which passed its own wetlands law, and has been delegated by the Federal Government for years to operate the wetlands program. Frankly, I think it operates better than the Federal program.

    As proof of that, I will simply say that when I got tired at one point of hearing complaints about the wetlands program, I offered to repeal it and use the Federal guidelines. And suddenly, the whole tenor of the State of Michigan changed, and they said, no, no, no, we like our wetlands law.
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    It seems to me most of the problems arise from two things. One, the issue of property rights. And number two, the application of the regulations by the Federal Government. We should concentrate on those two issues rather than changing the basic approach of preserving wetlands.

    Thank you.

    Mr. BOEHLERT. Thank you very much.

    Mrs. TAUSCHER. Thank you, Mr. Chairman.

    I'm pleased that the subcommittee is turning today to the issue of wetlands protection. I believe that wetlands are the most important and valuable natural resource we have in California and around the Nation. Wetlands also play a critical role in protecting water quality by filtering pollutants from rivers, lakes and coastal waters. For all these reasons, I believe we need to do a better job of protecting wetlands as a Nation.

    Unfortunately, we've already lost too many wetlands in America. And in California, our wetland losses have topped 90 percent. We can do, and need to do, a better job and a smarter job of protecting this nationally important resource.

    For example, I'm concerned with the largely unassessed wetland loss caused by NWP 26. And I would like to add my voice to that of the California Department of Fish and Game and many members of the scientific community in urging elimination and reworking of this excessive source of wetland loss. Doing a better job of protecting wetlands does not mean that we cannot encourage responsible economic development at the same time.
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    Like many members of Congress and like most Americans, what I stand for in support is balance, a common sense approach to protecting the environment on the one hand and facilitating and encouraging responsible economic development on the other. I hope and trust that when the Corps issues its replacement permits for NWP 26 that these new permits will strike a better balance that treats wetlands more sensibly while continuing to keep the regulatory burden on developers as streamlined and uncomplicated as possible.

    While I am new to Congress this year, I am aware that this has been a very contentious legislative issue in previous years. During the last Congress, attempts were made to weaken protections for wetlands under the Clean Water Act. Let me say that I hope this body does not go down a similar path in this Congress. I detect little support in America and certainly not in my district for bills that would weaken the Clean Water Act.

    As we move forward on wetlands, I hope we can come together from both parties to work toward a better, smarter system for detecting wetlands and a better, smarter system for encouraging economic growth.

    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much.

    Mrs. Kelly.

    Mrs. KELLY. Thank you, Mr. Chairman.
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    In the interest of time, we have large panels and so forth, I would request that I be allowed to insert a statement into the record.

    Mr. BOEHLERT. Fine. Thank you very much.

    [Mrs. Kelly's prepared statement follows:]

    [Insert here.]

    Mr. BOEHLERT. Mrs. Emerson, did you—

    Mrs. EMERSON. Yes, I would like to ask, Mr. Chairman, if I could submit my whole statement for the record, but I won't use all of it here.

    Mr. BOEHLERT. You may.

    Mrs. EMERSON. First of all, I want to thank you for holding this hearing on a subject that's of great importance to the agricultural community and small business owners in my district. And I particularly appreciate your highlighting the issue of recent regulatory and judicial developments regarding the wetlands programs of the Corps and the EPA.

    There have been several administrative proposals and court decisions lately that requires Congress to look very seriously at these issues. I'll be brief, Mr. Chairman, but let me say that Congress has been indecisive on wetlands reform for far too long. Instead, we are seeing the Federal agencies and the regulators dictate policy to our small business owners, developers, farmers and ranchers, and anyone who's been affected by the constant changes in policy regarding this Nation's wetlands. I think wetlands policy has grown by default rather than by design, largely constructed by the courts and regulatory agencies, not by Congress.
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    I believe after having reviewed it, since I too am a freshman, that the wetlands reform package put together last year by this committee during consideration of H.R. 961 was on the right track. We need a comprehensive common sense reform of wetlands policy by Congress to address this and many other key issues such as realistic wetlands definition and classification, prior converted crop land exclusions, clarifying normal farming practices, compensation for the loss of economic use of private lands, and an appeals process that does allow for judicial review of wetlands delineations and permit denials.

    I look forward to hearing the witnesses today and having the opportunity to ask them questions. Thanks.

    [The prepared statements of Mrs. Emerson and Mr. Poshard follows:]

    [Insert here.]

    Mr. BOEHLERT. Thank you very much, Mrs. Emerson.

    And now the Chair turns to one of the foremost experts in the Congress on wetlands, our good friend and colleague from the eastern shore of Maryland, Mr. Gilchrest.

    Mr. GILCHREST. Thank you for that introduction, Mr. Chairman.

    Mr. BOEHLERT. You've earned it.

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    Mr. GILCHREST. I'd just like to make some very quick comments. The concept of preserving wetlands I don't think anyone would disagree with. It's the difficulty of implementing that concept with a full range of diverse activities on the land. And this is what Mr. Ehlers raised before, and I think we are intelligent enough to continue economic development and preserve ground water, flood control, filtering systems. We can just figure it out, as long as we have enough information.

    It boils down to lung tissue and mortgage payments. We need a clean environment, and we need job development as opposed to the oxymoron of economic growth. When do you reach the limit?

    There is also an issue here about education. What is a wetland? Is it an obstacle to bus through, overcome, or is it an actual, natural, functioning process on a living, breathing planet that needs to be preserved, otherwise we negatively impact people? New York City can't pump any of the water underground to drink in New York City. It comes from the Catskills. It comes from miles away, because they've decimated the groundwater to a large degree because they've destroyed all the wetlands in that area.

    We have problems with landfills, rubble fills, sprawl, unbridled growth, all of these issues, taxation, all of these issues have to be looked at in a comprehensive way. Mr. Ehlers made some comment about, and legitimately so, a comment about property rights. We know we have the Fifth Amendment to the Constitution, which means that you are to be compensated if your property is taken away for the public good. Nobody argues with that, Mr. Chairman.

    The point, though, is that if your property is regulated to prevent public harm, is that the same thing? So these are issues we have to deal with intelligently. Understanding the mechanics of creation, understanding the natural processes of the planet, are things that need to be taken into consideration when we deal with this most fascinating topic.
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    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much.

    Mr. Bateman?

    Mr. BATEMAN. Thank you, Mr. Chairman.

    I'll take a moment to join in that chorus of those extolling the virtues of common sense, and hope that we will find our way through to it. And to generally associate myself with the remarks of the gentlelady from Missouri.

    The only other thing I would add as a prelude to the testimony we'll hear today is that perhaps it is inappropriate, perhaps even unwise, to administratively broaden the scope of the existing or the pre-existing wetlands program, even as we are approaching a comprehensive evaluation of it legislatively, and with all the controversy already surrounding the existing wetlands program. Perhaps going slow and at least giving the Congress an opportunity in this session to address it comprehensively and to grope for that common sense solution that we all seem to be in favor of would be the path of greater wisdom.

    Mr. BOEHLERT. Thank you very much.

    With that, we are pleased to welcome our first panel of witnesses. From the Administration, the Deputy Assistant Secretary of the Army for Civil Works, the Corps of Engineers, Mr. Michael Davis; from the Environmental Protection Agency, Mr. Robert H. Wayland, III, Director of the Office of Wetlands, Oceans and Watersheds.
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    Gentlemen, your statement will appear in the record in their entirety. We ask that you try to summarize them. We are not going to be arbitrary with the five minute rule, because your statements are very important. But we would ask that you consider the time for questioning and for other panels.

    Thank you very much. Mr. Davis, you are first.

TESTIMONY OF MICHAEL L. DAVIS, DEPUTY ASSISTANT SECRETARY OF THE ARMY FOR CIVIL WORKS; AND ROBERT H. WAYLAND, III, DIRECTOR, OFFICE OF WETLANDS, OCEANS AND WATERSHEDS, OFFICE OF WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY

    Mr. DAVIS. Mr. Chairman and members of the committee, I am Michael Davis. I'm the Deputy Assistant Secretary of the Army for Civil Works. I have the pleasure of working for your former colleague, Martin Lancaster.

    I'm very pleased to be here today to provide testimony on behalf of the Department of the Army and the Administration on this very important topic of wetlands protection, and in particular, the reauthorization of the Corps Nationwide permits. With your permission, I will summarize my comments and submit a more detailed statement for the record.

    The Corps of Engineers and EPA have been given the authority through Section 404 of the Clean Water Act to ensure the chemical, physical and biological integrity of the Nation's waters, in part through the protection of wetlands. The value of wetlands in maintaining water quality, reducing flooding and providing habitat for fish and wildlife species is well documented and are even discussed here today in some of your opening comments. We also know that we have lost over half of our wetlands since European settlement.
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    The maintenance of a viable wetlands regulatory program is vital to the protection of our wetlands resources. The Administration's 1993 wetlands plan has provided a much-needed road map and strategy for improving wetlands programs. We have implemented many of the 40 initiatives in the plan and wetlands programs are more fair, more flexible and more effective than ever before.

    Based on the principles in the President's wetlands plan, this past December the Corps issued, on the normal 5-year cycle, a package of revised nationwide permits. These permits became effective on February 11th of this year. The Corps worked with EPA and others in the Administration to develop a package of nationwide permits to reflect the need to protect important waters and allow activities that are truly minor to go forward with little or no review.

    The authority for the Corps of Engineers to issue general permits is found in Clean Water Act Section 404(e). This authority prescribes two explicit requirements for all general permits. First, permits must be based on categories of activities which are similar in nature, and second, the activities authorized must not result in more than minimal adverse environmental effects, either individually or cumulatively. General permits can be issued on a State, regional or nationwide basis for a period not to exceed 5 years.

    Clearly, the general permit program has become a very integral part of the Corps overall regulatory program. In fact, over 85 percent of all Section 404 actions are authorized by general permit. The average time for a final general permit decision from the Corps is 11 days. Yes, over 85 percent of the individuals regulated under Section 404 get a decision in an average of 11 days.
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    In June 1996, the Corps published for public notice and comment a proposal in the Federal Register to issue, reissue and modify the nationwide permits. In December 1996, the Corps announced the reissuance of 37 existing nationwide permits and the issuance of two new Nationwide permits. These permits provide a balanced package that incorporates over 4,000 public comments, years of State and Federal experience with nationwide permits, and many months of discussions with Government, private, commercial, and non-profit entities.

    Over two-thirds, or 25 of the nationwide permits, were reissued without any changes. These nationwide permits have proven to be useful and effective in their current form. Less than one-third of the Nationwide permits were modified. The vast majority of these modifications were made to increase their applicability and scope. And finally, two new nationwide permits were issued for some activities that formerly required an individual permit.

    By far the most controversial issue was the proposal to reauthorize Nationwide Permit 26 for activities in isolated and headwater systems. This Nationwide Permit alone accounts for approximately 30 percent of all activities authorized by nationwide permits, and perhaps more importantly, 75 percent of the total impact resulting from nationwide permits.

    The most recent data and scientific literature indicate that isolated and headwater wetlands often play an ecological role that is as important as other types of wetlands in protecting water quality, reducing flood flows and providing habitat for many species of fish and wildlife.

    For example, in many parts of the Nation, isolated and headwater wetlands comprise a significant portion of the functioning wetlands that remain in existence. The National Academy of Sciences in its 1995 report on wetlands noted, ''The scientific basis for policies that attribute less importance to headwater areas and isolated wetlands than to other wetlands is weak.''
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    In light of the above, in response to public comments, several substantive changes were made to Nationwide Permit 26. These include the reduction of the upper threshold from 10 acres to 3 acres, addition of a 500 linear foot limitation for stream bed impacts, prohibiting the use of Nationwide 26 with other nationwide permits when the total impacts exceed 3 acres, and the expiration and subsequent replacement of Nationwide 26 within 2 years. The Corps determined these provisions were necessary to ensure minimal individual and cumulative impacts.

    On what basis did we make these changes? Surveys of Corps districts were conducted to determine the use of Nationwide 26 and nationwide permits in general for fiscal years 1994 and 1995. The data shows that of the nearly 14,000 projects for which a Nationwide Permit 26 verification was requested and granted, approximately 5,000 acres of wetlands were lost or adversely affected nationwide.

    However, the overall number of projects allowed under this project is an estimate due to the nature of Nationwide 26 itself, which allowed applicants to proceed with activities without contacting the Corps if the work involved less than 1 acre. We estimated approximately 20,000 such projects were allowed to proceed under Nationwide Permit 26 in fiscal year 1995, bringing the total to over 34,000 projects nationally.

    One of the most important conclusions reached through the evaluation of the data was the effect on resources and the regulated public changes in Nationwide 26 acreage thresholds. Evaluation of the data resulted in a conclusion that a reduction of the upper threshold to 3 acres would move only 10 percent of the activities normally authorized under Nationwide 26 into the individual review process. However, this 10 percent accounted for over half of the adverse impacts it caused by Nationwide 26 activities.
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    After careful consideration of all comments, we have determined that Nationwide 26 should be replaced by activity-based nationwide permits. However, in fairness to the regulated public, the Corps determined that a 2 year transition period was needed rather than an immediate revocation of Nationwide 26. We believe that the 2-year period is sufficient to develop and issue necessary replacement nationwide permits.

    Although Nationwide 26 will not expire until December 1998, the Corps is already moving forward to develop these activity based nationwide permits. We have had initial meetings with development and environmental interests to listen to their ideas for replacement nationwide permits. We are continuing to receive initial recommendations and are eager to work with all interest groups.

    We will publish proposed replacement nationwide permits in the Federal Register by February 1998. We expect to publish the final replacement permits by August 1998.

    An example of the type of activity-based nationwide permit we are considering is already in existence. Nationwide Permit 29, also known as the Single Family Housing Nationwide Permit, was issued in June 1995. This permit was established to meet the needs of Mom and Pop property owners who need to fill up to one half acre of non-tidal wetlands for the construction of a single family home.

    To date, this nationwide permit has been used to authorize the construction of 385 homes throughout the Nation, with a total impact of just 70 acres. We envision replacement permits for similarly defined minor activities with practical, environmentally sound restrictions.
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    In conclusion, we strongly believe that the changes in the nationwide permit program were needed in order to continue to ensure that the tens of thousands of activities authorized result in no more than minimal adverse environmental effects, either individually or cumulatively. Our experience with administering the nationwide permit program indicated that the former limitations of Nationwide 26 could no longer ensure that only minimal impacts to the aquatic environment would occur.

    An essential part of the Corps experience with implementing the nationwide permits includes an increase in scientific information that clearly indicates the important functions and values of headwaters and isolated waters to the Nation's overall aquatic system. At the same time, the Corps recognizes that activities that involve only minimal impacts should be allowed to proceed with little or no review and delay.

    The replacement nationwide permits will ensure better that the environmental effects of the nationwide permit program are minimal and more clearly identify the activities covered. This, along with the other nationwide permit changes, improves the environmental protection and allows for the efficient authorization of development with minor impact, the purpose of the general permit program.

    Mr. Chairman, that concludes my statement. I'll be happy to answer any questions you or the committee may have.

    Mr. BOEHLERT. Thank you very much, Mr. Davis. You can be assured that we will have some questions. Mr. Wayland?
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    Mr. WAYLAND. Good morning, Mr. Chairman and members of the subcommittee.

    I'm Bob Wayland, Director of the Office of Wetlands, Oceans and Watersheds at the Environmental Protection Agency. I'm pleased to be here today with my colleague, Mr. Davis, to discuss recent developments in the Clean Water Act Section 404 program. My prepared testimony and this oral summary address four issues: the importance of wetlands, the so-called Tulloch rule, mitigation banking, and the inter-agency Alaska initiative.

    As members of the subcommittee recognize, any discussion of the Section 404 program should begin by emphasizing the values and importance of our Nation's wetlands resources. They provide a multitude of services to society: flood control, water quality improvement, groundwater recharge, and fish and wildlife habitat, to name a few. Wetlands also form the basis of many thousands of jobs, and contribute billions of dollars to the economy. Just think of the economic importance of commercial fishing and recreational hunting to our Nation, to name just two values.

    Recognizing the importance of wetlands protection and restoration to realizing the goals of the Clean Water Act, the Clinton Administration set out to ensure that our wetlands programs are fair, flexible and effective. The result was the 1993 Administration Wetlands Plan. Implementation of many of the Plan's administrative initiatives has produced tangible results by making the program more fair and flexible, while continuing to ensure effective protection of the Nation's human health and the environment.

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    An important component of the Plan was the EPA/Corps issuance of a rule revising three Section 404 regulatory definitions. Let me emphasize that the District Court decision addressed only one part of that rule, the revised definition of dredged material. As a result, in the Government's view, the rest of the rule remains valid and in effect and provides that the placement of pilings is regulated under Section 404 when such placement has the effect of a discharge of dredged material. It also codifies the agencies policy that prior converted crop lands are not subject to Clean Water Act regulation.

    As you know, in response to a challenge brought by several industry groups, a Federal District Court invalidated the Corps-EPA revised definition of discharge of dredged material, frequently referred to as the Tulloch rule. EPA and the Corps respectfully disagree with the decision, and the Department of Justice has filed a notice of appeal and a motion for stay pending a decision on appeal.

    However, unless and until the District Court's decision is stayed or overturned, the Government is fully committed to complying with the Court's injunction. On April 11, 1997, EPA and Corps headquarters issued joint guidance to our field staffs, explaining the decision and its effects on the Section 404 program.

    The agencies' decision to issue the Tulloch rule was based on: our increased understanding of the severe environmental effects often associated with activities covered by the rule; the increasing sophistication of developers who seek to convert waters of the U.S. to uplands without being subject to Section 404 environmental review; and litigation brought to address these issues, notably Avoyelles Sportsmen's League v. Marsh.

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    EPA and the Corps continue to believe that the regulatory clarification expressed in the Tulloch rule is within our statutory authorities and was in fact consistent with the practice of many Corps districts and EPA regions as they sought to apply the Avoyelles decision.

    The case that gave rise to the Tulloch rulemaking provides a graphic illustration of the type of environmental harm that occurred in the absence of Section 404 review prior to issuance of the Tulloch rule. Developers in New Hanover County near Wilmington, North Carolina, drained, cleared and destroyed 700 acres of valuable pocosin wetlands to prepare the site for residential and commercial development and a golf course.

    These activities not only destroyed valuable wetlands, but also resulted in the flooding of neighboring property and the pollution of nearby streams. These two photographs are taken from the Tulloch site.

    Moreover, these impacts were virtually identical to those resulting from less sophisticated projects, where the only difference was the amount of dredged material falling back into the wetlands. We are very concerned that by precluding 404 review of activities covered by the court's decision, our ability to ensure effective and consistent protection of the Nation's human health and the environment has been weakened by the District Court.

    The decision creates an incentive for persons to once again take advantage of regulatory loopholes. They will be able to design large projects that destroy hundreds of acres of wetlands, harm neighboring property and pollute streams and rivers in a way that precludes effective Clean Water Act review. This review is not aimed at preventing development, but instead is needed to minimize pollution and ecological damage, as well as to provide appropriate mitigation to offset environmental harm.
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    I also want to quickly update the subcommittee on the status of two other initiatives included in the Administration's Wetlands Plan, mitigation banking and Alaska wetlands. Wetlands mitigation banks are an innovative, market-based way for land owners to effectively and efficiently compensate for unavoidable wetland impacts. Issuance in November 1995 of the Federal mitigation banking policy has facilitated the establishment of mitigation banks nationwide.

    Recent survey information indicates there are now approximately 200 mitigation banks that have been approved or are under development. We believe that well-designed, professionally managed mitigation, undertaken by persons with a strong incentive to achieve lasting results will substantially improve the disappointing record of compensatory mitigation.

    In recognition of the unique circumstances in Alaska, the Administration as part of the 1993 Plan, implemented the Alaska Wetlands Initiative to identify and address the concerns of Alaskans with Section 404 implementation in that State. The initiative was successful, as demonstrated by a variety of measures, a number of which are described in my written statement. To name just one, abbreviated permit processing procedures have expedited the evaluation of 24 permits for discharges to wetlands associated with the construction of water, wastewater and sanitation facilities in Alaskan villages.

    Nevertheless, while the EPA and Corps have undertaken various administrative initiatives to support the Section 404 program in Alaska, we continue to look for additional opportunities to make the program more fair and flexible, while continuing to ensure effective protection for the State's valuable aquatic resources.
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    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much, and let's get right to it.

    You've heard the criticism, as have we. Some of your critics are arguing that it's emotion and politics and not science that dictated your decision. So the opening question is, what is the biological or scientific basis that led the Corps and EPA to determine that the Nationwide 26 that existed from 1991 to 1996 was causing significant environmental degradation? Let's talk science. Mr. Davis?

    Mr. DAVIS. Yes, Mr. Chairman. We need to go back, I think, to about 1977, some 20 years ago, when we first codified a Nationwide 26 type permit. At that time, our understanding of wetlands systems was certainly different than it is today. The science of wetlands functions and values has clearly evolved over the last 20 years. It's evolved a lot over the last 5 years.

    The Corps, as the geographic jurisdiction of the program expanded from 1975 to 1977, came up with Nationwide 26 to help deal with some of the work load. We didn't have the regulatory infrastructure, the staff in place in 1977. So they simply carved out the geographic part of the aquatic system in this country based on what I would view as an ecologically flawed concept.

    And that concept, that somehow the headwaters and isolated wetlands are less important than others. We know today that that's not the case. The literature is much more clear today, and it indicates that these systems are very integral parts of the overall aquatic system in terms of water quality abatement, flood storage, other fish and wildlife habitat type benefits.
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    So our understanding has clearly changed over the last 20 years, as the science has evolved.

    Mr. BOEHLERT. Mr. Wayland?

    Mr. WAYLAND. I think Mr. Davis gave a very accurate summary, and his prepared statement and mine both refer to the National Academy of Sciences' evaluation undertaken at the behest of Congress of delineation methodology which went on to make the statement that the scientific basis for differentiating protection based upon whether waters are isolated waters or hydrologically connected to open water areas is scientifically weak.

    So I think we have progressed significantly in our understanding of the important role of these isolated systems to the overall health and integrity of our Nation's aquatic ecosystem. And these changes to Nationwide 26 reflect that improvement in our scientific understanding.

    Mr. BOEHLERT. The National Academy of Science report, are you referring to the one, I think it was May 1995?

    Mr. WAYLAND. Yes, Mr. Chairman.

    Mr. BOEHLERT. It was unfortunate the way that the House proceeded. There were some of us, Mr. Gilchrest joined me in that effort, to try to delay action in H.R. 961 until we had the benefit of that National Academy of Science report.
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    We all like to talk about science, but we sometimes are wedded to science only if we find it politically convenient, and it was unfortunate that we proceeded with a consideration of H.R. 961 just prior to the issuance of that report by the National Academy.

    But in your collective judgment, you think that was an outstanding report, I take it, and you adhere to it and wish that we would, too.

    Mr. WAYLAND. I think we were quite satisfied with the report. It was undertaken as a result of a directive of Congress through EPA's appropriation. It was comprised of eminent scientists, including many from the private sector, as well as distinguished academic researchers, and generally found that the methods used by the agencies to identify and delineate wetlands were appropriate and scientifically sound.

    Mr. BOEHLERT. Let me ask you this. How do you plan to better integrate other environmental concerns such as the Endangered Species Act into the nationwide permit program?

    Mr. DAVIS. One of the things that we have agreed to do as a result of the reissuance of this nationwide permit is to enter into programmatic consultation with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. We're going to take a more comprehensive look at the entire nationwide permit package over the next couple of years, leading up to the next cycle of reissuance. So we'll be in a better position and perhaps have better information on how the program does affect threatened and endangered species.

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    We believe that we have very substantial and important conditions in place right now under the general permit program where our field regulators can screen out and identify those actions that might potentially have an effect on threatened or listed species, and send those over to the Fish and Wildlife Service or National Marine Fisheries Service for a quick review.

    Mr. BOEHLERT. Mr. Wayland, do you care to comment on that?

    Before you do, let me ask you, Mr. Davis, programmatic consultation, I hope that's not a Washington phrase for delay. Are you going to do it in a timely manner?

    Mr. DAVIS. Yes, Mr. Chairman. It will not delay anything, because we're going to use this to be prepared for the next 5-year reissuance cycle. So we're starting that process now. So I'm confident that we'll finish that well before we have to use it.

    Mr. BOEHLERT. My time is up, but Mr. Wayland, did you wish to comment?

    Mr. WAYLAND. Just to take a step back in terms of the role of science in the program, Mr. Chairman, one of the guiding principles for the President's Plan was that we should apply sound science to our decision making. And EPA and the Corps, together with other Federal agencies, are working very hard to try to better understand wetland functions and values, and incorporate those considerations into our regulatory decisions. The plan declares very clearly that we recognize that all wetlands are not created equal, and we need to look closely at functions and values in undertaking effective protection, mitigation and restoration efforts.
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    Mr. BOEHLERT. I'm glad to see so much emphasis here on sound science. You probably recall that the last Congress, the Speaker appointed a Speaker's Task Force on the Environment. And I was asked to co-chair that. And after much consideration, we developed a statement of principles. And the first principle was that we would have, and still is, that we would have science-based decision making.

    With that, let me turn to one of the foremost scientists produced by the City of Brotherly Love, the ranking member, Mr. Borski of Philadelphia.

    Mr. BORSKI. Thank you, Mr. Chairman.

    Mr. Davis, let me start with you. Some have questioned the underlying legal authority for Permit 26, particularly since the statute refers to categories of activities. Would you please comment?

    Mr. DAVIS. That's a good question and a challenging question. Let's go back to some of the legal arguments that the Corps has made over the years, I guess. And a principal one is that a Nationwide 26 type of permit was in existence when Section 404(e) was enacted in December of 1977. So in a sense, we make the case, I guess, that it was kind of grandfathered.

    However, over the last several years, we've become increasingly concerned that it is very difficult to reconcile Nationwide 26 with the plain words of Section 404(e), which requires that these permits be issued for categories of activity. I think we all recognize that Nationwide Permit 26 is a permit for a category of water. So that reconciliation is challenging and difficult and one of the reasons that we're moving away from the approach that we had in Nationwide 26.
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    Mr. BORSKI. Mr. Davis, are the nationwide permits considered to be the rule?

    Mr. DAVIS. In our judgment, the permits themselves are not the rule. The procedures by which we promulgate and issue the nationwide permits are a rule. And it's gone through the APA rulemaking process the last time in 1991. But the permits themselves, and we actually announced this in 1991 through a rulemaking, that we did not consider the permits themselves to be a rule. These are general permits that are authorized in the statute. They're issued at not only the national level but they're issued at the regional level as well. So we do not consider them rules.

    Mr. BORSKI. Tell us how the States have been responding to the new nationwide permits, and how does this compare to your experience under the previous general permits? And then Mr. Wayland, if you'll respond to that as well.

    Mr. DAVIS. Mr. Borski, I think overall, the State response has been much more favorable this time. We started an effort over a year and a half ago to really reach out to the States and try to bring them into this process and develop good nationwide permits that reflect the needs of the States.

    As part of the process, once the package was issued in December, we had a very extensive 60 day period where were worked closely with all of the States to develop good regional conditions to further refine the nationwide permits for individual States. So overall, I think the response has been good.
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    I will say, though, there are several States who continue to be very concerned about the nationwide permit program, concerned from the standpoint that the Corps still hasn't tightened up, perhaps, enough from the environmental protection standpoint.

    Mr. WAYLAND. Until the reissuance, a significant number of States had not certified Nationwide 26 under Section 401 of the Clean Water Act, which gives them the opportunity to certify as consistent with State water quality standards any federal permit or license for an activity that may result in a discharge to navigable waters. We worked with the Corps to try to encourage a more open dialogue about the changes that were being made in the nationwide permit program in hopes of securing a greater percentage of State water quality certifications. And we did so with some success.

    Many States use their 401 certification process as a parallel wetland protection effort. And it's an extremely important and valuable tool to many of the States. And we generally take a hands-off view with respect to their implementation of their water quality certification. It's something that is entrusted to them directly by the statute. I think it's been used to good advantage in a number of cases, and I think that the States' participation in the review of the Nationwide permits has been beneficial to the Federal agencies.

    Mr. BORSKI. Could you tell us, or at least give the subcommittee later which States have denied certification?

    Mr. DAVIS. Yes, Congressman, we'll provide that for the record.
    [The information received follows:]
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    [Insert here.]

    Mr. BORSKI. Thank you. And one of the witnesses, Mr. Wayland, if I may start with you, anyway, one of the witnesses we'll hear from on the third panel makes a very compelling point that it is little comfort to flood victims that a developer may be required to mitigate destruction of a wetland by protecting or creating wetlands somewhere else, when destruction of the wetlands caused their home to be flooded.

    How can we ensure that citizens will not be flooded out of their homes as a result of development on nearby wetlands?

    Mr. WAYLAND. Mr. Chairman, the agencies, through the 404(b)(1) guidelines, do express a preference for mitigation on-site. And where that's not possible, mitigation within the watershed in which the development project occurs is highly desirable. We can't and don't want to require mitigation that is not practicable.

    And there are situations in which mitigation on-site or within the watershed is not practicable. They are relatively few in number, and most mitigation therefore does occur in relatively close proximity to the site.

    In addition, there are important Federal programs and a number of agricultural programs that have been alluded to today which have as their primary purpose to discourage the destruction of wetlands or to encourage the protection and restoration of wetlands, notably the Wetlands Reserve Program and the Conservation Reserve Program, together with the Swampbuster program. These programs are a significant complement to the Clean Water Act Section 404 program.
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    And I think we are working very closely with our colleagues at the Department of Agriculture to try to make sure that where landowners are willing to enroll property in the Wetland Reserve Program or the Conservation Reserve Program to assure the long term protection of those lands, that they are compensated for their participation in those programs.

    Mr. BORSKI. Mr. Chairman, may I ask Mr. Davis to respond?

    Mr. BOEHLERT. Sure.

    Mr. BORSKI. Does the Corps consider these impacts on permit decisions?

    Mr. DAVIS. Absolutely, Congressman. We would not intentionally issue a permit if we believed it was going to increase flooding on adjacent property owners, even if the mitigation was successful for other environmental reasons, we wouldn't do that. I don't know how we could do that.

    Most of the problems we've seen, where individuals have been flooded have come in the context of enforcement actions where people have gone ahead and built projects and flooded their neighbors without coming to the Corps and getting a permit first.

    Mr. BOEHLERT. Thank you very much.

    As is the practice of the Chair, members will be recognized on an alternating basis in order of their appearance. In other words, first come, first served on a bipartisan basis.
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    Mr. Horn.

    Mr. HORN. Thank you, Mr. Chairman.

    I'd like to bring up the Tulloch rule and the American Mining Congress decision. Since the Tulloch rule was implemented to settle a lawsuit, and now the American Mining Congress decision has called into question that settlement, I'm curious what the Administration proposes to do to reconcile these conflicting decisions.

    Mr. WAYLAND. Mr. Horn, as I outlined in my testimony, we have filed a notice of appeal and a request to stay the opinion pending the appeal. We believe very strongly that the discharge of dredged material incidental to excavation of wetlands where the consequence is as depicted on these photographs over here, the destruction of hundreds of acres of wetlands, is an activity that appropriately should be reviewed under the Clean Water Act.

    Of course, as Mr. Davis' statement outlined, a significant number of wetlands permits are issued each year, not just general permits, but individual permits that authorize activities to take place in wetlands where there aren't appropriate upland alternatives, and where there is mitigation to offset the environmental impact.

    So we believe that it's important to have a higher court examine the decision of the D.C. District Court, and that's the path we're on at present.

    Mr. HORN. What's the status of Judge Harris' decision?
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    Mr. WAYLAND. We are complying with Judge Harris' decision. We have sent instructions to our field office jointly from Army and EPA indicating that activities which involve only the incidental fallback of dredged material are not at present, and until a higher court addresses the issue, or until the stay motion is granted, subject to Clean Water Act, Section 404. As an accommodation to permitees who may out of prudence believe that there is a possibility that a higher court will reverse that decision, the Corps has indicated it will continue, it will either hold in abeyance or continue to process permits in order to assure that projects are not delayed due to the uncertainty created by the decision.

    Mr. HORN. What's the Corps of Engineers' view on this issue?

    Mr. DAVIS. Well, we have the same view as EPA, that we disagree with the District Court opinion. We think that the Tulloch rule is a sound decision consistent with the Clean Water act, and we certainly support the motion for a stay and the appeal request. The interim guidance, as Bob said, does basically say that we will not regulate these types of activities unless a land owner asks us to do so in writing.

    Mr. HORN. So your guidance of both agencies across both the Corps districts and the EPA regions are the same?

    Mr. DAVIS. It's joint guidance, co-signed by both agencies.

    Mr. HORN. It would be helpful, I think, if you could explain how the program grew from regulating the disposal of the polluted sediment dredged from river bottoms to covering dirt that falls back from a backhoe into an area that may never be wet at the surface or covering the clearing of vegetation from a utility right of way on grounds that the soil that falls back to the ground from the root of a cleared bush is a discharge. Could you sort of explain that to us?
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    Mr. DAVIS. I'll take the first pass at that, Mr. Horn. The Clean Water Act of 1972 prohibited the discharge of dredged or fill material without a permit. In 1977, Congress significantly amended Section 404, added a number of provisions, including amendments to exempt certain ongoing agricultural activities. And in the process of doing that, they exempted ongoing activities.

    And where the activity did not impair the reach or flow of waters of the United States, plowing, ditching and other kinds of specified activities. We think it's a reasonable understanding both of the activity that takes place and of Congress's action in 1972 as amended in 1977 that activities such as the ones illustrated over here that gave rise to this case, together with other cases brought earlier, notably the Avoyelles Sportsmen v. Marsh case, called on us to clarify what was and was not subject to regulation. We did that after notice and comment through the Tulloch rulemaking.

    Mr. HORN. What's the current definition of waters of the United States? Have you got a succinct current definition?

    Mr. WAYLAND. It's a succinct three-part definition. Wetlands are waters of the United States which are saturated or inundated for a sufficient period of time to sustain and that do sustain a prevalence of aquatic vegetation and where the soil type is indicative of the presence of wetland conditions.

    Mr. HORN. I always liked the one that said you could float a Supreme Court opinion on it. It just depends on the weight of the opinion, I suspect.
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    [Laughter.]

    Mr. HORN. So I don't know if you're taking 2 page opinions or 200 page opinions to make that test.

    Are you seeking legislation on the Tulloch rule or do you plan to, or what?

    Mr. WAYLAND. Mr. Horn, at the time we developed and released the 1993 Administration wetlands plan, we indicated that there were a number of areas in which the broad language of the Clean Water Act permitted decisions, and in fact required decisions to be made in the interest of clarity and fairness to landowners which the agencies have done through rulemaking.

    But that as part of a comprehensive reauthorization of the Clean Water Act, and one geared to fulfilling its purpose of protecting and restoring the Nation's waters, that we would be willing to work with Congress on amendments that would state with greater specificity how wetlands should be regulated and protected.

    And that was our position in 1993. I think that the broad and non-specific nature of the statute in a number of cases can give rise to confusion. At the same time, I think unfortunately in the last Congress a somewhat different direction was taken, and our concern very clearly was that the amendments that were under debate by and large would not have been true to the purposes of the Clean Water Act and we couldn't support them.
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    Mr. HORN. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much.

    Mr. Blumenauer.

    Mr. BLUMENAUER. Thank you, Mr. Chairman.

    I appreciate your helping us focus on the value of this resource, the stake that all Americans have in making sure that we don't lose wetlands. I'm curious, if you could set the context for us, whether the programs that we have in place at this point, the incentives, the refinements that you've undertaken, have put us in the position where we are either gaining or losing ground.

    There are some that allege that we are actually now restoring more wetlands than are being lost. I'd be interested in your perception whether the restorations are in the place, the location, the magnitude that have equivalent protections. Could you give us a sense of where we are right now?

    Mr. DAVIS. I'll take the first stab at this. And Mr. Wayland can certainly add to it.

    If you go back just 20 years ago and you look at the estimates of wetlands losses, the predictions then or the estimates then were anywhere from 300,000 to 500,000 acres that were being lost annually. That tapered off through the mid-1980s to the late 1980s. And today, though, we believe that the average annual losses are somewhere between 70,000 and 90,000 acres.
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    So I guess the good news is that these programs are starting to work. People are more aware of the importance of this resource. And we kind of have the patient, I guess, stabilized. But we need to take the next step and look more comprehensively at restoration programs and non-regulatory approaches to complement the regulatory program to actually get to where we want to go, and that's a net increase to try to get back some of those hundred million acres that we have historically lost.

    So we're making progress, but we're not there yet. There are some who would suggest that if you look at the numbers and you add up all of the mitigation that's going on in the country that we're already at a no net loss. We don't believe that's the case.

    Just simply, if you look at the success of that mitigation, you'd have to question whether we're there, because we know that much of it is not working as we had hoped. Our understanding of that area is also improving and getting better, but we're not there yet.

    So I don't think that anybody in the Administration would suggest that we're at no net loss at this point. Again, we believe we're at about 70,000 to 90,000 acres average annual loss at this point.

    Mr. WAYLAND. I'll just augment that briefly by saying that some of the reports that suggest that we've achieved a net gain erroneously attribute to some of the wetland programs, notably some of the Fish and Wildlife Service programs, an increase in the wetlands resource base, when in fact many of the acres that are enrolled in Partners in Wildlife and other programs are actually enhancement and protection programs, not restoration programs which don't increase the base.
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    Many of the acres, probably the vast majority of the acres enrolled in several of those programs, are wetlands before they're enrolled and they're wetlands after they're enrolled. They may be managed differently to enhance their functions and values, and that's a beneficial thing.

    They may be protected, or access may be granted by the land owner as a result of those programs. And that may well be a beneficial thing. But it doesn't mean that the acres have shifted on the side of the ledger from a loss to a gain.

    Mr. BLUMENAUER. If we've lost half our wetlands, if the inventory is a hundred million acres, should we have a different ultimate goal, from no net loss to some strategic reclamation?

    Mr. DAVIS. That's a very good comment, and that's exactly what the Administration has adopted. We actually have a two part no net loss goal. The short term is no overall net loss to kind of stabilize things. But actually, the long term goal is a net gain. We want to try to recapture some of those hundred million acres. Obviously, we're not going to get them all back.

    But there are lots of opportunities to go in and restore former wetland sites and get some of that acreage back. We do have some programs now that help us do that, some of the USDA programs, some of the Fish and Wildlife programs are working in those areas.

    Mr. BOEHLERT. Mr. Thune.
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    Mr. THUNE. Mr. Chairman, it would be a loss to this committee if we didn't benefit from some of the pearls of wisdom from our distinguished chairman of the Resources Committee, so I will defer to him at this point and reserve the right to ask questions later. Thank you.

    Mr. YOUNG. Thank you, Mr. Thune.

    Mr. Chairman, in 1993, the President talked about balance, common sense, workable set of improvements, simpler and fairer, nice words. I don't think it went far enough. But as long as we have you two gentlemen here that deal directly with my State and with other parts of the United States, I'd just like to make sure we're on the same page.

    While I don't quarrel with the notion that activities that destroy wetlands should be regulated, I do agree with the judge in the American Mining Association case that your remedy for an imperfect statute is not to create new authority for yourselves, but to come back to Congress. One of the problems we have today in America is there are too many agencies that think they're God and actually make regulations and implement those regulations regardless of the public input. It doesn't work.

    The question I have says, much needed reform was adoption of appeals process within 1 year of this initiative, which would have been 1994 and 1995, the Corps was to develop an administrative appeals process. The reform package says, ''To increase fairness in the wetlands permitting process, the Corps will establish an administrative appeals process so that landowners can seek speedy recourse if permits are denied without having to go to court.'' Has that initiative been implemented yet?
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    Mr. DAVIS. Congressman Young, major steps have been taken to implement that initiative. We're disappointed that we don't have that in place right now. We have proposed a regulation that would provide the infrastructure to put in place an administrative appeals process that would allow landowners to appeal jurisdictional determination.

    Mr. YOUNG. Stop right there. Why hasn't it been released?

    Mr. DAVIS. For the last 2 years, Congress has not given the Corps of Engineers the money to implement the program.

    Mr. YOUNG. Now, you're holding it hostage, although you said you would do it. You're holding it hostage so we increase your funding. Is that the way you're supposed to do this? This is supposed to be fairer, more simple, and the land owner is being hurt.

    Mr. DAVIS. We made it clear from the very beginning that we would implement an administrative appeals program. We think it's the right thing to do, we think—

    Mr. YOUNG. If we don't fund it, you're not going to do it.

    Mr. DAVIS. We don't know how we can do it, sir. We're already running a very stretched program.

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    Mr. YOUNG. What if we direct you to do it?

    Mr. DAVIS. I'm sorry?

    Mr. YOUNG. What if we direct you to do it?

    Mr. DAVIS. We would certainly comply with any direction.

    Mr. YOUNG. Then that shall happen.

    Much-needed reform was established in the 90 day deadline for permit action. It initially says, ''To increase fairness and efficiency in the wetlands permitting process, the Corps will establish deadlines for permitting decisions under the Clean Water Act.'' When were the regulatory changes implemented to assure the deadlines?

    Mr. DAVIS. We revisited that initiative, and we determined that basically we were already there, that given the other things we were working on, banking, the Alaska initiative that you're familiar with, the administrative appeals rule, it was not a good investment of limited time to develop a new regulation to do something that we're already doing. The average time for getting permit decisions now is about 101 days for individual permit decisions.

    Mr. YOUNG. Can you document it's an average 101 days?

    Mr. DAVIS. Yes, sir, we can send something for the record.
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    Mr. YOUNG. And Alaska is how many days?

    Mr. DAVIS. I can't recall but I can provide that for the record.

    Mr. YOUNG. It will be submitted to me, will it not?

    Mr. DAVIS. Yes, sir.
    [The information received follows:]

    [Insert here.]

    Mr. YOUNG. The Corps issued guidance, recognizing that all wetlands are not equal to value, highlighting flexibility for less vigorous review for projects with very minor impacts. What effect has this guidance had on actual permitting decisions, such as a change in the stringent application of the Corps' alternative tests?

    Mr. DAVIS. We think it's improved the Corps' process. Performance in the program has improved over the last 2 or 3 years, in spite of an increase in work load. We think that flexibility guidance that we issued jointly with EPA was very important to recognize that all wetlands are not the same and all wetlands should not be regulated the same. And I think it had the intended effect.

    Mr. YOUNG. Has it changed anything? Have we improved this process?
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    Mr. DAVIS. Yes, sir.

    Mr. YOUNG. Is there happiness in the hinterlands?

    [Laughter.]

    Mr. YOUNG. What I'm suggesting, respectfully, and why I get excited about this, we have a problem today in America. Because no one trusts you or EPA or any other agency. Because I don't find anybody happy with how you're conducting your project to try to protect wetlands. In fact, you might be destroying wetlands. There's no partnership occurring.

    Now, three times, three questions I've asked you, and nothing's occurred, because you said you're waiting, we don't need it, no action is necessary.

    Mr. WAYLAND. Mr. Young, if I might—

    Mr. YOUNG. Go right ahead.

    Mr. WAYLAND. I did have some statistics at my fingertips concerning permitting and also, public satisfaction with the 404 program in Alaska. I think it's noteworthy that in 1996, the last complete year for which we have statistics, some 1,000 general permits were approved in Alaska in an average of 9 days versus the U.S. average of 14 days. Two hundred sixty individual permits were issued in Alaska in an average of 68 days.

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    Mr. YOUNG. Can you define those permits? In what area were they applied to?

    Mr. WAYLAND. I have a total number of individual permits.

    Mr. YOUNG. I think most of them were water and sewer for my native villages.

    Mr. WAYLAND. And EPA provided $45 million in grant funds for design and construction of water and sanitation facilities in the last 3 years, and an addition $29 million for Alaska native village sanitation projects since 1989. The Corps is doing exit surveys now on satisfaction with the 404 program on the part of people who received permits or who apply for permits. And on a scale of one to five, with five being the best, the average score is four out of five——

    Mr. YOUNG. In Alaska?

    Mr. WAYLAND. In Alaska.

    Mr. YOUNG. I'd like to know who you're talking to.

    Mr. WAYLAND. Alaskans responded to six separate measures, including needs met in a timely fashion, treated courteously, and opinion of regulatory program.

    Mr. YOUNG. All right, just one thing. Initially, verbally too some important steps in making the 404 wetlands programs more balanced, but clearly the words alone aren't enough. The reform program recognized the permit deadlines and appeals process are ''much-needed reforms.'' These much-needed reforms that haven't been met, but the reforms designed to increase the Federal Government's regulation of private property has been met.
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    Now, is that a fair assessment of what's occurred?

    Mr. DAVIS. I don't think it's a fair assessment, Congressman. A lot of things have been accomplished. You picked out a couple of things that haven't been done out of a list—principally the appeals rule, because of funding reasons. We'd like to do the appeals rule, we've done our part, we're ready to go with that, we're prepared to do it. And in fiscal year 1998, the President has requested the money in the 1998 budget for the third year. We'll do that as soon as we get those funds and can bring those people on board.

    There were a lot of accomplishments over the last 3 or 4 years, and in fact the program is working better.

    Mr. YOUNG. I thank the Chairman.

    Mr. BOEHLERT. Thank you, Mr. Young.

    Mr. Johnson is next.

    Mr. JOHNSON. Thank you, Mr. Chairman.

    Let me ask you, Mr. Davis, besides getting to comment overall on Nationwide Permit 26 when it was proposed for reissuance last year, how does the general public, can you tell me, find out about and influence specific projects authorized under these permits?

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    Mr. DAVIS. For nationwide general permits, or general permits, there is no public notice requirement. For the development of the package of permits themselves, like the ones we just issued, there's extensive public involvement there through the Federal Register and through public notices that each of our districts issue. That's to get comment on the permits themselves.

    The individual actions that are authorized under those permits, there is no public comment involved for those types of activities.

    Mr. JOHNSON. Talking a little bit about the Tulloch ruling, testimony of one of the witnesses coming up, in looking ahead on the next panel, says that the Tulloch rule would severely hamper local government's ability to perform routine maintenance and operation of flood control and related water management systems. In your view, how does the wetland program currently address the routine maintenance and operation of the flood control systems and in your view, are changes needed in response to these concerns that I've raised?

    Mr. DAVIS. We have responded, Congressman, to that concern. That's one of the things that we did start regulating as a result of the Tulloch rule. But also as part of the nationwide permit package that we issued in December 1996, we issued a new nationwide permit for the maintenance of flood control facilities. So this provides substantial regulatory relief to those organizations that have to maintain these channels.

    Mr. JOHNSON. A question continuing on Tulloch. Is there any scientific reason not to regulate excavation activities in the same way that we regulate other dredge and fill activities?
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    Mr. DAVIS. No, sir, not in our judgment.

    Mr. JOHNSON. Are the impacts to water quality any less damaging?

    Mr. DAVIS. No, sir.

    Mr. JOHNSON. So if a landowner drives a bulldozer into a stream and starts shoveling around the stones from the bottom up to the banks, is that regulated now in the wake of the Tulloch case?

    Mr. DAVIS. It depends on how they're doing it. If they're doing it in land clearing, where there's more than incidental fallback, yes, it would be regulated. We believe that most land clearing activities that you described, I think, would be regulated.

    Mr. JOHNSON. Thank you very much. That's all my questions.

    Mr. BOEHLERT. Thank you.

    Dr. Ehlers.

    Mr. EHLERS. Thank you, Mr. Chairman.

    Mr. Blumenauer asked the first part of my question, but I will continue. You commented about the difficulty of reclaiming wetlands, that you're not making a great deal of progress. And frankly, I'm not sure you will make much progress, because most of those wetlands are paved over.
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    I'm just wondering what type of program you have in terms of replacement wetlands, and creating wetlands of various sorts, rather than reclaiming. I give an example, in my district, there's one community that has done very well by requiring that every commercial building have a retention pond, and that every housing development have a sizeable retention pond. It assists greatly in flood control, it's created new wetlands. Initially, they're very sculptured and they look artificial. But after a few years of aquatic growth and animal life developing, they begin to resemble natural wetlands.

    Are you doing anything to encourage that, or persuade communities to do that across the Nation?

    Mr. WAYLAND. Mr. Ehlers, we don't have a comprehensive, significantly funded national wetland and riparian area restoration program. The EPA 319 nonpoint source grant program, is being used to restore riparian areas and wetlands. We do require wetland mitigation to offset permitted losses under the 404 program. The Swampbuster program, the Wetland Reserve Program, the Conservation Reserve Program all attempt to get toward wetland restoration.

    I think restoration techniques have improved and advanced significantly. Where an area is paved, obviously it's not a good candidate for restoration. But there are many wetlands that have been drained or otherwise degraded, which with the simple restoration of the hydrology can function once again as they did in the past. But there is no substantial national program for wetland restoration.

    Mr. EHLERS. The second question, I mentioned in my introductory comments that I'm from the State of Michigan, which has its own wetlands program, perhaps not surprisingly, since we're surrounded by four of the five Great Lakes and our State is sometimes described as 10 feet of soil floating on the Great Lakes. How do you explain that other states have not taken the same route of passing their own wetlands law? Have you been encouraging them to in any way, or discouraging them?
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    Mr. WAYLAND. I'm sorry your colleague Mr. LoBiondo isn't still here, so I could congratulate New Jersey as having joined Michigan as the second State to assume the wetlands program.

    Mr. EHLERS. But aren't they assuming it under Federal law rather than their own law?

    Mr. WAYLAND. They have their own wetland protection law, which forms the basis for their State assuption. The State has to have an equivalent program that can be recognized under the Federal law.

    In addition to assumption, which a few additional States including Oregon are presently evaluating, we have a number of States that are operating programmatic general permits which Mr. Davis may be able to talk about in a few minutes. We have increased the wetlands grant program to States and others to the point that it now reaches $15 million a year, in hopes of increasing State capability and State interest in program assumption.

    But very frankly, many of the same controversies that have brought us to this hearing room in the past are features of wetland protection and regulation. And that together with the fact that there is not an operational grant mechanism as there is for most other environmental programs, has been among the reasons why States have not proceeded with assumption or programmatic general permits. We continue to work at this problem, we continue to encourage the States. We would very much like to see States operate this program where they can do so effectively, as they do with many other environmental programs.
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    Mr. EHLERS. Mr. Davis, do you wish to comment on any of the above?

    Mr. DAVIS. As Mr. Wayland indicated, there are several other tools, and State assumption, like Michigan and New Jersey now has, it's certainly one very effective way that States can become more actively engaged. And we certainly encourage that and would like more States to do that.

    But there's also another tool that we have that shows great promise, and that's the programmatic general permits. Congressman Gilchrest can certainly comment on the one in Maryland that we just reissued. That gives States a little more flexibility and another tool to take on more responsibility when they have their own programs in place that protect the resource at the same level that the Federal program does. And that's a very important threshold to keep in mind that the State program has to provide the same level or greater protection than the Federal program.

    Mr. EHLERS. I yield back the balance of my time, Mr. Chairman, and thank you.

    Mr. BOEHLERT. Thank you, Dr. Ehlers.

    Mr. Pascrell.

    Mr. PASCRELL. Thank you, Mr. Chairman.
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    I think we could agree that as we move toward abatement and partnership rather than prosecution that you've made great strides, the EPA and the Corps. Representing New Jersey, I think that we've made great strides as well. The initiatives are important.

    But there is a large part, obviously, that has been left to you folks concerning coastal waters, concerning major rivers. And it would seem to me, when we look at activity within my State, that a large part of those activities deal with excavation. Very concerned.

    What has been your experience and are you monitoring what goes on in excavation in order to protect our wetlands in New Jersey?

    Mr. WAYLAND. If I might, Mr. Pascrell, the New Jersey program, which was the second program to be assumed, in many respects is more comprehensive than the Federal program. It regulates certain activities and a number of pieces of geography that are not subject to Section 404.

    EPA maintains on behalf of the Federal agencies an oversight role with respect to the New Jersey program, as we do with the Michigan program and under which we evaluate a very small number of permits that the State issues. Generally, those have been determined ahead of time to be the ones with the greatest potential impact.

    New Jersey's program does conform to the Federal program as it pertained to excavation in instances where that excavation would have the effect of destroying wetlands. For purposes of regulation, we moved from a de minimis threshold that was based upon the quantity of material removed to the effect on waters of the United States. And that's a requirement of the New Jersey program as well as the Federal program, or was a requirement of the Federal program prior to the AMC decision.
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    Mr. PASCRELL. The New Jersey experience is one, and in Michigan as well, that needs to be duplicated. How do we do that? What do you do in your positions to precipitate duplication around the United States, which makes your job a lot easier?

    Mr. WAYLAND. In many cases where the State has a functioning program under State law, or exercises its 401 water quality certification in order to evaluate many of the factors that would be evaluated in the Federal program, the Corps has adopted parallel processing requirements, such that it's not a duplicative process but a complementary process.

    The roles and responsibilities of the agencies are spelled out in memoranda of agreement under the assumption process. And programmatic general permits are a valuable tool that affords somewhat more flexibility in terms of how much of the program the State is able or willing to take on.

    Assumption is a bit of an all or nothing proposition, although it's not quite all, because as you observed, it does exclude traditionally navigable waters. And it may be more than many States are willing to take on in an initial foray into substituting their programs for the Federal program. That's where programmatic general permits are particularly helpful.

    Mr. PASCRELL. And just one final question to Mr. Davis. Looking at the New Jersey and Michigan experience, are you satisfied that both of those States are living up to what they've taken on in terms of their own responsibilities? Are you satisfied this is the way to go in terms of protecting the very subject we're discussing today? Or do you need to monitor those States, just like all the other States?
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    Mr. DAVIS. I think overall we are satisfied. I think that we have to recognize, and we in fact have recognized, that this is a big task. If we're actually going to protect this important resource, and move on to a phase of actually increasing the resource, it's going to take the resources of Federal and State agencies and local agencies. We just can't do it or shouldn't do it alone at the Federal level.

    So we've got to rely on the States to do more. And we would encourage more States to become more actively involved, using the existing approaches.

    I do think there needs to be some Federal oversight or review periodically of the programs that States have. In fact, we consistently hear from the State wetlands managers that they would like that, they want that. They don't want to have the Federal Government completely walk away under any circumstances from the wetlands protection area.

    Mr. PASCRELL. Thank you very much. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you.

    Mrs. Kelly.

    Mrs. KELLY. Thank you, Mr. Chairman.

    I appreciate the two of you being here today, and I applaud the fact that you're concerned about preserving, protecting and enlarging the Nation's wetlands, if possible. That being said, I want to note that in reading the materials, I noticed that in NWP 26, you have lengthened the time, that notification requirement, that's from 30 to 45 days.
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    During that time, I want to know if you have considered what the economic impact of that would be on a business when you consider the fact that you're now talking about the State process and local people also. If you lengthen that time, it withholds a business from doing what they want to do. I don't disagree with it, I just would like to ask if you've considered that economic impact.

    Mr. DAVIS. We certainly consider the impacts, a broad array of impacts, on those types of decisions.

    Mrs. KELLY. The economic impact?

    Mr. DAVIS. Yes. If you look broadly at the nationwide permit packages, we think we've done some things that provide relief in some areas from a regulatory standpoint, and some things that perhaps increased regulatory process a little bit. This is an example where we added 15 days to this one particular nationwide permit.

    And the reason is that as I mentioned in my statement, Nationwide 26 is responsible for about 70 percent of the impacts of all the nationwide permits. We felt like that 30 days was not a sufficient amount of time for us to do the screening and the review that we need to do under Nationwide 26 to make sure that the activities are currently minimal.

    And in fact, there's kind of an unintended consequence of what we did in Nationwide Permit 26 that will help landowners. Let me try to explain what that is. In the old system, landowners who were going to impact less than one acre did not even have to notify the Corps of Engineers.
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    Well, many of them did anyway, because they wanted the confidence that their permit was covered under this nationwide permit, or perhaps, and we're finding more often, that the lending institutions require it anyway. Before they loan somebody money, they're going to have the landowner go to the Corps and verify that it's covered under the nationwide permit.

    Well, those, because they were discretionary, kind of went into a pile on some Corps regulator's desk and didn't get a high priority. With the new system, that clock starts running at the one-third acre level instead of the one acre level. So there's more discipline, actually, and the people I think will actually get quick turnaround overall than they did under the past process.

    Mrs. KELLY. Have you made actual changes in your department to ensure that?

    Mr. DAVIS. The rule requires that. I mean, the new permit process requires that, yes.

    Mrs. KELLY. So you know you have enough people and so forth? It really made me very sad to say you didn't have enough money when Mr. Young was talking with you, I want to make sure you have enough money to do your job in order to get these permits turned around very quickly.

    Mr. DAVIS. That's a very important thing, and this is a very labor intensive program. About 85 percent of the budget goes to pay for salaries, so we don't have a lot of flexibility.
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    Let's go back to the 45 day clock just for a second. If a landowner doesn't hear from the Corps within 45 days, the rule lets them go forward. They don't need to wait any more than the 45 days. So there's discipline there. If they don't hear from us, they can go forward.

    Mrs. KELLY. I want to know if you've done anything proactively to work with businesses to help them conform to regulation. I would like to see more of an emphasis on that rather than the businesses having to go to court. I'd like to see the money come back to working. What have you done?

    Mr. DAVIS. One of the principal things that we——

    Mrs. KELLY. I'm sorry, let Mr. Wayland have a shot at this one.

    Mr. WAYLAND. Well, Mike was on a roll there.

    Mrs. KELLY. That's okay, we'll let him have a chance. You'll have to speak fast.

    Mr. WAYLAND. I just wanted to say, Mrs. Kelly, that several years ago, we established a toll-free number, a wetlands hotline, that people can call for information if they have questions about the applicability of the program, requirements that need to be met, how to get in touch with their Corps district office, who has the jurisdictional responsibility in the area in which they are located. We think that's been very beneficial in terms of providing quick response to landowners with questions about wetlands.
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    In addition, we've made a number of grants through States to local governments to try to make better use of local building permit and planning processes to make sure that landowners are familiar with wetland requirements at the time they're going through those local approval processes, so that it doesn't become a sequential process in which you first obtain approval at the local level and then realize you need approval at the Federal level, but instead are on notice early in the process, so that these things can happen in parallel.

    Mrs. KELLY. Mr. Davis, can you put a quick shot in there on that?

    Mr. DAVIS. No, I was just going to say, you mentioned how we can work with local businesses. One of the things that we encourage and often do is what we call preapplication consultations. We try to work with developers before they get too far into the process, buying property and too far into the plans, so we can help them shape that project so we can avoid the impacts to the extent possible.

    Mrs. KELLY. How much time elapses between the time a business calls you and you are able to get somebody there?

    Mr. DAVIS. It would vary from district to district. Unfortunately, in some districts, it's too slow.

    Mrs. KELLY. Thank you.

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    Mr. BOEHLERT. Mrs. Emerson.

    Mrs. EMERSON. Thank you, Mr. Chairman.

    Mr. Davis, I'm glad to finally see you in person and want to thank you for all the work and help that you've given us in southern Missouri with regard to the St. Johns-New Madrid flood control project.

    Speaking of flood control levees, and since you all brought it up first, let me ask you this particular question. The Tulloch rule requires a permit for mechanized brush clearing of levees and other flood control structures. Difficult, delay, you know, I guess the maintenance of these levees and other flood control structures becomes difficult, delayed because individual permits were required.

    In the package of nationwide permits, the Corps proposed a general permit for levee maintenance. But before it could be used in a national baseline of maintenance, a study had to be done. Given this baseline study requirement, is the levee maintenance nationwide permit currently in use?

    Mr. DAVIS. Yes, Congresswoman, it will be in use. Although with the Tulloch rule at this point, the utility of this permit is not that great, because we perhaps wouldn't be regulating a lot of those activities until we resolve the Tulloch rule issue.

    Let me clarify that. The cutting of vegetation on a levee itself, the mowing and things that you do on a levee is not regulated. I think that's been very clear over the years, that we don't regulate that type of activity when you're out bush hogging or clearing vegetation off a levee itself.
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    It's when you go into the bottom of that channel and you excavate the material out that's accumulated over the years and perhaps we've seen channels that are filled in completely with sediment, and you have trees growing that may be very large trees. That type of activity would be potentially regulated under the Tulloch rule, yes.

    Mrs. EMERSON. Have you all done this baseline study?

    Mr. DAVIS. No, the baseline study is done on a channel by channel basis. So if you had a levee board or a district, they would come to the Corps and establish the baseline condition for a channel or a reach of channels and set that baseline. And that's what we work from in the future with this nationwide permit. But it's not a national program to do baselines. It's done on a case by case basis.

    Mrs. EMERSON. And have any been done, to your knowledge?

    Mr. DAVIS. I'm not personally aware of them, but I would guess that several have been. But keep in mind, the permits only became effective February 11th. So, we're only been in it about 2 months now in implementing this permit.

    Mrs. EMERSON. Mr. Wayland, do you know of any?

    Mr. WAYLAND. No, I have nothing to add.

    Mrs. EMERSON. Okay. Let me move on to a different subject. And I'll direct this to you, Mr. Davis. Even if your number of 500 additional individual permits is correct, do you believe that there will be additional man hours of review in order to comply with the preconstruction review requirements of the new nationwide permit rules?
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    Mr. DAVIS. We think there will be some incremental increase in work load for the Corps. And that concerns us, because we're already running a very stressed program with the resources we have. But in terms of the preconstruction notifications, we don't believe there will be a large increase for the reasons that I mentioned to Congresswoman Kelly, that in the past, a lot of people, even though they didn't have to, notified us for activities of less than one acre. So when we kind of added it all up, we don't think there's going to be a real substantial increase in the number of preconstruction notifications.

    Mrs. EMERSON. Can you put a number, possibly, on the average number of man hours that are required to review a preconstruction notification?

    Mr. DAVIS. It varies from application to application. Some of them are very straightforward, can be done in a matter of hours. Some of them may take days or weeks to get through, depending on the complexity of the project and the type of resource that we're dealing with. I think we estimate we'll still have around 13,000 or 14,000 preconstruction notifications annually to look at.

    Mrs. EMERSON. Okay, well, then given this additional work load, do you, can you assure our committee that you'll have sufficient manpower to observe the additional work load under existing budgetary limitations without increasing the time required to process the individual permits?

    Mr. DAVIS. Again, I don't think from the preconstruction notification (PCN) requirement itself it's going to be the reason we have additional work load. As you indicated, we do expect about 500 more individual permits a year. That will bump it up from about 6 percent of the total permit work, or for individual permits, to about 6 1/2 percent. So whether that's something we can deal with without any effect on performance, we don't know yet. That's probably about the same level that we had in fiscal year 1995, so we think we can manage it.
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    The problem we're facing, while we're on this subject, frankly, is a flat budget. And with cost of living and things like that, it actually has resulted in declines or cuts in the number of regulators. Some may suggest that's a good thing. But it does have a direct effect on our ability to respond to the public. And we would certainly support and hope that the Congress is supportive of the President's proposed increases for the budget this year.

    Mrs. EMERSON. Okay, thanks, Mr. Davis.

    Thanks, Mr. Chairman.

    Mr. BOEHLERT. Thank you, Mrs. Emerson.

    Mr. Davis, I want to make sure I'm clear in my own mind, because I don't have any levees in my district, but I know it's very important to Mrs. Emerson. Routine maintenance of levees, exempted from any permit requirement under Section 404?

    Mr. DAVIS. There are several things that could actually cover the routine maintenance. There's a general permit, there's an exemption under Section 404(f). There's the new nationwide permit that we issued for the excavation of material out of channel. So there's a variety of tools that we have that minimize or eliminate the need for permits for routine maintenance in most of these flood control channels.

    Mr. BOEHLERT. Well, you know, there's a good deal of discussion going on on the Hill right now, and there's some talk about what language might be included in the emergency supplemental appropriations bill.
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    And I am very sympathetic to the call from those who say that we need authority to maintain and repair our levees, for example. I had always been led to believe that the authority is there to maintain the levees, nothing more is required. And I wanted to develop specific language that would permit emergency repairs.

    Just to make it absolutely clear, I don't want anyone in America to think that the Government of the United States has a policy that prevents an emergency repair of a levee. I want to make that abundantly clear. But then those who have some question about that come back to me and say, we can't even maintain the levees without this detailed permitting process.

    So you can assure me that that is not so? Routine maintenance of flood control structures, including levees, is permitted without any permit?

    Mr. DAVIS. It's either covered by a general permit or an exemption under Section 404(f).

    Mr. WAYLAND. Emergency reconstruction of levees is exempt under 404 (f).

    Mr. DAVIS. We just did a thorough evaluation of the California situation, because there was a recent hearing on that. And we could not find one example where either the Clean Water Act or the Endangered Species Act delayed or impeded in any way the emergency reconstruction of any of the levees out there.

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    Mr. BOEHLERT. Would you repeat that?

    Mr. DAVIS. We could not find any example where Section 404 or the Endangered Species Act delayed the emergency reconstruction of any levee in central or northwest California as a result of the January 1997 flood.

    Mr. BOEHLERT. I could try to make a point by asking you to repeat it one more time, but I won't.

    [Laughter.]

    Mrs. EMERSON. Mr. Chairman?

    Mr. BOEHLERT. Yes, Mrs. Emerson.

    Mrs. EMERSON. I'd like to ask one follow-up question. What about eminent threat, rather than something that's already happened? In other words, if the integrity of a levee is threatened presently, and yet you expect that you're going to have severe flooding as a result of Minnesota or something else coming down, what's the status of that?

    Mr. DAVIS. That should be covered under the routine maintenance provisions of the general permit or the exemptions. And you can maintain these levees to their existing standards and heights and design without any or very little review from the Federal Government.

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    Mrs. EMERSON. How do you define very little review?

    Mr. DAVIS. Subject to the general permit you don't even have to notify us, for one thing. You can just do the work.

    Mrs. EMERSON. Privately?

    Mr. DAVIS. Yes.

    Mrs. EMERSON. Okay, thanks.

    Mr. BOEHLERT. Thank you very much. Mr. Bateman?

    Mr. BATEMAN. Thank you, Mr. Chairman.

    Mr. Davis, in your statement, I see the indication as to the number of permits granted and the time frame within which they are granted. And it doesn't seem to comport with the orthodox wisdom that I get from my constituents. You say, for instance, that a nationwide permit generally takes about a month, an individual permit usually takes more than a year to process.

    I'm sorry, that's not the statement I was looking at. Over 85 percent receive authorization under a general permit, and an average time of 11 days, less than 10 percent were subjected to a more detailed individual permit evaluation, where the average time was 104 days. Less than 1/2 of 1 percent of the 64,000 applicants were denied, applications were denied. That's the national, those are national statistics.
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    Is there a great deal of deviation from those figures from district to district?

    Mr. DAVIS. I suspect there will be some. I actually haven't looked at the data arrayed by district. So I really couldn't tell you. I suspect there will be some. But probably not a lot.

    Mr. BATEMAN. Would that data be available for the district engineer's office in, say, Norfolk?

    Mr. DAVIS. Yes, sir, we can run that information for the Norfolk district for you.
    [The information received follows:]

    [Insert here.]

    Mr. BATEMAN. I would like to have it. Because it just doesn't comport with the things that I've been told.

    You mentioned that if there was no decision by the regulators within 45 days, the permit applicant could proceed with his project. Is that true in all instances, or only in certain types of permitting activities?

    Mr. DAVIS. Those general permits the nationwide permits that have what we call the preconstruction notification requirement, most of them have a 30 day clock, Nationwide Permit 26 has a 45 day clock. But under, the rules are the same either way. If you are proposing to use that nationwide permit and you send an application to the Norfolk district and they don't respond to you within 45 days for a Nationwide 26 activity, then yes, you can go forward with your project.
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    And the other ones, again, have a 30 day clock, so the same rule applies.

    Mr. BATEMAN. These relate only, that statement relates only to instances where there's some form of a nationwide permit, or a general permit?

    Mr. DAVIS. That's correct.

    Mr. BATEMAN. Mention was made of Michigan and then New Jersey as having a wetlands protection regulatory scheme of their own. I'm intrigued to have you deal a little bit more specifically, how does the role of the Corps of Engineers and other Federal agencies differ in those States from what you routinely would be doing in other States which do not have a State regulatory regimen?

    Mr. DAVIS. In the States of Michigan and New Jersey, the Corps has a much less active program than we do in other States. There are still waters, for example, that we continue to have a program on, the traditional navigable waters, the Corps maintains jurisdiction over those. So we do have a program in some parts of the State, but certainly not like we would in other States that do not have or have not assumed the program.

    Mr. BATEMAN. In terms of the public policy involved here, if you've got a sound national wetlands protection regulatory regimen that proceeds on the basis of sound definitions, good science and we've made sure that it operates on the basis of common sense standards, why isn't it better to have just a national regulatory scheme and the economies of one system, one scheme, one agency that's responsible as opposed to having a multitude of agencies and entities who are pursuing the same policy objectives?
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    Mr. WAYLAND. Mr. Bateman, if I could, the Clean Water Act doesn't preempt State programs with respect to any form of activity that's subject to the Clean Water Act. It's not desirable to have duplication with no value added. But in many instances, States have programs which are complementary to the Federal program, and absent some Federal preemption, it's their prerogative to do that.

    Certainly for a State to become prepared to assume the Federal program, or to operate a program under a programmatic general permit in lieu of the Federal Government they need to have had some experience. They need to have had a program on the ground.

    Many State programs have been developed and conceived with just that in mind, that they should become the wetlands protection program, pursuant both to State law and the Clean Water Act. Where those programs are sufficiently protected, we would applaud that and welcome the opportunity to support assumption or a programmatic general permit.

    But I think a State couldn't reasonably expect to substitute its program for the Federal Government's if it were at a standing start, if you will. So I think that that's a basis on which some of each is probably appropriate in some circumstances.

    Mr. BATEMAN. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you, Mr. Bateman.

    Mr. Gilchrest.
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    Mr. GILCHREST. Thank you, Mr. Chairman. I will yield to Mr. Thune.

    Mr. BOEHLERT. All right, Mr. Thune.

    Mr. THUNE. Just a quick question for you, Mr. Davis. In your written testimony you had indicated that approximately 33,800 projects, or I should say activities were permitted each year under the previous application of NP 26. Then you mentioned that approximately 10 percent of activities previously permitted under NP 26 will now require individual permits.

    Ten percent, of course, of that number, is 3,380. Now, you and EPA have indicated that there are only 500 new individual permits per year that will result from all these changes, which presents a discrepancy. But I guess my question would be, since the Corps only issues approximately 4,000 new individual permits a year, how long would it take the Corps to process individual 404 permits if 3,380 additional permits were required annually to replace NP 26?

    Mr. DAVIS. Congressman, if it was in fact 3,000 additional individual nationwide permits, then we would have a very difficult time maintaining the average of 104 days that we have right now. I don't believe it is that.

    What we've looked at were the delta between the one acre, I mean the three and ten acre, and how many new permits would be in that category. The number that we came back with was 500. We'll correct the testimony for the record if the numbers are inaccurate or confusing.
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    [The information received follows:]

    [Insert here.]

    Mr. THUNE. That's all.

    Mr. BOEHLERT. Mr. Gilchrest.

    Mr. GILCHREST. Thank you, Mr. Chairman.

    I just have a couple of quick questions. One of them is, a few years ago we had this National Academy of Sciences study to evaluate the various kinds of wetlands across the United States from southern California to Alaska to Louisiana to the eastern shore of Maryland.

    How has the EPA and the Corps of Engineers adopted that kind of critical information into their program or is that adopted into the process? I understand that we are still working under the 1987 manual—is that correct?—with a few modifications along the way.

    Has that scientific study been brought into the process at all?

    Mr. WAYLAND. Mr. Gilchrest, the study concentrated primarily on the efficacy, appropriateness and scientific foundation of delineation methodology incorporated into the 1987 manual. And frankly other agency practice has been a regionalization of delineation based upon regional plant lists, regional temperature distribution, a variety of factors that account for the big differences in climate and in plant communities in this very large country.
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    So I believe that the 1987 manual, which the Academy found to be scientifically appropriate, has incorporated a number of elements that respond to differences in climate, differences in circumstance.

    Where we have, frankly, a ways to go, and an area that the Academy was only able to touch on, but did not evaluate in detail, is in better understanding and describing the differences in functions and values of wetlands, which can be varied within a relatively confined landscape, but also vary greatly from one part of the country to another.

    Mr. GILCHREST. So I guess to a large extent that study codified existing scientific information that was already in use?

    Mr. WAYLAND. I think it affirmed the scientific understanding as incorporated in the program.

    Mr. GILCHREST. Thank you. Mr. Davis mentioned the programmatic permitting process, for example, Maryland doesn't have the assumption like Michigan, Maryland has gone and has worked with the Corps of Engineers with the State programmatic permitting process. I will tell you something that you are already aware of, that there's a lot of controversy with that, especially with this recent 60 day notice of intent.

    I think the basic, there's a lot of reasons for the controversy with this particular program in the State of Maryland. One of them deals with not keeping track of the cumulative loss of wetlands.
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    And Mr. Davis, in your testimony, and we've been over this before, but as far as your statement on page three of the testimony, dealing with the nationwide permits, two explicit requirements for the general permit, the second one, the activities authorized must not result in more than minimal adverse environmental effects, either individually or cumulatively. And I guess I still have this hangup about cumulative.

    How can, you gave a basic answer as to minimal impact and how you evaluate that. But I have two questions. How do you evaluate cumulative impact? I mean, it is an assessment that we say we've lost these 3 acres, now there are 8 acres, now there's 100 acres and so on. How do you evaluate cumulative impact?

    And then at what point do you reach a limit where you've lost enough, where you can't lose any more?

    Mr. DAVIS. Certainly the second point is the more challenging question. But they are actually both very challenging. We have struggled, and when I say we, collectively the agencies over the years, to try to come up with better methodologies for assessing cumulative impacts. And only now I think that we're seeing the technologies improving in terms of our GIS systems and our imaging systems and other things that we now have that will help us get there. We also are very concerned about—

    Mr. GILCHREST. Can I interrupt just for a second? And I know the technical aspect of this is important. But what I'd like to add is, is there anything—you know, a lot of times we place too heavy a burden on the Corps of Engineers, saying, at the last minute, when somebody wants to come in, for example, with a place in Maryland called Chapman's Landing, that ''the Corps has to save us'' when in fact a part of that responsibility for preserving wetlands and net resource areas for a whole range of reasons resides with the local government, resides with the planning commission, resides with the State, citing a vision for the future for this reason.
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    And with that mix, with the Corps of Engineers, with the State Department of Natural Resources, with the Maryland Department of the Environment, with local planning commissions, do you see a greater need for enhanced communication in consultation with the full range of people in order to make, to have an understanding that mitigation isn't going to last forever?

    Pretty soon we're going to run out of land to mitigate into. Cumulative impact, even if it's just a half an acre, over the course of 100 years—and 100 years is not a very long period of time, especially at this stage of the arbitrary evolution of civilization.

    I think my time is up, Mr. Chairman, but I appreciate everybody's patience with me. I guess I want increased consultation.

    Mr. BOEHLERT. Do you want to comment on Mr. Gilchrest's statement?

    Mr. DAVIS. I think the important thing is to take those tools we now have and focus in the watershed context and integrate Federal programs. You answered the question, integrate Federal programs to the State and to the local government so that everybody's aware in the context of a watershed how important a particular piece of wetland may be and what the consequences of impacting that wetland might be on the watershed, downstream property owners, fish and wildlife, other things.

    We've got to do that, integrate it up and down. We've done it in the Federal program and I think we'll make better decisions.
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    Mr. BOEHLERT. Mr. Kim?

    Mr. KIM. Thank you, Mr. Chairman.

    I'd like to go back to this Nationwide Permit 26 again, which really bothers me. There are two questions. One is, you changed this policy, this discharging to isolated waters, which means it's not connected to anything, it's not adjacent to anything, it's all by itself. Now you change the date, I mean, affecting acreage, from ten acres to three acres. Also, you changed the policy on preconstruction notification from one acre to one-third acre. This is micromanagement.

    Isn't that contrary to Mr. Clinton's direction about downsizing Government and less regulations, more power to people? Why are you doing this? That's my first question.

    The next question is, this preconstruction notification from 30 days to 45 days, you lengthened. I think Mrs. Kelly asked the question, what economic impact would there be. I don't think you answered that. Would you answer that, also? What economic impact would there be from extending this preconstruction notification?

    Mr. DAVIS. Let me answer that one first. I don't believe that that will have any noticeable impact on the economics of these projects. I think many of these, the average time for a general permit decision is 11 days. So the record shows that for the most part, we don't take the 45 days of the thousands and thousands we do each year. The average time is 11 days.
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    Mr. KIM. Then why did you change it to 45 days? Why didn't you leave it at 30 days?

    Mr. DAVIS. We believe that in the context of Nationwide Permit 26, it was important to have that extra time when we needed it. Because we have this default value that at the end of 30 days, they could go forward with the project unless we—

    Mr. KIM. You just said you don't need it, an average of 11 days.

    Mr. DAVIS. The average is 11 days. But when you—

    Mr. KIM. Then why change it to 45 days? You're contradicting yourself. If 30 days is long enough, why do you extend it another 15 days? Because psychologically, they're not going to get it in until the 45 days anyway. So I don't understand this. Why would there not be an impact? Changing it to 15 more days certainly will change it, some kind of impact. I just don't accept that explanation.

    Mr. DAVIS. We continue to believe that because of the potential for impacts associated with Nationwide 26, the one that results in, as I said, 70 percent of the overall impacts for the program, we needed to pay additional attention to that permit. We now understand that while these are clearly isolated and small systems in the headwaters, they're also very important.

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    If you look at the Prairie Potholes in the midwest, they produce most of the ducks we have in this country. These are tenth-acre, half-acre, one acre wetlands all over the landscape that are clearly very important. Not only ducks, there's also indications that these things play a role in flood control. Perhaps the elimination of the Prairie Potholes contributed to some extent to the 1993 floods in the midwest. So these are more important than perhaps we all thought in the past.

    Mr. KIM. Then all this time EPA hasn't made a mistake, one acre was not accepted, so you found out that one acre is not acceptable, one-third acre is more responsible?

    Mr. DAVIS. We don't know what the exact right number is. What we're going to do, though, is phase it out altogether after 2 years, so that these acreages will not be an issue after December 1998. So we'll be going to activity-based permits. It will be clearly defined and then articulated which activities are covered. It won't be based on these types of waters.

    Mr. KIM. Mr. Chairman, I think one-third acre is a very small area. I think it's micromanagement, I think it's the wrong direction we are going.

    You didn't answer as to Mr. Clinton's direction to downsizing and more power to the people and less regulations.

    Mr. BOEHLERT. Thank you very much, Mr. Kim.

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    Anyone care for additional questions?

    [No response.]

    Mr. BOEHLERT. Guess not.

    Thank you very much. It's nice to have you both. Thanks again.

    Our second panel consists of Doug Harrison, General Manager of the Fresno Metropolitan Flood Control District. He's representing the National Association of Flood and Stormwater Management Agencies. And representing the Metropolitan Water District, Timothy H. Quinn, Deputy General Manager of the Southern California District, from Los Angeles, the City of the Angels.

    Mr. Harrison and Mr. Quinn, your statements will be made part of the record in their entirety. We ask that you try to summarize them and we will proceed.

    Mr. Harrison, you're up first.

TESTIMONY OF DOUG HARRISON, GENERAL MANAGER, FRESNO METROPOLITAN FLOOD CONTROL DISTRICT, REPRESENTING THE NATIONAL ASSOCIATION OF FLOOD AND STORMWATER MANAGEMENT AGENCIES; AND TIMOTHY H. QUINN, DEPUTY GENERAL MANAGER, METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, LOS ANGELES, CA

    Mr. HARRISON. Thank you, Mr. Chairman and members of the committee. It's a pleasure to be before you again.
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    I'm testifying today on behalf of the members agencies of our National Association of Flood and Stormwater Management Agencies. These members serve the stormwater needs of both urban and rural communities across the Nation. And our function is to protect the lives and property and economies of our local constituencies, and we appreciate your committee's interest in these recent judicial and regulatory areas, as they relate to the 404 regulation of flood control activities, specifically.

    Our testimony touches on a number of points concerning the background of flood control systems management, related Federal mandates, and the relationship of these issues to the Tulloch rule. And rather than restate our written testimony, we would try to crystallize the issues as we see them from a flood control perspective and add some brief points.

    I should note that it's important to respond, I think, to the Corps' answer to a question on the issue of levee damage and the floods in California. I think the answer unfortunately was incomplete. The maintenance of levees is not specifically a 404 issue, although there are some cases where it is.

    But we do have cases where 404 issues cause levees to fail. Section 404, as administered impairs the maintenance of the channels inside the levees and channel capacity is lost through sedimentation, or flow efficiency is lost through impediments to impairments flow that grow up within the channel itself. The water therefore goes over the top of the levees much sooner. The rate of levee failure is increased as the capacity of the leveed channels decreases. And that most certainly is an issue under 404.

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    Flood control projects are authorized by—

    Mr. BOEHLERT. Excuse me, Mr. Harrison, that's not part of your testimony, but would you be able to provide the committee with specific examples?

    Mr. HARRISON. Yes, sir. There are a couple of examples that are cited in our testimony where we've had cases with maintenance problems on levee channels and failures that occurred in storms in the southern California region. But we could provide others as well.

    Mr. BOEHLERT. All right, thank you very much.

    Mr. HARRISON. As I noted, flood control projects are authorized by elected officials at the State and local and national levels. And they're designed to protect people and their homes and their businesses and the economies of our communities. Before that work is done, those projects and their long term operations and maintenance are reviewed for environmental impacts. Corresponding mitigation based on the design life of that project, is included in the project plan.

    I think it was the recognition of the project approval process that caused Section 404 to include an exemption of maintenance and repair of flood control structures. In 1993, the Tulloch rule was promulgated in a way that we think circumvented that exemption that had been provided by the Congress for the maintenance of flood control projects. It did so through this incidental fallback theory that you have already addressed this morning.

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    Permits for maintenance activity have frequently treated the maintenance work as though it were a new construction project, and permitting and mitigation requirements were frequently reimposed every time the maintenance work was re-undertaken. The effect of the rule in many cases has been to seriously impede flood control systems maintenance work.

    Part of that happens because of the interrelationship of a number of regulatory requirements; 404 permits can take years to obtain and we would have some difference with the time frames that you've heard. We think there are data that aren't necessarily included in the averages presented to you.

    The process involves multiple regulatory steps, general environmental reviews such as NEPA and corresponding State reviews, State fish and game, Federal Fish and Wildlife Service, Section 401 certification, Endangered Species reviews, and historic preservation reviews. All of those are tied into this whole process that makes the maintenance of projects very, very difficult now.

    Let me conclude with this emphasis. The more that the Tulloch rule or a similar rule is allowed to impair the necessary maintenance of authorized flood control systems, the more negative will be the long term results. When projects don't work correctly, that is, flood control projects don't work correctly, people get hurt, people get killed, homes are destroyed and businesses are lost. In many cases, some of the valuable environmental wetland areas are blown out by uncontrolled flood waters themselves.

    We think it's essential that the Congress take the necessary action to reaffirm its exemption of the maintenance and operations of authorized projects. And we thank you for the opportunity to appear and submit these comments.
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    Mr. EHLERS [assuming Chair]. Thank you very much, Mr. Harrison.

    Mr. Quinn?

    Mr. QUINN. Thank you, Mr. Chairman and members of the committee. We very much appreciate this opportunity to express some of our views on this important piece of legislation that affects us.

    I'm here today to offer you the perspectives of a hands-on organization. For point of clarification, Metropolitan serves water not only to Los Angeles, but to 27 member agencies and more than 200 cities that stretch from Ventura on the north to the Mexican border on the south.

    We operate a system that includes seven reservoirs, nearly 800 miles of pipelines, distributes and pumps water through a 5,000-plus-square-mile service area. All told, we provide all or a significant part of the water supplies for 16 million Americans and an economy that's close to half a trillion dollars a year in income generation.

    At the same time, certainly over the last decade, Metropolitan has, I believe, earned a reputation for environmentally progressive actions. I live in a world where you can't get your job done unless you find ways to find that balance that some members were talking about before, so that we can have a strong economy and a better environment. And it's from that pragmatic perspective of accomplishing balance out there in the field that we approach the Clean Water Act and do have some concerns about the status quo.
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    Status quo is not acceptable to us. We are looking for change, and we are hopeful that it's time to promote a consensus based piece of legislation that strikes a reasonable middle ground balance that can be broadly supported by the various interest groups.

    In a nutshell, what Metropolitan is looking for in the Clean Water Act is something that allows us to go about our business, to provide water supply to the public, to allow us to do that in an environmentally sensitive way, but perhaps most importantly to minimize the unnecessary cost and delays that we believe characterize the existing system.

    Rather than go into a lot of detail, let me pick just one example. My testimony includes specific examples on wetlands and other policy areas of interest to Metropolitan. But in the interest of time, let me focus on just one example, a real-world, on the ground project that we are trying to deal with today.

    In order to make sure that the Southern California economy remains healthy in the future, Metropolitan has embarked on a $4 billion capital improvement program. The largest single element of that program is a $2 billion reservoir, one of the largest public works projects in the country that's now under construction in Riverside County, in our service area.

    In addition to the reservoir, a pipeline that we call the inland feeder that is necessary for bringing water into that reservoir for protection against earthquakes, when our systems might be cut off, and for better operation of our imported water systems.

    The inland feeder is a project in which we have a lot of interface, happy and some unhappy, with the Clean Water Act. It's a $1 billion project necessary for the health of a half a trillion economy. That project by itself will employ nearly 1,000 workers when it's under construction.
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    To build the pipeline, we interfaced with a lot of small wetlands issues, typically far less than the 10 acre limit. Previously, we would have used Nationwide Permit Rule Number 26 to deal with the permitting requirements for that project in a timely and low cost way.

    But in the absence of rule 26, we are deeply concerned about unnecessary delays, costly delays, on putting that project into motion. To us, the cost would be measured in millions of dollars for staff time for additional permitting activities. Probably more important, this is a project that's ready to go. But it could be delayed for as much as 18 months, thereby delaying the creation of 1,000 jobs in the southern California economy.

    What we're looking for in legislation is something that allows this balance between the environment and the economy of California, but in a way that doesn't expose us to this kind of unnecessary delay.

    As I mentioned, we have a number of other areas of specific interest. In the interest of time, I'll leave that to the written testimony. But I'll be glad to answer any questions about it from members of the committee.

    Mr. EHLERS. Thank you very much, both of you.

    Just a few questions. You heard in the previous panel some discussion about the maintenance requirements for levees and other flood control devices, and whether or not the Endangered Species Act is creating problems for maintenance. Have you encountered any problems of that sort in your operation? Or are you aware of States where that has been a major problem?
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    Mr. HARRISON. The environmental review package that is involved in flood control systems maintenance projects and the related permitting process requires all of those protected areas to be examined. This review process includes endangered species review, and historical preservation site reviews, even when you're maintaining projects that have been in existence for long periods of time.

    It is a significant time and regulatory constraint to go back and review over and over and over again these matters which have been previously addressed through the environmental clearances on these projects. It creates delays and additional cost in getting the maintenance work done on these facilities.

    Mr. EHLERS. So you perceive it to be a problem?

    Mr. HARRISON. It can certainly be a problem, both in process and in some places as to the substance of the work.

    Mr. EHLERS. Do you see a role for the flood control management agencies in the creation and improvement of wetlands, particularly the incorporation of created or restored wetlands, as a means of non-structural flood control?

    Mr. HARRISON. I think there is a very direct relationship between flood control and the recognition of preservation of existing wetlands and the creation of new wetlands. We have done that in the projects in my own community. We are also developing a major habitat preservation plan working jointly with our local wildlife officials, that plan recognizing the new wetlands created in the structures that we have provided. There are areas where they are somewhat natural to the environment of that area. Our local environmental folks are very pleased with that result.
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    Mr. EHLERS. Mr. Quinn, what would you do to make the 404 program more efficient?

    Mr. QUINN. In general terms, in picking up on some previous comments, I think there's a perception that the only good regulation comes from a centralized regulator, typically here in Washington. I would create incentives for those out there closer to the resource to strike consensual arrangements amongst ourselves to solve these problems at a local level and minimize the degree to which you have detailed oversight of a centralized regulator, who typically doesn't understand your problems as well as you do.

    In Metropolitan's case, we typically are not, it's not an argument over how much you spend on mitigation or what you do for balancing economic and environmental concerns. We recognize that we have to approach things through coalition politics, dealing with the local interests that are close to the environmental resources, both in southern California and our major water supply sources, from the Colorado River and the State water project.

    Sometimes, activities coming from Federal regulators in Washington actually are part of the problem, when you're trying to put together those consensual coalition building activities. So again, in brief, I'd look for ways to provide incentives to get these problems solved at the local level, with as little Federal explicit oversight as possible.

    Mr. EHLERS. In the earlier discussion you heard reference that Michigan and New Jersey are the only States that have a wetlands law and have the responsibility delegated to them. Has California considered that? Have you advocated that California consider that, so that the decisions will be at least closer to you than they are now, and perhaps might be delegated to you?
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    Mr. QUINN. I confess I'm surprised to find that there's any environmental law that doesn't exist stronger in California than anywhere else in the Nation. I have not personally investigated that question. But I will be glad to do so and provide a report back.

    Mr. EHLERS. It seems to me that would be one action that could be taken. And personally, having served in local government and State government and now the Federal Government, I'm a great believer in trying to take care of the problems as close to the source of the problem as you can. So I sympathize with your comment.

    But my question is, what sorts of mechanisms do you think would be necessary to protect the interests of others, while at the same time delegating more responsibility to individuals such as you?

    Mr. QUINN. I'll try to be directly responsive. We regret the loss of Nationwide Permit Rule 26. In our case, we don't believe it was something that was being used in any way whatsoever to abuse the broader goal of restoring wetlands or no net loss. Sometimes, when things are coming from a centralized position and you have a generalized rule like that, you have a lot of intended consequences.

    We frankly doubt, when you look at the merits of our situation, that the more time intensive mechanisms are going to be justified. But we're wrapped up in this large, what's happened on a nationwide level, and again, we're looking for more specificity, more specific circumstances that fit us instead of a nationwide mold.
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    Mr. EHLERS. Thank you.

    My time has expired. I'm pleased to recognize the gentleman from Wisconsin, Mr. Johnson.

    Mr. JOHNSON. Thank you, Mr. Chairman.

    Mr. Harrison, your organization has a history of recognizing the importance of wetlands in controlling floods and reducing the impact of the quality and the quantity of stormwater runoff. I wonder if, and you talked about the Tulloch rule a little bit, if you acknowledge the harm that can result from activities which the Tulloch rule sought to remedy, particularly in the additional threat from floods or degradation of water quality. Your testimony doesn't discuss the availability of nationwide permits or the maintenance of existing flood control projects, those number 31 nationwide permits.

    I wonder if you would comment on the availability of these nationwide programs and statutory exemptions addressing the concerns that you brought up in your full testimony here about Tulloch and why the general permits aren't adequate.

    Mr. HARRISON. First, the new nationwide permit 31 was just issued February 11 of this year. I don't know that anyone has had enough experience with it to know if it is well constructed to meet the needs of the operation and maintenance of existing flood control systems. There are some areas within that permit which are problematic on their face.
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    It excludes the removal of sediments and encroaching vegetation in the part of the project that might be a natural channel. It does not base the permit on the operations and maintenance plan that was subject to the original project design and environmental reviews and clearances and mitigations. Yet, it would develop a new maintenance plan delineation that is submitted with the permit application. In fact, the applicant flood control agency may have to redo that plan over and over again if there is some intervening time loss between maintenance activity, with the result that system capacity is lost.

    The bottom line is that projects were designed to provide a certain level of flood protection. As sediment builds up in those facilities and as new emergent vegetation moves into those ssediments facilities, and you no longer provide that designed level of protection. Smaller floods now create the damages that the projects were built to protect. The losers in that process are the Federal Government and the local agencies that paid for the project, and the local folks whose communities, homes, and businesses were to be protected by those facilities.

    It seems that there is no perfect answer. There is a required balancing where the public interest and need for public health, safety and protection is on one side of the issue, and appropriate environmental protection is on the other.

    Mr. JOHNSON. So you might suggest revisions to Nationwide Rule 31? You're saying you haven't used it?

    Mr. HARRISON. I have not used it yet. We will only know with the passage of time whether it's a functional tool that meets the needs of these communities to have their systems maintained.
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    Mr. JOHNSON. Overall, would you agree of the need to preserve wetlands, to help reduce flooding?

    Mr. HARRISON. In many cases, yes.

    Mr. JOHNSON. And just a question on the timing on the permitting process, I know you were when we heard about the average time of 11 days in the permit process, and obviously, it doesn't sound like that's what you were experiencing.

    Mr. HARRISON. No, sir, that's correct. I just went 2 years to get a 404 permit to build a fence around an area where we're going to construct an 80 acre detention facility. My experience was a little different.

    Now, the 2 year timeframe was the time to go through all of the required steps, including the wetlands delineation process and then the application for the permit. So, if you look at just the time for that the permit to actually move across the district engineer's desk, maybe that is 11 days. But, if you look at the entire life cycle of the permitting process itself, you will find it's something totally different.

    Mr. JOHNSON. Are you opposed to the Tulloch rule overall? And is it based solely on just the maintenance activity?

    Mr. HARRISON. Our addressing of the Tulloch rule, yes, goes to its impact on the ability to maintain flood control systems. If there were other problems the rule was intended to address, perhaps there needs to be a more targeted tool to address those other problems, and thereby allow the Congress to recognize the unique needs for maintenance of existing flood control systems.
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    Mr. JOHNSON. Thank you very much.

    Mr. EHLERS. Thank you very much for your testimony. We appreciate hearing from you.

    Next we will introduce panel three. Fortunately we have a large extended table.

    First will be the Southern Environmental Law Center, Mr. Derb Carter, Attorney, representing them. Next, Mr. Glen Spain, from the Pacific Coast Federation of Fishermen's Associations. Followed by Doris Wilson from Louisville, Kentucky. Next we have Robert Szabo from the National Wetlands Coalition, followed by Darrel Seibert from the National Association of Homebuilders. Ronnie E. Duncan, National Association of Industrial and Office Properties. Mr. James R. Thomas, Jr., from the American Consulting Engineers Council. And Jonathan Tolman, from the Competitive Enterprise Institute.

    Now that everyone is settled in, we'll turn first to Mr. Carter, from the Southern Environmental Law Center.

TESTIMONY OF DERB S. CARTER, JR., ATTORNEY, SOUTHERN ENVIRONMENTAL LAW CENTER, CHAPEL HILL, NC; GLEN SPAIN, NORTHWEST REGIONAL DIRECTOR, PACIFIC COAST FEDERATION OF FISHERMEN'S ASSOCIATIONS, EUGENE, OR; DORIS WILSON, ON BEHALF OF FLOOD VICTIMS, LOUISVILLE, KY; ROBERT G. SZABO, EXECUTIVE DIRECTOR AND COUNSEL, NATIONAL WETLANDS COALITION, WASHINGTON, DC; DARREL SEIBERT, PRESIDENT, SEIBERT DEVELOPMENT CORPORATION, HUDSON, OH, ON BEHALF OF THE NATIONAL ASSOCIATION OF HOMEBUILDERS; RONNIE E. DUNCAN, DIRECTOR AND VICE PRESIDENT, PUBLIC AFFAIRS, NATIONAL ASSOCIATION OF INDUSTRIAL AND OFFICE PROPERTIES, BOCA RATON, FL; JAMES R. THOMAS, JR., P.E., PRESIDENT-ELECT, AMERICAN CONSULTING ENGINEERS COUNCIL, SALISBURY, MD; AND JONATHAN TOLMAN, ENVIRONMENTAL POLICY ANALYST, COMPETITIVE ENTERPRISE INSTITUTE, WASHINGTON, DC
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    Mr. CARTER. Thank you, Mr. Ehlers. My name is Derb Carter. I'm an attorney with the Southern Environmental Law Center in Chapel Hill, North Carolina.

    I've seen over 15 years the Federal wetlands program up close and on the ground. I was a lead attorney in the Tulloch case in North Carolina and my client, the North Carolina Wildlife Federation, is a party to the AMC case that we're also discussing today.

    The two official subjects of this hearing, the Corps decision to phase out Nationwide 26 and the decision in the AMC case are complicated and technical. But the basic thread that ties them together is not. In each case, wetland developers and their attorneys are grasping at legal technicalities to keep profitable loopholes open long after the damaging environmental consequences of those loopholes are beyond doubt.

    The first of those loopholes is the periodic failure of the Corps to regulate excavation activities in wetlands. This was closed by the Tulloch rule in 1993. That rule arose out of a case in coastal North Carolina that's been mentioned previously today. I think it's very important for this committee to understand the facts that gave rise to that case.

    It was brought to our attention by two neighbors of these developments. One of them was suffering from flooding from the drained wetland water being dumped on their property. The other was a fisherman who was concerned about the impacts of draining those wetlands into the tidal creeks and estuaries from which they took oysters and clams.

    When we investigated, we found that at both sites, the developers had excavated in wetlands a system of drainage ditches to drain the wetlands specifically to avoid the permitting requirements of Section 404. When we examined the files maintained by the Corps, we found that they had determined on frequent site inspections that dirt was being discharged as a part of this excavation but that it was de minimis and not subject to regulation.
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    When we examined the law, we concluded that it's very clear on the face of Section 404 that a permit is required for the discharge of dredged or fill material in wetland, without any limitation on the face of the statute regarding the amount of dirt that is discharged in the wetland. In fact, Section 404(f)(2) states that any discharge that changes the use of a wetland for flow and circulation is impaired, or reach of the wetland reduced requires a permit.

    Certainly the law should require permit for discharges associated with the installation of ditches to convert over 700 acres of coastal wetlands in North Carolina to residential and commercial development. The impacts on these developments have been substantial. The State has permanently closed to shell fishing the tidal creek that received drainage from these developments. Neighboring properties are still being flooded from the water that's released from these two developments.

    I've enclosed with my statement a recent article with a picture from the local newspaper that shows one of these developments that is flooded after only moderate rainfall. It's unfortunate that the concerns of the home builders, who have been challenging these actions, do not extend to the unsuspecting homeowners that have invested their life savings in houses built on these drained wetlands.

    These facts led to the promulgation of the Tulloch rule, which requires a permit for any discharge that destroys or degrades a wetland. We believe this is an eminently sensible rule, fully consistent with the purpose of Section 404, to protect our remaining wetlands from unregulated destruction.

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    I'd also note that this rule has received bipartisan support. It was proposed by the Bush Administration and adopted in final form by the Clinton Administration. But no sooner had the rule been adopted than the American Mining Congress filed suit against it, claiming that Congress never intended the Corps to regulate excavation activities, even when this amount of wetland destruction was involved. The decision from the court was unexpected, and to our minds, unfortunate. And like the Corps, we disagree with the decision, and are appealing it.

    Substantial environmental damage will result if the Tulloch rule is not enforced. In the meantime, what should Congress do? My respectful recommendation is to let the judicial process take its course. However, when reauthorization does happen, everyone has agreed for years that to draw a distinction between filling and excavation in the regulatory program is senseless and unfair, and Congress should explicitly include excavation in a list of regulated activities to remove all doubts.

    Now I'll turn to Nationwide Permit 26, which as we know has been changed, previously it authorized wetland fill up to 10 acres. Let me tell you what's going on in North Carolina. In coastal North Carolina, this is not an alarmist environmentalist, the State has declared a water quality crisis. Our coastal rivers and estuaries are choked by excessive nutrients.

    A recently discovered toxic dynoflagellate is killing fish by the millions, and we've had a moratorium on commercial fishing licenses now going into its third year. As a matter of fact, Governor Hunt tomorrow will hold a press conference to announce emergency measures to address this nutrient enrichment.

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    These headwater wetlands that are affected by Nationwide Permit 26 perform critical functions in removing nutrients from these waters. And in the area of North Carolina that is developing, the average size of a wetland is one acre. So under the previous version of Nationwide Permit 26, half of these wetlands in North Carolina that are performing this critical function of reducing nutrient enrichment of our estuaries would have been covered by 26 without public review, comment or agency review. Lowering that threshold to one-third will slow the loss.

    I think the environmental community wants to work with the Corps to change this program into one that will address activities that truly have minimal individual and cumulative impact. Not so, unfortunately, the Association of Home Builders, who have taken to the courts in an effort to hang on to this scientifically bankrupt loophole a little longer.

    In conclusion, ultimately excusing activities like excavation from review under Section 404 or approving projects with significant cumulative impacts without real review as Nationwide Permit 26 does feeds the profits of a few at the expense of everyone else. Last Congress, some developers tried to persuade this body to increase loopholes in the wetlands program and increase the public protection of this valuable resource. They failed. Now they've turned to the courts.

    I urge this subcommittee and the Congress to let the judicial process run its course. Let the Administration continue to fine tune and improve the program. And in the next reauthorization, strengthen Section 404 so that these loopholes can never be reopened again.

    Thank you very much.

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    Mr. BOEHLERT [resuming Chair]. Thank you very much, Mr. Carter.

    Mr. Spain.

    Mr. SPAIN. Thank you, Mr. Chairman and members of the committee.

    My name is Glen Spain. I'm the Northwest Regional Director for Pacific Coast Federation of Fishermen's Associations, or PCFFA. We are the largest organization of commercial fishermen in the west coast. There's a lot of talk about the value of wetlands. I would like to underscore that and tell you how valuable it is for the Nation's commercial and recreational fishing industry.

    Fishing in all its forms contributes roughly $111 billion to the Nation's economy every year, and supports $1.5 million family wage jobs. These are economic impacts in every district in this country. In coastal districts, the impact is commercial fish. In inland districts, it's recreational fishing. And in all districts, it is wherever seafood caught in U.S. waters is consumed or sold or purchased.

    This industry is extremely dependent on wetlands in this country. Roughly 71 percent of all the harvest of commercial and shellfish is all of species that are dependent for some portion of their life cycle on wetlands. For the recreational fishing interests inland, it's even more wetlands dependent.

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    Let me give you some examples. In the west coast, the west coast northwest salmon industry produced in 1988 $1.25 billion to the Nation's economy in that region, and supported some 62,000 jobs. That resource is worth, at that market rate, worth $39.5 billion to the economy.

    That resource is also 100 percent wetlands dependent. Salmon spawn in inland waters and need fresh, unpolluted inland waters. They are dependent on estuaries, which have to remain biologically intact. And they are dependent on wetlands all throughout their life cycle.

    Another good example is the Gulf shrimp industry, which is a resource which produces $244 million a year in 1991 dollars. I think it's more now. That resource is 100 percent wetlands dependent. That is where those shrimp originate. And the vast majority of the biological resources that built our industry, one of the Nation's largest and oldest industries, is from wetlands. That resource in the Gulf shrimp industry is a $7.7 billion resource.

    Everywhere you look, crabs, halibut, bluefish, lobsters, virtually all shellfish, a multitude of other species, are dependent on wetlands for part of their life cycle. Another issue is flood control. The way I like to think of it is, wetlands are like sponges on a table. If you pour a pitcher of water on a table, if you have enough sponges there, it won't hit the floor. If you have one sponge there, you've got water in your living room.

    One acre of wetlands to a depth of 12 inches will contain, safely contain, 330,000 gallons. In other words, paving over that one acre of wetlands will put 330,000 gallons of water somewhere else. If you pave over a wetland, that water will still reign. And it will go somewhere. And all to often unfortunately as we've seen the last few years, it goes into peoples' living rooms.
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    One of the most effective, cost efficient ways you can prevent floods in this country is to protect, maintain and if at all possible, restore wetlands in this country. We are still losing wetlands. The NRC report and virtually every credible scientific report indicates that we are losing wetlands.

    We have been able, through the Clean Water Act, to reverse not at all, but at least to slow down the loss of wetlands. And that unfortunately, some people argue that we ought to throw that out now that we've accomplished the job. That's very much like saying that the crime rate is down now, so let's fire all the police.

    I think that the Clean Water Act is doing its job. It can certainly do it more effectively and more efficiently. And there are a number of reforms that I've indicated in my testimony, including permit deadlines, much better basis on good science, and I'd refer to the NRC report, Wetlands Characteristics and Boundaries, as the best available science on definitions.

    It has to be properly funded. If we want the agencies to do an expeditious job, we have to fund them. It makes no sense to double their workload and have their budgets on a periodic basis. We need speedy, inexpensive, dispute resolution mechanisms. And we need to, and those already exist in Federal law and in many States. And those need to be integrated into the process.

    We also need to have, underscore the cumulative impacts analysis that we have to go. We really need a no net loss.

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    Two concerns I want to address in conclusion, the Permit 26 problem and the Tulloch rule problem. The Permit 26 problem is clearly a huge exemption, and it's never been looked at in terms of cumulative basis. My basic philosophy is, if I go bankrupt $100 at a time or $1 at a time, I'm still bankrupt.

    Essentially what we've been doing is nickel and diming the destruction of wetlands all across the landscape. And the cumulative impact will lead us to the same place, and that is loss of a major resource. Wetlands resources already have cost our industry roughly $27 billion, 450,000 jobs directly attributable to habitat loss, much of which is wetlands loss.

    The final thing on the Tulloch rule, I'm a common sense guy, we represent commercial fishermen, we are commercial fishermen, we look at the Tulloch rule in another arena. Say somebody wanted to steal your desk. Well, if they just carted it away, that would be theft. But if they move it to the hallway, it's no longer your desk and it's fair game. That essentially is what the Tulloch rule says about wetlands. Drain it, it's not wetlands so you can fill it. That's a huge loophole and I think it may require Congressional action to plug that.

    Thank you.

    Mr. BOEHLERT. Thank you very much.

    Our third witness, we're going in the order our witnesses were introduced, Doris Wilson of Louisville, Kentucky. Ms. Wilson, I'd like to thank you. You're a teacher and educator, you're taking time away from the classroom to share your thoughts with us, and we very much appreciate it.
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    Ms. WILSON. I would like to thank you for inviting me, also.

    Thank you for the opportunity to address this committee today. My name is Doris Wilson, you already know that. I am from the Louisville, Kentucky area. I was born in Bowling Green, Kentucky, and moved to the Louisville area around 1960.

    I have lived in my home since 1978 in the Prospect area, and that's for about 30 years. I teach elementary school, and I am a single parent with two boys, one still living in the home.

    I want to talk about a topic of increasing concern to many Americans, protecting our families and homes from floods. I am speaking on behalf of thousands of flood victims who cannot be here today to ask you to do more, much more, to protect us from flooding.

    I don't ever recall feeling as desperate as I felt on March 1st, 1997, and I truly hope this doesn't ever happen again. I must admit that now I have, because of this experience, a deeper respect and compassion for the thousands who also have had to endure floods in their lives.

    I do realize that some of the flooding is inevitable. However, most of the more severe flooding is caused by man's tunnel vision of economic gain. Developers who put their own greed before the needs of their neighbors are truly egocentric in nature.

    Some developers are quick to talk about established neighborhoods, becoming good neighbors and working together. In any relationship, it takes all parties working together. Destroying homes in established neighborhoods and placing lives in danger, in my opinion, is not a characteristic of a good neighbor.
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    I have studied the Federal wetland destruction program and found out, I am not alone. The whole Federal program is a flood disaster in progress. In the last 4 years, floods have pushed millions out of their homes, killed over 500, and cost property owners and tax payers over $33 billion.

    The Army Corps increases flood risk by granting over 90 percent of the wetland destruction permits in the Nation and Kentucky. The State of Kentucky has already lost about 80 percent of its wetlands. No wonder the Louisville Courier Journal recently said our county was designed to flood.

    As a teacher, rules are one of the important tools that we use daily. So I would like to lay out five basic rules to help protect our families and homes from flooding.

    One, those who are responsible for the mess should clean it up. The developers who destroyed all these wetlands and built all these houses in flood plains should pay to clean up the mess. The developers should pay to restore my house, not the Federal Government, and not my insurance company.

    It is just simple decency. If Congress won't back flood victims' rights, maybe we need to look to the courts.

    Number two, don't do things that hurt people. No one has the right to flood someone else's home or increase another family's risk of flooding. Congress should stop the building in flood prone and flood plain areas as well as wetland destruction permits.
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    Congress should require a flood risk assessment on each and every wetland permit, destruction permit, and assess the increased flood risk and warn the neighbors about it. In my case, it was so noted in the planning and zoning layout that my neighborhood had drainage problems. We should reject any permit that increases flood risk to all of our families and homes.

    Number three, contribute your fair share. See how Congress gives billions of our money to developers for roads, sewers, and cheaper flood insurance. The developers repay us by destroying wetlands and flooding our homes.

    It makes no sense. Make those who profit pay the full cost of wetland destruction and flood disaster costs.

    Number four, when peoples' lives are at stake, be conservative. We have lost too many wetlands already. Kentucky lost over 80 percent, and the Nation has lost 50 percent. The developers should have to put it back the way God made it. If someone wants to destroy a one acre wetland in my neighborhood, they should restore eight acres there to soak up flood water. Also, they should not be allowed to build until a new wetland is working.

    Number five, stop doing irresponsible things, like easy wetland destruction permits. Congress should also do away with all these easy wetland destruction permits, like Nationwide 26 and 29. Why would the Government make it easier to build in a place they know floods? These permits just encourage more flooding, wetland destruction, disaster and loss of lives.

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    I have here to my right pictures showing the destruction of the wetland in my community. Also, I have brought a tape that shows what happened. It shows the destruction of the wetland and also flooding on March 1, 1997.

    I thank you for giving me this opportunity to speak before you. Thank you.

    Mr. BOEHLERT. Thank you very much Ms. Wilson.

    Mr. Szabo?

    Mr. SZABO. Thank you, Mr. Chairman and Members of the committee.

    The National Wetlands Coalition was formed in September 1989 for the single purpose of encouraging Congress to revisit the 404 program legislatively. This is our fourth Congress where we will have been making that pitch and supporting legislation. We hope that perhaps this Congress, this year, on the 20th anniversary of the last time the Congress has dealt with this issue, would be the year that perhaps that can happen.

    We agree with many of the comments made that one of the problems with this program is that it has evolved more than it has been designed by act of Congress. And we think the time has come that people can no longer support the status quo, people on either side of the issue cannot live with the status quo. So perhaps the time has come to deal with this issue.

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    Let me address the two issues that the Committee noted for comment today and add one other that is related. First of all, our Coalition, from day one, has supported the expansion of the activities to be regulated under Section 404 to include excavation and drainage. The legislation that was reported by this Committee in the last Congress did that. We support that expansion as part of an overall reform of the program that addresses some of the concerns that the regulated community has had with this program.

    But we do agree that if you're going to have a regulatory program, and we agree you should have a regulatory program, that it should cover excavation and drainage, as well as the discharge of ''dredged and fill material.'' The reason that clause is in there is what Mr. Horn asked this morning. How did we get from a program that was regulating discharges of dredged material into navigable waters to one that's doing what it's doing today.

    Nationwide permits. The simple truth is the program cannot operate without nationwide permits. The Corps struggles to issue 7,000 individual permits a year. The 104 days they say they spend in issuing an individual permit is only the period after you have gone back and forth with them to have your land delineated and to have all the correct information put into the permit. Then it may take an average of 104 days for them to make a decision.

    By the Corps' own terms, 34,000 activities were permitted last year under Nationwide Permit 26, excuse me, in fiscal year 1995. Two years from last December, those 34,000 activities will require individual permits unless replacement permits are in place by the time HWP 26 goes away. You heard Mr. Davis say that it would be very difficult for the Corps to handle 3,000 additional permits in a timely fashion on an individual basis.

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    So we believe very strongly that before Nationwide Permit 26 goes away, there must be replacement permits in place.

    One other thing that we think should happen is one of the things President Clinton recommended in August 1993: the Corps must be given permission, which requires legislation, to issue general permits based on ''categories of waters,'' or ''waters,'' not only on ''activities.'' That's been an overlooked part of the President's package of proposed reforms to the Section 404 programs.

    There's never been a legislative request from the delinenation that this recommendation be enacted. We request that it be enacted to give the Corps greater flexibility to try to deal with the nationwide permit problem. The Corps is right now trying to guess how many individual permits, how many new general permits need to be adopted to cover those 34,000 activities. The Corp may miss its calculation and its guess.

    The last thing I want to mention, and I want to add to the record, is something that's connected to this whole process but doesn't get much attention. And that is the plant list that's maintained by the Fish and Wildlife Service. And I would like to add to the record comments that we filed on the plant list, if I may, Mr. Chairman.

    Mr. BOEHLERT. Sure. Without objection, so ordered.

    Mr. SZABO. The plant list was put out for comment for the first time recently. Now, the plant list is integral to delineating a wetland under the system the Government maintains.
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    To give you an example, the plant list, you mentioned sound science. I think a close examination about how sound the science is on the plant list would be interesting. It's an observational list. I was asked today to report from the folks in the Virginia Peninsula that one proposed change on the plant list for that region would makes a huge difference in how much land is considered to be ''wetland.''

    Because under the way the Government delineates today, the presence of facultative plants does two things. That is, the presence of hydrophytic vegetation satisfied one of the three factors for designating an area as ''wetlands.'' Also from the presence of facultative plants, the government can presume the presence of hydrology, which is one of the two remaining characteristics required for an area to be designated as a wetland.

    In the Virginia peninsula area, the Fish and Wildlife Service plans to move American Holly, Loblolly Pine and the paw-paw plant into the facultative wet category, where as it has been an upland plant in the past. And that simple change, without notice or comment, without a rulemaking, will make a vast difference in what is considered to be a wetland for jurisdictional purposes.

    So I would encourage the Committee also to pay attention to the plant list. And when there is finally a rulemaking on how to delineate a wetland, something that's never occured by the way, the plant list ought to be brought into that rulemaking so that all the factors that are considered identifying the wetlands can be found in one place.

    Thank you, Mr. Chairman.
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    Mr. BOEHLERT. Thank you very much.

    Mr. Seibert?

    Mr. SEIBERT. Thank you, Mr. Chairman.

    Ladies and gentlemen, my name is Darrel Seibert, and I'm from Akron, Ohio. I'm here to testify today on behalf of the 190,000 member firms of the National Association of Home Builders. The vast majority of NAHB members are small business owners. I would like to talk about two related but separate issues involving recent regulatory and judicial developments concerning wetlands.

    The two issues are the regulatory decision by the U.S. Army Corps of Engineers to eliminate Nationwide Permit 26, and the recent court decision overturning the Tulloch rule. First, I would like to talk to you about the economic impact to our industry resulting from the Corps' changes made to the Nationwide Permit Number 26.

    Since NWP 26 was first authorized in 1977, it has remained essentially the same, allowing impacts from one to ten acres. The Corps recently reviewed over 400 comment letters on changing NWP 26. My understanding is 70 percent of those letters agreed with NAHB's position, to leave the permit as it has been since 1977 and amended. Likewise, the majority of the local Corps districts who filed comments also supported no changes to Nationwide 26.

    Nonetheless, the Corps ignored these comments and on December 13th, 1996, issued a final rule that reduced the threshold limits of wetland conversions to one-third acre and three acres.
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    Finally, the Corps also decided in its final rule that the new, much more restrictive Nationwide Permit 26 will be eliminated in 20 months.

    I want to emphasize that in my opinion, without these permits, or a viable alternative solution, many of our members will be forced out of business. The resulting scarcity of lots and homes will cause home prices to dramatically escalate. Our experience with the EPA and the Corps is that they rarely meet the deadlines they propose on setting forth the new permits that they're proposing.

    Most of the wetlands that builders convert are marginal potholes and fields. They are created many times by a trucker dozer, leaving ruts or blocked small swales where cattails grow. As a developer, I assemble four to eight of these small depressions, marginal wetlands, that in total add up to an acre or less.

    I believe most people envision big dozers filling in many acres of pristine wetlands when they think about NWP 26. The vast majority of the wetland fills are not pristine wetlands being dozed full of dirt. The Corps decided to make many of these important substantial changes to NWP 26 without public notice.

    The Corps claims that it made the decision to phase out 26 based on comments to the proposed rule expressing the old NWP 26 allowed unacceptable impacts. At the same time, our numbers and the National Wetlands Coalition actually show a net increase in wetlands created under the old Nationwide 26 permit.

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    In place of 6,500 acres of wetlands, which were converted to other uses, we find that 7,800 new acres of wetlands were created or restored. If the old NWP 26 created or restored more wetlands than were impacted, how can the Corps also argue that the permit allows too great an impact on wetlands?

    The Corps suggests the new rule will increase the number of individual permits it will have to process by 10 percent. NAHB believes the number will be far higher. Consider the Corps did not consider the potential significant increase in individual permit applications resulting from the new 500 lineal foot fill rule.

    Mr. Davis from the Corps indicated that if no action on your NWP 26, that action would occur within 45 days. Our experience has been that, in Ohio, we must be from a different State, because we're not seeing that response on the 11 days or 13 days they were talking about.

    NAHB filed suit because the U.S. Army Corps of Engineers chose to significantly modify, eliminate, Nationwide 26 without proper public notice, comment or review, or to show us that a replacement permit process would allow us to continue our businesses.

    Further, NAHB will be seeking a legislative solution to the problem caused by the modification and elimination of NWP 26. Further, we are pursuing a mitigation banking program which would promote restoring wetlands even more than we are already. Builders have no problem mitigating wetland fills in a bank if an existing bank is available. However, it must be understood that with no, without Government agency support, we are looking at 5 years before a complete nationwide mitigation banking system can be up and running.
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    Five years ago in Ohio, we created a win-win situation for both the environmentalists and the home builders. The Ohio Wetland Foundation was formed to create wetland mitigation banks with the help of certain State agencies. This was done to comply with the no net loss Federal wetland policy.

    Another major problem between the environmental lobby and home builders is the lack of a clear definition of what constitutes a wetland. No one will define for us what a marginal, a middle grade or a pristine wetland is. Why is that?

    There are many areas, such as the classification of wetlands, that are left unanswered in the present Clean Water Act legislation. How can we solve our very important environmental issues if we cannot even agree up on a vocabulary?

    We come here today to ask your help and encourage this win-win environmental and home building program to take root and spread across America. If the environmental lobby is sincerely interested in accomplishing a true no net loss result, they would stop fighting the home builders, and give us the time, by extending NWP 26 and their support, to make mitigation banking a national success story.

    Thank you.

    Mr. BOEHLERT. Thank you, Mr. Seibert. Where is Hudson, Ohio?

    Mr. SEIBERT. That's just north of Akron and south of Cleveland.
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    Mr. BOEHLERT. And just south of Mr. LaTourette's district, right?

    Mr. SEIBERT. Right.

    Mr. BOEHLERT. Just checking.

    Mr. Duncan?

    Mr. DUNCAN. Thank you, Mr. Chairman and members of the subcommittee.

    My name is Ronnie Duncan. I'm a National Director and Vice President of Public Affairs for NAIOP, National Association of Industrial and Office Properties, which is the largest non-profit trade association representing office and commercial developers and owners throughout the country. Professional, I am a principal and co-founder of Sevell-Duncan Realty Services based on Boca Raton, Florida. My practice involves the development and planning of commercial real estate projects throughout the southeastern United States.

    I come to you today on behalf of NAIOP with more than 5,000 members having as its primary mission to promote sound public policy related to real estate development. And to this end, NAIOP works with various public entities and particularly local governments and regional industrial development agencies in helping to develop projects with an appropriate level of balance between economic development and the protection of our environment.
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    During the past year, we've worked very closely with EPA and the Corps and other Federal agencies to reach this balance, as Mrs. Tauscher spoke of earlier this morning, between environmental regulations and recognition by these agencies of the critical factors which impact the viability of real estate development and ultimately the enhancement of the economies of our local communities in which we live and work.

    Our members are small business people and are advocates of the master planning of development, recognizing the sensitivity of wetland resources. And in projects which include comprehensive, positive solutions to mitigate environmental impacts.

    Our long term record I think speaks for itself, and illustrates the many projects that have utilized wetland mitigation to offset these very impacts.

    We are very concerned, however, with the regulatory changes made by the Army Corps of Engineers as a part of their recent rulemaking. These changes will create delays in our opinion and increase expenses associated with the project development, ultimately being passed to the end user, and will over-burden existing agency staff resources at the Federal and local levels in order to oversee and manage these regulatory changes.

    Most important, however, is the fact that such regulatory rulemaking will not necessarily result in the intended increase in environmental protection, which is the supposed bottom line of these new regulations. We are actively involved in reform of wetland regulations, because we have practical knowledge of what impacts they have on our local community.

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    And although we for the record have submitted several case studies, I'd like to demonstrate or talk about two in particular at this point in time, and the importance of establishing a more balanced and market oriented approach to such rulemaking.

    Not far from where we currently sit today, in the great State of Virginia, there is a solid waste facility impacting eight acres of wetlands within a 400 acre site. It's in a rural setting. If it were permitted prior to the new program, the project qualified for NWP 26. On-site alternatives and mitigation would be documented and submitted to the Corps, and the permit would be issued within 30 days.

    Under the new regulations, an individual permit would be required, since these impacts were greater than the new three acre threshold. This would result in greater analysis and evaluation of off-site alternatives, which would increase the cost of the project and quite frankly, that cost would be passed on through higher user fees for the waste facility.

    The individual permit itself would take 6 months to a year to complete, at a minimum, not 30 days, which again would increase costs. And associated with that, there would be more agency review required, which is another cost involved in this process.

    Another case study comes from my home State, the State of Florida, on the treasure coast, where a developer found himself in the second phase of a three phase residential and commercial development comprised of a total of 89 acres. The drainage required impacted a 4 1/2 foot wide, 800 foot long, what we'll call bed, just a little shallow area. The impacted area itself was under the one-third acre PCN threshold.

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    Because it came in after February 11th of this year, they not only have to go through the notification and individual process, but they now have no idea as to where they stand. It's going to take at least a year to resolve this issue, and get their approvals and permits in place. And at that point, even during that time, they believe they will encounter a very discretionary process, whereby they will incur additional costs, and because of market changes, may in fact have to abort the second phase.

    We believe that the provisions of the new rulemaking will have a significant impact on property owners, their employees, their residents and more importantly, the businesses which occupy these projects, the corporations and individuals which make this country great. NAIOP members are taking great care in the planning of environmentally responsible and balanced commercial projects, which not only guide the development process, but more importantly, assist in the economic feasibility of these projects and the enhancement of the economic growth and vitality of our communities.

    We continue to be concerned about the following: the 2-year expiration of NWP 26. Two years is entirely too short a period of time, in that most commercial or real estate projects of any size take longer than 2 years to prepare, commence and complete. And those that are caught in the middle right now, quite frankly, do not have a clue as to where they're going to end up in the process.

    We're concerned about the increased bureaucracy and administrative costs associated with these regulations. The business community must bear the increases in staff requirements at the Federal and local levels to review, comment and conduct these field reviews and to enforce these enhanced regulations. Project schedules will be impacted greatly, and the costs associated to the Corps will, we believe, be increased significantly.
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    We're also concerned about the classifications and the definitions, and we believe many of them are ambiguous and do not provide a good plan for us as developers, and frankly as business people, to operate. We believe there should be a better vocabulary, as was stated earlier.

    We're concerned about the enhanced regulatory environment and the fact that the Corps is not only regulating wetlands, but we believe preserving upland habitat that is not within their jurisdiction to regulate.

    The nationwide permitting process itself, and in particular Nationwide Permit 26, has been used successfully in conjunction with the development of numerous commercial and residential projects. These projects demonstrate how impacts and mitigations were used to once again balance environmental protection and community needs. Flexibility, the key, was provided through this program.

    And we support this flexibility in a strong and positive effort to continue Nationwide Permit 26.

    In conclusion, NAIOP believes that the regulatory changes to the wetlands program will unfairly burden the entire business community and economic climate. As the Chairman said earlier this morning, we agree with him in that this is, we should not continue to live in a stalemate situation. We have to move forward with a positive and proactive wetlands reform strategy.

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    There is no evidence or analysis that these changes that are proposed will result in significantly added protection to the environment. There are many good examples which illustrate how the nationwide permit system provided the needed flexibility to advance projects in concert with planned wetlands protection, and we are very interested as an organization and as small business people in continuing the existing system in the future.

    NAIOP would like the opportunity to be an active and constructive participant in the wetland regulatory reform and we would welcome the opportunity to continue our work with the Corps and EPA in developing a nationwide permit system that is both flexible and effective in providing sound levels of environmental protection.

    Thank you for the opportunity to testify today.

    Mr. BOEHLERT. Thank you very much.

    Mr. Thomas?

    Mr. THOMAS. Thank you, Mr. Chairman.

    I appreciate the opportunity to testify about recent regulatory and judicial developments related to wetlands. My name is Jim Thomas, and I'm a registered professional engineer and managing partner of George, Miles and Buhr, Engineers and Architects, located in Salisbury, Maryland. Today I'm testifying before you in my role as President-Elect of the American Consulting Engineers Council.

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    The American Consulting Engineers Council is the largest trade organization of its kind, representing 5,500 consulting engineering firms and 200,000 technical employees from across the United States. More than 75 percent of our firms are small businesses with fewer than 25 employees in each firm. I have submitted a detailed statement for the record.

    For the next few minutes, I am going to present some of the major concerns and recommendations ACEC members have about the modified nationwide permit program. Specifically, I'm going to focus on the 500 linear foot limitation, limitations on stacking, and for a grandfather provision for certain projects.

    Let me stress that ACEC supports the intent of the nationwide permitting program. Many of our ACEC members not only have been trained, but have years of experience designing projects that protect the waters of the United States and create wetlands.

    Nonetheless, ACEC believes that its suggestions, if implemented, would help resolve consulting engineers' concerns, make the nationwide permitting program more effective, and ensure that waters of the United States, including wetlands, are adequately protected.

    Let me first address our concerns related to the 500 linear foot limitation. Under the modified utility line backfill and bedding permit, a preconstruction notice and review is required if a proposed activity would impact 500 linear feet or more of the waters of the United States. Activities that may adversely impact more than 500 feet of stream bed may not be authorized under Nationwide Permit 26, which is the headwaters and isolated waters discharge permit.
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    ACEC is particularly concerned that the 500 foot limitation may restrict or preclude activities impacting far less of an area than the one-third limitation established under Nationwide Permit 26. For example, depending on the cross section of a drainage feature, there are instances in which 500 feet of linear impacts represents less than 1/100th of an acre. This is a far cry from the one-third of an acre threshold which triggers the current preconstruction notification.

    Second, the 500 linear foot limitation will adversely impact different kinds of development. For example, under certain circumstances, the ability to run sewer lines, water mains, roads and other basic necessities will be precluded because of the 500 foot limitation, thereby preventing the development of neighborhoods.

    Lastly, the 500 linear foot limitation is based on overly broad or vague terms, including stream bed, waters of the U.S. and disturbance. Because there is no clear definition of what constitutes a stream bed, consulting engineers may request individual permits for projects unnecessarily. This results in project delays and an increase in the amount of resources spent on the project.

    If there was a more concise definition of the term, waters of the United States, or if better guidance were established by the Corps, valuable resources spent to address legal and administrative functions and delays in the project could be avoided. To help address these concerns, ACEC suggests that the Corps issue a regulatory guidance letter within the agency confining the application of the 500 linear foot limitation to situations where portions of the drainage area show some minimum flow characteristics.
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    Also that the Corps clearly define what is meant by stream bed and a guidance document using criteria such as flow, dry periods, response to runoff and drainage basin size and character. Regional variations in drainage basins, stream bed, hydrology, and stream bed hydrology must be considered when developing criteria for defining a stream bed.

    The Corps of Engineers and the EPA must reaffirm a minimum impact threshold below which no or only minimum regulatory review is required in order to prevent situations in which the 500 linear foot threshold is illogical or inappropriate.

    Our second major concern is the limitation on stacking. Under the old nationwide permit program, permits for utility lines, road crossings and bridges could be used in a combination in development. This is known as stacking. While stacking is permitted under the new rules, it is severely restricted. In fact, stacking is essentially being disallowed, even in situations where the original topography is being restored.

    Whether the consulting engineer is helping the client plan the development of a few houses on three acres or a residential community on a thousand acres, the stacking limitation essentially precludes the ability of the engineer to obtain a nationwide permit to construct roads or run utilities through a project. Instead, the consulting engineer must apply for individual permits, and the individual permits delay and run up the cost of projects.

    Our third major concern is the need for a grandfather provision for certain projects. Current Corps permit procedures dictate that work impacting wetlands had begun or a contract was secured by January 21, 1997, then the Corps would require all work on that project to be complete within 12 months.
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    Many ACEC member firms are finding it difficult, if not impossible, to complete project activities within the time limit, because of the scope of work to be completed or because of delays caused by the review of project designs by other Federal, State or local agencies. ACEC suggests that the Corps allow for grandfathering of projects impacting wetlands in which a contract was secured or work had begun prior to January 21, 1997.

    With respect to the Tulloch rule, ACEC member firms generally have seen less disruption from the implementation of the Tulloch rule than is expected from the implementation of the modified nationwide permit program. Further, while the Corps is not requiring a Section 404 permit for activities only involving incidental fallback, the pending appeal of the strikedown of the Tulloch rule and possible stay means many consulting engineers will probably apply for Section 404 permits for these activities anyway.

    Again, most of the consulting engineers' attention has been focused on addressing the modified nationwide permits, particularly the 500 foot limitation, limitations on stacking, and the lack of a grandfather provision for certain projects. With this in mind, ACEC believes that its suggestions for addressing these issues related to the modified nationwide permits would, if implemented, help resolve consulting engineers' concerns, help make the nationwide permit program more effective and efficient, and ensure that waters of the United States, including wetlands, are adequately protected.

    If I could just deviate from my prepared comments one second, Congressman Gilchrest is my home Congressman. But I am picking up a comment that he made this morning regarding communication. I believe that this is very, very important. I think whether it's engineers or developers or contractors, they're not out to necessarily rape and pillage the land.
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    But I do believe that communication and education is important, that we should redirect some of our resources so that people on the field, on the ground, know what's happening, not people here in Washington, or my case in Annapolis, but people in the counties, in the individual jurisdictions who are doing the work. We have a county nearby who's implementing a tactical advisory group, a one-stop shop if you would, for permitting. And it is extremely effective. I think it would reorient those resources to that.

    And I thank you very much.

    Mr. BOEHLERT. Thank you. I'll tell Mr. Gilchrest your endorsement of his thinking.

    Mr. Tolman?

    Mr. TOLMAN. Thank you, Mr. Chairman.

    My name is Jonathan Tolman, I'm an environmental policy analyst at the Competitive Enterprise Institute here in Washington, D.C.

    As you have heard, the Corps of Engineers wetlands regulatory program has experienced two dramatic and far-reaching developments. The first is of course the rule, final rule issued by the Corps on Nationwide 26. The second is the Federal court decision on the so-called Tulloch rule.

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    The fundamental question I would like to address in my comments is what impact these two developments pose on wetlands of the United States. Although the recent developments will have a profound impact on the 404 program, analysis of the status in terms of wetlands suggests that the 404 program itself has little relevance to nationwide wetland conservation and restoration.

    In other words, despite the continuing problems with Section 404, the Nation's wetlands are dramatically improving. The reason for these improvements has little to do with Federal regulations and much more to do with a handful of voluntary incentive programs, which were created in the mid-1980s.

    Over the last decade, the convergence of two little-known trends has resulted in the achievement of the stated goal of no net loss of wetlands. Indeed, the best available data suggests that the goal has not only been met, but exceeded. Wetland loss due to agricultural conversion, formerly the number one source of wetland loss, has slowed to a trickle.

    Also, wetland restoration has exploded in the last decade. What was once a few thousand experimental acres nationwide has become hundreds of thousands of acres a year.

    As part of the most recent national resources inventory, the U.S. Department of Agriculture surveyed wetlands across the country to document their status and trends. Based on the national resources inventory, the United States as a whole is losing roughly 141,000 acres of wetlands a year.

    However, beginning in the mid-1980s, the Federal Government began several non-regulatory programs designed to restore wetlands. The first programs to begin wide scale restoration were the North American Waterfowl Management Plan and the Partners for Wildlife program, both operated by the Fish and Wildlife Service. In the early 1990s, the Department of Agriculture began restoring wetlands under the Wetland Reserve Program.
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    In 1995 alone, the Partners for Wildlife program restored 48,000 acres. The North American Waterfowl Management Plan restored 42,000 acres. And the Wetland Reserve Program enrolled 118,000 acres. Taking into account the fact that a small percentage of enrolled acres are not actually restored, these three wetland programs restored at least 187,000 acres of wetlands in 1995 alone.

    If successful wetland restoration under the 404 program is included, then the U.S. restored an estimated 210,000 acres of wetlands in 1995. And you can see by the chart that when one compares the restoration rates of these four programs with the gross annual loss rate of wetlands, the conclusion is obvious: the U.S. is achieving no net loss by approximately 69,000 acres a year.

    In analyzing the data from the various Government programs designed to restore and protect wetlands, and interesting fact has emerged. There is a wide disparity in the cost and effectiveness of the voluntary restoration programs and the regulatory 404 program. CEI estimates that the programs such as the North American Waterfowl Management Plan and the Wetlands Reserve Program cost the Federal Government on an average between $600 and $800 per acre of wetland to restore and protect it.

    The Federal Government's cost of restoring and protecting wetlands under the 404 program, however, is nearly $4,000 per acre. This is nearly five times what other programs cost. In addition, the 404 program imposes significant costs on private landowners while voluntary programs do not.

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    Analysis of wetland restoration programs clearly shows that wetland restoration is exceeding current wetland losses. The 404 program, however, does not deserve the credit. Because of the regulatory nature, the 404 program is a costly restoration program with documented low success rates. The current trend of scaling back Nationwide 26, which will lead ultimately to its phase-out, will create even higher costs on the Federal Government in terms of operating the program, as well as imposing greater and greater costs on landowners for little if any environmental gain.

    The Tulloch rule decision is unlikely to endanger the current achievement of no net loss in the United States, simply because it has little to do with what is actually helping us achieve no net loss, and that is the restoration programs, such as the North American Waterfowl Management Plan and the Wetlands Reserve Program.

    Given the failure of the 404 program and the success of the non-regulatory initiatives, there is little logical reason for the Federal Government to continue funding the Army Corps of Engineers wetlands program. Reallocating funds from the Corps of Engineers regulatory program to non-regulatory programs would likely result in an increase in both wetland acreage as well as wetland function and value without infringing on private property rights.

    Although far from perfect, incentive based programs appear to be far more cost effective and an equitable means of protecting and restoring America's wetlands than Federal regulations.

    Thank you, Mr. Chairman.

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    Mr. BOEHLERT. Thank you very much.

    Mr. Johnson.

    Mr. JOHNSON. Thanks, Mr. Chairman. I'm still lost, looking at the numbers here. And your conclusion is that there's been a total increase in wetlands.

    Mr. TOLMAN. In 1995, yes.

    Mr. JOHNSON. And so the earlier testimony you heard today—

    Mr. TOLMAN. Mr. Davis' comment about losing 70,000 to 90,000 acres a year is based on the National Resources Inventory.

    Mr. JOHNSON. Right.

    Mr. TOLMAN. The median year of that study is 1987. I do not dispute the fact that in 1987 we were losing 70,000 to 90,000 acres a year. However, I will point out, that is a decade ago.

    Mr. JOHNSON. All right. I want to hear, well, Mr. Seibert talked about that, too, the loss of wetland, and your testimony also talked about the increase in wetland. I wondered if you had any response to another industry concern that Mr. Spain brought up about, we have two concerns of very important industries, home builders versus an important fishing industry. Both of whom are looking for an accommodation in some kind of thing. Did you find anything that either of you heard that there's some common ground between the two of you?
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    Mr. SEIBERT. It's difficult to address his problem, because I heard about his problems for the first time today. Although I can understand the need and desire that he has to retain the wetlands he has for his industry.

    I would suggest that the vast majority of the wetlands that are converted to other uses, whether it's agriculture or home building or industry in this country is not being done in the areas that are affecting his industry today. I can't speak specifically about his State, from where he is, because I'm not from that area. But I sure think that we would be totally sympathetic to making sure that spawning grounds and other areas that are necessary for him, that his industry would not be destroyed.

    Mr. JOHNSON. Mr. Spain, maybe your reaction to Mr. Seibert's comments about mitigation banking?

    Mr. SPAIN. In terms of your question, are there balances that can be achieved, of course there are. I don't know that the law as currently constituted achieves that wisely. And also, I would defy anybody in this country to show me any district, any town, any city, that is not in a watershed. Every watershed has wetlands as part of the integrity of that watershed.

    Now, in our industry, of course, we're dependent very heavily on coastal watersheds. But the sport fishing industry, which is also very much a part of the economy, depends on those inland watersheds and wetlands there. Then there are flood control issues.

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    What I would like to see, frankly, is the rules changed, so that there is an appropriate balance of values and of interests. And that requires two things paramount. Number one, looking at the cumulative impacts, which of course the NWP 26 system did not do, and that was its basic flaw.

    The second is looking at the full range of values of wetlands, not just private property rights, but what about public property rights, the right of the public to clean water, the right of the public in our industry, we are the participants in users of a public resource, the right of cities to not have excessive filtration costs for their water systems because of pollution.

    All those are values that are economically definable that are provided as services, environmental services is sort of the catch word, by wetlands. And if all of the things are on the table and we have some way of assessing when to stop, then I think we can reach an appropriate level of balance as a matter of both science and public policy.

    Mr. JOHNSON. Thank you very much. And I wonder, Mr. Seibert, if you'd address some of the issues brought up by Ms. Wilson there, and her problem, that she didn't know about and was worried that some of the flooding was caused actually by development there and that there was no allowable land left for absorption of the water. Obviously that's a concern of yours, because you don't want to build a new home and have it flooded, anyway.

    Mr. SEIBERT. Absolutely not. It's very difficult to assess her situation, because I don't know the facts of her situation. I think it's very unfortunate that she had the problems that she had, as all flood victims had in this last series of floods that we had.
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    But I think one of the major problems that we confuse today is we call any area that's in a flood plain a wetland. The two are distinctly different. And we talk about sometimes in the process of creating ponds or retention basins in areas that have a wetland classification, even if it's a marginal one. We lose the importance of the difference between the different types of wetlands we have, and we end up calling that creation of a pond, a retention pond to collect storm water, a fill.

    Well, I don't know, I guess I'm from the farm land and I think that a fill is when you take something and put a lot of dirt in a hole, not when you take it out to create retention capabilities. So I think that FEMA has come out with a lot of rules as to what you can do and what you can't do, developers can't go in willy-nilly and take any property that's in a flood plain and just go ahead and build developments. We have to abide by many of the governmental as well as local rules that are occurring today.

    No question in the past, before all these rules were done by a lot of people who were not developers, built a lot of homes on land that they owned. But I think that we become the catch-all of all that blame.

    Mr. JOHNSON. I see my time is up. Thank you very much, Mr. Chairman.

    Mr. BOEHLERT. Ms. Wilson, did you want to comment on that?

    Ms. WILSON. Yes, I did.
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    He spoke of delineation, well, basically what he said is we call a lot of areas wetlands I think is what I understood him to say. The area that I was in truly was a wetland. And had been there for many, many years when it was finally destroyed and changed to a pond.

    And as we all know, about 80 percent of the area is a wetland. And that is a fact.

    Mr. BOEHLERT. Okay. Mr. Spain, I guess you wanted to comment.

    Mr. SPAIN. Yes. I had one comment in answer to Mr. Johnson's question and Mr. Seibert's response. One of the suggestions that we have in our testimony, and I think that would be something very much supported by developers, is have an expedited process so a developer can go into a deal and as a condition of escrow, they will get a report back or permit back from the Army Corps of Engineers.

    It doesn't make any sense to create a situation where a developer has to commit millions of dollars to a project and then find out, maybe a year or 2 down the road, that they can't do it. They can't legally do it.

    Let's have a data system where people have all the information available, you can do it by computer and by on-line services now, so a developer can have an analysis, the preconsultation process that the Corps now is going through I think is a very good move, and we ought to formalize that, so if a developer finds that there's going to be permit problem, there's going to be a wetlands there, they can build that into the cost of the project or they can simply not close the deal.
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    Mr. BOEHLERT. Thank you.

    Mr. LaTourette, Ohio's favorite son on this subcommittee.

    Mr. LATOURETTE. Thank you very much, Mr. Chairman.

    I want to thank all of the witnesses for their testimony. And there was a common thread, one thing I wanted to mention to you, Mr. Spain, I might eliminate that example of the desk, because that's exactly how we get rid of desks around here, we leave them in the hallway and people take them away. So it's probably not a good example to use with us.

    [Laughter.]

    Mr. LATOURETTE. But the one theme that seemed to run through all of the testimony, and I made different notes, Mr. Thomas talked about better definitions of waterways, I think Mr. Szabo, you introduced into the record the plant list and how the issue of what plants we're going to consider and what plants we aren't going to consider impacts upon it. Someone else talked about hydrology, a number of you talked about the NSF report in 1995.

    And that I think brings me to you, Mr. Carter. As I understood your testimony, you were urging Congressional inaction. And there are a number of people running around Capitol Hill today already saying that this is the do-nothing Congress. I took your observations to encourage us to not do anything until the administrative process and the judicial processes have worked their will on both the Tulloch rule and also the permitting problem.
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    Here's my concern, if I can just talk for another minute, and then I'd welcome your thoughts and the thoughts anyone else at the table has. My concern is that what I've heard during this panel is exactly the problem we have, the need to balance protection of wetlands together with what is not only perceived but is a constitutionally protected right of property rights.

    It's my understanding about 75 percent of the wetlands in this country are owned by individuals on private property, not public property. And the fact that Congress hasn't revisited this issue for 20 years has led to a regulatory maze that at least from the mail and observations that I get in my office, infuriates not only the environmental side of the equation, but also the developmental side of the equation.

    Aren't we better to take the lessons we have learned over the last 20 years, take the science that has occurred and reference the 1995 NSF report and take testimony, quality testimony such as was presented here to develop through Congressional action a strategy that then provides a framework for the Corps to move forward?

    Just one example. When Mr. Seibert talks about ruts created by bulldozers that become waterways of the United States, I think that, and just a quick example from my district, there was a fellow that bought 40 acres in the 1950s, and he wanted to save it for his retirement. Unfortunately, as that ground lay there, the political subdivision that had the responsibility of cleaning out the ditches and making sure water didn't back up on it didn't do a very good job. And when he went to sell it about 3 years ago, all of a sudden, it had become a waterway of the United States.
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    Can't we put all of our minds together on every side of this equation and come up with a better set of definitions, so that developers have clear definitions as to what they're going to do, and Ms. Wilson doesn't have to worry about her home and her neighbors' homes being flooded, and that we also protect quality and real wetlands of the United States or waterways of the United States?

    Mr. CARTER. My recommendation was really directed to the two issues that are the focus today of this hearing, which are the changes to Nationwide Permit 26 and the legal challenge to those changes, given which the development interests have come to view discretionary permit that Congress has authorized the Secretary of the Army to issue as something that appears to approach a legal entitlement.

    The other is the Tulloch case, the decision in that case, and the implications that that may have for the regulatory program. My recommendation is that those are going to work their way through the courts.

    I have a view of what I think the outcome will be, and I guess what I'm concerned about is some need, perceived need, to jump into the fray now, reopen this program which you just listed a whole litany of detail that is very technical in nature, that I think the Administration is making a good faith effort to deal with through the various reforms and programs that it has underway.

    It's our view that this is headed in a positive direction. It will never be reconciled in a way that can totally avoid the inevitable conflict between the fact that most of the remaining wetlands are private property and they perform critical public functions that we as a society I think want to maintain.
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    Mr. LATOURETTE. But hasn't that, the way it's worked to date, and the Administration's efforts and the regulatory attempts they've made, when they revisited NWP 26 at the end of last year, hasn't that created sort of a patchwork quilt which has become unworkable to all sides of this equation? And wouldn't it be better, you seem to have great faith in the Administration, and that's good. But wouldn't it be better if this Congress took the bull by the horns and protected all of the interests that are represented at this table by revisiting this issue?

    Mr. CARTER. My view is that at some point, inevitably, the Clean Water Act will be reauthorized, and Section 404 will be a part of that reauthorization. And in fact, Congress will be involved. That's your decision, obviously, on when that will occur.

    My concern, just viewing it from the outside, I sit there in North Carolina, given a State that is combined with, in addition to Louisiana, has and is experiencing the greatest amount of wetland loss. It's a difficult situation, because we have the National Homebuilders trying to thwart the Federal program. North Carolina has just attempted to put a wetlands program in place for the first time in North Carolina. They've been sued by the homebuilders in North Carolina to challenge that authority.

    So it's a frustrating situation. I think the Act will be reauthorized. I think Congress should, it's your appropriate role, to be involved and sort all this out. A concern I have is that these two issues, Nationwide Permit 26, and the Tulloch rule, are being used or there's an attempt to use these as some kind of wedge to open up the process and a lot of the so-called moderate legislation that I've seen drafts of floating around are not in my view any way close to moderate. It's a slightly moderated version of the legislation that was previously introduced that I thought would do a disaster to the Nation's remaining wetlands.
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    Mr. LATOURETTE. I beg the Chair's indulgence, you're referring to the Clean Water Act amendments of the last Congress, is that what you're referring to?

    Mr. CARTER. That's correct.

    Mr. LATOURETTE. Thank you very much, Mr. Chairman.

    Mr. BOEHLERT. The Chair agrees with you.

    Mr. Poshard.

    Mr. POSHARD. Thank you, Mr. Chairman.

    Mr. Spain, cumulative effect, are we talking about over an entire watershed? When you say cumulative effect versus site-specific, over what amount of territory are we talking about?

    Mr. SPAIN. The logical hydrological unit is obviously the watershed and the water basin. This is a reform that many agencies are undergoing right now in the State level and on the Federal level, they're redefining their boundaries not by what really are artificial lines, but by hydrological lines.

    Clearly, if you live in a watershed, it is no great comfort to you that the 1,000 acres of wetlands that provides flood control for your house has been replaced by another 1,000 acres of wetlands 16 States away. I think what we really need to do is, we need to look at each watershed as a hydrological unit and try to mitigate and maintain all the wetlands in that area as best we can. That is the scientific consensus, also the NRC report.
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    Mr. POSHARD. I have a small national forest in my district, about 260,000 acres. The environmental community is always saying we have to look at cumulative effects of everything. And the Forest Service says, that's not possible to evaluate the effect of horse ridership in one area of the forest and the effect of a logging operation in another part of the forest that's going to affect some indigenous song bird, and how that all turns out. It's just not a possibility of doing it.

    But you're saying there is a pragmatic, logistical way that we can effect that in a watershed?

    Mr. SPAIN. There certainly is. And if you look at some of the models of watershed and ecosystem analysis that's coming out of the western states, you will find that there are a number of ongoing efforts and they made a great deal of progress, if the Forest Service in your district is that far behind the times, I think you'd better boot them in the butt.

    [Laughter.]

    Mr. POSHARD. Mr. Duncan and Mr. Carter, do you see a difference in the so-called natural wetlands qualitative functions and the mitigated man-created wetlands? Is one qualitatively different than the other?

    I mean, I'm listening to Mr. Tolman over here, and the net effect of what he's saying, I see true in my Congressional district, basically. I don't know any wetland construction in a wetland that the Corps has approved where the mitigating factor hasn't been at least three or four to one, it seems like. It's very rare they would ever approve even a two to one. But it seems to me like the Corps does a good job of at least restoring or mitigating two or three times what's lost.
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    Now, I guess what I'm asking, is there a qualitative difference between what's restored or created and the wetland that is lost? Just give me two different viewpoints here if you can.

    Mr. CARTER. I'll try to respond to that. One of the reasons for the ratios in mitigation is to make up for the qualitative differences that have been observed, and the uncertainty involved, when you go in and attempt to restore a wetland. Where we come from, some of the most valuable wetlands are the deep swamps.

    You have bottom land hardwood trees that are 100, 150 years old. Replacing that is an extremely difficult thing to do. Because it takes those trees that long to grow. We're not going to know really for another century whether we have adequately replaced those functions of that bottom land hardwood swamp that's been eliminated by some particular project.

    So I think one thing that has clearly occurred is that we're getting away from attempting to create wetlands wholesale out of upland, which I think everyone acknowledges is not a desirable thing to be doing, and moving towards the opportunities that exist, it goes strategically into areas where wetlands have been converted to another use, maybe it's marginal farm land, and putting them back into an appropriate wetland function.

    Mr. SEIBERT. If I might, I think you're using an example that you're going into a forested area that's very deep, with large trees that has a lot of organic material. That's not a realistic scenario as to what most of the developers are involved with.

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    First of all, it would be extremely expensive to do that. And it would be very difficult to provide any foundation for whatever you're building. So I think again we need to look at where the vast majority of conversion is occurring. And that's occurring on the marginal wetlands. It's not in an area where you have a major problem.

    And secondly, we need to talk about the restoration that's occurring. Restoration is occurring in old wetlands that were converted to agriculture, as Mr. Carter said. And the seed bed is there. It's a matter of changing the hydrology to bring it back to what it was before, take out the drain tiles, take out the little dam that was there, and if you didn't do anything, most of it would come back on its own.

    But we're doing a lot in the way of planting the different materials that were there originally, and we're coddling them and taking care of them. I think the wetland mitigation banks that have occurred in Ohio have turned out to be a tremendous success and we're very proud of them.

    Mr. POSHARD. Mr. Chairman, I had several other questions. Just let me make one comment to the committee, really quickly. I know I'm over my time. I hope we can do something to get this definition acceptable to most people. This is driving me crazy. Hydrophytic vegetation, hydric soil and what is it, 14 days a year standing water, do I remember that correctly, constitutes wetland.

    Now, if you change that arbitrary type of definition to 10 days a year standing water, you've just created millions more acres of wetlands, just by virtue of the definition itself. Can we arrive at any kind of scientific approach to determine what a wetland really is? Is that ever possible for us to do that?
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    Because that complicates everybody's version of what we're doing in this country with respect to this issue. I hear people all the time saying, we're losing millions of acres of wetlands. I hear other people say, no, we're gaining. And it all depends on the definition. It truly does. We're losing wetlands according to this arbitrary definition that somebody set in a manual 15 years ago. But if you change that definition, we're not losing wetlands.

    How in the world do we know what it really is? How are we going to determine as a Congress who's going to give us that definitive explanation? We've got to do this at some point in time.

    Mr. BOEHLERT. Well, you've put your finger on the nub of our dilemma. It's not easy. And that's why we've got our work cut out for us. That's why we, the committee, I should say, not we, because I was not part of the effort, failed last time with H.R. 961. I didn't think it was a good bill.

    We've got our work cut out for us. But the good news is, Mr. LaTourette is going to help us.

    Do you have anything more?

    Mr. POSHARD. No.

    Mr. BOEHLERT. Mr. LaTourette, do you have anything more?
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    Mr. LATOURETTE. No, I don't.

    Mr. BOEHLERT. I want to thank all our witnesses for serving as valuable resources for the committee. And your statements are part of the permanent record. Our other colleagues will be looking them over. Thank you all so much.

    Without objection, Representative Richard Baker's opening statement will be included in the record, as well as some questions to EPA and the Corps, which will be forwarded to the agencies on behalf of Representative Baker.

    [EPA and U.S. Army Corps of Engineers' responses to questions and Mr. Baker's prepared statement follow:]

    [Insert here.]

    Mr. BOEHLERT. And to all of our witnesses, we say thank you. Some may receive some questions from us in writing that we would ask that you respond to in a timely manner. Thank you very much.

    [Whereupon, at 1:45 p.m., the subcommittee was adjourned, to reconvene at the call of the Chair.]

    [Insert here.]

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    Carter, Derb S., Jr., Attorney, Southern Environmental Law Center, Chapel Hill, NC

    Davis, Michael L., Deputy Assistant Secretary of the Army for Civil Works

    Duncan, Ronnie E., Director and Vice President, Public Affairs, National Association of Industrial and Office Properties, Boca Raton, FL

    Harrison, Doug, General Manager, Fresno Metropolitan Flood Control District, on behalf of the National Association of Flood and Stormwater Management Agencies

    Quinn, Timothy H., Deputy General Manager, Metroploitan Water District of Southern California, Los Angeles, CA

    Seibert, Darrel, President, Seibert Development Corporation, Hudson, OH, on behalf of the National Association of Homebuilders

    Spain, Glen, Northwest Regional Director, Pacific Coast Federation of Fishermen's Associations, Eugene, OR

    Szabo, Robert G., Executive Director and Counsel, National Wetlands Coalition, Washington, DC

    Thomas, James R., Jr., P.E., President-Elect, American Consulting Engineers Council, Salisbury, MD
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    Tolman, Jonathan, Environmental Policy Analyst, Competitive Enterprise Institute, Washington, DC

    Wayland, Robert H., III, Director, Office of Wetlands, Oceans and Watersheds, Office of Water, U.S. Environmental Protection Agency

    Wilson, Doris, on behalf of Flood Victims, Louisville, KY

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

    Baker, Hon. Richard, of Louisiana

    Emerson, Hon. Jo Ann, of Missouri

    Kelly, Hon. Sue W., of New York

    Poshard, Hon. Glenn, of Illinois

PREPARED STATEMENTS SUBMITTED BY WITNESSES

    Carter, Derb S

    Davis, Michael L

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    Duncan, Ronnie E

    Harrison, Doug

    Quinn, Timothy H

    Seibert, Darrel

    Spain, Glen

    Szabo, Robert G

    Thomas, James R

    Tolman, Jonathan

    Wayland, Robert H

SUBMISSIONS FOR THE RECORD

Baker, Hon. Richard, a Representative in Congress from Louisiana:

U.S. Environmental Protection Agency, responses to post hearing questions

U.S. Army Corps of Engineers, responses to post hearing questions
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Questions for Corps and EPA Wetlands

(iii)

Davis, Michael L., Deputy Assistant Secretary of the Army for Civil Works, charts:

401 Certification For All Nationwide Permits

Number and Percentage of States Issuing/Denying NWP 26

Corps of Engineers Regulatory Program, FY 1996 Average Evaluation Days, All Permit Actions, Alaska District Data

Corps of Engineers Regulatory Program, FY 1996 Average Evaluation Days, All Permit Actions, National Data

Corps of Engineers Regulatory Program, FY 1996 Average Evaluation Days, All Permit Actions, Norfolk District Data

Corps of Engineers Regulatory Program, FY 1996 Average Evaluation Days, All Permit Actions, National Data

Clarification of the increase in Number of Individual Permits Resulting from the Changes to Nationwide Permit 26
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ADDITIONS TO THE RECORD

    National Association of Realtors, statement

    National Wetlands Coalition, statement

    National Wildlife Federation, statement and attachments

    U.S. General Accounting Office, Superfund: Information on EPA's Administrative Reforms, May 30, 1997

    Wilson, Doris, Protect Our Families and Homes From Floods, statement

    Wise Use Movement, statement

(iv)