[Federal Register Volume 60, Number 138 (Wednesday, July 19, 1995)]
[Proposed Rules]
[Pages 37280-37290]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17311]




[[Page 37279]]

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Part III





Department of Defense





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Department of the Army



Corps of Engineers



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33 CFR Parts 320, 326 and 331



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

  Federal Register / Vol. 60, No. 138 / Wednesday, July 19, 1995 / 
Proposed Rules  

[[Page 37280]]


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.

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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 

[[Page 37281]]
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.

[[Page 37282]]


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 

[[Page 37283]]
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.

[[Page 37284]]

    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
                                                            ------------
    Total..................................................    2,502,500
                                                                        

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 

[[Page 37285]]
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) 

[[Page 37286]]
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.

    Accordingly, 33 CFR Parts 320 and 326 are proposed to be amended 
and 33 CFR Part 331 is proposed to be added as follows:

PART 320--GENERAL REGULATORY POLICIES

    1. The authority citation for Part 320 continues to read as 
follows:

    Authority: 33 U.S.C. 401 et seq.; 33 U.S.C. 1344; 33 U.S.C. 
1413.

    2. Section 320.1(a)(2) is amended by revising the final sentence to 
read as set forth below.


Sec. 320.1  Purpose and scope.

* * * * *
    (a)(2) * * * A district engineer decision to deny a permit or a 
Corps jurisdictional determination is subject to an administrative 
appeal by the landowner or permit applicant in accordance with the 
procedures and authorities contained in 33 CFR Part 331. Such 
administrative appeal must meet the criteria in 33 CFR 331.5; otherwise 
there is no administrative appeal of that decision. An applicant or 
landowner must exhaust any administrative appeal available pursuant to 
the 33 CFR Part 331 and receive a final agency decision prior to filing 
suit in Federal District Court.

PART 326--ENFORCEMENT

    1. The authority citation for Part 326 continues to read as 
follows:

    Authority: 33 U.S.C. 401 et seq.; 33 U.S.C. 1344; 33 U.S.C. 
1413.

    2. Section 326.3(e) is amended by adding a new paragraph (e)(1)(v) 
to read as follows:


Sec. 326.3  Unauthorized activities.

* * * * *
    (e) * * *
    (1) * * *
    (v) No permit application will be accepted unless and until the 
applicant has furnished a signed statute of limitations tolling 
agreement to the district engineer. A single statute of limitations 
tolling agreement will be prepared for each unauthorized activity. Such 
agreement will state that in exchange for the Corps' acceptance of any 
after-the-fact permit application and/or any administrative appeal 
associated with the unauthorized activity, the responsible party agrees 
that the statute of limitations will be tolled until one year after the 
final after-the-fact permit decision or, if there is an administrative 
appeal, one year after the final agency decision as defined at 33 CFR 
331.9, which ever is later.
    Part 331 is added to read as follows:

PART 331--ADMINISTRATIVE APPEALS PROCESS

Sec.
331.1  Purpose and policy.
331.2  Definitions.
331.3  Review officers.
331.4  Notification of appealable actions.
331.5  Criteria.
331.6  Filing appeals.
331.7  Review procedures.
331.8  Timeframes for appeals decisions.
331.9  Final appeals decisions.
331.10  Final agency decisions.
331.11  Unauthorized activities.
331.12  Exhaustion of administrative remedies.

    Authority: 33 U.S.C. 401 et seq., 1344, and 1413.


Sec. 331.1  Purpose and policy.

    (a) General. The purpose of this regulation is to establish 
administrative appeals policies and procedures for final Corps of 
Engineers geographic jurisdictional determinations and permit denials 
with prejudice. The appeals process will allow landowners and permit 
applicants to pursue an administrative appeal of a final Corps of 
Engineers decision or determination with which they disagree. The basis 
for an appeal and the specific policies and procedures of the appeals 
process are described in the following sections. It shall be the policy 
of the Corps of Engineers to promote and maintain an administrative 
appeals process that is independent and objective, fair and equitable, 
and efficient and cost-effective.
    (b) Jurisdictional determinations. Under the Corps of Engineers 
regulatory program, landowners and permit applicants may request, and/
or receive, final Corps jurisdictional determinations to determine the 
presence and extent of wetlands, scope and extent of other waters of 
the United States, and whether the property or 

[[Page 37287]]
waterbody is subject to Department of the Army jurisdiction. Therefore, 
such geographic jurisdictional determinations are vitally important 
decisions to landowners and permit applicants. These decisions affect 
whether or not the Corps has regulatory jurisdiction, and whether a 
permit is required for work involving regulated discharges and 
activities. The administrative appeal process shall apply to these 
decisions.
    (c) Permit denials. Permit decisions that result in denial with 
prejudice may be appealed under the administrative appeal process.


Sec. 331.2  Definitions.

    The terms and definitions found in 33 CFR Parts 320 through 330 are 
applicable to this regulation. In addition, the following terms are 
defined for the purposes of this Part:
    (a) Jurisdictional determination means a written Corps 
determination that a wetland (as determined and defined by a wetland 
delineation) and/or waterbody is subject to regulatory jurisdiction 
under section 404 of the Clean Water Act or a written Corps 
determination that a waterbody is subject to regulatory jurisdiction 
under sections 9 and 10 of the Rivers and Harbors Act of 1899. 
Additionally, the term includes a written reverification of expired 
jurisdictional determinations and a written reverification of 
jurisdictional determinations where new information has become 
available that may affect the previous written determination. For 
example, such geographic jurisdictional determinations may include, but 
are not limited to, one or more of the following determinations: 
presence/absence of wetlands, wetland/upland boundary, ordinary high 
water mark, mean high water mark, high tide line, interstate commerce 
nexus for isolated waters, and adjacency of wetlands to a waterbody. 
All jurisdictional determinations will be in writing and will be 
identified as either preliminary or final jurisdictional 
determinations. Some office, or preliminary, jurisdictional 
determinations are provided to applicants or landowners, generally to 
indicate the presence or absence of wetlands or waterbodies. They are 
advisory in nature and may not be appealed. Final jurisdictional 
determinations will be provided in writing and will be certified as a 
final jurisdictional determination and may be appealed.
    (b) Wetland delineation means a Corps of Engineers (Corps) 
delineation, or verification of a delineation submitted by an applicant 
or consultant, indicating the size and boundaries of a subject property 
that is a wetland in accordance with the current Federal manual for 
identifying and delineating wetlands (FDM). Additionally, the term 
includes reverification of expired wetland delineations and 
reverification of wetland delineations where new information has become 
available that may affect the final delineation.
    (c) Permit denial means a written Corps denial with prejudice (see 
33 CFR 320.4(j)) of an individual standard permit as defined in 33 CFR 
325.5(b). Permit denials also include cases where a proffered 
individual permit is refused by the applicant in writing 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. If the applicant refuses a proffered general permit, 
the District Engineer will not deny a permit for the proposed project 
based on that refusal. The applicant must apply for an individual 
permit. If that individual permit is subsequently denied with 
prejudice, then the applicant may request an appeal of that denial.
    (d) Appealable action means a written final jurisdictional 
determination or permit denial as those terms are defined in paragraphs 
(a) and (c) of this section.
    (e) Affected party means a permit applicant or landowner (i.e., an 
individual who has an identifiable and substantial legal interest in 
the property) that has received a final jurisdictional determination, 
or permit denial as those terms are defined in paragraphs (a) and (c) 
of this section.
    (f) Appellant means an affected party who has filed an appeal under 
the criteria and procedures of these regulations.
    (g) Review officer (RO) means the Corps of Engineers agency 
official responsible for the review and final decision on the merits of 
an appeal or review and recommendation to the Corps agency official 
making the final decision on the merits of an appeal. The RO, and/or 
the appeals decision-maker, is the District Engineer, or the Division 
Engineer as appropriate, or their designee(s).
    (h) Notification of appeals process (NAP) means the information 
fact sheet which explains the administrative appeals process, criteria, 
and procedures. The NAP will accompany all final wetland delineations, 
jurisdictional determinations, and permit denials, as these terms are 
defined herein.
    (i) Request for appeal (RFA) means the affected party's official 
request to appeal an appealable action with which he disagrees. The RFA 
will include required information to identify the affected party, 
proposed project, reason(s) for the appeal, and any supporting data and 
information. The format and required information of the RFA will be 
provided to the affected party at the time of notification of appeals 
process. The affected party initiates the administrative appeals 
process by completing and returning the RFA to the appropriate Corps of 
Engineers office.


Sec. 331.3  Review officers.

    (a) Authority. The District Engineer, or the Division Engineer as 
appropriate, has the authority and responsibility for administering a 
fair, reasonable, and effective administrative appeal process. The 
District Engineer, or the Division Engineer as appropriate, may act as 
the RO or may delegate, either generically or on a case-by-case basis, 
any authority or responsibility described in this Part as that of the 
RO. However, the District Engineer, or the Division Engineer as 
appropriate, may not delegate any authority or responsibility described 
in this Part as that of the District Engineer, or the Division 
Engineer, respectively. Regardless of any delegation of RO authority or 
responsibility, the District Engineer or the Division Engineer as 
appropriate, retains overall responsibility for the administrative 
appeal process.
    (1) Jurisdiction determinations. The District and Division ROs have 
the authority to make a decision on the merits of the appeal. 
Furthermore, the District RO has the discretion to make a new 
jurisdiction determination.
    (2) Permits denials. The RO will prepare an analysis and 
recommendation for the Division Engineer. The Division Engineer has the 
authority to make the final decision on the merits of the appeal. Under 
the appeal process, neither the RO nor the Division Engineer has the 
authority to make a final decision to issue or deny any particular 
permit. The authority to issue or deny permits remains with the 
District Engineer. However, the Division Engineer may exercise the 
authority at Sec. 325.8(c) to elevate the permit case and then may make 
the final permit decision.
    (b) General. (1) Independence. The ROs shall be located in the 
Corps Division and District regulatory offices, unless specifically 
appointed as described in paragraphs (b), (c) and (d) of this section. 
The ROs will not perform or have been involved with the preparation, 
review, or decision making of the action being appealed. During the 
appeal process, the ROs shall maintain independence and objectivity in 
their 

[[Page 37288]]
review of an appeal case and when determining the merits of the appeal.
    (2) Review. The RO will conduct 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 and the ultimate decision. The 
District RO has the discretion to gather additional information when 
deemed necessary. When reviewing technical issues, Division RO's shall 
not substitute their judgment for that of the Corps district unless the 
reviewed decision was clearly erroneous or omitted a material fact. An 
RO who lacks specific expertise with regard to a specific appealed 
issue will obtain the assistance of another RO or other recognized 
expert from an office outside the Regulatory Branch or from a District 
other than the District where the appeal was initiated.
    (c) Jurisdictional determinations. (1) District RO. The Corps 
district RO shall be, or have the support of, a recognized expert with 
extensive experience in conducting and reviewing wetland delineations 
and performing and reviewing jurisdictional determinations. The 
district RO shall report directly to the Regulatory Branch Chief. This 
arrangement will insure that the district RO is removed from day-to-day 
involvement in routine jurisdictional determinations made by Regulatory 
Branch project managers, unit chiefs, and section chiefs. For any case 
where the jurisdictional determination was made by the Regulatory 
Branch Chief or higher authority, or the individual(s) who normally 
acts as the district RO has participated in the decision or otherwise 
advised the decision-maker, or at the District Engineer's discretion, 
the District Engineer or a Corps official at least one level higher 
than the decision-maker shall appoint a qualified independent RO to 
conduct the appeal process.
    (2) Division RO. The division RO responsible for appeals of a 
district RO's decision shall generally be the same RO(s) that is 
responsible for appeals of permit denials described in paragraph (d) of 
the section.
    (d) Permit denials. The ROs responsible for appeals involving 
permit denials shall be officials in Division regulatory offices with 
extensive knowledge of all aspects of the Corps regulatory program. For 
any case where the permit decision was made by the Division Engineer or 
higher authority, an agency official at least one level higher than the 
decision-maker shall appoint a qualified independent RO to conduct the 
appeal process.


Sec. 331.4  Notification of appealable actions.

    Every final jurisdictional determination and permit denial must be 
provided in writing to the affected party. For permit denials, the 
notification will also include a copy of the decision document. 
Additionally, an affected party has the right to review and obtain 
copies of the administrative record. Each notification letter will 
include a NAP and an RFA.


Sec. 331.5  Criteria.

    (a) Criteria for appeal. The reason(s) or basis(es) for requesting 
the appeal must be specifically stated and must be more than a simple 
request for appeal because the affected party did not like the 
decision. Examples of reasons or bases for appeals include, but are not 
limited to, the following: a procedural error, an incorrect application 
of policy or regulations, omission of material fact, incorrect 
application of Federal Wetland delineation manual, lack of interstate 
commerce nexus, incorrect application of 404(b)(1) Guidelines under the 
Clean Water Act, or use of incorrect data.
    (b) Actions not appealable. An action or decision is not subject to 
an administrative appeal under these regulations if it falls into one 
or more of the following categories:
    (1) a jurisdictional determination associated with an individual 
permit (including an individual permit with special conditions), or the 
permit itself, where the permit has been accepted and signed by the 
permittee;
    (2) any site specific matter that has been the subject of a final 
judicial decision; or
    (3) a final agency decision that has resulted from additional 
analysis and evaluation, as directed by a final appeal decision.
    (4) any matter than can not be controlled or changed by the Corps 
decision-maker (e.g., The requirement of a binding statute, regulation, 
state Section 401 water quality certification, etc.)


Sec. 331.6  Filing appeals.

    An affected party must file an RFA that is received by the Corps 
within 60 days from the date of the letter notifying the affected party 
of the appealable action. In any case where work is authorized to 
commence prior to the end of this 60 day period, either by general or 
individual permit, and the permittee wishes to request an appeal, the 
appeal must be received by the Corps and the appeal process concluded 
prior to the commencement of any work in the area identified as waters 
of the United States, and prior to any work that could alter the 
hydrology of waters of the United States. Additionally, the affected 
party must grant a right of entry to the RO to inspect the property and 
to conduct appropriate field tests and sampling that the RO determines 
may be necessary.


Sec. 331.7  Review procedures.

    (a) General. (1) Jurisdiction determinations. The administrative 
appeals process for jurisdiction determinations is a two level appeal 
process. The first level appeal is to a specialist review officer in a 
Corps district office. The landowner will be able to present 
information to the RO, or the RO may obtain information, for the 
administrative record. The second level appeal is to an RO in a Corps 
Division office. This review will be limited to the administrative 
record developed during the first level appeal, which would include any 
information provided by the landowner as part of that record.
    (2) Permit denials. The administrative appeals process for permit 
denials is a one level appeal process to the Division Engineer. The 
appeals process will be conducted by a RO in the Division office. The 
division RO will prepare the record, an analysis, and a recommendation 
for the Division Engineer. The Division Engineer may participate in the 
appeals process as the Division Engineer deems appropriate. The 
Division Engineer will make the decision on the merits of the appeal.
    (b) Acceptance of the request for appeal. Within 30 days after 
receipt of the RFA, the RO shall review the appellant's RFA and the 
administrative record. If, within this 30 day period, the RO determines 
that the RFA does not meet the criteria for appeal (see Sec. 331.5), 
the RO will notify the appellant in writing by certified mail of this 
determination and the reason(s) why the appeal failed to meet 
applicable criteria. No further administrative appeal is available, 
unless within 30 days from his receipt of the letter refusing his 
appeal, the appellant can refute the reason(s) for failing the criteria 
for appeal. The appellant may submit a revised RFA, if the reason(s) 
for failing applicable criteria have been remedied and the revised RFA 
is received by the Corps within 30 days from the date the appellant 
received notification that the original RFA failed to meet the criteria 
for appeal. If the RO determines that the revised RFA still does not 
meet the criteria for appeal, the RO will notify the appellant in 
writing of that fact by certified mail within 30 days advising 

[[Page 37289]]
the appellant that the matter can not be appealed.
    (c) Site visits. If within 30 days from receipt of the RFA the RO 
determines that additional field data and sampling are necessary, or if 
the appellant requests a site visit, the RO will conduct a site visit. 
The RO has the discretion to conduct a site visit, except when the 
applicant requests one, in which case a site visit shall be conducted. 
The appellant, or the appellant's authorized agent, must participate in 
the site visit if he has requested that one be conducted. If a site 
visit is conducted, the RO will schedule the completion of the site 
visit at the earliest practicable time. When practicable the site visit 
should be scheduled in conjunction with the review conference or 
meeting, if one is held. Site visits will not be conducted by Division 
ROs for appeals of District RO decisions on jurisdiction 
determinations.
    (d) Meetings and conferences--(1) Jurisdictional determinations 
meetings. The District RO may schedule a meeting with the appellant, 
his or her authorized agent, or both, and appropriate Corps regulatory 
personnel to review and discuss issues directly related to the appeal. 
Additionally, the appellant may request that such a review meeting be 
held. However, the final decision on whether to conduct a review 
meeting shall be at the discretion of the District RO. If a meeting is 
held, the appellant will bear his or her own costs associated with 
necessary arrangements, exhibits, travel, and representatives. The 
Division RO will not conduct any jurisdictional determination meetings 
or discussions with any party, including the District RO.
    (2) Permit denial conferences. An appeal review conference 
(conference) will be held for every permit denial appeal, unless the RO 
and the appellant mutually agree to forego a conference. When held, the 
conference will take place within 60 days of receipt of an acceptable 
RFA, unless the RO determines that unforeseen or unusual circumstances 
require scheduling the conference for a later date. The conference will 
be governed by the following:
    (i) Notification. The RO will set a date, time, and location for 
the conference and notify in writing the appellant and the Corps 
District regulatory office within 30 days of receipt of the RFA.
    (ii) Facilities. The conference will be held at a location that has 
suitable facilities and that is reasonably convenient to the appellant, 
preferably in the proximity of the project site. Where public 
facilities are available at no expense, these facilities are preferred. 
If a free facility is not available, the charges for the facility will 
be borne by the Corps District regulatory office.
    (iii) Participants. The RO, appellant, the appellant's authorized 
agent or consultant, and the Corps District staff are authorized 
participants in the conference. The Division Engineer and/or the 
District Engineer may choose to attend or not to attend at their 
discretion. If the appellant does not attend the conference, the 
appeals process is terminated with prejudice, unless the RO excuses the 
appellant for a justifiable reason. Furthermore, should the process be 
terminated with prejudice, the original permit denial decision shall be 
sustained.
    (iv) The role of the RO. The RO shall be in charge of conducting 
the conference. He shall open the conference with a summary of the 
policies and procedures for conducting the conference as described in 
these regulations. The RO's responsibilities are to conduct a fair and 
impartial conference, to hear and fully consider all relevant issues 
and facts, and to clarify any matters necessary to make a final 
determination on the merits of the appeal.
    (v) Appellant rights. The appellant, or the appellant's authorized 
agent, will be given a reasonable opportunity to present the 
appellant's views regarding the subject permit denial.
    (vi) Subject matter. The conference will be limited to matters 
contained within the existing administrative record. The RO may ask the 
Corps District representatives or the appellant to respond regarding 
particular matters of the relevant record, regarding the appellant's 
assertions or exhibits, or to clarify elements in the administrative 
record. New issues may not be raised or discussed.
    (vii) Testimony and transcripts. There will be no sworn testimony 
and no cross examination during the conference. The RO may tape-record 
and/or have a transcript prepared of the conference. The tape and/or 
transcript is for use by the RO to review the proceeding of the 
conference and to assist in the preparation of the RO's findings. A 
tape-recording or transcript is optional, at the RO's discretion. 
However, if none is planned or requested by the RO, the appellant may 
contract and bear the expense for such a record if so desired. Any tape 
or transcript would become part of the administrative record of the 
appeal process and must be made available to all parties upon request.
    (viii) Appellant costs. The appellant will bear his own costs 
associated with necessary arrangements, exhibits, travel, and 
consultants.
    (e) The appeal of a District jurisdictional determination to the 
Division office will be limited to the administrative record. The RFA 
will be accepted upon receipt by the appropriate Division office. The 
Division RO will base the appeal decision on the administrative record 
provided by the District office. Therefore, the appellant must provide 
to the District office all relevant information to be entered into the 
administrative record during the District jurisdictional determination 
appeal. The Division RO will not meet or have conversations with any 
interested party, including the District RO or Corps District 
personnel, the appellant or the appellant's agent, regarding this 
matter.


Sec. 331.8  Timeframes for final appeals decisions.

    The Corps will make a final decision on the merits of the appeal at 
the earliest practicable time in accordance with the time limits set 
forth in the following paragraphs.
    (a) Jurisdictional determination appeals.
    (1) District level appeal.
    (i) Normal timeframe. If the RFA meets the criteria for appeal and 
the District RO determines that a site visit is not necessary, the 
District RO, or designated Corps official, will make a final decision 
on the merits of the appeal within 60 days from receipt of the RFA, or 
the revised RFA, except as provided in paragraphs (a)(1)(ii) and 
(a)(1)(iii) of this section.
    (ii) Extenuating circumstances. If extenuating circumstances are 
present at the site that preclude the appellant and/or the District RO 
from conducting the site visit or gathering necessary information, the 
District RO may grant a time extension. Examples of extenuating 
circumstances may include seasonal hydrology conditions, winter 
weather, or disturbed site conditions. However, in no case shall the 
data collection or site visit period extend the total appeals review 
process beyond twelve months from the date of receipt of the RFA. If a 
time extension is granted for information and data gathering, the 
District RO will notify the appellant in writing. The District RO will 
complete the appeals review and make a final decision within 30 days of 
the site visit or data collection time extension period.
    (iii) New information. During the course of the appeals review, the 
appellant may present new information not available at the time the 
appeal was submitted. The District RO, at the 

[[Page 37290]]
District RO's discretion, may extend the time period for making the 
final decision to 30 days beyond the date of receipt of additional 
information submitted by the appellant, unless conditions as described 
in paragraph (a)(1)(ii) of this section exist.
    (2) Division level appeal. The Division RO, or designated Corps 
official, will make a final decision on the merits of the appeal within 
60 days of receipt of the RFA.
    (b) Permit denials. The Division Engineer will make a final 
decision on the merits of the appeal within 90 days of receipt of the 
RFA, or the revised RFA.


Sec. 331.9  Final appeals decisions.

    (a) In accordance with the authorities contained in Sec. 331.3(b), 
the Corps appeal decision will either:
    (1) determine that the appeal has no merit;
    (2) determine that the appeal has merit; or
    (3) for jurisdictional determinations only, at the District level 
the RO, or designated Corps official, may determine that the appeal has 
merit and revise the jurisdictional determination.
    (b) The Corps will document the appeal decision, addressing the 
conclusions reached on the merits of the appellant's appeal. If the 
Corps determines that the appeal has merit (paragraph (b)(2) above), 
the RO will notify the district of further analysis and evaluation 
needed before the district can make a final agency decision. The RO 
will notify the appellant and the appropriate Corps office of the final 
appeal decision on the merits of the appeal in writing. The appellant 
will be notified by certified mail.
    (c) The final appeal decision of the Division RO, the designated 
Corps official, or the Division Engineer, as appropriate, concludes the 
administrative appeal process and will be included in the 
administrative records. There is no further administrative appeal of 
the appealable action.


Sec. 331.10  Final agency decisions.

    (a) Jurisdictional Determinations. The final agency decision on a 
jurisdictional determination that has been appealed will be made by one 
of the following methods:
    (1) If the Division RO, or designated Corps official, determines 
that the appeal has no merit, then the final agency decision is the 
original jurisdiction determination or a District RO, or designated 
Corps official, corrected jurisdiction determination, as appropriate; 
or
    (2) If the Division RO, or designated Corps official, determines 
that the appeal has merit, the Division RO, or designated Corps 
official, will provide direction to the original decision-maker or the 
District RO, as appropriate, to complete the administrative record and/
or further analyze or evaluate specific issues. Subsequently, the final 
agency decision is the final jurisdictional determination made pursuant 
to the Division RO's, or designated Corps official's appeal decision; 
or
    (3) If the appellant accepts the agency decision based on the 
District RO's, or designated Corps official's appeal decision (see 
Sec. 331.9) or does not appeal to the Division Engineer, then that 
decision becomes the final agency decision. However, in such cases, the 
appellant has acted without exhausting all the administrative remedies 
under this rule. (See Sec. 331.12).
    (b) Permit denials. The final agency decision on a permit denial 
that has been appealed will be made by one of the following methods:
    (1) If the Division Engineer determines that the appeal has no 
merit, the final agency decision is the District Engineer's denial 
decision; or
    (2) If the Division Engineer determines that the appeal has merit, 
the Division Engineer will provide direction to the District Engineer 
to complete the administrative record and/or further analyze or 
evaluate specific issues. Subsequently, the final agency decision is 
the District Engineer's final decision made pursuant to the Division 
Engineer's appeal decision.


Sec. 331.11  Unauthorized activities.

    Jurisdictional determinations and permit denials associated with 
after-the-fact permit applications are appealable actions for the 
purposes of these regulations. If the Corps accepts an after-the-fact 
permit application, an administrative appeal of a jurisdictional 
determination and/or a permit denial may be filed and processed in 
accordance with these regulations subject to the provisions of 
paragraphs (a), (b), and (c) of this section. An appeal of 
jurisdictional determinations associated with unauthorized activities 
will normally not be accepted unless the Corps accepts an after-the-
fact permit application. However, in rare cases, the District Engineer 
may accept an appeal of such a jurisdictional determination, if the 
District Engineer determines that the interests of justice, fairness, 
and administrative efficiency would be served thereby.
    (a) Initial corrective measures. If the District Engineer 
determines that initial corrective measures are necessary pursuant to 
33 CFR 326.3(d), an RFA for an appealable action will not be accepted 
by the Corps, until the initial corrective measures have been 
completed.
    (b) Penalties. If an affected party requests, under this Section, 
an administrative appeal of an appealable action prior to the 
resolution of the unauthorized activity and the RO determines that the 
appeal has no merit, the responsible party remains subject to any 
civil, criminal, and administrative penalties as provided by law. Any 
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.
    (c) Tolling of statute of limitations. The RFA associated with 
unauthorized activities must include a signed statute of limitations 
tolling agreement. (See 33 CFR 326.3(e)(1)(v).) No administrative 
appeal will be accepted until such agreement is furnished to the 
district engineer.


Sec. 331.12  Exhaustion of administrative remedies.

    Applicants or landowners may not file a legal action in Federal 
District Court challenging a jurisdiction determination or a permit 
denial until after a final agency decision has been made on the permit 
application (i.e., permit issuance or denial) and the appellant has 
exhausted all applicable administrative remedies under this Part. If an 
appellant is challenging a permit denial, the appellant exhausts all 
administrative remedies when a final agency decision is made in 
accordance with Sec. 331.10(b).
Gregory D. Showalter,
Army Federal Register Liaison Officer.
[FR Doc. 95-17311 Filed 7-18-95; 8:45 am]
BILLING CODE 3710-92-M