Statement of Derb S. Carter, Jr.
Southern Environmental Law Center
Chapel Hill, NC
Wetlands Regulations
June 26, 1997

Chairman Inhofe, Members of the Subcommittee, thank you for the opportunity to testify today. I am testifying on behalf of the Southern Environmental Law Center, a public interest, environmental law firm working to protect the environment and natural resources of the Southeast. As a conservationist and attorney with over 15 years of experience representing citizens across the Southeast as they fought to protect wetlands in their communities, I have seen the federal wetlands protection program up close.and on the ground. I was one of the lead attorneys on the Tulloch case, and my client, the North Carolina Wildlife Federation, is a party to the AMC case, now before the Court of Appeals for the D.C. Circuit.

I will address two subjects today: the Corps' decision to phase out Nationwide permit 26, and the January 1997 decision in the AMC case that declared invalid the so-called Tulloch rule. The basic thread that ties these two subjects together is that, in each case, wetlands developers and their attorneys are grasping at legal technicalities to keep profitable loopholes open - long after the damaging environmental consequences of those loopholes are beyond doubt.

The Tulloch Rule

The first of those loopholes, the periodic failure of the Corps to regulate excavation activities in wetlands, was closed by the Tulloch rule. That rule arose out of a case in coastal North Carolina that illustrates why it is important and appropriate for the Corps to regulate the discharge of dredged material resulting from digging in wetlands.

The facts that gave rise to the Tulloch case were brought to our attention by a neighbor of one development whose property was being flooded by diverted drainage water from the wetlands, and by a fisherman who was concerned about the dumping of drainage water from wetlands at another development into a tidal creek from which he took clams and oysters. When we investigated we found that at both sites the developers had excavated in wetlands a system of ditches to drain the wetlands so as to avoid the normal permitting requirements for the proposed residential and commercial developments in wetlands. The developers employed extraordinary means to limit the amount of dirt discharged back into the wetland from the ditch excavation. When we examined files maintained by the Corps of Engineers, we found that frequent site inspections of both developments by Corps staff had determined that some amounts of dredged dirt had been discharged in the wetlands from the excavation of the drainage ditches, but the Corps had determined that this discharge was diminimus, and not subject to permitting requirements. Once drained, the Corps determined that the former wetlands were not jurisdictional and no permits or environmental review was required prior to development.

When we examined the law, it appeared clear that these wetland drainage activities should require a permit. To reach this conclusion, one need not go beyond the plain language of the statute. Section 301 of the FWPCA prohibits the "discharge of any pollutant." Section 502(12) of the FWPCA defines the discharge of pollutant to include "any addition of any pollutant [including dredged and fill material] to navigable waters from any point source." Section 404 of the FWPCA authorizes the Corps to issue permits "for the discharge of dredged or fill material" with no exemptions based on the quantity discharged or the source of the dredged material. Moreover, Section 404(f)(2) states "any discharge of dredged or fill material" that is "incidental to any activity" having as its purpose bringing a wetland into a use to which it was not previously subject, where flow and circulation of waters is impaired or the reach of waters reduced, "shall be required to have a permit." Certainly the law required a permit for the discharges of dredged material associated with the installation of ditches at these developments to convert hundreds of acres of critical wetlands adjacent to North Carolina's coastal estuaries.

We settled the case with the promulgation of the Tulloch rule which requires a permit for any discharge incidental to an activity whose purpose is to destroy or degrade a wetland. It is an eminently sensible rule, filly consistent with the purpose of Section 404 to protect our remaining wetlands from unregulated and unmitigated destruction.

No sooner did the Corps issue the Tulloch rule than the American Mining Congress (AMC) filed suit against it, claiming that Congress never intended the Corps to regulate excavation activities when it asked the Corps to protect wetlands, and that the Corps had therefore exceeded its authority in issuing the Tulloch rule. The decision in January was unexpected, and, to our minds, unfortunate. Like the Corps, we disagree with the District Court decision and are appealing it. We are also seeking a stay pending appeal of the order striking down the Tulloch rule.

Substantial environmental damage will result if the Tulloch rule is not enforced. The Corps estimates that in the absence of Tulloch, some 6,500 excavation projects will go unregulated, with impacts on 10,000 acres of wetlands, 10,000 acres of open water, and 1,500 miles of streams and tributaries.

At the same time, it is important to be clear about what the AMC decision does not do. It does not change the regulated status of most mechanized land clearing activities - those were regulated before Tulloch, and they should be regulated even if incidental discharge is not. You can't take a bulldozer into to clear trees off a wetland without doing substantial damage to the wetlands, and you can't do it without moving a significant amount of dirt around. Similarly, taking heavy equipment into a creek to dig it up and dump material on the banks is still regulated - and it should be, given the way it destroys aquatic life and habitat and usually contributes to flooding downstream.

One need not look further than the two developments that gave rise to the Tulloch rule to forecast the environmental damage that will result if the AMC decision stands. The impacts of the drainage and conversion of wetlands at the two "Tulloch" developments are substantial and lasting. The State of North Carolina has permanently closed to shell fishing the tidal creeks now receiving runoff and drainage from the developments in the former wetlands. Neighboring properties are still being flooded during even moderate rain events. Not surprisingly, the developments in the former wetlands, experience extensive flooding. The unsuspecting homeowners that invested their savings in houses built on these drained wetlands are now seeking public assistance and funding to alleviate the flooding problems.

What should Congress do as this case proceeds through the courts? My respectful recommendation is to let the judicial process take its course. However, when Congress does reauthorize the FWPCA, everyone has agreed for years that to draw a distinction between filling and excavating in the regulatory program is senseless and unfair, and Congress should explicitly include "excavation" in list of regulated activities to remove all doubts.

Nationwide Permit 26

If excavation was a major source of unregulated wetlands loss before promulgation of the Tulloch rule in 1993, Nationwide permit 26 has been the biggest hemorrhage within the 404 program, and that is why conservationists have opposed it. Until the most recent reissuance last December, Nationwide permit 26 allowed the destruction of up to 1 acre of isolated wetlands and headwater streams with no notice to anyone, and up to 10 acres with notice to the Corps, but not to the public or even necessarily to the federal resource agencies. Science has shown that isolated wetlands are among the most important types of wetlands for protecting water quality, serving as habitat, and recharging underground drinking water supplies in various parts of the country; headwater streams are the smallest streams in the watershed, and are the most important parts of river systems for protection of water quality in the watershed. The National Research Council of the National Academy of Sciences recommended in 1995 that NWP 26 be reviewed because "[t]he scientific basis for policies that attribute less importance to headwater areas and isolated wetlands than to other wetlands is weak." National Research Council, Wetlands: Characteristics and Boundaries (May 1995). We've known that NWP 26 was allowing the destruction of tens of thousands of acres of these wetlands and streams each year.

Wetlands, particularly headwaters wetlands, are a first line defense in removing pollutants, including excessive nutrients, from runoff entering surface waters. In the rapidly-developing Piedmont region of North Carolina that drains into the nation's second largest estuary the average size of a wetland is less than one acre. Thus, under the previous version of NWP 26, half of these wetlands and their critical nutrient removal functions could be destroyed with no notice or permit. Meanwhile, the State is currently considering a billion dollar expenditure to upgrade sewage treatment systems primarily to address excessive nutrient enrichment of coastal waters. Existing wetlands provide this service free.

When the Corps proposed to reissue NWP 26 last year, conservationists urged the Corps to eliminate the loophole. NWP 26 violates the legal standards for general permits; it covers a category of wetlands while the Clean Water Act authorizes general permits to cover narrow categories of activities. More importantly, NWP 26 violates both the letter and the spirit of the Corps' general permit authority by authorizing projects with far more than minimal cumulative impacts.

The Corps should have eliminated NWP 26 sooner. Although the Corps has issued NWP 26 with lower thresholds, the permit remains illegal and significantly destructive. Any way you count it, it will allow the unregulated and unmitigated destruction of thousands of acres of isolated wetlands and headwater streams over the next two years. Nonetheless, conservationists are looking to the future, trying to work with the Corps and the regulated community to find alternative Nationwide permits that will protect the environment and work for us all.

Not so the National Association of Homebuilders, who have taken to the courts in an effort to hang onto this scientifically bankrupt loophole a little longer. They apparently believe that a general permit issued under fully discretionary authority now amounts to legal entitlement. The Homebuilders claim that the Corps could not decide to eliminate NWP 26 in two years because it did not specifically solicit comments on that option in its original proposal to reissue the Nationwide. The law requires the Corps to make an affirmative decision to reissue any Nationwide; the default option when a Nationwide is up for reauthorization, is for it to expire and not be reissued. That is no secret, particularly since at public hearings throughout the comment period the Homebuilders heard repeatedly the recommendations of state and local officials and ordinary citizens that NWP 26 not be reissued, or that it be severely limited in the very ways the Corps has done - with limits on the linear impacts permitted to streams, and on the practice of stacking NWP 26 with other nationwides to smuggle projects through with no review.

So the Corps is collecting data to come up with alternative permits, and the Homebuilders are in court. What should Congress do? Again, I'd recommend that this Subcommittee let the administrative and judicial processes take their course. As an advocate experienced in dealing with the Corps, I know the Corps will benefit from prodding to keep to its schedule, and to have the replacement permits ready by the time NWP 26 expires. I also know that conservationists are unlikely to brook further delay in closing that loophole.

The final question to ask is, why are the wetlands developers fighting so hard to avoid meaningful environmental review of their projects? It is not as though most projects don't get a permit; today, between 95 and 97% of individual permits are granted - between 99.5 and 99.7% of projects when general permit authorizations are included. What is really at stake here is time - not whether the developers get to make their money, but how fast, and with what disregard for the environmental consequences.

Ultimately, excusing activities like excavation from review under the 404 program, or approving projects with significant cumulative impacts without real review as NWP 26 does, feeds the profits of a few at the expense of everyone else. Last Congress, some developers tried to persuade this body to increase loopholes in the wetlands program and decrease public protections. They failed. Now they have turned to the courts. I urge this Subcommittee to let the judicial process run its course, and, in the next reauthorization, to strengthen the Section 404 program so that these loopholes can never be reopened again.

Thank you, and I'll look forward to answering your questions.