Throughout much of the nation’s history, wetlands have been viewed as impediments to development and not as vital environmental resources. It is only in the last 30 years that there has been a significant, though some would argue, often superficial, attempt to regulate wetland intrusions. As might be expected, those attempts have often been met with significant resistance and a mounting body of case law is developing.

On a federal level, there are numerous statutes and policies, often contradicting one another, that directly impact wetlands. Many federal programs actually encourage the conversion of wetlands for agricultural purposes while others impose harsh penalties for doing so. The key feature of federal wetland policy is that there is no unified policy that is embraced by the variety of governmental entities that are involved in wetland regulation. To make matters even worse, the Corps appears to apply a different set of standards to its own projects than it does to those which pass through its doors for regulatory approval. Additionally, with 49 Corps Districts throughout the U.S., there are claims of substantial differences in the way the regulations applied dependent on the location of the project.

Federal control of wetlands can be broken down into three general categories:

1. Primary legislation, such as the Clean Water Act.
2. Policy and Rules between cooperating agencies to implement legislation
3. Regulations or policies that are contained in legislation primarily dealing with other issues, examples of which include, The Swampbuster Provision of the Food Security Act of 1985 and curiously enough, the Tax Code.

The Clean Water Act...

The only legislation dealing directly with wetland regulation is the Clean Water Act (CWA) of 1972 which provides the basis for developing and implementing regulations designed to protect the “waters of the United States.” The program is administered jointly between the EPA and the Army Corps of Engineers with the following breakdown in responsibilities:

Army Corps of Engineers

•administers the day-to-day program, including individual permit decisions and jurisdictional determinations
•develops policy and guidance
•enforces Section 404 provisions

Environmental Protection Agency

•develops and interprets environmental criteria used in • evaluating permit applications
•determines scope of geographic jurisdiction
•approves and oversees State assumption
•identifies activities that are exempt
•reviews/comments on individual permit applications
•has authority to veto the Corps' permit decisions (Section • 404[c])
•can elevate specific cases (Section 404[q])
•enforces Section 404 provisions

Like many legislative initiatives, the CWA is very vague and offered no definition of what constituted a “water of the United States.” That decision was left to the regulatory agencies and, ultimately, the courts. In so doing, the concept of “waters of the United States” was expanded from the historic concept of being limited to navigable waters and tidal waters by way of a Memorandum of Understanding (MOA) between the EPA and the Corps to include:

[a]ll other waters such as interstate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce.

This definition was further expanded in 1986 to include waters which are or would be used as habitat by migratory birds which crossed state lines and/or those protected by Migratory Bird Treaties. This latter addition to the definition of “waters of the United States” became known as the “Migratory Bird Rule” (MBR) and greatly expanded the Corps’ regulative authority to include isolated, inland wetlands.

The MBR was welcomed by environmentalists as it seemed to indicate that the Corps was willing to go out on a limb to protect wetlands. In all, the MBR was a rather creative use of the federal authority to regulate interstate commerce in that the Corps asserted that migratory birds represented a source of significant economic interest that transcended state borders due to the popularity of bird watching and their value to recreational areas. The MBR came under increasing fire until the U.S. Supreme Court ruled in 2001 SWANCC v. USACE that the Corps had exceeded the authority granted by Congress under the CWA.

The importance of this case cannot be overstated and, as a result, millions of acres of isolated wetlands are at risk. A detailed discussion of the subject may be found by clicking on the following link, A Caveat to Success - New Perils for Wetlands.

How Does the Clean Water Act Protect Wetlands?

Section 404 of the CWA requires that a property owner obtain a permit from the Corps for any non-exempt activity before placing dredged or fill material in waters of the United States, including wetlands. Certain normal farming practices are exempt and do not require a permit, but they may not be associated with bringing a wetland into agricultural production or converting an agricultural wetland to a non-wetland area. The agricultural exemptions include:

•Established (i.e., ongoing), normal farming activities such as: plowing, harvesting, seeding, minor drainage, cultivating
•Maintenance, but not construction, of drainage ditches
•Construction and maintenance of irrigation ditches
•Construction and maintenance of farm or stock ponds
•Construction and maintenance of farm roads, in accordance with best management practices

A complete list of exemptions is contained in Section 404(f) of the CWA.

Purpose of Wetlands Permitting

Obviously, merely requiring a permit does nothing to protect wetlands and, in fact, it is the reason for requiring a permit that is of importance. The basic premise of the program is that no filling of the wetlands can be permitted if a practical alternative exists. Those applying for a permit must show that they have attempted to avoid wetland impacts where practical, or provided for mitigation for “unavoidable” impacts.

It is critical to note that neither the CWA itself nor the regulations that have been developed to implement it say that you can not fill wetlands. Rather, you simply have to do your best to avoid impacts and mitigate those that you can’t. It is this reality that opens up the hornet’s nest of issues that surrounds the 404 permitting process. What constitutes “practical,” “minimized” and “mitigation” are often subjects that are open to debate and interpretation and thus conflict.

404 Permits - There are two types of 404 permits, as described in Corps literature. They are:

Individual permits are required for projects that have a significant impact on wetlands and each is reviewed using Section 404(b)(1) Guidelines. The process can (should) be quite rigorous and includes the requirement to show that all alternatives to avoid the impact have been considered and that the proposed activity will not violate other applicable law, including the Endangered Species Act. Further, the activity "cannot cause or contribute to significant degradation of wetlands by adversely impacting wildlife, ecosystem integrity, recreation, aesthetics, and economic values." An Environmental Impact Statement (EIS) is required and theoretically, it is only after all of the hurdles have been cleared that mitigation can be considered as an option.

General permits are issued to the public-at-large to authorize specific activities that have minimal environmental impacts, the extent of which varies dependent on the permit type applied for. A general permit can be issued on a state, regional, or nationwide basis. Activities authorized by a general permit require substantially less review than an individual permit, and some permits do not even require notification of the Corps prior to commencing the project.

As can be seen, there are substantial differences between the two permit types and developers would always rather be operating under a general permit and will often argue that that is all that is legally required. In general, wetland permitting battles can be very tough fights and one is well advised to consult with an attorney specializing in environmental law. While the Corps does reject permits, those rejections are few and far between and are often based on technical failures in the application process rather than by a substantive failure of the proposal in the eyes of the Corps.

Nationwide Permits

The Corps uses General Permits to authorize 80% of the activities that they regulate. Of the General Permit types, the Nationwide Permits (NWP), of which there are now approximately 45, have come under the heaviest fire and have been subject to the most change. Theoretically, these permits include specific limitations that ensure both minimal adverse wetland impacts as well as ensure that the aquatic environment will be protected. Those designing projects that meet these criteria are given an expedited review by the Corps. The issue, of course, is what constitutes a minimal impact.

NWP-26
The Corps came under very heavy fire for its issuance of NWP-26, which allowed the filling of up to 10 acres of isolated and headwater wetlands. It is estimated that this permit accounted for 30% of all wetland intrusions allowed under the NWP program. Those objecting to the standards of this permit included environmentalists, the EPA and a number of states, including Pennsylvania.

The Corps responded to these complaints by issuing “new guidelines” for the utilization of NWPs in general, and NWP-26 specifically, when all of the NWPs were reauthorized in 1997. In 2000, NWP-26 was eliminated by modifying six NWPs to cover the activities formerly controlled by NWP-26. At that time, modifications to nine additional NMPs were made and two additional permit categories were added.

The importance of the changes mentioned above are twofold. First, from a practical perspective, the Corps dramatically reduced the threshold levels from 10 acres (pre-1997) to 3 acres (NWP-26 1997-2000) to ½ acre under the current NWPs. Further, it is now mandated that the Corps be notified of all disturbances of 1/10 of an acre or more. In addition, numerous other requirements beneficial to wetland protection were incorporated including a reduction in the thresholds related to stream bank disturbance from 500 to 300 linear feet. Second, the Corps has shown a willingness to incorporate protective changes into its policies. (It remains to be seen if this represents a major policy shift for the Corps and whether the same level of protection will be offered in Corps sponsored projects.)

For the full text of the 1997 Corps Final Notification of the Reissuance of NWP please refer to:
http://www.spk.usace.army.mil/cespk-co/regulatory/final-NWP-1996.html

For the full text of the 2000 Corps Final Notification of the Issuance and Modification of NWP please refer to:
http://www.epa.gov/owow/wetlands/regs/nwpfinal.pdf

Both documents are lengthy and are not for the faint of heart. However, they contain very useful information regarding the nature of and criteria for the issuance of NWPs. Also included is a discussion of the various comments received during the approval process which shed some light as to the thinking that went into the final enactment of these regulations.

Water Resources Development Acts

The Water Resources Development Act (WRDA) is viewed by many as nothing more than a biennial, multi-billion dollar spending spree by Congress. It is during this process that new water projects are funded and the “pork” is delivered to local communities. (See Power Politics and the Corps.)

However, every once in awhile provisions protecting wetlands creep into a WRDA and can be of importance. For example, WRDA-86 contained a number provisions related to wetland protection, the most important of which was the clarification of mitigation requirements as they related to Corps projects.

WRDA-90 in theory, is one of the most important pieces of legislation that has been enacted to support the CWA. It establishes environmental protection as a “primary mission” of the Corps in terms of the planning and construction of water resource projects. Equally important, WRDA-90 established a goal of:

"no overall net loss of the Nation's remaining wetlands base, as defined by acreage and function, and a long-term goal to increase the quality and quantity of the Nation's wetlands, as defined by acreage and function."

The Corps was directed to work in concert with the EPA, FWS and other appropriate agencies to develop a wetland action plan and authorized demonstration programs to evaluate the feasibility of wetland restoration and creation to meet “the no net loss” mandate. Unfortunately, the Corps was not given the resources to carry out the mission to which they were assigned, the funds going instead to a wide variety of construction projects. The goal of “the no net loss” has not been met and the program is considered to be only marginally effective.

Swampbuster

Although the CWA addressed, in part, the conversion of wetlands for nonagricultural uses, it did little to deal with the agricultural conversion of wetlands. Between 1972 and 1985 over 200,000 acres of wetlands yearly were converted to agriculture. In 1985 the situation changed substantially with the passage of the Food Security Act which contained the Wetlands Conservation Provision, more commonly known as “Swampbuster”.

In a nutshell, the Swampbuster provision says that anyone who converts wetlands to agriculture is ineligible to receive USDA farm program benefits, inclusive of subsidies. Swampbuster differs substantially from the CWA in that it is not a regulatory tool per se, but rather relies on the principle of disincentive to be effective. If you fill in a wetland, then you do not qualify for federal assistance. The measure was made stronger by the inclusion of all land owned by the individual or company. Thus a wetland violation on parcel “A” could cause the loss of USDA program eligibility on parcel “B” even if the two parcels had no physical relationship to one another.

The strength of Swampbuster was diluted somewhat with the passage of the Farm Bills of 1990 and 1996. The farm community lobbied for and received greater “flexibility” and the changes allowed farmers to drain wetlands under a vague “minimal effects” standard as well as allowed the USDA to waive penalties in exchange for mitigation. Mitigation standards for Swampbuster have been established by the Natural Resources Conservation Service (NRCS) and it is distressing that the Swampbuster standards are substantially lower than those established by the Corps for CWA permitting. It is even more distressing to note that even with the higher standards imposed by the Corps, mitigation plans have failed at an alarming rate. In addition, the 1996 Farm Bill removed crop insurance and disaster payments from the list of USDA program benefits subject to sanction under Swampbuster, thus significantly lowering the incentive to comply.

Although Swampbuster is often cited as an environmental measure, its origins and continued existence may be more closely tied to commodity price stabilization. The Food Security Act was in large measure a response to surplus production driving down commodity prices. Swampbuster is viewed as an effective tool to keep new agricultural lands (converted wetlands) out of production. This is viewed by policy makers as desirable under the theory that adding production capacity would further increase the commodity surpluses, thus further depressing prices. The USDA has estimated that if Swampbuster were eliminated, between 8 and 18 million acres of wetlands would be converted to cropland. Though a limited number of farmers would benefit (those converting the wetlands), the resulting increase in commodity supplies would actually cause a net reduction in farm income of $1.6 to $3.2 billion dollars per year.

The Tax Code

While Swampbuster provides a disincentive to convert wetlands to agriculture, various provisions of the tax code actually encourage farmers to do exactly the opposite. The Tax Reform Act of 1986 contains several key elements that impact wetlands by providing tax incentives to convert them to cropland.

First, it allowed for accelerated depreciation of capital investments in irrigation as well as subsidized them with a special provision within Section 179. This allows taxpayers to deduct the first $10,000 of the cost of irrigation as an ordinary business expense. Additionally, in certain instances one may even claim a special water depletion allowance when the water is being pumped out of the ground at an unsustainable rate. The illogical “logic” of the argument is that the value of the property is being depleted as the water supply is exhausted and thus the person removing the water should be compensated for the lowering of the value. (No, this doesn’t make any sense to us either!)

MOAs and RGLs

Federal legislation is often at best a strange beast. Virtually all of the laws passed by Congress are so vague that as written, they are fundamentally useless. In reality, any Congressional action requires implementation by the various Departments impacted by the legislation and it is at the departmental level (or lower) that the actual rules and methodology for implementation are established. In many cases, the Departments must even develop basic operational definitions as they are not provided by Congress. A prime example of this is the reference to “waters of the United States” contained in the CWA. It is very clear from the Act that they are to be protected but it is not clear what they are. This trait of legislation gives the various Departments a great deal of power and flexibility. It also causes a great deal of consternation as well as provides a livelihood for thousands of attorneys.

Often legislation mandates cooperation between various Departments and/or agencies. Since the rules pertaining to particular legislation need to be developed and enforced in concert, the various Departments and Agencies of the federal government use a process that is referred to as “Memorandum of Agreement” (MOA) to obtain that goal.

Definitional standards and/or rules are established by one or more of the agencies and each participating agency agrees to abide by them. In terms of wetlands, MOAs between the EPA and Corps are key components to CWA policies. Additionally, MOAs between the Department of Transportation, EPA and Corps regarding NEPA implementation are critical components in the understanding of federal policies toward wetlands in terms of highway construction.

Regulatory Guidance Letters (RGL) are issued by the Corps to transmit “guidance” on the regulatory efforts from headquarters to division and district offices. Often viewed as dictates from “on high,” RGLs are important components to wetland regulation policy initiatives in that they often describe the specific manner in which a policy is to be interpreted in the field.

The Role of State Government in Protecting Wetlands

Section 404 of the CWA allows for wetland permitting authority to be delegated to the states under two distinct provisions.

1. State administration of the entire 404 process with the exception of waters subject to the ebb and flow of the tide including adjacent wetlands. The standards maintained by the state must be at the same or greater level as those maintained at a federal level and there are significant hurdles that must be cleared for a state program to qualify. The EPA reports that as of January 2003, only Michigan and New Jersey have assumed authority for permitting while several other states and tribes are in the process of doing so. (Please note that on tribal lands, the various Native American tribes have the same regulative authority as states.)

2. Issuance of “Programmatic General Permits” or “State Programmatic General Permits” (SPGP) by the Corps allows states to issue 404 permits for certain activities. In Pennsylvania, the Pennsylvania Department of Environmental Protection (PADEP) regulates certain wetland impacts under the authority of PASPGP-2, which went into effect on July 1, 2001.

In general terms, PASPGP-2 allows PADEP to regulate projects “which individually or cumulatively result in direct or indirect impacts to 1.0 acre or less of waters of the U.S.” Projects that do not meet those criteria are subject to review by the Corps. However, the complexity of the inclusions and exclusions to this general principle are so extensive that the complete text of PASPGP-2 has been provided as a reference and is recommended reading for all local officials or anyone attempting to protect wetlands within the state. You will notice that under PASPGP-2 the threshold of one acre is higher (less restrictive) than the ½ acre maximum of Nationwide Permits.

The Role of Local Government in Protecting Wetlands

Under the theory that wetlands have important public value that transcend local interest, local governments have no permitting authority and little power to protect these important ecosystems within their own communities. Zoning and subdivision ordinances can be used to a limited degree to attempt to control wetland intrusions, but the reality is that these attempts will often fail in the face of a concerted challenge by a developer.

Wetlands in Pennsylvania

There are approximately 404,000 acres of wetlands in Pennsylvania according to the latest FWS National Wetlands Inventory. The state had been losing wetlands at an average of 1,200 acres per year from 1956 - 1979 but PADEP reports that significant wetland gains (4,693 acres) occurred in the Chesapeake Bay watershed between 1982 and 1989.

Officially, PADEP maintains that the “no net loss” policy of the Corps is insufficient and that its strategy is one of a "Net Gain of Wetland Resources." The purpose of the position:

“is to ensure the continuation of wetland gain by providing a framework and resources for the restoration of wetlands within the overall context of the Commonwealth’s watershed management programs.” (PADEP)

PADEP reports that statewide wetland impacts now average less than 75 acres per year and that since 1990, 4,660 acres of wetlands have been restored with a resulting net gain of 3,765 acres throughout the state. On the surface, these figures are very encouraging. However, to a large degree they are misleading as the state often allows wetland mitigation rather than requiring avoidance and there are substantial issues and problems associated with mitigation that will be discussed shortly.

Upon reading PADEP literature one would be left with a warm and fuzzy feeling that our wetlands are in good health and that PADEP is comprised of some of the best intentioned tree huggers on the planet. This impression is in sharp contrast to the negative feelings that many environmentalists and local officials have been left with following attempts to get assistance from PADEP. Be advised, if you are relying solely on PADEP “to do the right thing” you may want to reconsider what other options may be available to you.