AGENCY: Army Corps of Engineers, DoD.
ACTION: Final rule.
SUMMARY: On July 19, 1995, the Corps of Engineers published notice in the Federal Register of a proposal to establish an administrative appeal process for the regulatory program of the Corps of Engineers, (33 CFR Parts 320-331). The notice period expired on September 5, 1995. The Corps has evaluated and addressed the issues raised in comments submitted in response to the proposed rule. Appropriate changes have been made to clarify and enhance the administrative appeal process for permit denials and declined permits published herein as a Final Rule.
EFFECTIVE DATE: This rule becomes effective on August 6, 1999.
FOR FURTHER INFORMATION CONTACT: Mr. Sam Collinson, Corps of Engineers Regulatory Branch, (202) 761-0199.
SUPPLEMENTARY INFORMATION:
I. Background
Shortly after coming into office in 1993, the Clinton Administration convened an interagency working group to address concerns with Federal wetlands policy. After hearing from States, tribes, developers, farmers, environmental interests, members of Congress, and scientists, the working group developed a comprehensive, 40-point plan (the Plan) to
enhance wetlands protection, while making wetlands regulations more fair, flexible, and
effective for 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 was through the development by the Corps of an
administrative appeal process, to be implemented after public rulemaking. The Plan
provides that the process will be designed to allow for administrative appeal of Section
404 geographic jurisdictional determinations and permit denials.
On July 19, 1995, the Corps of Engineers published notice in the Federal Register
of a proposal to establish an administrative appeal process for the regulatory program of
the Corps of Engineers. The notice period expired on September 5, 1995. The Corps has
evaluated and addressed the issues raised in comments submitted in response to the
proposed rule. Appropriate changes have been made to clarify and enhance the
administrative appeal process for permit denials and declined permits published herein as
a Final Rule. In Fiscal Years 1995 to 1999 the President's budgets have included money to
implement an administrative appeal process for permit denials and jurisdiction
determinations. From FY 95 through FY 97 the Congressional appropriation for the Corps
regulatory program was held level at $101 million. In FY 98 Congress appropriated $106
million. This funding in FY 98 allowed the Corps to move toward finalizing regulations for
administrative appeals of permit denials and declined permits. Congress held the Corps
regulatory program budget level again in FY 99 at $106 million. The President's Budget
request for FY 00 of $117 million includes funds necessary to implement the appeals
process for jurisdictional determinations as well as the appeals process for permit
denials that we are finalizing with this rule. Should Congress provide the full request of
$117 million in FY 00, we will proceed to implement the appeals process for jurisdictional
determinations.
The rule adopted herein provides for the administrative appeal within the Corps of a
denial with prejudice by the district engineer of a Department of the Army permit
application, as well as the appeal of a declined proffered individual permit. Consistent
with the Plan and as explained below, third parties may participate in the appeal process.
This rule does not establish, at this time, an appeal process for jurisdictional
determinations or wetland delineations. We have carefully considered the issue, and have
determined that given the resources available to the Corps at this time, we would be
unable to administer an appeal process for jurisdictional determinations and wetland
delineations in a timely manner without adversely affecting the overall performance of the
Corps regulatory program. The employees dedicated to these new tasks would have to be
taken from the existing district staffs, with the result that each district would have
fewer project managers to evaluate permit applications and administer the rest of the
program. Given this situation, we believe that our efforts should be concentrated to the
extent possible on maintaining and improving the overall performance of the Corps
regulatory program. Should additional resources become available at a later date, we will
consider expanding the appeal process to include jurisdictional determinations and wetland
delineations.
II. Comments on the Proposed Rule
A. General
Comments received on the proposed rule can be summarized under several broad headings. They are: (1) The type of actions reviewed and the extent of the review; (2) The identity and authority of the review officer (RO); (3) The identity and rights of appellants; (4) Enforcement-related issues; (5) Suggested procedural changes and clarifications; and (6) General expressions of both opposition and support of an administrative appeal process. The comments concerning each of these topics, including those that pertain to the appeal of permit denials and the terms and conditions of proffered individual permits, were carefully considered, and are addressed herein. Comments that pertain solely to the appeal of jurisdictional determinations are not addressed in this document. Consideration of those comments will be addressed at such time as the Corps may adopt an appeal process for jurisdictional determinations.
B. Discussion of Specific Comments
(1) Type of Actions Reviewed and Extent of Review
A number of comments were received requesting that the appeal process be expanded to
include the assertion of discretionary authority, issuance of cease and desist orders,
special conditions, denial without prejudice of a permit application, and delays in the
evaluation of a permit application.
While we recognize the desire of various individuals and interest groups to expand the
scope of the administrative appeal process to cover all regulatory decisions that may
impact their respective interests, we have determined that there are several reasons why
it would not currently be prudent to do so. First, some of the decisions that were
suggested should be appealable are preliminary in nature. As a result, there often is not
an adequate administrative record upon which to base a meaningful review. For example, the
assertion of discretionary authority to require an individual permit for an activity is
often based upon preliminary indications that the potential adverse effects of a
particular project on the environment, or other aspects of the public interest, may be
more than minimal. In such cases, the individual permit process is needed to investigate
the probable effect of the project on the public interest before making a final permit
decision. In addition, the assertion of discretionary authority only addresses the form of
authorization that is being considered, and not whether the proposed activity will be
authorized. Second, we have limited resources to implement an administrative appeal
process, and we could easily find ourselves to be overwhelmed by the demand for
administrative review of a broad range of regulatory decisions. Given our FY 1998
appropriation from Congress, sufficient funds are available to implement properly an
administrative appeal process for denied permits, and declined individual permits only.
Third, we do not wish to encourage permit applicants to enter into a formal administrative
appeal process without first utilizing the informal review process already available in
Corps district offices. The informal district review process, generally based on
additional information or a new interpretation of existing information, is the most timely
and efficient means to resolve many issues, such as jurisdictional questions. Accordingly,
at this time, we are limiting the administrative appeal process to denied permits, and to
proffered individual permits that have been declined by the applicant.
Several of the comments received indicated that some parties believed that the appeal
process would allow an applicant to appeal the terms and conditions of an individual
permit, and begin work in jurisdictional areas, while the appeal was under way. This
interpretation of the appeal process is incorrect. Permit conditions are an integral part
of a permit, and cannot be treated as independent actions. No regulated activity would be
allowed to begin in any jurisdictional waters of the United States until the applicant has
accepted all the terms and conditions of the proffered permit. In cases where an
individual permit has been accepted by the applicant, and the terms and conditions of such
permit are subsequently unilaterally modified by the district engineer pursuant to 33 CFR
325.7, the permit may be declined by the permittee and appealed under this process, as
long as no regulated activities have taken place in waters of the United States on the
project site. Permit conditions are designed to ensure that the authorized project will be
constructed, operated and maintained in such way that it would not cause significant
degradation of the aquatic environment, or be contrary to the public interest; or to
ensure compliance with legal requirements, such as Section 401 State water quality
certification conditions, and the Endangered Species Act. In the case where an applicant
declines a proffered individual permit because the applicant objects to the terms and
conditions of the permit, the appeal process would proceed as follows. Should the
applicant object to the terms and conditions of the individual permit, the applicant must
write a letter to the district engineer explaining his objections to the permit. The
district engineer, upon evaluation of the applicant's objections, may: (a) modify the
permit to address all of the applicant's objections, or (b) modify the permit to address
some, but not all, of the applicant's objections, or (c) not modify the permit, having
determined that the permit should be issued as previously written. In the event that the
district engineer agrees to modify the proffered individual permit to address all of the
applicant's objections, the district engineer will issue such a modified permit. Should
the district engineer modify the proffered permit to address some, but not all, of the
applicant's objections, the district engineer will send the applicant such a modified
permit and the decision document for the project. If the district engineer does not modify
the proffered permit, the district engineer will offer the unmodified permit to the
applicant a second time. In all cases, the second transmittal of the permit shall include
a notification of appeal (NAP) form and a request for appeal (RFA) form (see definitions
in 33 CFR 331.2). If the applicant subsequently declines any modified or unmodified
permit, this declined permit may be appealed to the division engineer upon submittal of a
completed RFA form. The completed RFA must be received by the division engineer within 60
days of the NAP.
There were several comments concerning the scope of the review process. Several
commenters recommended that the review officer (RO) consider new information, conducting,
in effect, a new and independent review. Other commenters indicated that new information
should be accepted only if it serves to clarify existing issues, and did not raise new
issues that were not considered in the Corps original evaluation of the permit
application. After careful consideration, we have decided that the review undertaken by
the RO would be limited to the existing administrative record; however, the RO may seek to
clarify the record through consultation with the appellant and his agent(s), the district
engineer, other Federal and state agency personnel, or other parties, as described in 33
CFR 331.3 and 331.7.
Accepting new information about the project during the appeal process would constitute
a fundamental change of the administrative record. Such new information might well have
resulted in a different permit decision had it been presented to the district engineer
during the original permit evaluation process. It is essential that new information be
accepted only at the district level, so that the district engineer's decision will reflect
an accurate and comprehensive analysis of the data compiled in the administrative record.
Furthermore, allowing an applicant to withhold potentially critical information from the
district engineer might encourage forum-shopping, if an applicant were to believe that a
more favorable decision might be obtained from the division engineer than from the
district engineer.
(2) The Identity and Authority of the Review Officer (RO)
Comments were received regarding the appropriate person to serve as the RO, and the extent of the RO's authority. Most comments were concerned primarily with ensuring that
the RO be independent and impartial, that the process be efficient, and that the RO have
the authority to change the original permit decision. Some commenters also recommended
that the RO be authorized to change unilaterally a district engineer's permit denial
decision.
Suggestions were also received stating that the administrative appeal process should be
conducted outside of the Corps of Engineers, e.g., by contracting with private
consultants, utilizing administrative law judges, or referring the appeals to another
Federal agency. Several commenters expressed strong support for retaining the appeal
process within the Corps, while other commenters expressed an equally strong desire to
transfer the appeal process to an independent third party in order to promote
impartiality, to avoid the perception of bias, and to enhance the credibility of the
process.
We have given careful consideration to whether the appeal process should be
administered wholly within the Corps, or whether it should be administered by an
independent third party. While the perception of agency bias is a serious concern, we
believe that such perceptions cannot be avoided absolutely, and that the negative
connotations are far outweighed by having the appeal process managed by people who have
the most experience with the Corps of Engineers regulatory program. Moving the appeal
process outside the agency, either to another Federal agency, or by contracting with the
private sector, even if a Corps representative were part of the process, would severely
diminish the consistency and efficiency of the appeal process, and would raise serious
legal questions. The Corps regulatory program is complex, and it is unlikely that
individuals outside of the agency would have the perspective and long experience with the
program that would be needed to conduct a thorough, timely review. Also, given the
evolving nature of the policies, laws, regulations and court decisions that have shaped
the Corps regulatory program, non-Corps review officers would have to be trained and
updated on a regular basis in order to stay abreast of the changes. We believe that it
would be difficult to provide this recurring training to individuals outside of the Corps.
Furthermore, it would be imprudent and inappropriate to transfer the appeal process to a
third party, because the Corps bears the statutory responsibility for full implementation
of the regulatory program. Finally, it is noted that this rule does not diminish the right
of an appellant to seek redress through the Federal courts if he receives an unfavorable
decision from the Corps upon completion of the administrative appeal process.
Simplification and lower program costs were also offered as reasons for transferring
the process to the private sector. We are not convinced that contracting the work would be
simpler or less costly than administering the process internally. Corps involvement in the
appeal process would still be necessary, particularly in the case where permit denial
decisions were remanded to the district engineer for reconsideration as the result of a
successful appeal. Further, contract management responsibilities would remain with the
Corps, and could constitute a substantial administrative burden.
Efficiency was also cited by several commenters in support of establishing the appeal
process as a single level of review at the division level. We have examined the issue, and
agree that the operational efficiency of the appeal process would be maximized by a
one-level review of the existing administrative record.
Several commenters expressed the view that the appeal process should grant authority to
the division engineer to unilaterally overturn the permit decision of the district
engineer. Otherwise, it was argued, the best result an appellant could hope for would be a
new, time-consuming review by the same regulatory project manager who made the original
permit recommendation to the district engineer. One commenter further stated that such a
process is inconsistent with the Corps own assertion that an impartial, objective review
requires the final permit decision be made at the division rather than district level.
We believe that the commenters failed to appreciate the positive aspects of limiting
the review to ensure that the requisite procedural steps have been followed, that no
material facts have been overlooked or misinterpreted, and that the permit decision is
consistent with established policies and official guidance. If the division engineer
determines that the administrative record is insufficient to support the decision, or that
the decision is inconsistent with a requirement of law, regulation, an Executive Order, or
officially-promulgated Corps policy or guidance, the division engineer will give specific
instructions to the district engineer regarding corrective actions that must be taken in
reconsidering the permit decision. These instructions would ensure that the district
engineer's subsequent decision would be based on proper legal, factual, procedural, and
policy grounds. Remanding the decision to the district engineer for corrective action also
affirms the principle that the authority to make permit decisions rests with the district
engineer, who is the person ultimately responsible for implementation of the regulatory
program within his district. Furthermore, from a workload management perspective, Corps
district staff are better prepared than division personnel to handle the day-to-day
requirements of the permit evaluation process. In addition, an administrative appeal
process that required a full public interest review would be more time consuming than a
review of specific issues, and would in many cases duplicate work already done at the
district level. Also, if after conducting an appellate review, the division engineer has
reason to believe that the permit application should not be referred back to the district
engineer for a final decision, the permit application may be elevated in accordance with
33 CFR 325.8(b)(4), and the division engineer will make the permit decision.
Another commenter suggested modifying the third sentence of Section 331.3(b)(2) to
provide the RO more flexibility. It was suggested that we strike the wording, "shall
not substitute their judgment for that of the Corps district (when reviewing technical
issues) unless the reviewed decision was clearly erroneous or omitted a material
fact," and replace it with, "shall provide a recommendation on the decision that
is supported by clear and convincing evidence." We believe that under the original
language, the RO has sufficient flexibility under the review process; however, we have
reworded that section to clarify the meaning.
A comment was received suggesting more involvement by Corps headquarters to assure the
consistency of appealed decisions and to facilitate adjustments in policy, as may become
necessary. We agree that there is a need for Corps Headquarters to monitor the appeal
process, especially during the period of initial implementation, but we believe that
routine, case-by-case involvement is neither warranted nor practical. Corps Headquarters
will provide training to the review officers to ensure understanding of the policy and
procedures, and to ensure consistency of the process. Corps Headquarters will also provide
support on a case by case basis in the evaluation of appealed actions, if requested by a
division engineer.
Permit decisions made by a division engineer or higher authority may be appealed to an
Army official at least one level higher than the decision-maker. This higher Army official
shall make the decision on the merits of the appeal, and may appoint a qualified
individual to act as a review officer (as defined in Section 331.2 of this Part).
References to the division engineer in this Part shall be understood as also referring to
higher-level Army authority when that authority is conducting an administrative appeal.
Several commenters suggested that, because of its unique organizational structure,
appeals arising from decisions in the New England Division (NED) office should be directed
to Corps headquarters rather than the division engineer. The Corps has recently
reorganized the division offices. The former New England Division is now the New England
District, and reports to the North Atlantic Division office. The former New England
Division is consequently like the other Corps districts, and there is no need to set up a
separate appeal process structure for the New England regional office.
(3) The Identity and Rights of the Appellant
A number of commenters expressed concerns that the proposed administrative appeal process would unduly restrict who may pursue an appeal, that the scope of participation by
the appellant was ill-defined, and that appellants should not be required to exhaust the administrative
appeal process before seeking relief in the Federal courts.
In response to the question regarding who may pursue an appeal, the Corps has decided
that, since the appeal process is limited at this time to the appeal of denied permits,
and to the appeal of declined individual permits, appellants are properly limited to those
parties who have had their permit applications denied, or to those parties proffered an
individual permit by the district engineer. Expanding the appeal rights to third parties
would potentially increase the number of appealable actions by an order of magnitude or
more. This would simply be unworkable. With regard to the scope of participation by the
appellant, we believe that the procedures outlined in 33 CFR 331.6 and 331.7 adequately
describe the scope of participation of appellants and their agents. We have also added a
definition of the term "agent(s)" to 33 CFR 331.2. With regard to the need to
exhaust the administrative appeal process before seeking relief in the Federal courts, we
believe that the administrative appeal process would serve to identify and correct any
procedural shortcomings of the original permit evaluation process, and can lead to a
resolution of problems without the added burden to both parties of an action in the
Federal courts. Furthermore, requiring an appellant to exhaust the administrative appeal
process does not prevent the appellant from seeking relief in the Federal courts should
the appellant not be satisfied with the outcome of the appeal.
In response to requests for clarification of who may attend site investigations and
appeal conferences to provide support and representation for the appellant, the rule has
been written to allow the appellant's agent(s), as defined in 33 CFR 331.2, to participate
in the process. The appellant's agent(s) may participate in the appeal conference and in
any site investigations, as outlined in 33 CFR 331.7.
Numerous comments were received regarding third party involvement in the administrative
appeal process. A number of commenters favored limiting third party involvement to the
extent provided for in the proposed rule. Other commenters requested expansion of third
party involvement. It was evident from several comments that some confusion exists
regarding when third parties may participate in the appeal process. In order to clarify
these issues, additional language has been added to the rule in 33 CFR 331.7 and 33 CFR
331.10. The supplementary language is intended to make it clear that there is no third
party involvement in the appeal process itself. However, we have provided for interested
parties to be involved in those cases where the division engineer has determined that the
administrative record supporting a permit denial is inadequate, and has remanded the
decision to the district engineer for further consideration. In such a case, any party who
commented during the original permit review process will be advised that the decision is
being reconsidered, and that they may submit supplemental comments. If the noted
deficiency in the administrative record is serious enough to merit issuance of a new
public notice, anyone may submit comments. Under these circumstances, the public interest
review is starting anew, and there is no requirement that interested parties must have
participated in the original permit review process.
(4) Enforcement-Related Issues
One commenter suggested that under the proposed rule the after-the-fact (ATF) permit
process should more appropriately be titled an after-the-fact "enforcement"
process. We believe that the existing language properly identifies that a permit
application is being evaluated "after-the-fact" for an activity that has already
occurred. It would be inappropriate to use the term "after-the-fact enforcement"
since a permit may be granted as a result of the ATF review process. In certain cases
involving alleged unauthorized activities, the Corps will afford the responsible party the
opportunity to apply for an ATF permit. Once any initial corrective measures have been
completed and the activity otherwise meets the criteria in 33 CFR 326.3(e), evaluating an
ATF permit application is an appropriate response to an unauthorized activity. If an ATF
permit is issued, such permit will alleviate adverse effects to the affected water of the
United States through special conditions and/or compensatory mitigation requirements. The
ATF process is one of several administrative remedies available to the Corps to resolve
unauthorized activities.
Several commenters responded to our proposal to amend 33 CFR 326.3(e) to require a
tolling agreement as a prerequisite to filing an administrative appeal of an adverse ATF
permit decision. Several commenters recommended narrowing the scope of the proposed
tolling agreement. As a result of further consideration, we have determined that it would
be appropriate to limit the tolling agreement, and 326.3(e) has been amended by adding
subparagraph (v).
This new provision would mandate that any party alleged to have engaged in an
unauthorized activity, who files an ATF permit application that the Corps processes, has
thereby agreed to a tolling of the Statute of Limitations, and, in addition, must sign an
agreement to that effect. Such tolling agreement would state that, in exchange for the
Corps accepting the ATF permit application and, if appropriate, considering the appeal of
any ATF permit denial or declined individual permit, the party has agreed that the Statute
of Limitations would be tolled for one year after the final action has been taken on the
ATF permit decision, or any succeeding administrative appeal of an ATF permit denial has
been finalized, whichever is later. The tolling period would terminate one year after a
final decision on (1) the denial of an ATF permit application; or, (2) an appeal of such a
denial decision, whichever is later. The one year post-decision period is necessary in the
event that the United States determines that it would be appropriate to file an action in
the Federal courts to obtain a satisfactory remedy for the unauthorized activity.
The 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 will be required to sign a separate tolling agreement for
each individual unauthorized activity.
One commenter asked that the third sentence in Section 331.11 be revised to read
"* * * unless the Corps receives an ATF permit * * *" because the commenter felt
the Corps could not refuse a permit application. To the contrary, the Corps may refuse a
permit application when any one of four situations exist as identified in 33 CFR
326.3(e)(1). For this reason, we believe that the current language is appropriate. Another
commenter recommended that an appeal initiated in response to the Corps actions on
unauthorized activities should not be processed until resolution of the alleged violation.
As noted earlier, although protection of the environment is one of the Corps primary
goals, there are some circumstances where allowing an appeal to proceed before an
enforcement action is concluded is appropriate. Accordingly, we are convinced that this
decision must remain subject to the discretion of the district engineer.
Comments were received questioning the basis of the requirement that initial corrective
measures must be completed before an appeal could be accepted. One comment stated that
this requirement left an appellant little recourse; a result that appeared to be contrary
to the purpose of these regulations. Another believed that such a requirement was
premature because it presupposes that the appeal lacks merit. We disagree with both of
these arguments. First, interim corrective measures are those actions which the district
engineer believes to be necessary to prevent serious jeopardy to life, property, or
important public resources. We believe that when such a situation exists, the district
engineer must act promptly to require initial corrective measures to ensure that any
unsafe or hazardous conditions are corrected. Second, a determination to require a
corrective action does not prejudice an appeal, since it does not pass any judgment on the
merits of the overall project; it is simply intended to eliminate or reduce unsafe
conditions while the appeal is pending. Finally, the appellant always has the option of
seeking relief from the Federal courts.
The proposed rule, in Section 331.11(b), concerned the calculation of potential
penalties for unauthorized activities. That provision stated that "[A]ny penalty
imposed, as determined in the appropriate forum by the appropriate decision-maker, may
also include in the calculation of penalty the time period involving the appeal
process." This provision elicited comments stating that it was both ambiguous and
potentially unlawful. The Corps takes no position on the legality of this provision.
However, we have omitted this provision for several reasons. First, this particular
provision was somewhat ambiguous in that it was not clear whether the time period of the
appeal process could be used to increase or decrease the penalties for unauthorized
activities. Second, the Corps realizes that it cannot dictate to a Federal court that the
time period for the appeal process must be included in determining the penalty for
unauthorized activities. A court must independently weigh the facts of a particular case
in order to determine the appropriate extent of penalties for that case. By omitting this
language, the Corps is not waiving its right to argue before a court that the time period
for the appeal process should be included in the calculation of the penalty for those
unauthorized activities. This explanation serves as notice to every appellant regarding
ATF permit applications that the time it takes for an appeal to be resolved by the Corps
may be included in the calculation of penalties for the unauthorized activities.
(5) Suggested Procedural Changes and Clarifications for Specific Sections
Section 331.3(a): One commenter suggested including "prompt" with "fair, reasonable, and effective" in describing the administrative appeal process to emphasize the Corps commitment to timely action on appeals. We agree that timely
resolution of appeals is vital to the success of this program, as is reflected by the
inclusion of time frames in the rule, and have revised this section to include the word
"prompt'.
Section 331.3(a)(2): One commenter suggested including the phrase "based on the merits of the appeal" in the first sentence. We agree with this suggestion, and have
clarified the first sentence of 33 CFR 331.3(a)(2) to reflect this suggestion.
Section 331.4: Several commenters noted that the proposed rule did not contain a list
of items that must be present in the administrative record that would be the subject of an
administrative appeal. Because the administrative record for individual cases varies with
the nature of each proposal, we do not believe it is necessary to identify items that
could be in the administrative record. Each administrative record typically contains many
common elements, such as a determination of jurisdiction, the permit application and
supplemental information provided by the applicant, the public notice and mailing list,
comments received in response to the notice, NEPA documentation (e.g., environmental
assessment) and statement of findings (or a combined decision document), 404(b)(1)
Guidelines evaluation, and related documents and correspondence.
One commenter suggested that the last three proposed words of Section 331.4 be deleted.
We have reworded the paragraph in order to clarify that a standard form for submission of
a Request For Appeal (RFA) will be provided to the potential appellant, along with the
Notification of Appeal Process (NAP) standard form.
Section 331.5: This section has been modified to clarify the criteria for consideration
of an appeal. Additionally, the criteria will be clearly outlined in the RFA form sent to
the affected party with the NAP.
Section 331.5(b)(1): One commenter suggested that it may not be clear to permit
applicants that endorsement of a proffered individual permit indicates acceptance of the
permit in its entirety, and effects a waiver of the applicant's right to appeal the terms
and conditions of the permit. We acknowledge that the wording of the preamble and the
proposed rule may not be clear enough. Therefore, the wording of the final rule has been
modified to state clearly that the acceptance of an individual permit results in the
waiver of an applicant's right to appeal the terms and conditions of the permit. This
provision will also be explained in the notification of applicant options (NAO) form
attached to the proffered individual permit sent to an applicant.
Section 331.6: One commenter suggested that we change the rule so that the RFA must be
filed within 60 days of the date that the applicant receives the NAP, rather than within
60 days of the date of the NAP. We have retained the wording of the proposed rule, because
it allows the 60 day time period to be measured from a clear and verifiable date, whereas
the date of receipt by the applicant would be difficult to verify.
One commenter suggested that it would be difficult for appellants to provide their
reasons for appealing a permit denial within 60 days unless the Corps provides a rationale
for the permit denial as part of the denial notification. In response to this request, the
district engineer will provide a copy of the decision document with the NAP where the
permit application has been denied. In response to one commenter who requested that permit
decisions be made available to the public, permit decisions are currently available to the
public under standard Freedom of Information Act procedures.
Section 331.7(d): Several commenters suggested that the RO should be required to notify
the appellant a minimum number of days prior to the date of the appeal conference to
ensure that the appellant has sufficient time to schedule and attend the meeting. We
agree, and have incorporated a requirement into the rule that provides that the appellant
be given 15 days notification of the date of the appeal conference (see 33 CFR
331.7(d)(1)).
One commenter suggested that it be made mandatory that complete transcripts be prepared
for all presentations and discussions occurring during the appeal conference. We do not
agree with that suggestion, because we believe that the cost of doing so would be
burdensome, and that requiring transcripts would considerably delay the appeal process.
However, we have required that the RO prepare a memorandum for the record (MFR) to
document the appeal conference (See 331.7(d)(7).) We believe that this process is adequate
and not unduly burdensome or costly.
Section 331.7(e): One commenter suggested that the RO be allowed to communicate with
both the appellant and the Corps district during the appeal process. Another commenter
concurred with our initial proposal to prohibit any conversations between the RO and the
parties to the appeal, and also suggested that the regulation should explicitly prohibit
any conversations regarding the appeal between the RO and any third party. The final rule
has been revised to allow the RO to communicate with all parties to the appeal, as well as
outside sources. (See Sections 331.7(d) and 331.3(b)(2).) We anticipate that the RO may
need to question the appellant and the Corps district staff to clarify the administrative
record, and may also need to consult with technical experts, Corps Headquarters staff,
Corps Office of Counsel, or other ROs, if the appeal raises technical issues, questions of
national policy, interpretation of regulations, or legal or programmatic concerns.
Section 331.8(b): Several commenters suggested that a specific time period be included
for soliciting comments from agencies and interested parties following a determination by
the division engineer to remand the permit denial decision to the district engineer for
reconsideration. Some commenters suggested a minimum of 15 days for opportunity to
comment. We have provided additional information on time frames in this rule (see Section
331.10(b).) We have also clarified that where the reconsideration by the district engineer
may involve substantial changes in the potential impacts of the project, a new public
notice will be issued in accordance with the provisions of 33 CFR Part 325.
Some commenters suggested that there be an absolute time limit of 30 to 45 days for the
district engineer to make a final decision on a remanded permit denial. We share the
desire of the commenters for timely decisions; however, appealed permit denial cases are
likely to be controversial, and/or may involve difficult issues that will require further
agency coordination and public participation. Since we cannot anticipate all such issues
and circumstances, we have elected not to establish any deadlines for the reconsideration
of decisions remanded to the district engineer.
Section 331.10: Some commenters recommended that the district engineer not be required
to re-open the public interest review process on remand of a permit denial decision.
Another recommended that the public interest review process be re-opened for all remanded
permit decisions. Depending on the issues raised in each remanded permit decision, there
may be laws, regulations or other guidance that would require the re-opening of the public
interest review process, including opportunity for comments from the public and/or Federal
and State agencies. Therefore, we are neither requiring nor prohibiting this practice, but
are retaining the original wording that makes this determination subject to the discretion
of the district engineer.
One commenter suggested that the rule be clarified regarding the 404(q) elevation
process. The administrative appeal regulation does not change any authorities or
requirements of Section 404(q) of the Clean Water Act. Currently the U.S. Army Corps of
Engineers has Memoranda of Agreement, under Section 404(q), with EPA, FWS and NMFS whereby
policy issues and certain permit decisions can be elevated to higher headquarters for a
decision. This regulation does not affect the Section 404(q) MOA elevation process.
Specifically, policy issues can be raised at any time and the Corps will send Notice of
Intent to Issue letters at the end of the appeal process for any permit decision that
qualifies pursuant to the Section 404(q) MOAs. We have added a statement to the end of
Section 331.10(b) to clarify that nothing in this rule precludes the agencies' authorities
pursuant to Section 404(q) of the Clean Water Act.
(6) General Expressions of Opposition and Support
A number of comments were received related to the estimated costs of administering the proposed administrative appeal process. One commenter indicated that our estimated costs were too low. Two commenters said that our estimated costs were too high. Though the Corps has not had any experience with such a program, we believe that our original cost estimates are reasonable. It is probable that, at the start of the appeal process implementation period, there may be a greater number of appeals than we anticipate. Consequently, the appeal process may be slower than desired due to the workload. We anticipate that as the appeal process matures, appellants will be less inclined to file appeals in questionable or speculative cases, since there will be an established record of consistent regional and national decisions, and ROs will have become increasingly proficient in implementing the appeal process as they gain experience. We will continually evaluate the cost and results of our appeal process. This evaluation may result in future adjustments to ensure that costs of the appeal process are minimized, and that the consistency, efficiency and timeliness of our decisions are maximized.
III. 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 section 331.12 in this rule to make it explicit that persons dissatisfied with permit decisions must avail themselves of the administrative appeal process established in this rule, and have received a final Corps decision on the merits of the appeal, prior to seeking redress in the Federal courts.
IV. Application of Rule to Prior Regulatory Decisions
Affected parties may appeal permit denial decisions and declined permits where the permit denial or proffered individual permit occurs after March 9, 1999. Such requests
will be accepted for administrative appeal in accordance with this regulation. Permit
denials or proffered permits that were transmitted in writing to an affected party prior
to the publication date of the final regulation will not be accepted under the appeal
process. 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 effective date
of these regulations, if necessary.
One commenter asked whether the availability of an administrative appeal process would
affect in-process litigation, initiated in response to a permit denied with prejudice
after the date of the publication of the final rule in the Federal Register. That
is, would this rule render the case as not ripe for judicial review. The appeal of permit
denials and declined individual permits will be accepted by the Corps starting on today's
date. Therefore, applicants must use the appeal process as of today's date and exhaust
such administrative processes before seeking relief in the Federal courts. Furthermore, in
it's discretion, the United States may agree to a suspension of on-going litigation if the
litigant wishes to seek relief through initiation of an administrative appeal, and if the
government believes that such a suspension would be appropriate. The suspension of
litigation to pursue an administrative appeal will not be construed as a waiver of any
right to resume litigation in the event that an administrative remedy acceptable to the
applicant is not achieved.
V. Environmental Documentation
We have determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment, because the Corps has prepared appropriate environmental documentation, including an Environmental Impact Statement (EIS) when required, for all permit decisions. Therefore, environmental documentation under the National Environmental Policy Act (NEPA) is not required for this rule. Moreover, this proposed regulation for administrative appeals only establishes a one-level review for denied permits and declined individual permits, as needed to ensure that applicable regulations, policies, practices, and procedures (including the preparation of appropriate environmental documentation) have been appropriately followed.
VI. Executive Order 12291 and the Regulatory Flexibility Act
The Corps does not believe that this final rule meets the definition of a major rule under Executive Order 12291, and we therefore do not believe that a regulatory impact
analysis is required. This final rule should reduce the burden on the public by offering
an administrative appeal process for certain Corps decisions, and, in some instances,
should allow the applicant to avoid the more time-consuming and costly alternative of
challenging a Corps permit decision in the Federal courts.
We also do not believe that this final rule 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 final rule only creates an optional review of
certain decisions through an administrative appeal process. The final 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 to have the decision reviewed through the
Federal courts. 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 final rule 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.
Dated: March 3, 1999.
Joseph W. Westphal,
Assistant Secretary of the Army (Civil Works), Department of the Army.
Comments regarding new levels of bureaucracy and the legality of the proposed rule were adequately addressed in the preamble to the proposed rule. As noted in the preamble to this final rule, numerous substantive and procedural changes have been adopted as a result of the comments received. Accordingly, 33 CFR Parts 320 and 326 are hereby amended and 33 CFR Part 331 is added as follows:
Extracted from Federal Register: March 9,l999 (Volume 64, Number 45)
[Proposed Rules] Page 37280
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