DEPARTMENT OF DEFENSE
Department of the Army
Corps of Engineers

33 CFR Parts 320, 326 and 331

Proposal To Establish an Administrative Appeal Process for the
Regulatory Programs of the Corps of Engineers

AGENCY: Corps of Engineers, Army Department, DOD.

ACTION: Proposed rule.

SUMMARY: The Corps of Engineers is proposing to establish an administrative appeal process to include in its regulatory program regulations (33 CFR parts 320-330). There is currently no administrative appeal process under which parties may contest Corps of Engineers regulatory determinations. Adverse decisions must be challenged in Federal District Court, and this formal judicial process may be time-consuming and financially burdensome for many parties. The proposed rule would provide permit applicants and landowners an opportunity to appeal permit denials and jurisdictional determinations.

DATES: Comments must be received by September 5, 1995.

ADDRESSES: Comments should be submitted in writing to: Office of the Chief of Engineers, ATTN: CECW-OR, 20 Massachusetts Avenue NW., Washington, DC 20314-1000. Comments will be available for examination in Corps District and Division offices or at the Office of the Chief of Engineers, Room 6225, Pulaski Building, 20 Massachusetts Avenue NW., Washington, DC 20314-1000.

FOR FURTHER INFORMATION CONTACT:
Mr. Sam Collinson or Mr. Michael L. Davis, Corps of Engineers
Regulatory Branch, (202) 761-0199.

SUPPLEMENTARY INFORMATION:

I. Background

Shortly after coming into office, the Clinton Administration convened an interagency working group to address legitimate concerns with Federal wetlands policy. After hearing from States, developers, farmers, environmental interests, members of Congress, and scientists, the working group developed a comprehensive, 40-point plan to enhance wetlands protection, while making wetlands regulations more fair, flexible, and effective to everyone, including America's small landowners. The Plan was issued on August 24, 1993. It emphasizes improving Federal wetlands policy through various means, including streamlining wetlands permitting programs. One of several approaches identified in the Plan for achieving such streamlining is through development by the Corps of a Clean Water Act Section 404 administrative appeals process, to be implemented after a public rulemaking. The Plan provides that the process will be designed to allow for administrative appeals of Section 404 geographic jurisdictional determinations, permit denials, and administrative penalties.

The rule proposed herein is responsive to the President's directive. The appeal process is designed to allow administrative appeals to the Corps regarding two distinct decisions: (1) That a geographic area, including a particular parcel of property that is determined to be a wetland as defined in 33 CFR 328.3(b) and delineated in accordance with the Federal manual for delineating and identifying wetlands, is subject to Corps regulatory jurisdiction pursuant to Section 404 of the Clean Water Act and/or Section 10 of the Rivers and Harbors Act of 1899; and (2) denial with prejudice by the District Engineer of a Department of the Army permit, which includes cases where a proffered permit is refused by the applicant because the applicant objects to the terms or special conditions of the proffered permit and the permit is subsequently denied with prejudice by the District Engineer. Consistent with the Plan and as explained below, third parties can participate only in applicant appeals of permit denials.

As indicated above, the Plan also addresses administrative appeals of administrative penalty assessments. Section 309(g) of the CWA authorizes the Corps and EPA to assess administrative penalties for, among other things, unauthorized discharges of dredged or fill material into wetlands and other waters of the United States in violation of Section 404. The CWA establishes two classes of administratively assessed penalties, which differ with respect to maximum assessment and prescribed procedure. EPA and the Corps have implemented the requirements of Section 309(g) as follows. With regard to EPA, proposed assessments of Class II administrative penalties for Section 404 violations can be reviewed by an Administrative Law Judge through a hearing process, the procedures for which are set forth at 40 CFR Part 22. EPA proposed assessments of Class I administrative penalties can be reviewed by a Presiding Officer through a hearing process according to procedures set forth at 40 CFR Part 28. (Note that EPA issued a proposed rule establishing such procedures, see 56 FR 29996 (July 1, 1991); pending issuance of a final rule, the EPA is applying the proposed rule as EPA guidance.) With regard to the Corps, proposed assessments of Class I administrative penalties, like EPA's process, can be reviewed by a Presiding Officer through a hearing process according to procedures set forth at 33 CFR 326. The Corps is developing, but has not yet proposed, regulations for assessing Class II administrative penalties. The Corps expects that its Class II regulations will be similar to those of EPA's.

Also consistent with the Administration Wetlands Plan, the August 1993 Interagency Memorandum of Agreement (MOA) between the Department of Agriculture, the Environmental Protection Agency, the Department of the Interior and the Department of the Army concerning the delineation of wetlands for purposes of Section 404 of the CWA and Subtitle B of the Food Security Act, provides that persons who are adversely affected by Natural Resources Conservation Service (NRCS) wetland delineations on agricultural lands may appeal such wetland delineations under NRCS administrative appeal procedures published at 7 CFR Part 614. Under these procedures, any person who is adversely or potentially adversely affected by an NRCS wetland delineation can appeal that decision. This may be an owner, operator, tenant or partner of the farm to which the NRCS decision applies. The NRCS appeals procedures currently has four levels: (1) The District Conservationist, (2) the Area Conservationist, (3) the State Conservationist, and (4) the Chief of NRCS. The decision of the Chief is final. However, as a result of USDA reorganization the current NRCS appeals process is being revised. Furthermore, according to the MOA, in circumstances where a landowner submits an appeal to NRCS and the State Conservationist is considering a change in the original delineation made by NRCS, the State Conservationist notifies the appropriate Corps and EPA officials to provide those agencies an opportunity for their participation and input on the appeal. The Fish and Wildlife Service is also consulted. The Corps and EPA reserve the right, on a case-by-case basis, to determine that a revised delineation resulting from an NRCS appeal is not valid for the purposes of Section 404 jurisdiction. However, any subsequent jurisdiction determination by the Corps would be appealable under the appeals process being proposed today.

The proposed administrative appeal process for a final Corps jurisdiction determination is a two-level process. The initial appeal is to an independent jurisdictional expert within a Corps District Office. The second level appeal would be to a regulatory expert within a Corps Division Office. Depending on the specific issues raised the individuals responsible for the appeal process may consult technical experts from other Corps offices. The proposed administrative appeal process for permit denials is a one-level process. The appeal would be to the Corps Division Office. The appeal process would be conducted by a Review Officer in the Division Regulatory Office and the final appeal decision would be made by the Division Engineer. In cases where an applicant refuses a proffered permit because of objectionable conditions, the District Engineer will review the case and will deny the permit, issue the permit without the condition, or offer the applicant a permit with different conditions, which if refused would be denied. In those cases where such proffered permits are denied the applicant may appeal the denial to the Division Engineer.

Filing of a jurisdictional determination appeal under this rule will be limited to the permit applicant or the landowner (i.e., and individual who has an identifiable and substantial legal interest in the property.) The authorized agent of the permit applicant or the landowner may also file the appeal.

Most Corps districts currently have an informal consultation procedure wherein disagreements on jurisdictional determinations or permit decisions are discussed between the Corps Project Manager/ supervisor and the landowner/agent/consultant. Based upon additional information or differing interpretations of the data or issues, the preliminary jurisdictional determination or permit decision may be revised or conditioned to the mutual satisfaction of the parties. The Corps encourages the continued use of the informal consultation process as the most efficient and responsive means of resolving jurisdictional and permit issues. If informal consultation proves fruitless, the proposed administrative appeals process provides a formal administrative course of action.

Corps districts also respond to jurisdictional queries by providing an "office" jurisdictional determination, based on a review of wetland inventory maps, State or local wetland maps, topographic maps, soils maps, aerial photography, and land-use plans or studies. These office or preliminary jurisdictional determinations are advisory in nature and provided primarily for planning purposes and may not be appealed.

To ensure compliance with national policies and procedures, and consistency among the administrative appeals officers within Division and District regulatory offices, the administrative appeals program will be monitored by the office of the Chief of Engineers. Implementing guidance will be provided when deemed appropriate.

As discussed in further detail below, additional manpower and funding would be necessary for the Corps to implement an administrative appeals process for its regulatory program. The President has included $6 million for the administrative appeals process in the FY 96 budget submitted to Congress. Additionally, training will be necessary for the additional personnel hired to hear the appeal cases and some organizational adjustments may be needed to accommodate an appeals process. Given these considerations, we anticipate that implementation of an administrative appeals process could be accomplished no later than 6 months after the effective date of a final rule. Review officers at Divisions and Districts may begin hearing cases before the projected implementation date if funding, staffing, and training are completed.

II. Proposed Rule Organization

The proposed administrative appeals process rule is organized into the following sections:

Section 331.1, Purpose and Policy, describes the basic purpose of the proposed rule and the Corps of Engineers policies regarding the appeals process.

Section 331.2, Definitions, contains the definitions of important terms that are used throughout the proposed rule. The following terms are defined in this section: Wetland delineation, jurisdictional determination, permit denial, appealable action, affected party, appellant, review officer, notification of appeals process, and request for appeal.

Section 331.3, Review Officers, describes the independence, authority and organizational location of the review officers (ROs). ROs for jurisdictional determinations would be located in District and Division regulatory offices and the ROs for permit denials would be located in Division regulatory offices.

Section 331.4, Notification of Appealable Actions, would require that the Corps district office send notification of each appealable action to the affected party in writing. Each notification would contain additional information on the administrative appeals process and provide a form that the affected party must use to request an appeal.

Section 331.5, Criteria, describes the criteria which must be met for an action to qualify for the appeals process and also lists specific situations which would preclude an action from qualifying for the appeals process.

Section 331.6, Filing Appeals, provides 60 days from the date on the letter of notification of the appealable action, for the affected party to submit a request for appeal to the Corps. In filing the appeal, the affected party must also grant the Corps the right of entry onto the property in order to conduct appropriate field testing and data collection.

Section 331.7, Review Procedures, describes the procedures for reviewing a request for appeal (RFA). First, the RFA must be complete and meet the established criteria for appeal. If requested, or determined to be necessary, the RO also has the discretion to conduct a review meeting with the appellant for jurisdictional determinations. For permit denials, an appeal review conference will be held within 60 days after receipt of the RFA. Procedures for conducting the conference are included.

Section 331.8, Timeframes for Final Appeals Decisions, establishes the maximum time limits for Corps final appeals decisions.

Section 331.9, Final Appeals Decisions, describes the potential outcomes of an appeal process for an appealable action and concludes the administrative appeals process. Additionally, this section discusses the timeframes for the ROs, District Engineers and Division Engineers to reach a final decision on the merits of the appeal.

Section 331.10, Final Agency Decisions, describes when a final agency decision has been made for an action that has been appealed.

Section 331.11, Unauthorized Activities, discusses the policies and procedures for administrative appeals of appealable actions involving unauthorized activities.

Finally, section 331.12, Exhaustion of Administrative Remedies, describes the administrative process and remedies that an appellant must exhaust before he can seek further review or relief from an adverse action through a judicial action in Federal District Court.

III. Administrative Appeal of Jurisdictional Determinations

A. Background

In the day to day implementation of the Clean Water Act Section 404 Regulatory Program, the Corps of Engineers has the primary responsibility for determining whether any particular geographic area, including a wetland, is subject to Corps regulatory authority under section 404 of the Clean Water Act and/or section 10 of the Rivers and Harbors Act of 1899. The administrative appeals process would apply to jurisdictional determinations of geographic extent of waters of the United States.

Currently, the 1987 Corps of Engineers Wetland Delineation Manual (1987 Manual) is used for wetland delineations, which may be performed by Corps, Environmental Protection Agency or Natural Resources Conservation Service employees, the applicant, or a private consultant hired by the applicant. However, if the wetland delineation is performed by the applicant or the applicant's consultant, it is the Corps' responsibility to verify the accuracy of the wetland delineation. Wetland delineations typically constitute two separate determinations: first, a decision that an area falls within the technical definition of a wetland; and second, the establishment of how much of the area is wetland, i.e., the boundary or dividing line between wetlands and uplands by applying the 1987 Manual. When a wetland delineation is part of a jurisdictional determination, which establishes whether a particular area is subject to regulatory authority under section 404 of the Clean Water Act, decisions regarding presence, scope and extent of wetlands, adjacency of wetlands to a waterbody, and the interstate commerce nexus for isolated waters would be appealable under this proposed rule.

The proposed rule would establish a two level administrative appeals process for jurisdictional determinations. The first level appeal would be conducted by a review officer (RO) located in a Corps District regulatory office. Larger districts may require more than one RO. The second level appeal would be conducted by a review officer in the Corps Division regulatory office. While we are proposing a two level appeal process for jurisdictional determinations, we are seeking comments on whether the appeals process should be a one level appeals process and, if so, whether the appeal should be to the District or Division Engineer.

B. First Level Appeal--District Office

The District Engineer, or designee, is responsible for the review of and decision on the first level appeal of jurisdictional determinations. The District Engineer may retain or delegate either or both, the RO responsibilities and the appeals decision to the same or different Corps officials.

We are proposing that the RO should be, or should have the support of, a qualified delineation specialist who has extensive experience in applying the technical criteria of the current wetland delineation manual, is familiar with local geophysical and climatological conditions, and has extensive experience in the determination of jurisdiction. Based on our review of regulatory program requirements and past experiences, we believe that Corps personnel in the respective districts are the best trained and most experienced wetland delineators. Additionally, expert wetland delineators in District offices are usually very experienced with regional geographic jurisdiction issues. Our review also focused on the importance of ensuring that the RO be insulated from the influence of the District's regulatory staff responsible for the appealable action. Therefore, we are also proposing that the RO report directly to the District's Regulatory Branch Chief. This arrangement would remove the RO from day- to-day involvement in routine delineation and jurisdictional decisions made by Regulatory Branch project managers, unit chiefs, and section chiefs. For matters involving routine delineation and jurisdictional decisions, the RO would be equal or above all decision-makers in the Regulatory Branch Office, except for the Regulatory Branch Chief. Furthermore, any particular RO would be disqualified from a case if the RO had worked directly on the case, had involvement in reviewing or providing guidance on the case, or if the decision-maker on the action was the Regulatory Branch Chief, or higher level official. In such circumstances, the Regulatory Branch Chief or higher level decision- maker (at least one level higher than the decision-maker) would appoint an independent RO. We are proposing to locate the RO with the Regulatory Branch Offices within the Districts, because we believe it is critical for the ROs to maintain a high level of expertise and experience with local wetland and jurisdictional issues. Furthermore, the ROs could also administer the Corps Wetland Delineator Certification Program and conduct in-house supplemental training in jurisdictional determinations.

The proposed administrative appeals process for jurisdictional determinations would be initiated by the landowner filing a request for appeal (RFA). The appeal must be filed within 60 days of the issuance of a formal jurisdictional determination by the Corps. If work is authorized prior to the end of this 60 day period, either by general or individual permit, and a permittee wishes to request an appeal, the appeal must be filed and the appeal process completed prior to the commencement of any work in the area identified as waters of the U.S., or any work that could alter the hydrology of the waters. Unauthorized work may not be conducted to avoid regulatory jurisdiction over an area by alteration of its wetland characteristics.

The 60-day filing deadline is considered to provide adequate time for an appellant to submit an appeal. It is recognized, however, that in some cases data cannot be obtained in certain seasons or is complicated by disturbed site conditions. Under these circumstances, the appellant may include in the RFA a request for a time extension and provide reasons to support the request. The appeals Review Officer (RO) will consider the request and may grant a reasonable extension of time to enable the appellant to gather and submit additional data. The RO also has discretion to extend the time period for such circumstances to gather data or conduct research that is deemed necessary to reach a valid conclusion. We are proposing that, in such circumstances, the time for the total appeals process (from receipt of the RFA to the RO's decision on the merits of the appeal) will be completed as soon as possible but will not extend beyond twelve months from the date of receipt of the appellant's complete RFA. As an option to this twelve month maximum time frame, we are also seeking comments on establishing the maximum time frame for an extension at nine months.

The RO's evaluation process of the appeal includes a review of the appellant's RFA, supporting data, the Corps jurisdictional determination, and any other available data to determine if a site visit and/or any additional information is needed to complete the review. The RO will complete this review of the administrative record within 30 days of receipt of the appellant's complete RFA. If the RO determines that no additional data is required and that no site visit is necessary or requested by the appellant, a decision on the merits of the appeal will be made within 60 days after receipt of the complete RFA. If the RO determines that additional data is needed, or if a site visit is necessary or requested, the RO will schedule the completion of this work at the earliest practicable time. The RO, or other designated Corps official, would then make a decision on the merits of the appeal within 30 days after the receipt of new information, completion of the site visit, or the collection of data. However, in no case shall the data collection or site visit extend the total appeals review time for the RO, or other designated Corps official, to make a decision on the merits of the appeal beyond twelve months after receipt of the RFA.

In completing the evaluation process, the District RO will either: (1) Determine that the appeal has no merit; (2) determine that the appeal has merit and notify the Corps regulatory official of the appropriate course of action to be taken; or (3) determine that the appeal has merit and revise the jurisdictional determination. The Corps jurisdictional determination resulting from the appeal will be considered the final Corps jurisdictional determination, unless the appellant submits an RFA to the Division RO as described below.

C. Second Level Appeal--Division Office

The Division Engineer, or designee, is responsible for the review of and decision on the second level appeal of jurisdictional determinations. The Division Engineer may retain or delegate either or both, the RO responsibilities and the appeals decision to the same or different Corps officials.

We expect that normally the ROs in the Division Office would be the same ROs that conduct the administrative appeal or permit denials which is described in more detail later. While these Division ROs would normally be a regulatory expert or have the support of a regulatory expert, they may have limited jurisdictional determination expertise. Depending on the jurisdiction issue raised and the expertise of the Division RO, the Division RO will obtain the assistance of experts from a District Office other than the District Office where the appeal was initiated.

The appellant may appeal the formal jurisdiction decision resulting from the first level appeal at the District Office by filing an RFA with the Division Office within 60 days of such final jurisdiction decision. Within 15 days of receipt of the RFA by the Division Office, the District Office will forward the administrative record of the jurisdictional determination to the Division RO. The administrative record will include any information provided by the appellant during the first level appeal.

The Division Office review will be limited to the administrative record prepared during the District Office appeal review. Therefore, the appellant must submit any relevant information at that time. The Division Office RO will reach a final decision on the administrative appeal within 60 days of receipt of the RFA.

In completing the evaluation process, the Division RO will either: (1) Determine that the appeal has no merit; or (2) determine that the appeal has merit and notify the Corps District regulatory official of the appropriate course of action to be taken. The Corps jurisdictional determination resulting from the second level appeal will be considered the final Corps jurisdictional determination.

D. Costs

Because of the variable scope of wetlands among Corps districts and developmental pressures on those wetlands, limited data is available to assess the potential cost of the administrative appeal program for wetland delineations and jurisdictional determinations. However, assuming that 10% of the approximately 35,000 jurisdictional determinations conducted annually by Corps Districts are appealed, and that the average costs associated with each appeal is $1200-1500 (Salary/travel/data collection), the annual cost of the program could range from $4.2-$5.25 million.

IV. Administrative Appeal of Permit Denials

The proposed rule provides permit applicants with an opportunity to seek a timely and objective reconsideration of an adverse permit decision in a non-judicial forum. Only a denial with prejudice of a Department of the Army permit application, or the applicant's rejection of a proffered permit containing special conditions that are unacceptable to an applicant and subsequently denied by the District Engineer, would be subject to the administrative appeal process. A denial with prejudice occurs when the permit is denied based upon the project's failing to meet public interest criteria and/or guidelines specified in Corps regulations (33 CFR Parts 320 through 330) and EPA regulation (40 CFR Part 230). Conversely, a denial without prejudice would not be subject to an administrative appeal, because such a denial is a pro forma action based on the applicant's failure to obtain requisite approval from another regulatory entity, and is not a Corps decision made on the merits of a completed public interest review and Section 404(b)(1) analysis. Further, if the applicant endorses and accepts a permit that is modified, conditional, and/or mitigated, the permit is not subject to an administrative appeal.

Additionally, the Corps of Engineers, through a separate rule- making proposal, will be proposing to make permit decisions within 90 days from the date of public notice for a proposed project, except for limited situations which preclude the Corps from making a decision due to other regulatory or legal requirements. As part of this rule-making proposal, we are seeking comments on whether the failure of the Corps to reach a permit decision within established deadlines should be viewed as a permit denial and subject to an administrative appeal.

The intent of this administrative appeal process is to provide a venue wherein the appellant will have an opportunity to have an independent evaluation conducted of the Corps' denial of a permit, including a proffered permit containing special conditions unacceptable to the applicant which is subsequently denied by the District Engineer.

Several options were considered for the identity of the permit denial Review Officer (RO) and the appeals decision-maker. An analysis of the options resulted in a determination that the Division Office could best meet the goals of providing an objective forum, ensuring the availability of well-qualified ROs, achieving an acceptable level of cost-effectiveness, promoting administrative efficiency, and providing the greatest access and convenience to appellants.

The need to ensure an impartial and objective review was considered to be the most important factor in implementing a valid administrative appeals process for permit denials. We believe this goal is attained by placing the review function at the Division level with the Division Engineer making the appeal decision rather than within Corps Districts. The Division RO would exercise a delegated authority to act on behalf of the Division Engineer, in conducting the administrative appeals process. The Division Engineer would make the decision on the merits of the appeal and direct the District Engineer to implement administrative appeal remedies or proceed with the permit denial. It is anticipated that Division RO candidates will likely be drawn from present Corps staff at HQ, Divisions, and Districts, and that they will represent the best trained and most experienced regulatory experts available.

The essence of the appeals process is an independent analysis of the existing administrative record to ensure that the district's decision complies with legal, regulatory, and policy requirements, that omissions of material facts have not occurred, and that the record is sufficient to support conclusions of the permit decision that was made. The process provides for a review conference at which Corps personnel and the applicant, authorized agent, and/or consultant may meet with the Division RO to provide clarification of information in the administrative record. The record may not, however, be supplemented by new data since this would constitute an amended application that may initiate a new public interest review rather than an appeal of the existing record and decision. Further, in reviewing technical issues, Division Engineers will not substitute their judgment for that of the District Engineers unless the issue falls within the "clearly erroneous or omission of material fact" category.

Under the proposed rule concerning permit denials, the Division Engineer's determination will not constitute a final agency decision; but would conclude with a finding that would be sent to the District Engineer whose decision was being appealed. This finding would either: (1) Determine that the appeal has no merit; or (2) determine that the appeal has merit and notify the District Engineer of further analysis and evaluation needed before the District Engineer can make the final agency decision on the permit application.

The re-opening of the public interest review and 404(b)(1) Guidelines analysis may be a limited review, if the noted deficiencies are narrow in scope and impact. The supplemental review process will include notice to all parties who commented on or participated in the original review. However, if the noted deficiencies are substantial in scope and impact, the issuance of a new public notice, opportunity to request a public hearing, and preparation of a supplemental environmental analysis and decision document may be required (see 33 CFR 325.7). This would allow new interested parties an opportunity to offer their views for the District Engineer's reconsideration of the permit application.

Upon conclusion of the re-evaluation, if the District Engineer determines that the proposed action is contrary to the public interest and/or 404(b)(1) Guidelines, the original denial will be reaffirmed and the decision will not be subject to further administrative appeal. Further challenge must be through the judicial process. If the re- evaluation results in a determination that a permit should be issued, that decision will be based on a supplemental administrative record and with the benefit of additional input from all interested parties. Furthermore, the determination to issue a permit may be subject to the 404(q) elevation process, but is not open to further administrative appeals.

Additionally, as discussed above, an appeal could be initiated for a decision to issue a permit with special condition(s) that the applicant finds unacceptable, and thus refuses to accept the permit. However, if the administrative appeal of a permit decision was sought by an applicant because of special conditions the applicant considered unacceptable, the applicant is appealing the permit decision, not just the special condition(s) of the proffered permit. The District Engineer, when evaluating the permit decision for a proffered permit that was not accepted by an applicant, will decide, upon further evaluation, either to: (1) Reaffirm the decision to deny the permit; or (2) issue the permit with special condition(s) different from those in the original proffered decision. Appellants must be aware, therefore, that the rejection of a proffered permit would not result in a simple "yes" or "no" on the merits of a special condition(s). Rather, the entire decision making process is opened for consideration of public interest review criteria and 404(b)(1) Guidelines analysis by the DE in reaching a final permit decision. Furthermore, a decision that has undergone a reevaluation as directed by the Division Engineer can not be further administratively appealed.

Based on past regulatory program experience, it is reasonable to estimate that annually 250 permit denials may be appealed under the proposed rule. To accommodate this increased work effort, it would be necessary to establish one to two RO positions in each of the ten Corps Divisions to implement the administrative appeals process. It is estimated that the resulting annual expense would be $2.5 million.

These costs include:
20 ROs$1,840,000
RO's travel & per diem/per appeal ($750 x 250)187,500
Additional travel & per diem for Corps staff ($400 x 250)100,000
supplemental Public Notice and Additional District
Office Review of Appeals (250 cases at $1,500)
375,000
Total2,502,500

V. Third Party Appeals

An ideal administrative appeal regulation for some people would be one that allows all third parties to request an administrative appeal of jurisdictional determinations and permit decisions. We understand this position. However, such a program would be much more expensive and require many more people to administer than that contemplated in this proposal. Congress is considering appropriating a small budget increase to allow the Corps to implement the proposed administrative appeal process. It appears unlikely that Congress would fund the costs of an expanded administrative appeals process, the benefits of which we do not believe would justify the costs. While this regulation would not allow third party appeals, it does provide for third party input in permit denial cases where the District Engineer is reconsidering the permit denial, as discussed below.

Under the proposed rule, the applicant or the landowner, is the only individual who may initiate an appeal of a formal jurisdictional determination. In proposing this rule the Corps recognizes that there may be other parties having an interest in a jurisdictional determination. However, these interests are not the primary property interests. Third party appeals related to such secondary property interests could raise a number of property rights issues. Third party involvement would reduce the efficiency of the process since third parties are not likely to readily obtain the permission of landowners to enter onto the property to conduct the technical, on-site surveys that are critical to validate jurisdictional determinations, including wetland delineations. Further, if the Corps determines that an area is a geographic area subject to Corps regulatory authority, substantial development proposals would likely trigger permit requirements and provide third parties with an opportunity to participate through the public interest review process.

Under the proposed rule, the applicant is the only individual who may initiate an appeal of a permit decision. However, full participation by third parties is provided for in the appeal process if the Division Engineer's determination is to refer the file back to the District Engineer for re-evaluation. It was determined that it was not necessary to provide for third party participation in the RO's permit review conference, since third parties had an ample opportunity to provide comments or concerns and submit substantive evidence during the public notice phase of the permit evaluation process and again to provide comments if the District Engineer is reconsidering the application because the Division Engineer determines that the appeal had merit. Further, the President's plan did not contemplate nor recommend the administrative appeal of permit issuances. These decisions are considered valid reflections of the public interest since they have already undergone rigorous review, with input from numerous agencies and the general public, and these decisions may be elevated by some Federal agencies pursuant to Section 404(q) Memorandum of Agreement. Expanding the appeal process to permit issuance decisions would also significantly expand the potential number of appeals since the Corps annually issues approximately 10,000 standard permits nationwide. Opening these decisions to administrative challenge would have severe adverse effects on the overall efficiency and cost of the regulatory program. Furthermore, judicial review is available to affected third parties.

VI. Unauthorized Activities

As a general rule, jurisdictional determinations made in the context of an enforcement case can not be administratively appealed under this rule. We are concerned that the public interest in expeditious and efficient resolution of an enforcement action should not ordinarily be delayed by administrative appeals of jurisdictional determinations made for purposes of that enforcement action. However, the District Engineer, in his or her discretion, is authorized by this rule to make exceptions to this general rule, and to allow the administrative appeal of a jurisdiction determination made in the context of an enforcement action if the District Engineer believes that the interests of justice, fairness, and administrative efficiency would be served thereby.

In certain cases involving unauthorized activities, the Corps will afford the responsible party the opportunity to apply for an after-the- fact permit. In many instances this approach obviates the need for a formal enforcement action and expedites the restoration of the affected wetland. The use of this after-the-fact permit approach can, however, be affected by statute of limitations complications. Further, engaging in an Administrative Appeal regarding an activity involving an enforcement case might raise issues regarding application of Statute of Limitations with respect to potential enforcement actions.

Consequently, we propose to amend 33 CFR 326.3(e) to include a new subparagraph (v). This new provision would require those parties alleged to have engaged in an unauthorized activity to sign a statute of limitations tolling agreement prior to filing an after-the-fact permit application. Subsequent to acceptance of an after-the-fact permit application by the Corps, an applicant may appeal a jurisdiction determination and/or a denial of an after-the-fact permit. Such tolling agreement would state that, in exchange for the Corps' considering the appeal of a jurisdictional determination or the after-the-fact permit application, or both, the party would agree that the statute of limitations would be tolled until one year after the final action has been taken on a jurisdictional determination appeal or the after-the- fact permit decision has been made (whichever is later), or one year after any succeeding administrative appeal of an after-the-fact permit decision has been finalized. Such tolling agreement would also state that permit applicants will not raise a statute of limitations defense in any subsequent enforcement action brought by the United States, with respect to the unauthorized activity for the period of time in which the statute of limitations is tolled. A party should only be required to sign one tolling agreement regardless of the number of appeals sought involving a single unauthorized activity. For example, a party sings a tolling agreement to appeal a jurisdictional determination, then applies for and receives an after-the-fact permit decision, and then appeals the permit decision, the tolling agreement will remain in effect until one year after the date that the after-the-fact permit decision has been made final.

Although we are planning to consolidate and propose revisions to the Corps Regulatory Program Regulations at 33 CFR Parts 320-330, within the next year, it is important that we make this minor amendment in conjunction with this proposed rule on administrative appeals to avoid creating undue confusion among the regulated community. This confusion would stem from the fact that, even if we were to make the proposed change to subparagraph (v), we would still have to include a provision in the administrative appeals regulation requiring that every applicant who applies for an after-the-fact permit prior to the effective date of subparagraph (v), sign a tolling agreement prior to filing an administrative appeal. This provision is necessary to address those parties that apply for after-the-fact permits between now and the effective date of subparagraph (v). If we were to wait until we revise 33 CFR Parts 320-330 to propose subparagraph (v), then this group of after-the-fact permit applicants would only increase in number, further contributing to the confusion that this provision could create.

VII. Exhaustion of Administrative Remedies

In Darby v. Cisneros, 113 S.Ct. 2539 (1993), the Supreme Court recently held that persons subject to Federal agency regulation need not exhaust administrative remedies before filing a lawsuit in Federal District Court, unless a statutory or regulatory provision requires such exhaustion. In response to Darby v. Cisneros, the Corps is including Sec. 331.12 in this proposed rule to make it explicit that persons dissatisfied with jurisdictional determinations or permit decisions must avail themselves of the administrative appeals process(es) proposed in this rule and received a final agency decision prior to seeking redress in the Federal courts.

VIII. Application of Rule to Prior Regulatory Decisions

We are proposing that when the final administrative appeals process is adopted that certain actions completed prior to the effective date of the final regulation be allowed to be appealed in accordance with this regulation. We believe that it would be appropriate to accept administrative appeals of final jurisdictional determinations and permit denials, that were transmitted in writing to an affected party one year prior to the effective date of the final regulation, if the affected party submits a request for appeal (RFA) to the Corps within 60 days of the effective date of the final rule.

It should be noted by potential appellants of prior regulatory decisions that the criteria for appeal must be met, or the request for appeal will be rejected by the Corps. Additionally, if large numbers of RFAs are received under this provision, an RO may delay the initiation of processing an RFA for up to 6 months after the implementation date of these regulations, if necessary.

IX. Environmental Documentation

We have made a preliminary determination that this action does not constitute a major Federal action significantly affecting the quality of the human environment, because the Corps prepares appropriate environmental documentation, including an Environmental Impact Statement (EIS) when required, for all permit decisions. Furthermore, wetland delineations and jurisdictional determinations do not result in an applicant or landowner being able to conduct work in waters of the United States without a required permit authorization, but only describe and determine the scope and extent of waters of the United States under Corps regulatory jurisdiction based on technical criteria that is established separately. Therefore, environmental documentation under the National Environmental Policy Act (NEPA) is not required for those actions. Moreover, this proposed regulation for administrative appeals only adds an optional one-level review to permit denials, to insure that applicable regulations, policies, practices, and procedures (including the preparation of appropriate environmental documentation) have been appropriately followed.

X. Executive Order 12291 and the Regulatory Flexibility Act

The Corps does not believe that this proposed regulation meets the definition of a major rule under Executive Order 12291, and we therefore do not believe a regulatory impact analysis is required. This proposed rule should reduce the burden on the public by offering an administrative appeal process for certain Corps decisions, and in many instances, should avoid the more time consuming and costly alternative of appealing a decision under judicial review.

We also do not believe that this proposed regulation will have a significant impact on a substantial number of small entities pursuant to Section 605(b) of the Regulatory Flexibility Act of 1980, because this proposed regulation only creates an optional review of certain decisions through an administrative appeal process. The proposed rule should be less time consuming and less costly to permit applicants who want to appeal a decision with which they disagree, but currently can only seek an appeal through the judicial system. Furthermore, since the administrative appeal would be optional at the applicant's or landowner's discretion, we have minimized the potential of any increased regulatory burden on small entities. If an applicant or landowner chooses to forego an appeal, the net effect of the proposed regulation would be zero.

Note 1.--The term "he" and its derivatives used in these regulations are generic and should be considered as applying to both male and female.

List of Subjects

33 CFR Part 320
Environmental protection, Intergovernmental relations, Navigation, Water pollution control, Waterways.

33 CFR Part 326
Investigations, Intergovernmental relations, Law enforcement, Navigation, Water pollution control, Waterways.

33 CFR Part 331
Administrative appeal, Navigation, Waterways, Environmental protection, Water pollution control.

John H. Zirschky,
Acting Assistant Secretary of the Army (Civil Works),
Department of the Army.


Extracted from Federal Register: July 19, 1995 (Volume 60, Number 138)
[Proposed Rules] Page 37280


Top of Page I Previous Page I Front Page


Environmental Technical Services Co., 834 Castle Ridge Rd., Austin, TX 78746
January 12, 1998 URL= http://www.wetlands.com/coe/f19ju95a.htm