FINANCING STATE WETLANDS PROGRAMS
Prepared for:
OFFICE OF WETLANDS PROTECTION
U.S. ENVIRONMENTAL PROTECTION AGENCY
Prepared by:
%
jikNk APOGEE RESEARCH, INC.
NOVEMBER 1990
Printed on Recycled Paper
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ACKNOWLEDGEMENTS
This document was prepared by Apogee Research, Inc., for EPA's Office of Wetlands
Protection, Wetlands Strategies and State Programs Division, under EPA Contract
No. 68-03-3514. Apogee Research gratefully acknowledges the direction and assistance provided
by Lori Williams of EPA's Office of Wedands Protection, who served as Contract Manager. In
addition, EPA's wetlands regional program contacts (see Appendix B) provided invaluable
assistance in identifying case studies for this report.
Much of the information contained in this report was gathered from telephone
conversations and written materials provided by state wedands program officials. All contributed
generously of their time, for which we are thankful.
For additional copies contact:
Wetlands Strategies and State Programs Division
Office cf Wedands Protection A-1Q4F
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
Phone: (202) 382-5043
EPA believes that a truly effective program to protect our nation's wedands depends on
a concerted effort by all levels of government, private industry, developers, fanners, conservation
organizations, the scientific community, and others. In recognition of the importance of our
nation's wedands, EPA's Office of Wetlands Protection (OWP) was created to expand effons and
emphasize wedands protection goals. OWP is involved in regulatory actions, the development
of strategies to protect wetlands, the coordination of wetlands policies among several federal
agencies, assisting states to develop wedands protection programs, public outreach work, and
scientific program development
T-»
Kqjond Ccn.cr for Environmental Information
US HPA Region Ml
1650 Arch St
Philadelphia, PA 19103
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LOTD
U.S. Environmental Protection Agency
Region HI information Resourca
C-?nter (3PM52)
TABLE OF CONTENTS S
ruiiadeSphia, PA 191U/
1. INTRODUCTION
2. OVERVIEW OF STATE WETLANDS PROTECTION ACTIVITIES 4
Regulatory Programs 4
Section 404 permit program 4
State regulatory programs 5
State water quality certification 5
Nonregulatory Programs 5
Acquisition programs 6
Public land management 6
Private land management 6
3. ALTERNATIVE FINANCING MECHANISMS FOR STATE WETLANDS
PROGRAMS 8
Alternative Financing Mechanisms 8
Fees 9
Taxes 12
Fines and Penalties 14
Bonds 14
Other Alternative Financing Mechanisms 15
Funds Management 17
4. CONSIDERATIONS IN SELECTING FINANCING MECHANISMS iy
Who Should Pay far Wetlands Protection Activities? 19
Is the Financing Mechanism Politically and Publicly Acceptable? 20
Is the Financing Mechanism Financially Feasible? 21
What are the Administrative Requirements of the Financing Mechanism? 21
What are the Impacts of the Financing Mechanism? 22
How Can These Criteria Be Used in the Decision-making Process? 22
5. SELECTED CASE STUDIES 23
APPENDICES
A. GLOSSARY OF FINANCIAL TERMS 82
B. WETLANDS REGIONAL PROGRAM CONTACTS . 85
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LIST OF WETLANDS FINANCING CASE STUDIES
MICHIGAN PERMIT APPLICATION FEE 24
NEW YORK STATE PERMIT APPLICATION FEES 26
NEW JERSEY FRESHWATER WETLANDS PERMIT FEES 29
WISCONSIN PERMIT FEE 32
OREGON REMOVAL-FILL PERMIT FEES . 35
NORTH CAROLINA COASTAL DEVELOPMENT PERMIT FEE 38
MAINE WETLANDS PERMIT FEES 40
NEW HAMPSHIRE PERMIT APPLICATION FEE 43
PENNSYLVANIA WATER OBSTRUCTION AND ENCROACHMENT PERMIT
FEE 45
LOUISIANA COASTAL USE PERMIT FEES . 47
OHIO WATER QUALITY CERTIFICATION FEE 49
CALIFORNIA WATER QUALITY CERTIFICATION FEE 52
LOUISIANA WATER QUALITY CERTIFICATION FEE 54
MARYLAND TIDAL WETLANDS COMPENSATION FEES 56
TENNESSEE PROPERTY TRANSFER TAX 58
FLORIDA DOCUMENTARY STAMP TAX 60
MISSOURI DEDICATED SALES TAX 63
NEBRASKA HABITAT STAMP 65
IOWA HABITAT AND WATERFOWL STAMPS 67
NEW JERSEY WATERFOWL STAMP 69
NEW HAMPSHIRE FINES AND PENALTIES 71
NEW YORK STATE LAND ACQUISITION PROGRAM 73
CALIFORNIA STATE COASTAL CONSERVANCY 75
MUfNESOTA STATE WATER BANK PROGRAM 77
MINNESOTA RIM RESERVE WETLANDS RESTORATION PROGRAM 79
OREGON WETLANDS MITIGATION BANK REVOLVING FUND ACCOUNT 81
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1. INTRODUCTION
Widespread recognition of the environmental and economic benefits of wetlands is
relatively recent. Wetlands once were perceived as wastelands that could be useful only if
converted to other uses. Many now realize that wetlands have great value in their natural state
because they perform many functions in natural systems (see Exhibit 1). At the same time,
property containing wetlands continues to have value for other purposes and wetland alterations
continue to occur. Continued loss of valuable wetlands resources will deprive the nation of the
substantial environmental and economic benefits they provide.
In response to continuing wetlands losses, federal, state, and local governments, as well
as nonprofit organizations have begun to broaden their efforts to protect these valuable resources.
One of the primary challenges they face is obtaining the funding necessary to support wetlands
protection programs. Moreover, wetlands protection activities must compete with other
environmental goals for funding at a time when all levels of government are facing tight budget
constraints.
Financing wetlands protection presents special problems, because it is often difficult to
assess who benefits from wetlands protection (and therefore, who might be willing to pay for it)
or who is causing damages to wetlands (and therefore, who is a logical target for mandated
payments for damages). It is difficult or costly to identify and recover costs from the
beneficiaries of wetlands protection, because many of the benefits of wetlands protection (such
as those described in Exhibit 1) accrue to the general public rather than wetland owners.
Furthermore, it is difficult to exclude those beneficiaries who are unwilling to pay from enjoying
the benefits of wetlands protection and restoration activities. Recovering costs from harmful
activities presents problems because it is difficult to identify off-site sources of degradation or
quantify aidverse effects to wetlands.
Traditionally, governments have relied on general revenues to support environmental
programs such as wetlands protection. Other, more innovative financing mechanisms include
fees, taxes, or fines and penalties. Fees, such as permit and inspection fees, can provide revenues
to support regulatory programs. Taxes applicable to financing wetlands protection activities
include property transfer taxes, severance taxes, and waterfowl stamps. While fines and pena'ties
generally are designed to modify behavior, they can also be a source of funding for government
wetlands programs. Establishing dedicated funds to manage revenues from these financing
mechanisms is an effective means to tie those revenues directly to wetlands protection programs.
This guidebook reviews a number of alternative financing mechanisms that are beiig used
to finance state wetlands programs. It focuses on financing state regulatory prop/am, but
examples of financing for nonregulatory programs also are included since they may be applicable
to regulatory programs as well. Case studies profile how states have used a variety, of these
mechanisms, ranging from permit fees to property transfer taxes to habitat stamps.
The guidebook is organized to provide information on what states are doing to protect
wetlands, how to pay for these activities using alternative financing mechanisms, and how to
evaluate which alternative financing mechanisms are mcrt appropriate. Chapter 2 provides an
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Exhibit 1. Wetlands Functions
Flood conveyance -- Riverine wetlands and adjacent floodplain lands often form natural floodways that
convey flood waters upstream to downstream points.
Barriers to waves and erosion -- Coastal wetlands and those inland wetlands adjoining larger lakes and
rivers reduce the impact of storm udes and waves before they reach upland areas. !
i
Flood storage - Inland wetlands may store water during floods and slowly release it to downstream j
areas, lowering flood peaks. |
Sediment control -- Wetlands reduce flood flows and the velocity of flood waters, reducing erosion and
causing flood waters to release sediment.
Fish and shellfish -- Wetlands are important spawning and nursery areas and provide sources of nutrients
for commercial and recreational fin and shellfish industries, particularly in coastal areas.
Habitat for waterfowl and other wildlife -- Both coastal and inland wetlands provide essential breeding,
nesting, feeding, and predator escape habitats for many forms of waterfowl, other birds, mammals, ami
reptiles.
Habitat for rare and endangered species ~ Almost 35 percent of all rare and endangered species are
either located in wetland areas or are dependent on them, although wetlands constitute only about 5
percent of the nation's lands.
Recreation ~ Wetlands serve as recreation sites for fishing, hunting, and observing wildlife.
Water supply - Wetlands are increasingly important as a source of ground and surface water with the
growth of urban centers and dwindling ground and surface water supplies.
Food production •• Because of their high natural productivity, both tidal and inland wetlands have
unrealized food production potential for harvesting of marsh vegetation and aquaculture.
Timber production - Under proper management, forested wetlands are an important source of timber,
despite the physical problems of timber removal.
Historic, archaeological values - Some wetlands are of archaeological interest Indian settlements were
located in fnMW| and inland wetlands, which served as sources of fish and shellfish.
Education and research - Tidal, coastal, and inland wetlands provide educational opportunities for nature
observation and scientific study.
Open space and aesthetic values ~ Both tidal and inland wetlands are areas of great diversity and beauty
and provide open space far recreational and visual enjoyment.
Water quality - Wetlands contribute to improving water quality by removing excess nutrients and many
chemical contaminants. They are sometimes used in tertiary treatment of wastewater.
Source: National Wetlands Policy Forum, 1988
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overview of state wetlands protection activities, including both regulatory and nonregulatorv
programs. Chapter 3 provides general descriptions of the major alternative financing
mechanisms, that is, fees, taxes, fines and penalties, and bond financing, as well as other
miscellaneous mechanisms. Chapter 4 presents a number of considerations that can help evaluate
when a particular financing mechanism will work for you. Finally, Chapter 5 presents case
studies of how alternative financing mechanisms are being used to support wetlands protection
activities in different states.
- To help states implement alternative financing mechanisms and foster communication on
financing issues, you will find a list of EPA's wetlands regional program contacts in Appendix B.
Also, each case study provides a contact for further information on the alternative financing
mechanisms included as examples in this guidebook. The Office of Wetlands Protection is
interested in working with states to identify successful mechanisms for financing wetlands
programs. If you have any comments on this guidebook or other suggestions, contact:
Wetlands Strategies and State Programs Division
Office of Wetlands Protection A-104F
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
Phone: (202) 382-5043
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2. OVERVIEW OF STATE WETLANDS PROTECTION ACTIVITIES
States protect wetlands through both regulatory and nonregulatory programs. Regulatory
programs may be specific to wedands protection or incorporate wetlands protection as a
component of broader regulatory efforts. Nonregulatory programs include acquisition programs,
public land management, and public programs providing incentives or technical assistance for
private land management to promote wetlands functions. Other state program activities
supporting both regulatory and nonregulatory activities include wetlands research, wetlands
inventory, mapping, and public education to increase awareness of the values of wetlands. The
sections below provide an overview of the major regulatory and nonregulatory state wetlands
protection activities.
Regulatory Programs
All three levels of government - federal, state, and local - regulate alterations to
wedands. The federal government regulates wetlands primarily under section 404 of the Clean
Water Act. Both state and local governments have a role in reviewing applications for federal
permits under section 404. In addition to participating in the section 404 program, many states
have established their own wetlands regulatory programs. The degree of wetlands regulation
under state programs varies widely. Some state regulatory programs require permits for
alterations to wetlands, such as dredge or fill, construction, or drainage activities. Other states
use broader regulatory programs covering water quality, land use, or wildlife protection, to
prevent wetlands alterations. Local governments utilize land use controls to protect wetlands and
in some states, they are responsible for implementing state wetlands regulations.
Section 404 permit program
The section 404 program is administered jointly by the U.S. Army Corps of Engineers
(Corps) and the U.S. Environmental Protection Agency (EPA), with other federal and state
agencies having review responsibilities. The section 404 program requires a federal permit for
discharges of dzedged or fill material into the nation's waters, including most wetlands. The
Corps of Engineers also administers a regulatory program under section 10 of the Rivers and
Harbors Act of 1899. The Corps usually combines section 10 and section 404 review if a permit
application is covered by both laws. Section 10 requires a federal permit for dredging or the
placement of fill or structures in navigable waters of the United States. Because it only covers
navigable waters, section 10 is more limited in scope of geographic jurisdiction than section 404,
Under the section 404 permit program, states can review and comment on section 404
permit requests. In some states, the Corps and the state have agreements for joint processing of
section 404 permit applications and those of related state permits. If a state permit is denied
within 30 days after die Corps has issued public notice of the federal permit application, the
Corps usually will deny a federal section 404 permit. While the Clean Water Act includes
provisions for state assumption of the section 404 program, Michigan is the only state to have
assumed operation of the program.
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State regulatory programs
State laws regulating activities in wetlands usually differentiate between coastal and inland
wedands. Historically, coastal wetlands have received more protection under state regulatory
programs, often in conjunction with coastal zone management programs. All of the coastal states
have laws regulating activities in their tidal wedands. Many coastal states have specific coastal
wetlands regulations requiring permits for alterations to coastal wetlands, while other states
protect wetlands under broader coastal land management regulations. Massachusetts was the first
state to regulate activities in wetlands by passing a law in 1963 requiring permits for dredge and
fill activities in coastal wedands.
State regulatory efforts have provided less protection for inland or nontidal wetlands.
Cuirendy, 14 states have laws regulating activities in nontidal wetlands. Some states, such as
Massachusetts, Florida, and Oregon, have laws that apply to both tidal and nontidal wedands.
Only a few states have specific laws to regulate activities in nontidal wetlands. New York and
New Jersey regulate activities in nontidal wedands under a state permit program. Other states,
such as Connecticut, Massachusetts, and Wisconsin, establish state regulations that are
implemented at the local level. Finally, some states protect nontidal wedands under broader state
water or land use regulations.
State water quality certification
Section 401 of the Qean Water Act grants authority to the states to review proposed
activities affecting state waters, and grant, deny, or place conditions on any federal license or
permit authorizing such activities. If a state denies water quality certification, the federal agency
is prohibited from issuing a permit or license. States have used their water quality certification
authority to grant conditionally or deny Corps of Engineers section 404 permits and Federal
Energy Regulatory Commission licenses to construct hydropower dams.
State water quality standards, adopted pursuant to section 303 of the dean Water Act,
are an important component of water quality certification. States may deny certification for
proposed projects that do not comply with their water quality standards or place any conditions
on certification necessary to assure compliance with state water quality standards. While all
states have some form of water quality standards, not all states have standards which can easily
be applied to wetlands. Those states with water quality standards encompassing wetlands can
use the water quality certification process to control projects requiring a federal license or permit,
occurring in or affecting wetlands.
Nonregulatory Programs
Nonregulatory programs play a significant role in state wetlands protection efforts by
promoting public and private stewardship to protect and manage wetlands resources.
Nonregulatory programs include acquisition programs, public land management, and government
programs providing incentives or technical assistance for private land management to promote
wedands functions.
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Acquisition programs
Many states protect wetlands through acquisition programs; indeed, some states have more
than one acquisition program that protects wetlands. Many of these programs, however, are not
designed specifically to acquire wetlands. Wetlands often are acquired for more specific wedands
functions, such as waterfowl habitat, watershed protection, or open space. Acquisition programs
often are under the jurisdiction of a different state agency than the one that administers wetlands
regulatory programs.
States acquire full ownership through fee simple acquisition or partial property rights
through an easement. With easements, the private landowner retains basic ownership and use
rights, but conveys the right to develop or alter the land. In most cases, states acquire property
only from willing sellers. Local governments, however, may be reluctant to support state
acquisition of wetlands, if the state does not make payments to compensate local governments
for lost property tax revenues. Such compensation programs for state-owned property present
additional administrative costs.
In some states, wetlands acquisition by private, nonprofit organizations is an important
component of overall acquisition efforts in the state to protect significant wetlands. These private
initiatives can effectively complement state acquisition programs and reduce the financial burden
of achieving wetlands protection goals.
Public land management
After wetlands are in public ownership, they must be adequately managed to protect their
natural functions. In some cases, wetlands may be managed for specific purposes, such as
waterfowl habitat or recreation. Like acquisition, management of state-owned wetlands often
comes under the jurisdiction of a different state agency than the one that administers wetlands
regulatory programs.
Private land management
Government programs promoting private land management for wetland functions are
among the most innovative wetlands protection activities. Recognizing that a large proportion
of wetlands are in private ownership, this approach attempts to ensure wetlands protection
through education and economic incentives. Although economic incentives are used to protect
wetlands, they an not revenue-raising mechanisms. State governments must identify a source
of funding to support operating costs and any direct public expenditures required by incentive
programs.
Some incentive programs offer tax advantages to individuals who protect wetlands. These
advantages can include a reduction in property tax, income tax, gift or inheritance tax, or capital
gains tax. The success of tax incentive programs for wetland protection depends on providing
adequate compensation to the property owner. Income tax credits or property tax reductions for
granting easements or undertaking specific land management activities must adequately
compensate landowners for income lost due to restrictions on use of the property. Property tax
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incentive programs receive greater support from local governments if the state makes payments
to reimburse local governments for a reduction in the tax base.
Subsidies offering incentives for wetlands protection are available primarily through
federal programs administered by the U.S. Department of Agriculture. Not all federal farm
programs contribute to wetlands protection, but some do by encouraging farmers to set aside
certain lands or use beneficial land management practices. States also can provide subsidies,
such as payments to farmers to keep wetlands out of crop production or cost sharing for
beneficial land management practices.
Through public education and outreach programs, states inform the public and landowners
about the functions and values of wetlands and options available to protect and manage wetlands.
Dissemination of such information can encourage private land management decisions to protect
wedands functions and values. Other state programs provide technical assistance to landowners
or local governments on wetlands management or restoration activities. In addition, these public
education and outreach efforts often help create public support for regulatory programs.
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3. ALTERNATIVE FINANCING MECHANISMS FOR STATE WETLANDS PROGRAMS
The majority of state wetlands protection activities are supported by general revenues.
General revenues derive from a variety of state taxes (for example, corporate and/or personal
income taxes, or sales taxes) and are appropriated by the state legislature to various programs on
an annual or biennial basis. The mix of taxes that comprise general revenues reflects the general
taxing philosophy of an individual state, and the amount of funds appropriated to particular
programs reflects the spending priorities of the state. Because of this political accountability, and
to the extent that all businesses and residents of the state benefit equally from wetlands protection
activities, general revenues may be the most appropriate funding source. General revenues,
however, are subject to fluctuation as a result of shifting public priorities or changes in state
fiscal conditions.
Increasingly, states are turning to dedicated fees and taxes to fund specific components
of their environmental programs. Such fees and taxes are two major categories of alternative
financing mechanisms (any source of revenue other than general tax revenues) that states may
use to support wetlands programs. Revenues from dedicated fees or taxes may be tied directly
to a program when deposited in a special account or trust fund used to pay for specific program
activities. Alternatively, revenues may be deposited in the state's general fund, with the
understanding that a corresponding amount will be appropriated for the specified program
activities.
There are both advantages and drawbacks to the use of dedicated fees and taxes to suppon
state wetlands programs. Three primary factors argue for the use of dedicated funding. First,
dedicated fees and taxes often tap "new" sources of revenues, that is, they do not overlap with
sources of general revenues. Second, the availability of dedicated revenues removes wetlands
programs from the fluctuations of the appropriations process, where they must compete with other
public programs for limited funds. Third, when dedicated revenues are predictable, program
managers are afforded greater continuity and, therefore, flexibility in program management
because of the certainty of funding from year to year.
*
The major drawback to dedicated fees and taxes is the potential loss of general revenues
as a source of program funds. In exchange for establishing dedicated fees or taxes, the state
legislature may cut back appropriations of general revenues, under the assumption that the new
funds from fees or taxes could replace funds previously provided by general revenues.
Furthermore, the potential exists for program activities to be limited by the capacity of the
dedicated financing mechanism, if it is the only funding source and revenues tend to fluctuate
from year to year. If revenues from dedicated fees or taxes fall short of program needs, activities
would have to be postponed or eliminated. Under these circumstances, dedicated fees or taxes
may be more appropriate for supplementing general revenues rather than an independent source
of funding.
Alternative Financing Mechanisms
This section presents a variety of alternative financing mechanisms that could be used to
suppon, in whole or in part, state wetlands protection programs. The alternative financing
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mechanisms presented below can be grouped into four general categories - fees, taxes, fines and
penalties, and bond financing. Fees are typically levied for a particular service, whereas taxes
are often more generally applied to income, property, or consumption of various commodities.
Fines and penalties differ from the other financing mechanisms because they typically are
designed to modify behavior, not to provide a steady stream of revenues for program operations.
Bonds are distinct because they are not stricdy a source of revenues, as bonds must be repaid.
A fifth group of miscellaneous mechanisms includes alternatives such as voluntary contributions
and lottery revenues.
Fees
A fee is generally a charge for a particular activity or service. Fees for public services
are intended to establish a direct link between the demand for services and the cost of providing
them. Indeed, the validity of a fee often rests on the relationship between the fee itself (who
pays and how much) and the service provided in return for paying the fee. Fees also are used
to help finance pollution control activities by charging polluters the costs imposed upon society
by their activities.
There is a growing public acceptance of the use of fees, where the "user" pays for the
"service" or "benefit" derived from a particular activity. If properly structured, a fee can require
program beneficiaries to pay program costs or assess the costs of remedial measures on the
parties responsible for the environmental degradation. Exhibit 2 lists a number of different types
of fees used to support activities conducted as part of environmental programs.
Structuring a Fee. Two considerations important for structuring a fee are: (1) the link
between the fee and the service provided, and (2) the revenue expectations. A well-structured
fee has a clear relationship between the demand for services and the cost of providing them, to
equitably match program costs with those responsible for environmental degradation or those
benefiting from program activities. Where fees provide the primary source of funds for a
program, they should be set to recover the full cost of the service for which they are being
collected. Typically, states and localities have charged only nominal fees and used the receipts
to supplement general revenues. Permit fees were found to be the most widely used type of fee
for wetlands programs (see Exhibit 3 for a summary of case studies on fees). Permit fees are,
for the most part, being used to supplement general revenues, and at the rates currently being
charged, are not generating sufficient revenues to pay the entire program costs.
When structuring a fee, it is necessary to consider both the base (who pays) and rate (how
much). The base is the number of parties or the number of activities per party subject to the fee.
Fees can generate substantial revenues at relatively low rates where the base is fairly large. Even
when few parties are subject to a fee, substantial revenues can be generated through higher rates,
as long as there is a direct relationship between the fee rate and the service provided.
Fees can be set at either a flat-rate or a variable-rate schedule. Under a flea-rate fee, all
parties pay the same amount Flat-rate fees typically are used where there is a comparable
activity or service provided by the state and where the cost of those services is roughly equal for
each party.
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Exhibit 2. Types of Fees
Permit Application and Processing Fees -- charge for permits issued by
the state.
• Certification Fees -- charge for certifying a facility or activity.
• Determination Fees -- charge for determining if a proposed activity is
covered under state regulations.
• Monitoring and Inspection Fees -- charge for monitoring or inspecting an
activity or facility.
• Plan Review Fees -- charge for the review of construction plans.
• License Fees -- charge for a right or license to conduct an activity.
Discharge and Disposal Fees - charge for the discharge or disposal of
materials (for example, wastewaters, industrial wastes).
Installation Fees - charge for the installation of equipment (for example,
a well or discharge pipe).
• Facility Fees •• charge for the use or enjoyment of publicly-owned
facilities or natural areas.
• User Fees - charges made on a continuous basis for publicly-provided
services.
• Impact Fees - charge for the incremental burden (or "impact") placed on
public services by new development
• Mitigation Fees - charge for mitigation of unavoidable advene effects of
development on wetlands.
A variable-rate fee is used where the cost of services or resulting impact differs among
parties. The fee paid by an individual party may be based on a simple rate schedule that
considers only broad differences among activities. Alternatively, the fee can be based on a more
complex indicator of impacts such as the volume of material discharged. The intent of a
variable-rate fee schedule is to charge each user based on the cost of services they require or the
environmental impact associated with their activities.
Variable-rate fees can be structured in a number of ways, but the two basic forms are
increasing or declining rate schedules. An increasing rate schedule would be used where the
incremental cost associated with each additional unit (for example, an operating unit or a
discharge) is more than the preceding unit A declining rate schedule would be used where the
incremental cost associated with each additional unit is less than the preceding unit.
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Exhibit 3. Summary of Case Studies on Fees
CASE STUDY
FEE RATE
TYPE OF SCHEDULE
FUNDS
MANAGEMENT
Michigan Permit Application
Fee
S25
flat fee
general fund j
New York State Permit
Application Fees
S10- S900
variable fee according to
type and size of project
general fund and j
dedicated account
New Jersey Freshwater
Wetlands Permit Fees
S100 and up
vanable fees set
according to actual cost
of service provided
special fund for j
wetlands management
program
Wisconsin Permit Fee
S15 - S75
flat base fee
+ variable fee according
to estimated project cost
general fund
Oregon Removal-Fill Permit
Fees
S50 • S375
(maximum $600)
variable base fee
(private, public, or
commercial)
+ volume fee
Common School Fund
North Carolina Coastal
Development Permit Fee
S25 and S100
variable fee according to
size of project
general fund
Maine Wetlands Permit Fees
$50 • $750 for
processing fee
SZ5 • $220 for
license fee
vanable fee according to
type of project
Maine Environmental
Protection Fund
New Hampshire Permit
Application Fee
$30 and up
variable fee according to
size of project
Wetlands Board Review
Fund
Pennsylvania Water
Obstruction and Encroachment
Permit Fee
$50 • $100
(maximum $600)
variable fee according to
type of structure at
activity
general fund
Louisiana Coastal Use Permit
Fees
$20 and up
flat fee + variable fee
according to size of
project
Coastal Resources Trust
Fund
Ohio Water Quality
Certification Fee
$15 • $200
variable fee according to
size of project
general fund
California Water Quality
Certification Fee
$500 • $10,000
variable fee according to
size of project
State Water Resources
Control Board general
fund
Louisiana Water Quality
Certification Fee
$25 and $265
variable fee according to
type of project
Environmental Trust
Fund
Maryland Tidal Wetlands
Compensation Fees
three separate fees
variable, fee according to
type and size of project
Tidal Wetlands |
Compensation Fund \
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Timing of Fees. The continuity of revenues from fees varies depending on whether the
fee is one-time or periodic (for example, monthly, annually, upon renewal of a permit). A
one-time fee is charged for services that are required only once. A periodic fee is charged where
there are continuing operations that require periodic review by the state (for example, inspection
for compliance with permit conditions). Revenues may be sporadic for one-rime or infrequent
activities, whereas with continuous activities, revenues would be fairly steady.
Taxes
Taxes are generally a charge against one of three bases -- sales, income, or property.
Income, sales, and personal property taxes comprise the principal source of revenue for most state
governments. Ad valorem property taxes are primarily the domain of local governments. Taxes
are most suited to activities where benefits are widely distributed and difficult to apportion
among individuals or groups of users. Because taxes have a potentially high revenue yield, they
typically are used when program funding needs are large. Revenues from state taxes related to
wedands protection activities primarily support acquisition programs (see Exhibit 4 for a
summary of case studies on taxes).
Exhibit 4. Summary of Case Studies on Taxes
CASE STUDY
TAX RATE
BASE
FUNDS
MANAGEMENT
Tennessee Property Transfer
Tax
H per $100 of value
all property transfers
in the state
Wetlands Acquisition
Fund
Florida Documentary Sump
Tax
55« per S100 of
value
all property transfers
in the sate
CARL and Water
Management Lands
Trust Funds
Missouri Dedicated Sales Tax
0.123% surcharge on
sales tax
all items subject to
state general sales tax
Conservation ,
Department Fund
Nebraska Habitat Stamp
$7.50 habitat stamp
sold with hunting,
trapping, and
combination
hunting-fishing license
Nebraska Habitat Fund
Iowa Habitat Stamp and
Waterfowl Stamp
$3.00 habitat stamp
S3.00 waterfowl
stamp
sold with hunting
License
sold with license for
waterfowl hunting
only
Fish and Wildlife Trust
and Fold
New Jersey Waterfowl Stamp
S2.50 far residents
S3.00 far
nonresidents
sold with hunting
license if hunting
waterfowl
Duck Stamps Account
within the Hunters and
An glen Fund
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Taxes are calculated using different formulas, or tax rates, on different bases. There are
two general types of rate structures -- fixed rates for each unit of tax base (for example, a
gasoline tax of 5
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taxes) to dedicate tax revenues from a particular source to a single program (the major exception
is gasoline taxes, which are often dedicated to highway trust funds). Revenues from a dedicated
tax often are collected by the state's fiscal agency and then credited to the appropriate account
or fund. While this removes an administrative burden from the program office, the agency
responsible for collecting state taxes may oppose collection of such taxes because of the
additional administrative requirements imposed on the fiscal agency. In some cases, the
distinction between a fee and a tax is blurred, and the program office may be responsible for
collecting tax revenues.
Fines and Penalties
Fines and penalties are imposed primarily for violations of state regulations. Fines and
penalties may be imposed for civil or criminal offenses, and may be levied administratively or
judicially. For example, a fine imposed for illegal alterations to wetlands could be authorized
administratively by state regulations or judicially by a court settlement.
Because revenues from fines and penalties typically are sporadic, they are not suitable as
a steady source of funding for program operations. In fact, reliance on revenues from fines and
penalties could provide perverse incentives to state agencies to allow degradation of wetlands in
order to collect considerable revenues. Over the long run, achieving wetlands protection goals
would necessitate eliminating fines and penalties altogether.
More often, fines and penalties are used to create incentives to modify behavior or
encourage compliance within the regulated community. The effectiveness of fines and penalties
as an incentive mechanism is dependent on a number of factors, including the ability of the state
to detect potential violations and the size of the resulting fine. If violations routinely go
undetected, or if the fine or penalty is too low, there may be little incentive for the regulated
community to avoid the risk of fines or penalties.
Fines and penalties usually are deposited in a state's general fund and are not directed to
specific programs. Revenues from fines and penalties could be dedicated to special funds to be
used by state agencies for wetlands protection activities (see case study of New Hampshire Fines
and Penalties). When fines or penalties result from illegal alterations to wetlands, and no other
compensation is provided for, dedication of such revenues to wetlands acquisition and restoration
could serve to offset wetlands losses.
Bonds
Bonds axe used to provide up-front capital for major investments, including land
acquisition and capital facilities. Governments can borrow funds from investors by issuing debt
in the form of bonds. The issuer of a bond receives funds up-front and then repays the bond
over time through "debt service," which includes interest expense plus repayment of principal.
Debt service can be paid from general revenues, from project revenues, or from special taxes or
fees. Because bonds must be repaid, they are not an independent source of revenue. Generally,
bonds are most appropriate for projects that have large initial capital costs, but whose benefits
extend into the future. Bonds are not suited to fund operating costs.
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Long-term bonds usually match the term of financing with the useful life of the project
when financing capital facilities, or typically a 20- to 30-year period in the case of land
acquisition. Three major categories of long-term bonds are general obligation (G.O.) bonds,
revenue bonds, and special tax bonds. G.O. bonds are paid out of general revenues and are
backed by the "full faith and credit" of the issuing entity. This means that the issuing state or
local government pledges to use all of its taxing and other revenue-raising powers to repay bond
holders. G.O. bonds require voter approval in many states and are limited by ceilings on the total
amount-of general obligation debt that can be issued by a government entity.
A revenue bond is repaid from revenues generated by the facility constructed with the
bond proceeds. Revenue bonds are backed strictly by the expected future stream of revenues
from the facility. Special tax bonds are repaid only with funds raised by a special tax, such as
highway bonds that are repaid only from a gasoline tax. These two types of bond financing are
not always subject to voter approval or a government's debt ceiling. Because a secure revenue
stream must be pledged for repayment of the debt, they are better suited to financing capital
facilities than land acquisition.
Other Alternative Financing Mechanisms
In addition to the financing mechanisms described above, there are several other potential
sources of funds for state wetlands programs. Two such mechanisms are lottery revenues and
voluntary contributions. Like fees or taxes, they are most useful when all or a portion of the
revenues are dedicated to specific programs, rather than those revenues going to the state's
general fund.
Lottery Revenues. As more and more states establish lotteries, they become a potential
source of revenues for environmental programs. The acceptability of a lottery by voters and state
legislatures may be improved if all or a portion of the revenues are earmarked to specific
programs. A major criticism of lotteries is that they are a "regressive" source of revenues (that
is, lower-income individuals, as a group, typically bear a greater proportion of the financing
burden than higher-income groups).
The state of Kansas uses a portion of its lottery revenues to help finance its water
resource management programs, including wetlands protection activities. Kansas created a State
Water Plan Fund in 1989 to provide a permanent, dedicated source of funding for implementation
of its State Water Plan. Half of the revenues for the State Water Plan Fund are derived from
required transfers of $6 million annually from the state general fund and $2 million annually
from state lottery funds. The other half of the fund's revenues are to be derived from a system
of fees on municipal water use, industrial water use, stockwater use, pesticides, fertilizer, and
pollution fines and penalties. Projects financed by the State Water Plan Fund must be related
to implementation of the State Water Plan, developed annually by the Kansas Water Office.
Wetlands projects are eligible because wetlands protection is an approved activity under the plan.
In FY 1990, $1,640,000 was set aside from the State Water Plan Fund for research and
construction activities to maintain water supply to the Cheyenne Bottoms Wildlife Area, a major
wetland area in the state and nation.
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In Minnesota, voters recently approved state constitutional amendments establishing an
Environmental and Natural Resources Trust Fund and a state lottery to finance the fund. As
stipulated by the amendments, 50% of the proceeds from each of the first five years of the lottery
will be dedicated to the fund. After this period, the state legislature may allocate from 0 to 50%
of lottery proceeds to the fund. The Environmental and Natural Resources Trust Fund is devoted
stricdy to improving the natural resources and environment of the state. The Reinvest In
Minnesota (RIM) Program may receive permanent funding from this trust fund. RIM consists
of a variety of activities to increase public and private investment in the state's natural resources.
The RIM Reserve Program, which pays landowners to restore previously drained wetlands, is one
of these activities (see case study of Minnesota RIM Reserve Wetlands Restoration Program).
Voluntary Contributions. Voluntary contributions are another source of revenues, but
sometimes come with strings attached. Sources of voluntary contributions that have been used
to support wetlands protection activities are income tax checkoffs and matching funds for
acquisition or land management programs.
Contributions can be solicited in conjunction with the collection of state income taxes.
With state taxes collected annually, taxpayers may get into the habit of making contributions
through income tax checkoffs, providing a steady stream of revenues to a specific state program.
In practice, however, revenues from voluntary income tax checkoffs typically are highest in the
first few yean and level off thereafter.
Thirty-two states have voluntary checkoffs on their income tax forms principally for
nongame wildlife. These programs allow taxpayers to donate a portion of their state income tax
refund to specific state programs. Several states, such as Virginia and Ohio, have increased the
potential to raise revenue from their income tax checkoffs by allowing taxpayers not receiving
refunds to contribute by direct payments. In Ohio, the Natural Areas and Preserves Special
Account was created to receive contributions from the Ohio Natural Areas and Wildlife checkoff
and also direct contributions. These revenues are dedicated to supporting a program administered
by the Ohio Department of Natural Resources to identify and protect unique natural areas in
Ohio, including wetlands.
New York has raised substantial revenues from the Return a Gift to Wildlife checkoff on
its state income tax form. Since 1982, revenues from income tax checkoff contributions have
remained fairly steady at approximately $1.7 million per year. These revenues are supplemented
by direct contributions, which vary yearly, and recently by receipts from the sale of a book about
inland fish in New York. Revenues are deposited in a special account in the state's Conservation
Fund. The New York State Department of Environmental Conservation can use Return a Gift
to Wildlife funds for projects that cannot be supported through its annual budget. New York's
program differs from many other state income tax checkoffs in that it coven a broader range of
activities than the typical nongame wildlife programs. Return a Gift to Wildlife provides funds
for fish and wildlife habitat programs, public education programs, and research programs, as well
as programs to protect endangered and threatened species.
Matching funds for wetlands protection often can be raised from sportsmen interested in
promoting greater hunting and fishing opportunities through acquisition and development of
wildlife habitat. Ducks Unlimited is one of many nonprofit organizations that contribute
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matching funds. The Matching Aid to Restore States Habitat (MARSH) program of Ducks
Unlimited, for example, provides money to state wildlife agencies based on the amount that
volunteers in the state can raise. Funds are provided as grants or to match state funds for
acquisition, development, and enhancement of wildlife habitat.
Minnesota operates an innovative Critical Habitat Private Match to protect or improve
critical habitat for fish, wildlife, and rare and significant plant and animal species, as one of the
activities under the state's Reinvest in Minnesota Program. Wedands are considered an important
critical wildlife habitat. Administered by the Minnesota Department of Natural Resources, the
Critical Habitat Private Match uses state funds appropriated to the Critical Habitat Matching
Account to match dollar-for-dollar contributions from private individuals or organizations.
Contributions can be made in cash, land, easements, or as a pledge for a specific qualifying
project. All contributions are tax deductible. Land donations are accepted if they meet the
criteria of critical habitat and the value of such donations is the land's appraised market value.
If the land does not meet the criteria of critical habitat, it will be sold and the proceeds deposited
in the Critical Habitat Matching Account. Since 1986, $4.7 million in private donations and
pledges has been received through the Critical Habitat Private Match.
Funds Management
Equally important to raising revenues is managing them effectively. Funds management
mechanisms provide a means to allocate revenues from funding sources to program activities.
The most common mechanism is the general fund. The general fund is the commingled "pot''
of a state's general revenues, primarily taxes. Monies from the general fund are allocated to
various state programs by the state legislature through the appropriations process. Relying on
legislative appropriations, however, can create funding uncertainty.
Dedicating, or earmarking, revenues from a particular funding source to specified program
activities can partly insulate a program from the vagaries of the appropriations process. When
state laws dedicate revenues generated by a specific fee or tax to a particular program or activity,
a special account or trust fund can be established to receive and disburse the dedicated revenues.
Special accounts or trust funds are an effective mechanism to both manage funds and ensure that
dedicated revenues are used for the intended purpose only. Trust funds also are suitable for
accumulating funds for capital intensive uses, such as land acquisition. Some special accounts
or trust funds receive the proceeds from a single dedicated revenue source, while others employ
multiple revenue sources.
There are two ways that states earmark revenues for handling in trust funds -
constitutionally or legislatively. Most constitutionally earmarked funds require no legislative
appropriation to release trust fund deposits. Deposits accrue to the trust fund automatically and
are generally available only for the purpose named in the state constitution. In other cases, the
state legislature dedicates revenues from a funding source and creates a trust fund to manage
them. Legislative appropriations may or may not be required to release these statutorily
earmarked funds. The advantage of statutory earmarking is that legislatures have more flexibility
to collect funds and make annual appropriations. On the other hand, constitutional dedication,
though more difficult to enact, secures funds with less threat of political interference. Some
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states permit transfers of surplus earmarked funds to unrelated purposes regardless of the means
by which they were dedicated.
The major advantage of trust funds, and the primary reason for using them, is to ensure
that dedicated revenues are used only for specific purposes. Trust funds also increase the
flexibility program managers have over the use of program revenues. Where dedicated revenues
are predictable (for example, from fees or taxes on a well-defined base), trust funds provide
greater certainty of the amount of revenues available for program activities than appropriations
from general revenues.
The major drawback of trust funds is the administrative burden of establishing and
maintaining an independent fund. It may only be cost-effective to establish an independent fund
when there is a steady and substantial stream of dedicated revenues. In addition, there may be
both legislative and administrative opposition to creating a separate fund - the legislature may
object to the loss of control over the disbursement of funds and the administrative agency (for
example, a state fiscal office) may object to the additional administrative requirements. Finally,
funds may provide only an illusion of security for program revenues. In many states, interfund
transfers from one account to another to meet a priority need are common and can be made at
the discretion of the administration or legislature. A fund that continually maintains a large
unused balance may be particularly susceptible to such "borrowing" on a temporary or permanent
basis. In these cases, constitutional or legislative changes may be needed to ensure that fund
revenues are not diverted to other purposes.
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4. considerations in selecting financing mechanisms
When considering the use of an alternative financing mechanism, such as those described
in Chapter 3, there are several important factors to keep in mind. Generally, managers select
among financing mechanisms for wetlands protection (and for many other environmental
protection programs as well) by considering the following questions:
• Who should pay for wetlands protection activities?
Is the financing mechanism politically and publicly acceptable?
• Is the financing mechanism financially feasible?
What are the administrative requirements of the financing mechanism?1
• What are the impacts of the financing mechanism?
Each of these questions encompasses several different factors, as described below. The
answers to these questions are dependent on the legal, economic, and political characteristics of
the state or locality in which the financing mechanism will be used.
Who Should Pay for Wetlands Protection Activities?
Thequestion of who should pay for wetlands protection activities embodies the concept
of equity. Equity is reflected by the fairness of the distribution of the funding burden among
individuals or classes of individuals. In environmental programs, equity can be approached from
two directions - those who create or contribute to environmental problems should bear the
funding burden (the "polluter pays") or those who benefit from program activities should bear
the funding burden (the "beneficiary pays"). In practice, many programs rely on a combination
of these two principles when selecting financing mechanisms.
Within this issue there are two additional considerations, as defined below:
Intergeneraxional equity relates to the distribution of benefits over time. To be
fair, a financing mechanism should not permit those who pay to be separated in
time from those who benefit Placing the entire funding burden on today's
developers, for example, to acquire or restore wetlands that will be enjoyed for
many yean to come, could be considered inequitable. In contrast, the use of bond
proceeds to purchase wetlands would spread die funding burden over many years,
consistent with the long-term public benefits of the purchase.
Progressivity reflects the relationship between the relative financing burden and
wealth or income. Overall, regressive financing mechanisms - those- that affect
low-income groups disproportionately - are less acceptable than progressive
financing mechanisms.
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Is the Financing Mechanism Politically and Publicly Acceptable?
A financing mechanism must enjoy both political and public acceptability in order to be
viable in today's fiscal environment. The acceptability of a financing mechanism depends in pan
on the equity of the mechanism as well as other factors, as described below:
Legislative acceptability reflects the political attractiveness of a financing
mechanism. There are unique legislative predispositions in each state that often
influence the choice of a financing mechanism. The acceptability of a new
financing mechanism may be enhanced where there is a precedent for its use (in
other programs or in other states) and where the performance of the mechanism
(primarily the ability to generate revenues) has been demonstrated. The
willingness of a state legislature to dedicate revenues from a particular financing
mechanism to a specific program area will be influenced by whether there are
competing demands from other programs for those revenues.
i
Public acceptability reflects the willingness of those subject to a fee or tax to pay,
or the willingness of the public to make a particular sector pay. While industry
may initially resist the imposition of additional fees and taxes, they may drop their
opposition if they are convinced of the benefit to them of state program activities.
Likewise, general taxpayers may object to the imposition of fees or taxes for
services that were once provided free of charge. Demonstrating the full cost of
public services to the beneficiaries of those services is necessary to increase the
acceptability of new charges sufficient to cover program costs.
In addition to the issues of public and political acceptability, there are also questions
concerning the legality of a financing mechanism. Feasibility relates to the legal authority to
impose a fee or tax as well as to factors that affect the workability of a financing mechanism.
State legislatures must approve fees directly, or authorize state agencies to levy fees for the
services they provide. The imposition of taxes is solely a legislative responsibility. New fees
and •taxes may necessitate new partnerships between state wetlands protection programs and state
financial agencies which will take time and effort to establish.
Finally, the acceptability of a financing mechanism is influenced by concerns for
accountability. Different financing mechanisms are subject to varying degrees of public and
legislative control, and imply different levels of accountability by the administering body. For
example, dirdicated fees and taxes provide greater certainty that revenues from a particular source
go to their 1 purposes. At the same time, they remove funding decisions from the budget
process and may reduce accountability for funding decisions.
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Is the Financing Mechanism Financially Feasible?
The financial feasibility .of a financing mechanism is determined by the mechanism's
revenue potential, timing of funds, the stability and predictability of revenues, and the security
of the mechanism. These factors are described below:
Revenue potential is measured by the amount of money that can be raised with a
particular financing mechanism. Revenue potential is affected by two factors --
the size of the base against which a tax or fee is applied, and the tax or fee rate.
Timing of funds reflects whether a financing mechanism provides one-time or
continuing revenues. For example, permit fees represent a one-time source of
revenues unless the permit must be renewed periodically. The rime pattern of
revenues should match the time pattern of program costs.
The stability and predictability of revenues can have a significant impact on the
effectiveness of a program. Most taxes and fees are derived from steady tax or
fee bases. However, some tax or fee bases are sensitive to a downturn in general
economic conditions. Other revenue sources, such as fines and penalties, vary
significantly from year to year and cannot be predicted. The resulting funding
shortfalls can result in interruption of a program and the loss of its benefits.
Funding certainty refers to the risk that revenues will be diverted to unrelated
purposes. For instance, appropriations are risky; even though the revenue sources
for a program may be stable, a budget crisis may force the legislative body to
apply the revenues elsewhere. The potential interruption of funds may be avoided
by securing tax or fee revenues dedicated to a program, by establishing a trust
fund, or by establishing a distinct institution with its own revenue-raising and
implementation powers.
While the adequacy of revenues to support program costs is a key consideration, often the
financial feasibility of a particular financing mechanism is limitrd where it also is designed to
incorporate other considerations described in this chapter. For example, programs requiring
compensatory mitigation for wetlands losses (the "polluter pays") may not offer revenue-raising
potential (see case study of Oregon Wetlands Mitigation Bank Revolving Fund Account).
What are the Administrative Requirements of the Financing Mechanism?
Administrative requirements relate to the effort needed to implement an alternative
financing mechanism, including start-up costs and on-going collection and management of funds.
While states routinely collect revenues from a variety of sources, such functions are often left
to tax or financial staff, not program staff. To the extent possible, state wetlands programs
should utilize existing agencies and resources for collecting and managing funds. Resistance to
alternative financing mechanisms, however, may come from state fiscal offices, who are not
interested in collecting relatively small fees, particularlyr where the revenues are dedicated to
specific program activities. As a result, many state environmental programs are finding
themselves in a position of having to collect fees directly from affected parties.
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In addition to administrative questions, there is also the issue of whether the financing
mechanism provides flexibility to program managers. Flexibility reflects the ability to use
revenues from alternative financing mechanisms as needed for a variety of program activities.
Because some alternative financing mechanisms collect revenues from a narrowly defined group
of parties, the authorized uses of those revenues may also be limited to activities that directly
benefit those same parties. Where those panies provide a significant share of program costs,
their interests or demands could shape program actions.
What are the Impacts of the Financing Mechanism?
Impacts relate to whether a financing mechanism creates incentives for desirable (or
possibly undesirable) behavior, and whether it places an undue financial burden on industry or
general taxpayers. Some financing mechanisms can be designed to encourage desired behavior.
In doing so, however, they may work at cross-purposes with the objective of raising revenues.
For example, if a fee is set high enough to discourage alterations, wetlands will be protected, but
program revenues will fall.
Economic impacts are the effects of a revenue source on economic decisions, apart from
decisions that directly affect wetlands. The number of individuals who must pay a proposed fee
or tax, and the amount of revenue that must be raised by the fee or tax, are two important
considerations in assessing economic impacts. A large tax base is generally desirable to
distribute the burden of raising a substantial amount of revenue. Collecting a large amount of
revenue from just a few taxpayers could economically affect those taxpayers in an adverse
manner that might be perceived as unreasonable and unfair. States that do not have many fees
or large fees fear that the economic impact created by a fee or tax could also affect business
viability or location decisions.
How Can These Criteria Be Used in the Dedsion*maldng Process?
In general, no single financing mechanism will completely satisfy the above criteria.
Equity considerations, for example, may be qualified by concerns over administrative costs,
economic impacts, and incentive effects. Taken together, however, these criteria will form the
basis for selecting an appropriate financing mechanism for a specific program activity. The
purpose of such an evaluation is two-fold ~ first, to determine when an option is, in fact,
applicable to a particular program (based on equity, acceptability, and revenue potential) and
second, to determine how the option should be designed and implemented (based on feasibility,
flexibility, administrative requirements, and impacts). The individual case studies presented in
Chapter 5 illustrate how different states have elected to raise revenues for wetlands protection
programs. Those decisions were based on explicit, or more often implicit, evaluation of the
factors presented above.
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5. SELECTED CASE STUDIES
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MICHIGAN PERMIT APPLICATION FEE
BACKGROUND
In August 1984, the state of Michigan received approval to administer the section 404
permit program for the state's inland waters. Initial authorization of the Michigan section 404
program relied upon the existence of state legislation that regulated the discharge of dredge and
fill materials into state waters. The Michigan Department of Natural Resources (DNR) currently
reviews proposed projects under a consolidated permit process that includes nine state statutes
and four federal statutes. When the state receives an application, it then determines which
statutes apply.
A 1983 Memorandum of Agreement (MOA) between the Michigan DNR and the U.S.
Environmental Protection Agency (EPA) enables the DNR to cany out the policies, regulations,
and procedures necessary to administer the section 404 permit program. "Hie Clean Water Act
does not allow state assumption of section 404 authority in waters traditionally used for interstate
or foreign commerce. In Michigan, the section 404 program for these waters (including Great
Lakes coastal areas, connecting waters, and major tributaries to the Great Lakes upstream to the
limit of federal navigability) is still administered by the U.S. Army Corps of Engineers.
FINANCING MECHANISM
Michigan's DNR assesses a $22 application fee for each wetland permit application, as
authorized under the state's Goemaere-Anderson Wetland Protection Act Fees are paid at the
time of filing an application.
Only one $22 fee is assessed if an application comes under more than one of the state
laws included within the consolidated permit process. Also, if an applicant already has a permit
for a particular activity under certain state laws (such as a permit for filling, dredging, or
constructing a permanent structure in or within 500 feet of an inland stream or lake under the
state's Inland Lakes and Streams Act), they do not pay another $25 fee for a wetland permit
application.
FUNDS MANAGEMENT
The one-time, non-reimbursable application fee is collected at the time of application by
the DNR. Revenues generated from this fee are deposited in the state's general fund.
IMPLEMENTATION
The 1983 MOA gave Michigan the legal authority to administer the section 404 permit
program for the state's inland waters. The MOA outlines the roles and responsibilities of both
the DNR and EPA for administering and enforcing the state section 404 program. The MOA
also outlines reporting procedures whereby DNR provides periodic reports to EPA regarding state
section 404 program activities. Permit review under its section 404 authority is pan of the
Michigan DNR's consolidated permit process.
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The DNR was authorized to collect a $25 permit fee under the state's Inland Lakes and
Streams Act of 1972 (Public Act 346, Section 281.955). The state's 1979 Goemaere-Anderson
Wetland Protection Act (Public Act 203) requires a permit for dredge, fill, drainage, or
construction in wetlands. Use of a S25 permit fee for wetland permit applications was authorized
under section 281.707 of the Goemaere-Anderson Act.
A wetland permit application is not reviewed until the application is complete, including
payment of the permit fee.
REVENUE EXPERIENCE
The administration of section 404 requires a major commitment of state staff and agency
resources. The $25 permit fee does not pay the administrative cost associated with each
application. The cost to review permits is supplemented by general revenues. In 1989, the cost
of administering the state section 404 program was approximately $1.3 million, or one-half of
the DNR's land/water regulatory budget. Michigan does not receive financial assistance from
EPA or from other federal agencies to administer this program.
LESSONS LEARNED
There currently is a proposal to significantly raise the fee to more adequately cover permit
review costs.
CONTACT
Peg Bostwick
Michigan Department of Natural Resources
Land and Water Management Division
2nd Floor, Stevens T. Mason Building
P.O. Box 30028
Lansing, MI 48909
(517) 335-2694
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NEW YORK STATE PERMIT APPLICATION FEES
BACKGROUND
The New York State Department of Environmental Conservation (DEC) issues separate
permits for projects in or affecting tidal or freshwater wetlands. Such projects include dredging,
excavating, filling, erecting any structure, polluting, or any activity that impairs natural functions
in a wetland or its adjacent area. DEC also issues a permit for dredging or fill in navigable
waters, covering any excavation or placing of fill in navigable waters of the state or their adjacent
wedands. Permit application fees are assessed to partially defray the cost of processing permit
applications.
FINANCING MECHANISM
Applicants for permits to undertake certain projects in or affecting wetlands are required
to pay a permit application fee. Application fees vary depending upon the type and size of
project. Separate fee schedules exist for freshwater wetlands permits, tidal wetlands permits, and
dredging or fill in navigable waters permits, as specified below:
Freshwater Wedands Permit Fees
Major projects
Minor projects
* w»t1anHs Permit Fees
Maior projects
Dredging affecting 3,000 square feet or less
Filling of 100 cubic yards or less
All other major projects
Minor projects
Minor projects requiring a variance of 10% or less
from development restriction standards
Minor projects requiring a variance of greater than
10% from development restriction standards
Installation of two or less pilings per currently
existing principal building
All accessory structures less than 100 square feet
in area, adjacent to a regulated tidal wetland
All other minor projects
$50
10
$400
400
900
$400
900
100
100
200
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Dredging or Fill in Navigable Waters Permit Fees
Major projects
Minor projects
$50
10
FUNDS MANAGEMENT
DEC'S Division of Regulatory Affairs administers the permitting process and collects
permit application fees. Tidal wetlands permit fee revenues are deposited in a dedicated account.
Revenues from all other DEC permit application fees, including the freshwater wetlands and
dredging or fill in navigable waters permit feesrare deposited in the state's general fund.
Permit application fees are paid at the time an application is submitted to the appropriate
regional permit administrator (there are 9 regions). If an application is withdrawn before DEC
makes its initial assessment (a determination as to the completeness of the application), the
permit fee may be refunded. After that determination, the fee will not be refunded even if the
application is denied. The modification of a permit application, either in response to a Notice
of Incomplete Application by DEC or at the applicant's initiative, can require payment of a new
fee in certain cases where substantially increased permit processing effort is required by DEC.
IMPLEMENTATION
The authority to assess permit application fees to partially defray the costs of review and
processing of applications is provided by Anicle 70 of the Environmental Conservation Law of
1970. DEC's permit application fees are specified in the Uniform Procedures Regulations,
Pan 621, Chapter 6, New York Code of Rules and Regulations.
Under the Uniform Procedures Regulations, a minor project is one that, by its nature and
with respect to its location, will not have a significant effect on the environment A major
project is one that is not specifically defined as minor. Applicants can determine whether a
project is major or minor by referring to the specific permit program in section 621.4 of the
Uniform Procedures Regulations.
LESSONS LEARNED
The actual cost of processing permit applications is much higher than the amount of the
fee. The minimum cost for processing an application is estimated to be about S200 for a minor
project and about $2,000 for a small major project. These estimated costs do not include several
other costs of evaluating permit applications, such as those costs associated with impact
assessments.
A bill currently before the state legislature would change the state's wetlands regulations
to substantially increase freshwater wetlands permit application fees. Application fees for
freshwater wetlands projects would become $200 for minor projects and $2,000 for major
projects. The proposed fees would still pay for only a percentage of the costs to review and
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process applications. If the proposed increases become law, permit fees, combined with hisher
civil and criminal penalties, are Expected to raise approximately S2.5 million annually.
CONTACT
George Danskin, Chief Permit Administrator
Division of Regulatory Affairs
New York State Department of Environmental Conservation
50 Wolf Road, Room 518
Albany, NY 12233
(518) 457-2224
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NEW JERSEY FRE5HWAI tK WLTLA.NDS PERMIT FEES
BACKGROUND
New Jersey requires a permit for any project involving excavation, dredging, drainage,
fill, construction, or destruction of plant life in a freshwater wetland. The designation of
wetlands depends on a three parameter approach involving hydrology, soils, and vegetation. The
Division of Coastal Resources, New Jersey Department of Environmental Protection (NJDEP)
administers the permit program.
FINANCING MECHANISM
Freshwater wetlands fees are collected at the time of application. Rates in the freshwater
wedands fee schedule are set according to the actual cost of the service provided. The fee
schedule can be adjusted by administrative rule, when needed, to cover the cost of supporting
NJDEP's wetlands management program. Such adjustments are necessary because the wedands
management program is a fee-supported program.
Current NJDEP regulations charge the following fees for review of freshwater wedands
permit applications, letters of interpretation, and certain exemption requests:
Lener of Interpretation Fees
To determine if wetlands are present or absent $100
For verification or delineation of a wetland boundary $100
line on a parcel of land less than one acre
For verification of a proposed wetland boundary line $250 +
on a parcel of more than one acre (for parcels greater $20 per acre
than one acre, boundaries must be delineated by the
applicant and the state will verify proposed boundaries)
Individual Freshwater W»r^nHs Permit Application Fees
To review an application to drive pilings $500
To review an application for any other regulated activity $1,000 +
$100 per one-tenth
acre of freshwater
wetlands to be altered
Open Water Fill Permit Application Fee $1,000 +
$100 per one-tenth
acre of state open
water to be affected
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Statewide General Permit Fees
To review a proposed activity covered by a general SI00
permit application
If more than one general permit is required 5100 per
permit
Exemption Letter Request Fee $100
Transition Area Waiver Application Fees
If the application is accompanied by a Letter of Interpretation
- For a property less than one acre $100
-- For a property greater than one acre $200 +
FUNDS MANAGEMENT
$20 per acre
If no Letter of Interpretation accompanies the application
- For a property less than one acre $200
-- For a property greater than one acre $450 +
$25 per acre
If the Letter of Interpretation accompanying the application
does not delineate the wetland boundary
- For a property less than one acre $100
-- For a property greater than one acre $450 +
$25 per acre
Fees are paid to the state treasurer and payments must be marked to identify the nature
of the submittal and the name of the applicant Fees are sent to the Division of Coastal
Resources for recording before being deposited in the state's special fund to support the wetlands
management program. There are no provisions to reimburse fees for applications that are denied.
For every permit granted, the permittee must take measures to mitigate damage to on-site
wetlands. If wetlands are to be permanently damaged, the permittee must do off-site creation of
wetlands to compensate for wetlands losses. If off-site options are not feasible, the permittee
must make a monetary donation to the Wetlands Mitigation Bank, created by New Jersey's 1987
Freshwater Wetlands Protection Act The mitigation bank works to restore damaged wetlands
as well as to purchase new land for the creation of wetlands.
Permits last for a maximum duration of five years. No extensions are allowed. For
projects lasting longer than five years, a new application must be sought when the original permit
expires.
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IMPLEMENTATION
Fees are collected under the guidelines set oy tne Freshwater Wetlands Protection Act of
1987 (N.J.S.A. 13:9B). The Division of Coastal Resources was created to satisfy a legislative
mandate to streamline the regulation of wetlands. New Jersey now has one set of criteria to use
in reviewing wedands permit applications. Prior to the 1987 Freshwater Wetlands Protection Act,
at least five acts regulated various aspects of wedands protection. The Freshwater Wetlands
Protection Act Rules (N.J.A.C. 7:7A) establish procedures for implementing the act, including
the setting of fees and penalties.
The state permit program became effective July 1, 1988. State regulation of transition
or buffer areas adjacent to wetlands became effective July 1, 1989. Since the wetlands
management program became fully operational, NJDEP has focused on enforcement by
identifying and prosecuting violators of the act.
LESSONS LEARNED
By requiring that applicants with project sites of one acre or more in size delineate the
wedand boundaries themselves, the cost of such evaluation is pushed onto the applicant. The
Division of Coastal Resources needs only to verify the proposed boundary rather than conduct
its own investigation, decreasing the program's costs for the state. In addition, the mitigation
rules place the burden of restoring wedands ecosystems on those causing wedands degradation.
This "no-net-loss" approach also allows the state to pursue its goal-of wetlands protection at a
reduced cost to the taxpayers.
In general, the program has the effect of forcing developers to consider wedands issues
before beginning projects. There has been an increase in the use of land purchase contracts
which are contingent upon a satisfactory environmental evaluation. Developers are also using
project designs which anticipate the need for buffers adjacent to wedands.
CONTACT
Robert Piel, Jr., Manager
Bureau of Inland Regulation
Division of Coastal Resources
New Jersey Department of Environmental Protection, CN 401
Trenton, NJ 08625
(609) 633-6563
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WISCONSIN PERMIT FEE
BACKGROUND
The Wisconsin Department of Natural Resources (DNR) charges a fee for projects
requiring its water regulation permits, issued pursuant to Chapter 30 (sections 30.10 to 30.27) or
Chapter 31 (sections 31.02 to 31.38) of the Wisconsin State Statutes. These sections regulate
physical alterations to the state's navigable waters.
Under Chapter 30, separate permits are required for constructing or maintaining structures
in or over navigable waters, depositing any material in navigable waters, removing any material
from the beds of navigable waters, constructing or dredging waterways that connect to navigable
waters, and other activities affecting the state's navigable waters. Permits issued under Chapter
30 can be used to protect wedands, but the state's regulations for dredge and fill activities are
less comprehensive than those under section 404 of the Clean Water Act. Chapter 31 'requires
permits to build or remove dams, but this activity rarely impacts wetlands. The DNR's Bureau
of Water Regulation and Zoning administers the water regulation permit program.
FINANCING MECHANISM
The fee is based on the number of permit applications filed and the estimated project cost.
The DNR charges a basic fee of $10 per permit and a supplemental fee based upon the estimated
project cost. Most projects require only one permit If more than one permit is required, the $ 10
basic fee is assessed for each additional permit
Permit applicants must calculate the supplemental fee based on an estimate of the project
costs related to the regulated activity. Applicants must certify an itemized list of estimated
project costs on a DNR form. However, the itemized list need not be submitted if the applicant
certifies that the project costs exceed $10,000. Applicants must include all construction and
design costs, such as, but not Hmiwd to, technical costs, material costs, labor costs, construction
equipment rental or fees, monitoring costs required by the permit, and landscaping costs required
to prevent or minimi re erosion. If the project requires mare than one permit, the estimated
project cost is the total cost for all regulated activities. The amount of the supplemental fee
based on estimated project cost is determined by the following schedule:
Eftfimp^H Project Cost
Supplemental Fee
$1 to $200
$501 to $2,000
$2,001 to $3,000
$5,001 to $10,000
Greater than $10,000
$5
10
20
50
65
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No fee is required for any project funded in whole or in pan by any federal agency, state
agency, county, city, village, town, county utility district, town sanitary district, public inland lake
protection and rehabilitation district, metropolitan sewerage district, soil and water conservation
district, or federally recognized Native American tribal governing body.
FUNDS MANAGEMENT
The Bureau of Water Regulation and Zoning collects permit fees and forwards them to
the state treasurer. Permit fees are deposited in the state's general fund and are not credited to
the Bureau of Water Regulation and Zoning accounts. The fee must be refunded to the applicant
if a permit is denied or if an application is withdrawn by the applicant for any reason.
Permits usually are issued with a time limit of three years, although the DNR can specify
a time limit of less than three years at its discretion. Permits can be extended for no longer than
two years, provided that an extension is requested prior to expiration of the initial time limit.
IMPLEMENTATION
Sections 30.28 and 31.39 of the Wisconsin State Statutes require the DNR to charge a fee,
based on estimated project cost, for each permit application. Chapter NR 300 of the Wisconsin
Administrative Code specifies the procedures for assessing the fees.
The DNR evaluates the estimated project cost after receipt of an application and can
revise the fee if it was incorrecdy calculated by the applicant The DNR does not begin
processing an application until an acceptable fee has been established and paid.
The DNR entered into a general permit with the U.S. Army Corps of Engineers covering
certain waters where both the state and federal government have jurisdiction. Under the general
permit, the DNR reviews permit applications and the state permit decision is accepted by the
Corps as the federal permit decision. This avoids duplication of administration by state and
federal agencies with respect to those navigable waters over which the state and federal
government have concurrent jurisdiction.
REVENUE EXPERIENCE
Fee revenues do not come close to covering the costs of administering the permit
program. Because the permit fees are deposited in the state's general fund, the Bureau of Water
Regulation and Zoning does not have direct access to its fee revenues. The DNR has considered
the option of dedicated fee revenues, but is concerned that dedicating fee revenues to its
programs may lead to reduced appropriations from the state legislature.
The DNR also sells wetlands inventory maps. Currently, these maps are sold at cost and
do not raise revenue to support DNR programs.
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LESSONS LEARNED
Reimbursing permit fees when permits are denied or applications are withdrawn is costly,
because it creates an additional administrative burden for the DNR. Furthermore, processing
costs for denied permits are not recovered because the fee is refunded.
CONTACT
Scott Hausmann, Chief
Water Regulation Section
Bureau of Water Regulation and Zoning
Wisconsin Department of Natural Resources
Box 7921
Madison, WI 53707
(608) 266-7360
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OREGON REMOVAL-FILL PERMIT FEES
background
The Removal-Fill Permit Program is administered by the Oregon Division of State Lands
(DSL). Permits are required for removal, filling, or alteration of more than 50 cubic yards of
material in waters of the state, including wetlands. DSL reviews removal-fill permit applications
and determines whether to issue with conditions or deny a permit. In its review, DSL obtains
the views of affected property owners, government agencies, and public interest groups. DSL
also is responsible for enforcing the permit program. A permit fee is charged to cover pan of
the administrative costs of the Removal-Fill Permit Program.
FINANCING MECHANISM
Each first-time applicant is assessed both a base fee and volume fee based on the volume
of material removed or filled. Permits must be renewed annually and the permit holder is
re-assessed the base fee each year.
The 1989 Oregon Legislative Assembly set a new fee schedule for removal-fill permit
applications. The new schedule is the first increase in removal-fill permit application fees since
1973. Fees differ for removal versus fill applications. However, applications that involve both
removal and filling are assessed the higher of the two fees. The total maximum fee is $600.
Fees are not refunded if the permit is denied.
The following fees became effective in October 1989 under Oregon Revised
Statutes 196.815:
Fee for new applications = base fee + volume fee (if project is >500 cubic yards)
Fee for permit renewals = base fee
Base Fee Amounts
Removal Applications and Renewals
Fill Applications and Renewals
Private
Public
Commercial
$50
150
150
Private
Public
Commercial
$150
375
375
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Volume Fee Amounts
Removal Applications Fill Applications
<500 cubic yards no volume fee <500 cubic yards no volume fee
500 to 4,999 $75 500 to 2,999 575
5,000 to 50,000 150 3,000 to 10,000 150
over 50,000 225 Over 10,000 225
There are a number of exemptions from the removal-fill permit program. DSL does not
charge an application or renewal fee for erosion-flood repair projects. Filling or removal within
the beds and banks along non-navigable waterways in forest lands is exempt from regulation
when the activity is for forest management practices in accordance with the Oregon Forest
Management Act A removal-fill permit is not required for projects involving the construction,
operation, or maintenance of dams, or other diversions for which permits or certificates are issued
under other Oregon statutes. Removal-fill permits do not apply to the federal government when
it acts to service navigation.
FUNDS MANAGEMENT
Revenues received from the Removal-Fill Permit Program are credited to the Common
School Fund. DSL covers permit program costs from interest earnings of the Common School
Fund, with the limitation that permit program expenses cannot exceed income from permit
application fees as well as leasing and royalty revenues from state-owned submerged and
submersible lands.
IMPLEMENTATION
The 1967 Oregon Removal-Fill Law, as amended, regulates the removal and filling of
material in state waters. Oregon Administrative Rules (OAR 141-85-005 to OAR 141-85-090)
define the procedures for administering and enforcing the Removal-Fill Permit Program. DSL
received authority to collect permit fees under Oregon Revised Statutes 196.813. Fees were
established by the state legislature to pay for the review of removal-fill permit applications.
Both civil and criminal proceedings are available to enforce the Removal-Fill Law.
Removal or filling without a permit or contrary to the conditions of a permit is a criminal
misdemeanor punishable by a fine of up to 52,500. Violations are also subject to a civil penalty
of up to 510,000 per day of violation.
An application for a state removal-fill permit also serves as an application for a U.S.
Army Corps of Engineers section 404 permit. This joint application process avoids duplication
of effort for applicants and streamlines the permit review process for both the state and federal
programs.
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REVENUE EXPERIENCE
Application fees received by the Removal-Fill Program cover approximately 40% of the
costs of processing permits, program enforcement, and wedands planning. The remaining 60%
comes from state-owned submerged and submersible land leasing and royalty revenues.
CONTACT
Earle Johnson
Oregon Division of State Lands
775 Summer Street NE
Salem, OR 97310
(503) 378-3805
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north Carolina coastal development permit fee
BACKGROUND
North Carolina's Coastal Area Management Act (CAMA) directs the Coastal Resources
Commission (CRC) to identify and designate "areas of environmental concern" (AECs) in which
uncontrolled development might cause irreversible damage to property, public health, and the
natural environment. CRC adopted standards regarding what types of development activities can
take place within AECs without threatening public safety or the continued productivity and value
of important natural areas. Based on CRC's standards, the Division of Coastal Management
(DCM), North Carolina Department of Natural Resources and Community Development,
administers a permit program to guide development within AECs. A permit fee is assessed to
cover the administrative costs of processing the permit applications.
CAMA applies only to the 20 counties located along the state's tidal rivers, sounds, and
the Atlantic Ocean. CAMA permits are required only for developments in or affecting AECs and
CRC has designated coastal wetlands as an AEC. As such, CAMA covers North Carolina's
coastal wetlands only. CAMA's definition of development includes activities in AECs involving
construction, excavation, dredging, filling, and other alterations of land and/or water.
FINANCING MECHANISM
The CAMA permit program involves two main categories of permits: one for "major"
developments and another for "minor" developments. Major development permits, which involve
large projects that are of concern to the state as a whole, are administered directly by DCM and
CRC. Minor development permits are administered by the local government of jurisdiction.
Certain development activities having minimal environmental impact are authorized wide* general
permits.
The permit application fee is $100 for major development permits and $25 for minor
development permits. There is no application fee for general permits. CAMA grants CRC the
authority to assess permit fees.
FUNDS MANAGEMENT
Major development permit application fees are paid directly to DCM. Fee revenues are
deposited in the state's general fund Because minor development permit applications are
reviewed by local government permit officers, minor development permit application fees are
paid directly to the local government of jurisdiction.
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IMPLEMENTATION
The major development permit application form constitutes a joint application for U.S.
Army Corps of Engineers section 404 and section 10 permits. Under a general permit issued by
the Corps to the State of North Carolina, DCM reviews applications, does the public notice, and
then sends a state response to the Corps. DCM has another joint processing arrangement with
the Division of Environmental Management (DEM), North Carolina Department of Natural
Resources and Community Development, to issue a joint public notice for CAMA permits and
state water quality certifications in the coastal zone. DEM conducts state water quality
certifications, but the joint public notice is funded by DCM. Both joint processing arrangements
streamlined the permit process for the applicant, but increased DCM's costs.
Local governments administer the minor development permit program under authority
granted by CAMA and using standards adopted by CRC. Local permit officers are local
government employees trained by DCM to review applications for consistency with CRC
standards, issue minor development permits, and advise applicants on how to design their
projects.
REVENUE EXPERIENCE
Revenues from CAMA permits vary from year to year, as the number of permit
applications depends on development activity in North Carolina's coastal counties. The current
application fee does not cover the entire processing cost for major or minor development permits.
LESSONS LEARNED
Legislation passed in 1990 allows increases in CAMA permit fees to more adequately
cover DCM's permit processing costs. Under the new legislation, DCM can assess a major
development permit fee up to a maximum of $400. DCM will determine the actual fee schedule.
Currently, DCM is proposing increased fees far both major and minor development permits to
CRC.
CONTACT
John Parker, Chief
Permits Section
Division of Coastal Management
North Carolina Department of Natural Resources and Community Development
P.O. Box 27687
Raleigh, NC 27611-7687
(919) 733-2293
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MAINE WETLANDS PERMIT FEES
BACKGROUND
The Maine Department of Environmental Protection (DEP) assesses fees for its licensing
and permitting programs, including fees for wetlands permits. DEP regulations establish a fee
schedule to charge applicants for costs incurred in reviewing license and permit applications.
Revenues from DEP fees are deposited in the Maine Environmental Protection Fund.
FINANCING MECHANISM
DEP assesses different fees for each type of license, permit, certification, or notification
listed in its fee schedule. Fees are paid at the time of filing an application.
DEP assesses both a processing fee and license fee for wetlands permits. Processing fees
are assessed for costs incurred by DEP in determining the acceptability of applications for
processing and in processing applications to determine if they meet statutory and regulatory
criteria. License fees are assessed for direct costs incurred in monitoring, inspecting, and
sampling to assure compliance. Agencies of the state of Maine are not assessed these fees.
Current DEP regulations charge the following fees for freshwater wetlands and coastal
wetlands permits:
Type of Wedand Permit Processing Fee License Fee
Freshwater wetlands $100 $25
Coastal wetlands
Projects involving fill
below the normal high
water line or structures
in excess of 1,000 square
feet below the normal
high water line
Shoreline stabilization
with no fill except riprap
below the normal high
water line
All others
750 250
50 25
150 50
DEP also charges fees for minor revisions, amendments, and renewals. A $50 processing
fee is charged for minor revisions. Amendments are assessed one-half the processing fee of the
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initial application and no license fee. Renewals are assessed the same license fee as the ;n;:ui
application and one-half the processing fee of the initial application.
If DEP determines that an application is likely to require significantly higher costs than
covered by the fee schedule, such applications can be charged special fees. The special fee
charged for any large or complex project reflects DEP's actual costs for processing the
application and cannot exceed 540,000.
FUNDS MANAGEMENT
Both the processing fee and license fee must be paid in full when a permit application is
filed. DEP does not refund processing fees if applications are denied. Processing fees are
refunded, however, if the application is withdrawn by the applicant within 30 days of the start
of processing. License fees are refunded if DEP denies an application or if an applicanon is
withdrawn by the applicant
The Maine Environmental Protection Fund was established as a nonlapsing fund to
support DEP licensing and permitting programs. All DEP fees are deposited in the fund. DEP
expenses directly related to administering these programs are charged to the fund. The state
legislature approves allocations from the fund to DEP based on estimates of DEP's actual costs
for administering its licensing and permitting programs.
IMPLEMENTATION
The 1987 Natural Resources Protection Act consolidated several earlier state laws
affecting wetlands along with other state environmental legislation. DEP's license and permit
fees are authorized by Title 38, section 352 of the Maine Revised Statutes. Chapter 50 of DEP's
rules establish the fee schedule listing the actual fee to be charged for each type of license or
permit.
At first, DEP employees kept records of time and money spent on reviewing applications.
These records were used to establish that fees were set appropriately to cover actual costs
incurred by DEP in reviewing each type of application. The costs included, but were not limited
to, personnel costs, travel, supplies, legal and computer services. Since the commissioner
approved the fees, DEP no longer keeps records for this purpose.
DEP ensures that fees are paid by requiring that applications be returned to the applicant
if the processing and license fee are not paid at the time of filing the application. If DEP
determines that an application is unacceptable for processing, it will be returned to the applicant
and can be resubmitted within 60 days of the date the application was returned. If the application
is resubmitted after the 60-day period, it is considered a new application and the appropriate fees
are assessed.
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REVENUE EXPERIENCE
Fees received by DEP do not sufficiently support its permit processing and compliance
activities. Since it was established, the Maine Environmental Protection Fund has not had
sufficient funds to meet the allocations approved by the state legislature. Consequently, DEP has
submitted several legislative proposals for fee increases.
Because lack of funding restricts its ability to meet its mandates, DEP submitted a
proposal to the state legislature in 1990 requesting significant changes in its fees to more
adequately cover departmental costs for permit processing and compliance activities. A SlOO
processing fee and $100 license fee were proposed for freshwater wedands permits. For coaxal
wedands permits, a $3,500 processing fee and $1,550 license fee were proposed. As this bill did
not pass, DEP plans to submit a new proposal in the next legislative session.
LESSONS LEARNED
In Maine, the state legislature sets maximum fees by statute and DEP has established
actual fees through the rulemaking process. DEP charges the maximum fee in many cases.
Because maximum fees are determined by the legislature, DEP has limited flexibility in
establishing appropriate fees. In 1990, the legislature changed these procedures to allow the
commissioner to set the actual fees. DEP will no longer have to go through the rulemaking
process to set fees. However, DEP sail must go back to the legislature and work through the
legislative process for changes to the maximum fees.
CONTACT
Karl Wilkins
Maine Department of Environmental Protection
State House Station #17
Augysta, ME 04333
(207) 289-2812
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NEW HAMPSHIRE PERMIT APPLICATION FEE
BACKGROUND
New Hampshire requires a permit for any project involving dredging, fill, excavation, or
construction of any structure "in or on any bank, flat, marsh, or swamp in and adjacent to any
waters of the state." Such permits apply to freshwater and coastal wetlands as well as other state
waters.
The permit program is administered by the New Hampshire Wetlands Board. The Board
assesses permit application fees, which are deposited in the Wetlands Board Review Fund.
Preservation of salt marshes and tidal wetlands is given highest priority by the Board.
FINANCING MECHANISM
A permit application fee is paid at the time of filing the permit application. The amount
of the fee depends on the size of the project. A "major project" is of such size and scope to
create a potentially significant impact on wetlands. A "minor project" is of small size and scope
with a minor potential impact upon wetlands. "Minimum impact projects" are those minor
projects likely to have a negligible impact and may represent ordinary rights of property owners.
The permit application fee is $50 for minimum impact projects. For minor and major
projects, the fee is based on the area of dredge or fill proposed, and the number of boat slips
requested. The rate is 2.5« per square foot of dredge or fill proposed and $100 per boat slip.
Permit applications are not complete unless accompanied by the permit application fee.
Permits have a duration of two years starting at the date of approval and can be extended
upon written request for another two years. Additional extensions are allowed up to a limit of
six years. If the project is not completed within six years, the Wetlands Board requires a new
permit application and charges another fee for processing this application as a new permit.
FUNDS MANAGEMENT
Permit application fees are collected by the Wetlands Board. Fee revenues are deposited
in the Wetlands Board Review Fund, a nonlapsing fund in the state treasury. Funds are
appropriated to the Wetlands Board for its expenses in reviewing permit applications, conducting
field investigations, and holding public hearings. New Hampshire's rules have no provision to
reimburse a permit application fee when permits are denied or permit applications withdrawn.
IMPLEMENTATION
The permit program, permit application fees, and Wedands Board are authorized by
Chapter 482-A of the New Hampshire Revised Statutes. The rules of the Wedands Board are
Chapters Wt 100 to Wt 800 of the New Hampshire Code of Administrative Rules.
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The Wetlands Board consists of eleven members. Three members of the public j_-e
appointed by the governor for three-year terms. Eight state officials from specified departments
are members. The Wetlands Board is administered under the state's Department or
Environmental Services. Permit actions by the Wetlands Board can include review,ma
applications, reviewing all correspondence received, conducting field inspections, holding public
hearings on the proposed permit action, and approving, denying, or placing conditions on permits.
At the time of filing with the Wetlands Board, three copies of the permit application must
be filed with the town or city clerk, who may charge an administrative fee not to exceed S2.
Copies of the permit application must be made available for public review. The municipal
conservation commission or planning board, if any, can conduct a local investigation of the
proposed project.
REVENUE EXPERIENCE
Activities of the Wetlands Board are financed by a combination of fee revenues and
general revenues. Permit application fees are used primarily to cover the salaries of technical
and clerical staff directly involved in the permitting process. General revenues cover fixed costs
and salaries for a core staff. The Wetlands Board also is authorized to solicit and receive gifts,
grants, or donations, which it can administer and disperse to support its activities.
To increase its funding through fee revenues, the Wetlands Board increased its fees in
February 1990. For the first six months since fees were increased, average monthly fee revenues
were a little over $17,000 and the average number of new permit applications has been a little
over 200 per month.
LESSONS LEARNED
New Hampshire structured its current fee schedule to encourage developers to spend more
time locating and avoiding wetlands early in their planning process. Previously, permit
applications were assessed a flat fee of $100 ($300 from July 1989 to February 1990). With the
flat fee, some applicants would file permit applications to fill 10 to 20 acres of wetland,
attempting to get the Wetlands Board to define what it would allow. Even simple denials of such
applications often cost more to process than the flat fee and applicants used the Board's findings
supporting the denial to develop new permit applications until they found a proposal that the
Wetlands Board would approve.
CONTACT
Ken Kettenring, Bureau Administrator
New Hampshire Wetlands Board
64 North Main Street
P.O. Box 2008
Concord, NH 03301-2008
(603) 271-2147
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PENNSYLVANIA WATER OBSTRUCTION AND ENCROACHMENT PERMIT FEE
BACKGROUND
The Pennsylvania Department of Environmental Resources (DER) is responsible for the
environmental and engineering review of all permit applications for dams, water obstructions, and
encroachments. Through an agreement between DER and the U.S. Army Corps of Engineers,
applicants are able to simultaneously apply for the state permit, required under the authority of
the Dam Safety and Encroachments Act of 1978, as well as federal permits required under
section 404 of the Clean Water Act or section 10 of the Rivers and Harbors Act.
The Pennsylvania DER assesses a permit application fee for each state permit. The Corps
of Engineers assesses its permit fee separately from the Pennsylvania DER.
FINANCING MECHANISM
The Pennsylvania DER assesses an application fee for each water obstruction and
encroachment permit, according to the following fee schedule:
Type of Structure or Activity Application Fee
Bridges over IS foot span $100
Stream enclosures 100
Channel changes 100
Commercial dredging 100
All other water obstructions/encroachments 50
Permit applications submitted by federal, state, county, or municipal agencies are exempt from
the state fee.
A single application may be submitted and a single permit may be issued for multiple
structures and activities, which are pan of a single project or facility or pan of related projects
and facilities, located in a single county, constructed, operated, or maintained by the same person
or persons. When an application covers multiple structures or activities, the permit application
fee shall be the sum of appropriate fees up to a maximum of $600.
FUNDS MANAGEMENT
Revenues collected from permit application fees are deposited in the state's general fund.
All fines and civil penalties collected under the provisions of the Dam Safety and Encroachments
Act are deposited in a special fund known as the Dam and Encroachments Fund. This fund is
administered by DER to suppon activities protecting the citizens of the Commonwealth from
hazards to life, property, and the environment resulting from unsafe dams, water obstructions, and
encroachments.
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IMPLEMENTATION
DER regulates wetlands encroachments under the rules and regulations found at Title 25,
Pennsylvania Code Chapter 105, Dam Safety and Waterway Management, developed pursuant
to the 1978 Dam Safety and Encroachments Act. The act provides for the comprehensive
engineering and environmental review of water-related activities to protect the health, safety, and
property of the people and to conserve the natural resources of the Commonwealth. DER is
authorized to collect permit fees under section 105.13 of Pennsylvania Code Chapter 105.
Using a joint permit application form, applicants simultaneously apply for a DER water
obstruction and encroachment permit and for a Corps of Engineers section 404 or section 10
permit. Such applications also are considered a request for state water quality certification under
section 401 of the Clean Water Act.
REVENUE EXPERIENCE
Fees, fines, and civil penalties received by DER do not sufficiendy support permit
processing and compliance activities in accordance with the Dam Safety and Encroachments
Act.
LESSONS LEARNED
DER has adopted an action plan that is intended to clarify and further define DER's role
in wetlands protection. Major components of the plan include: an increase in review and
enforcement staff, the creation of an education and technical assistance program, and the
amendment of Chapter 103 to improve wetland regulations and increase permit fees.
CONTACT
Ken Reisinger
Pennsylvania Department of Environmental Resources
Division of Rivers and Wetland Conservation
P.O. Box 8761
Hairisburg, PA 17015-8761
(717) 541-7802
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LOUISIANA COASTAL USE PERMIT FEES
BACKGROUND
The Coastal Management Division (CMD) of the Louisiana Department of Natural
Resources assesses fees for its Coastal Use Permits (CUPs). CUPs are pan of the Louisiana
Coastal Resources Program, which regulates development in Louisiana's coastal zone. A permit
application fee and a processing fee are collected for CUP applications. Only the application fee
is assessed for Requests for Determination (RFD), that is, a request for CMD to determine
whether a CUP is required for a project in the Louisiana coastal zone.
CUPs are required for dredge or fill activities, including, but not limited to, construction
of boat slips; dredge or fill associated with construction of bulkheads, piers, or wharves; canal
construction; trenching of pipelines; prop-washing; mitigation activities such as construction of
levees, water control structures, or plugs; maintenance dredging; and dredging of water bottoms
in bays and lakes for shell.
FINANCING MECHANISM
Each CUP and RFD is assessed a $20 non-refundable application fee, which must
accompany the application. The non-refundable application fee is charged to all users of the
coastal zone, including private citizens, commercial entities, nonprofit organizations, state and
local agencies, and municipalities. If the application fee is not included with a CUP application,
the application is considered incomplete and returned to the applicant
In addition, a permit processing fee is assessed for all CUP applications according to the
total volume of material disturbed (material dredged or used for fill). Projects involving less than
125 cubic yards of dredge or fill material are not assessed the processing fee. Projects involving
from 125 to 50,000 cubic yards of dredge or fill material are assessed the fee at a rate of 4c per
cubic yard. Projects involving more than 50,000 cubic yards of dredge or fill material are
assessed the maximum processing fee of $2,000. CMD calculates the permit processing fee using
information supplied with the CUP application and bills the applicant when sending out the draft
CUP permit. Public agencies receiving permits for drainage improvement projects and private
citizens receiving permits for wetland restoration projects are exempt from the permit processing
fee.
FUNDS MANAGEMENT
Fees are paid to CMD and deposited in the Coastal Resources Trust Fund, a CMD
account which comprises its state match to the federal Coastal Zone Management section 306
program.
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implementation
Under the State and Local Coastal Resources Management Act of 1978 (Louisiana
Revised Statutes 49:213.11) and pursuant to a Notice of Intent published on March 20th, 1985.
the DNR's rules and procedures tor CUPs were amended to establish the fee system for CLP
applications and RFDs. The fee system became effective May 20, 1985.
CMD cannot issue a permit until all fees are paid. If a permittee wishes to revise an
activity for which a CUP has already been received, a new application must be submitted along
with a S20 application fee. Also, if a CUP application that was returned to the applicant bv
CMD or withdrawn by the applicant is subsequently resubmitted, it is subject to new fees.
The permit processing fee is based on a sliding scale of cubic yards disturbed because,
as a general rule, the time devoted to processing an application increases directly with the volume
of material disturbed. The fee schedule, therefore, is designed to collect fees proportional to the
processing cost of each application.
If the proposed project is located in a parish with an approved local Coastal Management
Program, the parish may process the CUP application if the project is of local concern according
to the State and Local Coastal Resources Management Act. Parishes also may charge a fee to
cover their CUP application processing costs. If the project is of state concern, CMD will
process the CUP application.
REVENUE EXPERIENCE
CMD collects about $260,000 annually through fees.
LESSONS LEARNED
CUPs issued by CMD are separate from U.S. Army Corps of Engineers section 404
permits. However, the Corps and CMD have an agreement for a joint public notice process.
Because the Corps funds most of the public notice process, the joint public notice has been very
useful to reduce the administrative and financial burden for the state permit program.
CONTACT
Lynn Wellman, Manager
Permit Section
Coastal Management Division
Louisiana Department of Natural Resources
P.O. Box 44487
Baton Rouge, LA 70804-4487
(504) 342-7591
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OHIO WATER QUALITY CERTIFICATION FEE
BACKGROUND
In Ohio, the main regulatory mechanism for protecting wetlands is the state water quality
certification rules. These rules establish procedures whereby Ohio can deny or place conditions
on federal permits authorizing discharge of dredged or fill material into state waters. Wetlands
are designated as "state resource waters" in Ohio's Antidegradation Policy (Ohio Administrative
Code 3745-l-05(C)j.
The Ohio Environmental Protection Agency (EPA) administers the water quality
certification program. Ohio EPA's Division of Water Quality Planning and Assessment
(DWQPA) evaluates the water quality impacts of dredging or fill activity in wetlands. When
DWQPA grants water quality certification, a certification fee is assessed to cover processing
costs.
FINANCING MECHANISM
Cenification fees are assessed after DWQPA makes a decision to grant a water quality
certification. Because fees are assessed only when certifications are granted, the number of
applicants charged a certification fee is less than the total number of applicants.
Ohio EPA receives applications for state water quality certification indirectly through
applications for federal permits issued by the U.S. Army Corps of Engineers or by direct
application to Ohio EPA. Filing an application with the Corps of Engineers for a permit pursuant
to section 404 of the Clean Water Act and/or section 10 of the Riven and Harbors Act
constitutes an application to Ohio EPA for state water quality certification. Ohio EPA accepts
these applications through Corps of Engineers public notices. Persons filing an application for
any other federal permit or license to conduct an activity which may result in a discharge to state
waters must file an application for state water quality certification directly with Ohio EPA.
Federal and state agencies are required to apply for state water quality certification, but
they are exempt from paying the fee. Other exemptions from the fee include projects authorized
under a Corps of Engineers general permit or nationwide permit, or discharge of dredged or fill
material as part of certain construction projects by federal agencies. In addition, the definition
of dredged or fill material in Ohio's regulations exempts material resulting from "normal farming,
silviculture, and ranching activities."
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Ohio EPA requires different certification fees for different categories of projects. Drecse
or fill projects, which are the two categories involving wetlands, are assessed certification tees
according to cubic yards of dredged or fill material, as follows:
Cubic yards of
dredeed or fill material
Fee
Less than 500
S15
500 - 5,000
25
5,001 - 15,000
50
15,001 - 30,000
75
30,001 - 50,000
100
More than 50,000
200
Other certification fees assessed by Ohio EPA are a S15 fee on certifications pursuant to
section 10 of the Rivers and Harbors Act, a SI00 fee on certifications for bulk commodity
facilities, and 50c per linear foot or a minimum $15 fee on certifications for breakwater
placements.
The maximum fee for residential use projects is S100, unless the total discharge of
dredged or fill material exceeds 50,000 cubic yards, then the maximum fee is $200. The
maximum fee for any other project is $200.
FUNDS MANAGEMENT
After DWQPA makes a decision to grant a water quality certification, the Permit
Processing Section of Ohio EPA's Division of Water Pollution Control (DWPC) issues a
certification letter and fee statement Certifications are not effective until all fees are paid.
Certification fee revenues are deposited in the state's general fund.
IMPLEMENTATION
The state of Ohio adopted its water quality certification rules in July 1982 as Chapter
3745-32 of the Ohio Administrative Code. These rules became effective in September 1982.
Ohio's water quality certification rules used existing authority granted to states under section 401
of the Clean Water Act to review proposed activities affecting state waters, and deny or place
conditions on federal permits or licenses authorizing such activities.
Ohio's water quality certification review procedures require DWQPA to evaluate wetland
functions and deny certification for high quality wetlands. In certain instances, DWQPA issues
certifications permitting limited degradation if the applicant follows steps to avoid and minimize
impacts, and agrees to mitigate for destruction of wetland habitat. Such mitigation is required
as a condition of certification, resulting in private expenditures for wetlands creation and/or
restoration.
Ohio EPA can revoke a state water quality certification at any time if applicable laws or
regulations are violated.
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REVENUE EXPERIENCE
Revenues from water quality certification fees depend on the number of certifications
granted and the size of those projects. Only a part of Ohio's revenues from water quality
certification fees are from projects involving wetlands. Ohio frequendy denies certification tor
projects affecting wetlands and collects no fee when certification is denied. As such, Ohio's
water quality certification fees have limited revenue-raising potential. Because certification tees
cover only pan of its water quality certification processing costs, Ohio EPA also relies on federal
Chapter 106 grants and state general revenues.
LESSONS LEARNED
Ohio EPA plans to increase its water quality certification fees in a few years to cover a
greater share of its state water quality certification processing costs.
CONTACT
Colleen Crook, 401 Coordinator
Ohio Environmental Protection Agency
P.O. Box 1049, 1800 WaterMark Drive
Columbus, OH 43266-0149
(614) 644-2871
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California water quality certification fee
BACKGROUND
California's state water quality certification program is administered by nine Regional
Water Quality Control Boards. The Regional Boards assess a water quality certification filing
fee on each application for a state water quality certification. Because wetlands are considered
waters of the state, California can use state water quality certification to deny or place conditions
on federal permits authorizing discharge of dredged or fill material into wetlands.
FINANCING MECHANISM
The water quality certification filing fee must be paid with each application for a water
quality certification. The amount of the fee is determined by the Filing Fee Schedule for the
State Water Resources Control Board (section 2200 of Chapter 9, Division 3, Title 23, California
Code of Regulations).
In the fee schedule, fees for dredging projects with spoils disposal are based on the
quantity of material to be dredged. A $500 fee is assessed for projects with under 25,000 cubic
yards to be dredged. For projects involving 25,000-500,000 cubic yards, the fee is $20 for each
thousand cubic yards of material to be dredged. Dredging projects involving over 500,000 cubic
yards are assessed a $10,000 fee.
The fee schedule also specifies filing fees for other activities, including municipal and
industrial wastewater discharges. The water quality certification filing fee for an acdvity not
specified in the Filing Fee Schedule is $200.
FUNDS MANAGEMENT
The Regional Boards collect water quality cemficadon filing fees when certification
applications are filed. If the state does not act on a water quality cemficadon application, the
cemficadon filing fee is refunded.
Fee revenues are deposited in the general fund of the State Water Resources Control
Board. Each of the nine Regional Boards has its own budget for water quality certification
reviews and can recover part of its fee revenues through budget requests. The State Water
Resources Control Board reserves part of the fee revenues to cover the costs of appeals.
IMPLEMENTATION
The Regional Boards are authorized to collect filing fees with water quality certification
applications by section 3833, Chapter 17, Tide 23, of the California Code of Regulations.
Chapter 17 also establishes procedures for the Regional Boards to act on water quality
certifications and provides for appeals to the Stale Water Resources Control Board if an
application is denied by a Regional Board. California's water quality certification regulations
use existing authority granted to states under section 401 of the Clean Water Act to review
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proposed activities affecting state waters, and deny or place conditions on federal permits or
licenses authorizing such activities.
REVENUE EXPERIENCE
Revenues from water quality certification filing fees are not sufficient to support the state
water quality certification program.
CONTACT
Jesse M. Diaz, Chief
Division of Water Quality
California State Water Resources Control Board
P.O. Box 100, 901 P Street
Sacramento, CA 95801
(916) 445-9552
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LOUISIANA WATER QUALITY CERTIFICATION FEE
BACKGROUND
In Louisiana, the state water quality certification program is administered by the Office
of Water Resources, Water Pollution Control Division, Louisiana Department of Environmental
Quality (DEQ). DEQ reviews and can grant conditionally or deny certification for projects tnat
require a federal permit for discharge of dredged or fill material into state waters (using state
authorities granted under section 401 of the Clean Water Act). From 60-70% of water quaiuy
certification applications in Louisiana involve inland or coastal wetlands.
FINANCING MECHANISM
A one-dme processing fee is assessed with each application for water quality certification.
A S25 fee is charged to process water quality certifications for noncommercial activities. A S265
fee is charged for processing water quality certifications for commercial activities. Fees are paid
at the time of application. Applications are not considered complete without the appropriate fee.
FUNDS MANAGEMENT
Fee revenues are deposited in Louisiana's Environmental Trust Fund for DEQ. Revenues
collected from water quality certification fees do not go directly back to the water quality
certification program.
IMPLEMENTATION
DEQ's water quality certification processing fees, authorized by the Louisiana
Administrative Code, became effective in 1984. Fees have not increased since 1984 and DEQ
has, no plans to revise its water quality certification fees.
REVENUE EXPERIENCE
Currently, the annual revenue from water quality certification fees is approximately
$150,000 per year. Because many applications are related to oil and gas activity and such
activities have slowed in recent years, fee revenues have dropped slightly from the previous
5160,000 to $170,000 per year. Fee revenues are sufficient to cover the costs of administering
the water quality cenification program in Louisiana.
LESSONS LEARNED
In Louisiana, some applicants for water quality certification have attempted to use the
program's noncommercial category for commercial projects. When different fees are assessed
for commercial versus noncommercial activities, it is important to narrowly define the
characteristics separating commercial activities from noncommercial activities.
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CONTACT
Larry Wiesepape
Water Pollution Control Division
Louisiana Department of Environmental Quality
P.O. Box 44091
Baton Rouge, LA 70804-4091
(504) 342-6363
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MARYLAND TIDAL WETLANDS COMPENSATION FEES
BACKGROUND
The Department of Natural Resources (DNR) administers Maryland's wetlands protection
programs. The DNR currently does not assess any fees for processing wetlands permit or license
applications. These activities are supported entirely from general revenues.
However, there exists a legislatively established special fund as pan of Man-land's
wedands protection programs. The Tidal Wetlands Compensation Fund was created to finance
acquisition of valuable wetland areas for preservation. Compensation fees may be assessed by
the State Board of Public Works (SBPW) for certain projects impacting wetlands as a condition
to issuance of a state wetlands license by SBPW. Fee revenues are deposited in the Tidal
Wetlands Compensation Fund and are dedicated to state acquisition of wedand areas.
FINANCING MECHANISM
Compensation fees are assessed by SBPW according to its policies and procedures.
SBPW policy outlines three compensation fees, as follows:
Compensation for Dredging in Navigable Waterways. A fee of $1.00 per cubic yard may
be assessed for fill material dredged from the bottom of navigable waterways when the
material is intended for private commercial use, sale, or to make fastland.
Compensation for the Creation of Fasti and bv Filling. A compensation payment
equivalent to one-third of either the full or fair market value of fastland created, may be
assessed when fill projects impact wetlands. The public benefit to be derived from the
project determines which value is used.
Compensation for Submarine Cables and Pipelines. A one-time $500 fee may be assessed
when tidal wetlands are impacted by installation of submarine cables and pipelines. In
addition, SBPW assesses an annual fee of 25$ per linear foot during the first 5-year
period. At the end of the first 5-year period and every five years thereafter, the amount
of the annual fee is adjusted according to the Consumer Price Index.
FUNDS MANAGEMENT
Compensation fees are deposited in the Tidal Wetlands Compensation Fund. This fund,
established by Natural Resources Article section 9-204, is legislatively dedicated to financing
state acquisition of wedands. The fund is administered through the state's Open Space Program,
which purchases other lands from other revenue sources to add to the inventory of state protected
areas.
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REVENUE EXPERIENCE
Revenues from compensation tees vary trom year to year. Over the last three fiscal years,
the following amounts have been deposited in the fund: 524,782 in FY 1987, SI7,455 in
FY 1988, and S48.135 in FY 1989. In FY 1990, the state estimates it will receive approximately
S235.000 from compensation fees. As much as SI million has been received in a single year
from compensation fees.
Expenditures from the Tidal Wetlands Compensation Fund for wetlands acquisition also
vary from year to year. Often, funds accumulate for several years and are then expended in a
single purchase. Over the past three fiscal years, 5325,000 has been spent, leaving a current
balance in the fund of S90.000.
CONTACT
Charles A. Wheeler, Director
Wetlands and Waterways Program
Water Resources Administration
Maryland Department of Natural Resources
Tawes State Office Building
Annapolis, MD 21401
(301) 974-3877
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TENNESSEE PROPERTY TRANSFER TAX
BACKGROUND
Tennessee maintains a dedicated fund for the acquisition of wetlands and bottomland
hardwood forests financed through a portion of the state's property transfer tax. The program,
administered by the Tennessee Wildlife Resources Agency (TWRA), had purchased over 8,700
acres of these lands for approximately S6.2 million as of early May 1990. Requests to acquire
another 12,700 acres have been submitted for approval by TWRA. TWRA expects to purchase
these lands shortly for approximately 57 miilion. An additional 20,000 acres have been evaluated
by TWRA, but not appraised, and will likely be purchased as funds become available.
FINANCING MECHANISM
A property transfer tax of 4c per $100 of value provides the funding for TWRA's
wetlands acquisition program. This represents a portion of the state's full 28$ per SI00 of value
property transfer tax.
FUNDS MANAGEMENT
The property transfer tax is assessed by the counties on all transfers of property in the
state. The revenues are then transferred to the state's Finance and Administration Department
and deposited monthly in the Wetlands Acquisition Fund.
IMPLEMENTATION
TWRA's wedands acquisition program was established by the 1986 amendments to
Tennessee's Natural Areas Preservation Act. Under the 1986 amendments, TWRA is charged
with acquiring wetlands and bottomland hardwood forests from willing sellers. Another
amendment in 1989 allows acquisition of upland areas and buffer zones tied to purchases of
wedands and bottomland hardwood forests. The 1986 amendments contained a provision to
repeal the entire program in 1996. Because of strong support in the legislature for the program,
it is increasingly likely that it will be extended.
The 280 property transfer tax, the 4c portion dedicated to wetlands acquisition, and the
Wetlands Acquisition Fund are authorized by Tennessee Code Annotated section 67-4-409.
Lands offered for sale to the state are evaluated and ranked by TWRA and appraised by
licensed appraisers. The appraisal process is overseen by the Finance and Administration
Department. The Director of TWRA and the state's Commissioner of Agriculture must approve
each acquisition.
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The state has had no difficulty in finding willing sellers of suitable lands. However, ii.-^e
most wedands are in the western half of the state while the tax is levied statewide, there were
concerns that eastern Tennessee was paying for a program primarily benefiting western
Tennessee. These concerns were addressed by the legislature by mandating that a particular tract
of upland area be purchased in eastern Tennessee with money from the Wetlands Acquisition
Fund.
Wetlands and bottomland hardwood forests acquired by the state are exempt from all state
and local property taxes as required by the 1986 Natural Areas Preservation Act amendments.
To alleviate the program's fiscal burden on local governments, the 1986 amendments also
established a separate Compensation Fund. The first $300,000 deposited in the Wetlands
Acquisition Fund was transferred and credited to the Compensation Fund. Using this fund, the
state treasurer annually reimburses affected cities and counties for lost property tax revenues from
such tax-exempt property.
REVENUE EXPERIENCE
The Wetlands Acquisition Fund receives around $340,000 per month or about $4 million
per year on average. The amount of revenue coming into the fund fluctuates according to
activity in the real estate market. As such, revenues vary considerably on a monthly basis, but
the yearly amounts have been fairly stable. Currently, funds are not adequate to purchase all
suitable wetlands being offered to the state.
The portion of the state's property transfer tax finances only the appraisal, survey, and
purchase of wetlands. With the exception of funds to manage acquired lands, all other program
costs (for example, salaries and administrative expenses) come from TWRA's budget. The funds
to manage acquired lands have been provided only recently. The Natural Areas Preservation Act
was amended to allow the interest earned on funds that have been obligated but not yet spent
(that is, funds set aside for the purchase of property that has been identified but has not received
final approval) to be set aside for that purpose. Whether this arrangement will provide sufficient
funds for management is not yet determined.
LESSONS LEARNED
Political opposition may arise from perceived geographic inequities. It is important to
address such considerations when establishing similar funding mechanisms.
CONTACT
Joe Hopper, Wetlands - Waterfowl Coordinator
Tennessee Wildlife Resources Agency
P.O. Box 40747
Nashville, TN 37204
(615) 781-6610
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FLORIDA DOCUMENTARY STAMP TAX
BACKGROUND
Through various acquisition programs, the state of Florida has been purchasing
environmentally sensitive lands, arc Ideologically significant lands, and lands suitable tor
recreation since 1963. The two major Florida land acquisition programs are the Conservation and
Recreation Lands (CARL) program and the Save Our Rivers Program. Both are funded primarily
by the state's documentary stamp tax, a 55c tax on each $100 in value of property sold m the
state.
The CARL program acquires environmentally, geologically, archaeologically, or
historically valuable lands, and land for state parks. Under CARL, approximately 190,000 acres
of land have been acquired since 1979. When CARL land acquisitions are combined with those
of CARL's predecessor program, the Environmentally Endangered Lands (EEL) program which
began in 1972, total land acquired exceeds 550,000 acres.
The Save Our Rivers program was created to fund acquisition of lands by the Florida
Water Management Districts (WMDs) to address water resource problems through basin
management Lands acquired are those necessary for water supply, conservation and protection
activities, and flood control. Since its inception in 1981, the Save Our Rivers program has
acquired approximately 385,000 acres of land for approximately $275 million.
FINANCING MECHANISM
The documentary stamp tax is a 554 tax on each $100 in value of property sold in the
state of Florida. Both CARL and Save Our Riven receive most of their funding from a
dedicated portion of the state documentary stamp tax.
Both programs also receive funding from a 32$ tax on each $100 in value on financial
documents (including stock certificates, bonds, debentures, and promissory notes). The state's
tax on financial documents was increased from 15c to 32$ in 1990. In addition to these funds,
CARL also receives $10 million annually from a severance tax on mining.
FUNDS MANAGEMENT
Of the total revenues collected from Florida's documentary stamp tax, 9.2% has been
dedicated to the Conservation and Recreadon Lands Trust Fund for the CARL program and
another 9.2% to the Water Management Lands Trust Fund for the Save Our Rivers program.
Because increased revenues are expected from the recently increased state tax on financial
documents, the dedicated portion of documentary stamp tax revenues for both programs is now
6.9%, effective July 1, 1990.
The documentary stamp tax is collected by counties when property is sold. The funds are
then transferred to the state and the appropriate percentages are deposited in the CARL and
Water Management Lands trust funds monthly.
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The CARL Fund pays for. the purchase of lands and for activities related to
acquisition such as appraisal and boundary surveys. In addition, CARL supports an ui\er.tor>
of natural areas in Florida. Up to 10% of CARL funds may be used for land management. All
other program costs (for example, salaries and overhead) are funded through the Florida
Department of Natural Resources budget.
Under Save Our Rivers, each WMD receives an allotted portion of the Water Management
Lands Trust Fund. WMDs have spent these funds primarily for land acquisition, according to
their 5-vear acquisition plans. Staff salaries and other costs incurred by WMDs for Save Our
Rivers activities can be charged to their allotments from the fund. In general, the WMDs are not
recouping these costs from the fund. However, increasing costs associated with land management
activities, in particular, may soon force WMDs to charge certain operating costs to their
allotments from the fund.
IMPLEMENTATION
When CARL was created in 1979 by the Florida legislature, it incorporated and expanded
the state's FEI. program that had been in existence since 1972. The administrative functions of
the CARL program are divided among three public entities. The Land Acquisition Advisory
Council identifies properties to be acquired, the Division of State Lands of Florida's Department
of Natural Resources negotiates acquisitions, and the Board of Trustees of the Internal
Improvement Trust Fund oversees activities and allocates money from the CARL Trust Fund.
The Division of State Lands provides primary staff support to the CARL program.
The Water Management Lands Trust Fund was created by the Florida legislature in 1981
for land acquisition by WMDs under the Save Our Rivers program. Although Save Our Rivers
is coordinated by the Florida Department of Environmental Regulation, the WMDs conduct the
selection, purchase, and management of lands.
The WMDs are public corporations established by the Florida legislature to undertake all
facets of water management for the major river basins in the state. Each WMD establishes its
own criteria for selecting lands to acquire based on the relative benefit of those lands to water
management, water supply, water resource conservation and protection, and project
implementation. Parcels of land given highest priority are those with outstanding environmental
features; with a high value for recreation, archaeologic, or historic preservation, enhancing
economic development, or providing urban greenspace; or lands endangered by conversion to an
incompatible use.
REVENUE EXPERIENCE
CARL and Save Our Rivers have received steadily increasing revenues from their portion
of the documentary stamp tax revenues. Much of the increase is attributable to occasional
increases in the documentary stamp tax rate. Even if the rate had remained constant, revenues
would have increased in conjunction with growth in the Florida real estate market over the same
time period. There is no cap on revenues received by the oust funds from the documentary
stamp tax.
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LESSONS LEARNED
For both programs, there is a substantial backlog of lands which could be acquired if
enough money were available. Recognizing the increasing rate of loss of wetlands and other
environmentally sensitive lands, the 1990 state legislature passed the Florida Preservation 2000
Act (Public Law 90-217). The act creates the Florida Preservation 2000 Trust Fund to receive
the anticipated S3 billion in bond proceeds to be generated over the next decade. The bonds are
backed by the projected increase in documentary stamp tax revenues, estimated between
$300 million and S343 million from 1990 to 2000.
By Florida law, the state legislature must designate the revenue or tax source to be used
for repayment of the bonds and must specifically appropriate the first year's debt service before
any bonds may be issued. The bonds issued each fiscal year must be authorized in the act
implementing the state's General Appropriations Act. Money will be transferred from the general
revenue portion of total documentary stamp tax revenues in amounts not to exceed S30 million
in FY 1991-92, $60 million in FY 1992-93, $90 million in FY 1993-94, and continuing each
subsequent fiscal year in $30 million increments to reach a maximum transfer of 5270 million
by FY 1999-2000, and thereafter for the purpose of paying debt service on the bonds.
CONTACTS
CARL
Dr. Greg Brock, Environmental Administrator
Office of Land Use Planning and Biological Services
Florida Department of Natural Resources
2639 N. Monroe Street, Suite B-114
Tallahassee, FL 32303
(904) 487-1750
Save Our Rivers
Ruark Cleary, Environmental Specialist
Division of Water Management
Florida Department of Environmental Regulation
2600 Blair Stone Road
Tallahassee, FL 32399-2400
(904) 488-0130
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MISSOURI DEDICATED SALES TAX
BACKGROUND
In 1976, the citizens of Missouri passed a constitutional amendment adding one-eighth
of one percent (0.125%) to the state's general sales tax and dedicating those revenues to the
Missouri Department of Conservation (MDC). One of the major programs undertaken as a result
of these additional funds has been the acquisition of lands for fish and wildlife habitat. Inmalh.
the goal was to acquire 300,OCX) acres of such habitat. Approximately 270,000 acres have been
acquired to date, including a substantial amount of wetland acreage.
FINANCING MECHANISM
One-eighth of one percent (0.125%) was added to the state's general sales tax, with those
revenues dedicated to MDC.
FUNDS MANAGEMENT
The state sales tax is collected by the Missouri Department of Revenue and 0.125% is
credited daily to the Conservation Department Fund. The fund is managed by the state treasurer.
IMPLEMENTATION
Unlike most state agencies, MDC is constitutionally mandated, not legislatively created.
The 0.125% addition to the state sales tax is also mandated by a constitutional amendment. As
a result, the state legislature is unable to alter or modify this funding source or its use.
In September 1989, MDC adopted its Missouri Wetland Management Plan (MWMP). The
0.125% addition to the state sales tax will support implementation of MWMP. MWMP is a plan
to guide the protection, restoration, and management of wetlands in Missouri to the year 2000.
It also implements portions of the North American Waterfowl Management Plan. MWMP
recommends acquisition of new wetland areas, along with expansion and development of existing
wetland areas to improve the amount and distribution of wetland habitat in Missouri.
REVENUE EXPERIENCE
Revenues from the 0.125% addition to the state sales tax have steadily increased from
around S24 million in 1978 to $52 million in 1989, and comprise 65% of MDC's budget.
Between $12 and $28 million has been budgeted yearly for the acquisition and management of
lands and the development of public access facilities. As MDC approaches its original goal of
acquiring 300,000 acres, more of the available funds will be spent on land management and
development, although land will continue to be acquired.r
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LESSONS LEARNED
In Missouri, the dedicated sales tax has provided a unique source of secure revenues tor
fish and wildlife habitat programs, including wetlands acquisition. It also provides a unique
opportunity to dramatically affect the status of wetland resources in Missouri by supporting
implementation of the new MWMP.
CONTACT
A1 Brand, Assistant Fiscal Administrator
Missouri Department of Conservation
P.O. Box 180
Jefferson City, MO 65102-0180
(314) 751-4115
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NEBRASKA HABITAT STAMP
BACKGROUND
The state legislature created Nebraska's wildlife habitat program in 1976. The Nebraska
Game and Parks Commission developed a Wildlife Habitat Plan and administers the wildlife
habitat program according to the plan. The program includes state acquisition of pnvatelv-ow.ned
lands, financial incentives to improve existing wildlife habitat on private lands, and intensified
habitat management of Nebraska Game and Parks Commission and other public lands. L'nder
the first 10-year Habitat Plan approved in 1977, the wildlife habitat program was oriented toward
all wildlife habitat. Wetlands are a high priority under the state's new Habitat Land Acquisition
Plan approved in August 1989.
FINANCING MECHANISM
The Nebraska Game and Parks Commission issues a non-transferable $7.50 habitat stamp
in addition to every hunting, trapping, or combination fishing-hunting license sold. The S7.50
charge applies to both resident and nonresident licenses. The habitat stamp expires on
December 31st of the year it was issued.
In addition to the state's habitat stamp, other funding sources for the wildlife habitat
program include federal assistance, private donations, and contributions from nonprofit
organizations. Nebraska receives federal funding from the Pittman-Robertson and
Dingell-Johnson funds. The Ducks Unlimited program in Nebraska contributes MARSH money
for acquisition and management of wildlife habitat
FUNDS MANAGEMENT
The Game and Parks Commission deposits the habitat stamp revenues with the state
treasurer. Habitat stamp revenues are then placed in the Nebraska Habitat Fund. For the period
from January 1, 1977 through June 30, 1989, habitat stamp revenues represented 57% of Habitat
Fund income, with federal aid representing 38%, and interest and gifts representing 5% of Habitat
Fund income.
Expenditures from the Nebraska Habitat Fund are made according to a 10-year Habitat
Plan developed by the Game and Parks Commission and approved by the state legislature. The
Nebraska Habitat Fund can be used only by the Game and Parks Commission for wildlife habitat
acquisition on a willing-seller willing-buyer basis, for leasing or easements, and for development,
management, and enhancement of wildlife lands. As specified in the Habitat Plan, approximately
one-third of the funds must be expended for state wildlife land acquisition, one-third for habitat
improvement and management on existing Commission lands and other public lands, and
one-third for habitat protection and improvement on private lands.
From July 1, 1977 through June 30, 1989, 34% of expenditures from the Habitat Fund
were for state wildlife land acquisition. During this period, $7.7 million was spent to purchase
18,479 acres of public hunting and fishing land, including 3,352 acres of wetlands.
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IMPLEMENTATION
Recognizing a critical habitat shortage, the Nebraska state legislature created the wildlife
habitat program in 1976 with Legislative Bill 861. The Nebraska Game and Parks Commission
is authorized to sell the habitat stamp under Nebraska Revised Statutes sections 37-216.01
through 37-216.09. The Nebraska Habitat Fund was created for the deposit of habitat stamp
revenues under Nebraska Revised Statutes section 37-216.07.
Under Nebraska Revised Statutes section 37-110, the Game and Parks Commission ;s
required to make in lieu of tax payments on lands acquired through the state's wildlife habitat
program. The Commission makes in lieu of tax payments annually to the counties. For each
parcel acquired, such payments are equivalent to the taxes paid on the land by the pmate
landowner for the year prior to state acquisition of the land.
The private lands portion of Nebraska's Habitat Plan is designed to create new habitat and
enhance existing wildlife habitat through contracts with landowners in participating Natural
Resource Districts (NRDs). Nebraska is divided into 23 NRDs by watershed, with 20 currently
participating in the private landowner program. In participating NRDs, costs for this program
are shared by the NRD and the Nebraska Game and Parks Commission. The state pays 75% of
the costs using funds raised through habitat stamp sales and the NRD pays 25% using funds
generated by local property taxes. For the three NRDs not participating in the program, the
Game and Parks Commission administers the program direcdy with landowners.
REVENUE EXPERIENCE
The average annual income from habitat stamp sales was $1,135,000 over the 13-year
period from January 1, 1977 to December 31, 1989. Total income from habitat stamp sales was
513,960,000 during the period from January 1, 1977 through June 30, 1989.
LESSONS LEARNED
\
All regions of the state receive due consideration for wildlife habitat acquisition, so
citizens in all regions of the state benefit from available public hunting and fishing lands.
CONTACT
Harold K. Edwards, Chief
Resource Services Division
Nebraska Game and Parks Commission
2200 N. 33rd Street
P.O. Box 30370
Lincoln, NE 68503
(402) 471-5411
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IOWA HABITAT AND WATERFOWL STAMPS
BACKGROUND
The Iowa Department of Natural Resources (DNR) uses a variety of funding sources for
acquisition of wildlife habitat, including wetlands. State funding sources used by the DNR tor
wedands acquisition are a state habitat and waterfowl stamp, donated funds, and monies from
Iowa's Resource Enhancement and Protection (REAP) Fund.
An important program affecting wetlands in Iowa is the Prairie Pothole Joint Venture
(PPJV), a cooperative effort among the Iowa DNR, the U.S. Fish, and Wildlife Service, county
conservation boards, and nonprofit organizations. PPJV's mission is to purchase wetlands and
uplands, and to restore privately-owned wetlands in Iowa for wildlife habitat. PPJV is financed
through the sale of state habitat and waterfowl stamps, Iowa's REAP Fund, U.S. Fish and
Wildlife Service funds, and donations from nonprofit organizations. 4
FINANCING MECHANISM
Anyone required to have an Iowa hunting license must also purchase a $5.00 state habitat
stamp. The $5.00 state waterfowl stamp is purchased with licenses for waterfowl hunting only.
In each case, both residents and nonresidents of the state pay the same $5.00 charge.
FUNDS MANAGEMENT
All revenues collected from the sale of habitat and waterfowl stamps are deposited in the
Fish and Wildlife Trust Fund. Habitat stamp revenues are earmarked for wildlife habitat
acquisition and waterfowl stamp revenues are earmarked for waterfowl habitat acquisition.
Iowa's REAP Fund was created by the Resource Enhancement and Protection Act of
1989, which established a long-term program to protect the state's natural resources. In fiscal
years 1989 and 1990, $15 million was set aside for REAP. A standing appropriation of
$20 million a year has been signed into law for fiscal years 1991-2000. The act requires that
28% of REAP program allocations be deposited in the REAP Fund's Open Spaces Account to
finance state acquisition and development of lands and waters.
IMPLEMENTATION
The state may be required to pay property taxes to counties on lands acquired, depending
on the source of funds. Lands acquired with state habitat stamp revenues and matched federal
funds are subject to the full levy of property taxes (110.3, 1987 Code of Iowa). Iowa's Land
Acquisition Bureau has a computerized record of all state lands acquired with habitat stamp
funds. Using habitat stamp revenues, the state makes annual payments to individual counties for
property taxes on lands acquired with habitat stamp funds.
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The state is not required to reimburse counties for lost property tax revenues on lines
acquired with state waterfowl stamp revenues. Legislation creating the waterfowl stamp program
passed in the early 1970s and contains no provision for reimbursing counties for lost tax
revenues. Also, the state does not reimburse counties for lost property tax revenues on lands
acquired with donated funds.
For open space property acquired by the DN'R on or after January 1, 1987, the state is
required to pay property taxes to the counties in accordance with Section 111E.4, HF 620, 1987
Iowa General Assembly. This provision affects open space property acquired with monies from
the REAP Fund, as required under the Resource Enhancement and Protection Act of 1989. All
open space acquisitions, including wetlands, financed by the REAP Fund are subject to the full
levy of property taxes. Payments to reimburse counties for lost property tax revenues are made
from the Open Spaces Account in the REAP Fund.
LESSONS LEARNED
Reimbursing counties for lost property tax revenues after land is acquired by the state is
an important pan of the Iowa DNR's land acquisition programs. The reimbursement provisions
alleviated concerns among Iowa's county governments regarding the local fiscal impacts of state
land acquisition. Local cooperation with state land acquisition efforts improved as a result.
CONTACT
Lee Gladfelter
Iowa Department of Natural Resources
Wallace State Office Building
Des Moines, IA 50319-0034
(515) 281-4815
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NEW JERSEY WATERFOWL STAMP
BACKGROUND
The New Jersey Department of Environmental Protection (DEP) administers three land
acquisition programs involving wetlands. The New Jersey Waterfowl Stamp and Print program
is a small pan of the state's land acquisition efforts, but it is most directly related to wetlands.
Funds for this program are collected through the sale of waterfowl stamps and prints to hunters
and collectors.
New Jersey's Green Acres Program began in 1961 and represents the largest pan of the
state's land acquisition effons. Under the Green Acres Program, the state issues bonds for state
acquisition of open space land or to assist with local acquisition of such lands. New Jersey's
1979 Pinelands Protection Act permits DEP to acquire environmentally sensitive lands in the
Pinelands National Reserve, including inland wetlands. In addition, local ordinances permit the
sale of land development credits in the Pinelands.
FINANCING MECHANISM
Anyone hunting waterfowl in New Jersey is required to purchase a state waterfowl stamp
in addition to the state hunting license. New Jersey's waterfowl stamp is $2.50 for residents and
$5.00 for nonresidents. The waterfowl stamp is valid from July 1 to June 30th of the following
year.
Waterfowl stamps can also be purchased with an accompanying print, which is a signed,
limited edition, numbered print. Most of the prints are purchased by collectors and their value
later increases according to the market among collectors.
FUNDS MANAGEMENT
Revenues collected from the sale of waterfowl stamps and prints are deposited in the
Duck Stamps Account within the Hunters and Anglers Fund. The Duck Stamps Account is a
dedicated account for the purchase and enhancement of wetlands and other waterfowl habitat.
The Hunters and Anglers Fund receives all revenues from state fish and game licenses, fines, and
permits.
IMPLEMENTATION
New Jersey Revised Statute S23:3-76 et. seq. authorizes DEP's Division of Fish, Game
and Wildlife to collect revenues from the sale of waterfowl stamps and prints. Since 1984, the
Division has purchased 5,500 acres using waterfowl stamp and print revenues.
The Green Acres Program has been extended since its inception in 1961 with six Green
Acres Bond Issue Acts. In 1983, the state of New Jersey issued $135 million of Green Acres
bonds, including $83 million to assist local governments with open space acquisition and
$52 million for state open space acquisition. The 1987 bond issue provided $35 million for
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assistance to local governments. Since-1961, the Green Acres Program has acquired o^r
100,000 acres for the Division of Fish, Game and Wildlife alone, with many more acres
purchased for parks and other open space needs.
DEP was granted authority to acquire environmentally sensitive lands, including inland
wedands. in the Pinelands under New Jersey Revised Statute S13:18-A-l et. seq. State funding
for this acquisition program is derived from general revenues. Local governments must develop
a Pineland Development Program that permits landowners in preservation areas to sell
development rights to developers elsewhere.
REVENUE EXPERIENCE
New Jersey's first waterfowl stamp and print issue in 1984 raised more than 5717,000 m
less than two years. Revenues from the 1988 waterfowl stamp and print issue totalled 5215,645.
For the 1988 issue. New Jersey collected 550,142.50 from sales of resident waterfowl stamps
(20,057 sold) and $30,295 from sales of nonresident waterfowl stamps (6,059 sold). In addition.
511,357.50 was collected from sales to residents of waterfowl stamps accompanying the print
(4,543 sold) and 521,880 was collected from sales to nonresidents of waterfowl stamps
accompanying the print (4,376 sold). Finally, New Jersey collected $101,970 from print sales
in 1988. New Jersey's 1989 waterfowl stamp and prim is still being sold to collectors only.
LESSONS LEARNED
The demand for first offering stamps and prints is immense. With subsequent issues,
however, the demand and revenues decrease.
Because the Duck Stamps Account is a dedicated account for the Division of Fish, Game
and Wildlife, revenues from waterfowl stamps and prints go directly back to the Division and
cannot be diverted to other purposes.
CONTACT
Frank Tourine
Division of Fish, Game and Wildlife
New Jersey Department of Environmental Protection
401 East State Street CN402
Trenton, NJ 08625
(609) 292-9480
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NEW HAMPSHIRE FINES AND PENALTIES
BACKGROUND
The New Hampshire Wetlands Board administers a permit program for dredge and fill
in freshwater and coastal wetlands (see case study of New Hampshire Permit Application Fee).
The Wetlands Board is authorized to impose an administrative fine of up to $2,000 for each
offense upon any person violating provisions of the state wetlands statutes or rules of the
Wetlands Board. The Board must provide notice and conduct an administrative fine hearing
before taking action to impose an administrative fine.
FINANCING MECHANISM
As specified in the rules of the Wetlands Board, the amount of the fine depends on the
size of the project and type of violation. When the violation involves continuing work after
receiving a notice of violation, or failure to remove fill or conduct wetlands restoration as ordered
by the Board, the fine imposed for all minimum impact, minor, or major violations is S2,000.
Administrative fines for other types of violations are assessed as follows:
Conducted Conducted
Unauthorized Work Unauthorized Work
Prior to or After After Being
Receiving a Permit Denied a Permit
Minimum Impact Project $200 $400
Violations
Minor Project Violations
Class I 600 800
Class 0 900 1,200
Major Project Violations 2,000 2,000
The Wetlands Board also can refer violations to the state Attorney General for legal
action. Civil penalties, not to exceed $10,000 per day for each violation, can be levied by the
state court for violations of the state wetlands statutes or rules of the Wetlands Board.
FUNDS MANAGEMENT
Proceeds of administrative fines and civil penalties aze placed in a nonlapsing fund in the
state treasury and can be spent by the Wetlands Board for restoration, research, investigation, and
enforcement relative to wetlands. To date, revenues from administrative fines have been used
primarily for capital improvements, such as development of an improved computer system.
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IMPLEMENTATION
The administrative fines, nonlapsing fund, and civil penalties are authorized by Chapter
482-A of the New Hampshire Revised Statutes. Procedures for imposing administrative fines are
specified in the rules of the Wedands Board (Chapters Wt 100 to Wt 800 of the New Hampshire
Code of Administrative Rules).
LESSONS LEARNED
In New Hampshire's experience, the publicity associated with imposing a fine on violators
can be more significant than the dollar amount. Most of the administrative fines imposed in New
Hampshire are relatively low, around $200. Even so, the desire to avoid negative publicity trom
a fine is often sufficient to assure compliance. In addition, the fines have increased awareness
of state wetlands laws and have greatly reduced the number of unreported violations.
CONTACT
Ken Kettenring, Bureau Administrator
New Hampshire Wetlands Board
64 North Main Street
P.O. Box 2008
Concord, NH 03301-2008
(603) 271-2147
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NEW YORK STATE LAND ACQUISITION PROGRAM
background
The New York State Department of Environmental Conservation (DEC) has been
acquiring lands for natural resources protection and restoration, preservation of scenic beautv,
provision of public access, or additions to state park lands since the turn of the century. Fundins
for the purchase of such lands has been provided primarily through bond revenues -- although
a portion of the funds have come from other sources, such as proceeds from the federal Land and
Water Conservation Fund and federal Pittman-Robertson funds.
FINANCING MECHANISM
The state of New York issued general obligation bonds in 1960, 1962, 1972, and 1986.
to finance a wide range of environmental programs, including funds for land acquisition
programs. These bonds are sold only after legislation authorizing their issue is passed by the
state legislature, signed by the Governor, and approved by the voters of the state. The state
legislature recently approved another bond act which will be put to a referendum vote in
November 1990.
The 1972 Environmental Quality Bond Act provided S103 million for land acquisition.
The 1986 Environmental Quality Bond Act provided a total of $250 million for land acquisidon,
historic preservation, municipal parks, and urban cultural parks, to both DEC and the Office of
Parks, Recreation and Historical Preservation (OPRHP). Appropriations to DEC from the 1986
bond revenues were exclusively for land acquisition. The proposed "21st-century Environmental
Quality Bond Act" for 1990 would provide $800 million for land acquisidon, available to both
DEC and OPRHP.
FUNDS MANAGEMENT
Revenues from bond issues are appropriated annually by the state legislature to various
state agencies and programs.
REVENUE EXPERIENCE
Revenues from the bond issues earmarked for land acquisidon programs are available only
for the purchase of land as well as activities, such as surveys and appraisals, that are directly
related to the purchase of land. All other program costs are paid from the operating budgets of
DEC and OPRHP. Following the 1986 Environmental Quality Bond Act, a special general fund
appropriation was made for hiring the additional DEC staff required to administer the expanded
land acquisition program. Similar appropriations may be made if the voters approve the
"21st-century Environmental Quality Bond Act."
Annual appropriations of revenues from the 1986 Environmental Quality Bond Act to
DEC and OPRHP have fluctuated yearly. In the initial two years, as the two programs were
becoming established, appropriations were approximately $30 million for each agency.
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Because most of the available funds from the 1986 bond act have been utilized, -.-s
backlog of desirable lands continues to grow. The amount available to DEC in 1990 from :r.e
remaining 1986 funds is a little less than half of the 1989 appropriation. The proposed
"21st-century Environmental Quality Bond Act" is needed to maintain DEC's acquisition error:
beyond 1990.
LESSOR'S LEARNED
A major concern of DEC is funding to meet the costs of managing the lands acquired.
In the past, bond revenues have not been provided for that purpose. The proposed "21st-century
Environmental Quality Bond Act" would provide S201 million for land management, but this
amount is inadequate to meet the needs of DEC.
Both the irregular nature of the bond issues and the variations in annual appropriations
contribute to fluctuations in the funding levels for land acquisition.
CONTACT
Shaun Keeler, Senior Aquatic Biologist
Division of Fish and Wildlife
New York State Department of Environmental Conservation
50 Wolf Road, Room 518
Albany, NY 12233
(518) 457-9435
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CALIFORNIA STATE COASTAL CONSERVANCY
BACKGROUND
-The California State Coastal Conservancy was created to preserve and restore California's
coastal resources and to address land use problems along the coast and in San Francisco Bay.
The Conservancy is authorized to acquire land, and to design and implement programs tor
wetlands and watershed enhancement as well as for restoration of coastal land and urban
waterfronts. In most cases, however, the Conservancy provides funds and technical assistance
to local governments and nonprofit organizations for those purposes. Depending upon project
costs and the availability of funds, the other party is often responsible for a portion of project
financing. The Conservancy does not hold lands nor does it provide funding to others for
long-term land management.
FINANCING MECHANISM
Funding for the Conservancy is included periodically in general obligation bonds issued
by the state to fund several state agencies and programs. These bond acts can be initiated by the
state legislature or, as they have been recendy, by citizens. State bond acts including funding
for the Conservancy have been approved every four years since the Conservancy was created in
1976. The acts often contain language specifying the programs or projects to receive funding.
The California Wildlife, Coastal and Park Land Conservation Act passed by initiative in
June 1988. This $776 million general obligation bond act made a total of $38 million available
for expenditure by the Conservancy. Of that amount, $34 million is available for such purposes
as acquisition, enhancement, and restoration of natural lands (including wetlands), development
of public access, and preservation of agricultural lands. The remaining funds are reserved for
specific projects or geographic areas. Some of the reserved funds will be used for wetland
acquisition and enhancement
The California Wildlife Protection Act of 1990 passed by initiative in June 1990. This
initiative established the Habitat Conservation Fund, which will receive $30 million from existing
revenue sources, including the state's general fund, cigarette tax revenues, environmental license
plate fund revenues, bond funds authorized after July 1, 1990, and other funds created by the
legislature or the people for purposes consistent with the act. Under the 1990 act, the
Conservancy is to be allocated $4 million annually for 30 years. These funds are not earmarked
for specific projects, but are to be used for general purposes, including acquisition of deer and
mountain lion habitat, rare and endangered species habitat, wetlands, riparian and aquatic habitat,
and open space.
FUNDS MANAGEMENT
Proceeds of the bond issues are placed in the state's general fund. Portions are
appropriated annually by the legislature for Conservancy activities.
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REVESUE EXPERIENCE
Recent bond acts contained funding only for certain programs or projects and placed
constrictive limits on operating costs. Even though bonds including funding for Conservancy
activities have been easily approved on a regular basis since 1976, Conservancy funding remains
subject to the vagaries of the political process.
While the 1990 act should have provided a reliable source of funding for the first time,
the Conservancy did not receive its S4 million from the Habitat Conservation Fund tor
FY 1990-1991. Given the state's current budget crisis, the legislature would not appropriate any
money from the state's general fund. Instead, in the final hours of the legislative session, the
legislature designated funds already proposed for appropriation to the Conservancy from the 1984
and 1988 bond acts.
LESSONS LEARNED
Voters in California have proven quite willing to approve bond issues including funding
for Conservancy activities. However, because these funds often are earmarked for specific
projects, not all projects receive consistent funding.
A significant portion of the Conservancy's funding is earmarked for grants to local
governments. Yet, the Conservancy has a difficult time spending those funds because local
governments often are unwilling or unable to undertake the projects suggested by the
Conservancy. Long-term land management costs discourage local government participation and
the Conservancy does not provide such funding. Nonprofit organizations work closely with the
Conservancy to develop projects and have become active participants in Conservancy acquisition
efforts.
CONTACT
Liza Riddle, Program Manager
California State Coastal Conservancy
1330 Broadway, Suite 1100
Oakland. CA 94612
(415) 464-4093
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MINNESOTA STATE WATER BANK PROGRAM
background
The Division of Waters of the Minnesota Department of Natural Resources (DNR)
administers a State Water Bank Program designed to compensate landowners for not convening
wedands to cropland. Under this program, the state purchases wetlands or makes easement
payments to landowners to preserve privatelv-owned wetlands. To qualify for State Water Bank
Program payments, the area must be a protected wetland" or otherwise deemed eligible by the
DNR. Water Bank Program easements restrict agricultural use of the area and require the
landowner to keep the wetland in its natural state.
FINANCING MECHANISM
The State Water Bank Program is primarily funded through allocations from state bond
revenues, supplemented by appropriations from the state's general fund.
IMPLEMENTATION
To be eligible for compensation under the State Water Bank Program, the area must be
classified as a "protected wetland" under Minnesota Statutes Chapter 105, or if not so classified,
can be designated eligible at the discretion of the DNR. For "protected wetlands," the DNR must
have denied the landowner a permit to drain the wetland under the state protected waters permit
program, and the landowner must demonstrate that the proposed drainage is not restricted by
property agreements, would be profitable, and that drainage of the area would create high quality
cropland. For unprotected wedands, landowners must demonstrate that drainage is not restricted
by property agreements.
For eligible "protected wetlands," the DNR must offer the landowner the following three
types of compensation payments within 60 days of receiving a complete drainage permit
application:
Fee Purchase. A purchase payment is based on a certified appraisal of the
property, obtained by the DNR. The DNR may acquire land if the landowner can
provide public access and obtain a county board resolution authorizing the sale of
land to the state. The land will be established as a State Wildlife Management
Area for public use and hunting.
Permanent Easement. A permanent easement payment is based on 50% of the
average estimated market value of cropland in the township at the time of the
permit application.
Limited Duration Easement. A limited duration easement payment is a one-time
payment based on 65% of the value of a permanent easement payment at the time
of the permit application. These easements are acquired for a duration of not less
than 20 years.
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If the DNR does not offer the landowner all of the above compensation offers u.thm 00
days, the DNR cannot oppose drainage of a "protected wetland.'' However, the DNR can >1111
prohibit drainage of a "protected wetland" if the landowner refuses to accept any of the
compensation offers or if the DNR determines that the wetland is not eligible for compensation
For unprotected w etlands, landowners are offered one or more of the compensation offers,
based on availability of funds. The first significant program activity with unprotected wetlands
occurred in 1988 through an open enrollment period, during which voluntary applications for
enrolling unprotected wetlands were accepted.
The State Water Bank Program was established by the state legislature in 1985. Tuo
amendments to the legislation, in 1987 and 1989, refined the compensation offers and the
procedures for calculating easement payments. To date, the State Water Bank Program has
completed 168 projects, involving a total of 8,010 acres, at a total cost of S3.5 million.
LESSONS LEARNED
Under the current State Water Bank Program eligibility rules, the DNR's financial offer
to landowners is tied to state water permit applications. Consequently, the DNR can only protect
wetlands proposed for drainage under the permit program. This limits the DNR's ability to
acquire and protect the state's highest quality wetlands, as it could if wetlands,were considered
on a case-by-case basis.
CONTACT
Bruce Gerbig
Minnesota Department of Natural Resources
Division of Waters
500 Lafayette Road
St. Paul.MN 55155-4032
(61^) 296-0515
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MINNESOTA RIM RESERVE WETLANDS RESTORATION PROGRAM
BACKGROUND
The Reinvest in Minnesota i RIM) Reserve Wetlands Restoration Program pays landow p.ers
to restore previously drained wetlands. It is one component of Minnesota's comprehensive RIM
program, which includes private land programs (under the RIM Reserve Program) along with
public land programs (under the Minnesota Department of Natural Resources). The Minnesota
Board of Water and Soil Resources (BWSR) coordinates administration of the RIM Reserve
Program through the state's 91 soil and water conservation districts (SWCDs). Drained wetlands
are enrolled in RIM Reserve through perpetual easements restricting agricultural use and
requiring the landowner to establish permanent vegetative cover.
FINANCING MECHANISM
To date, the RIM Reserve Program has been funded primarily by revenues from general
obligation bonds. Bond funds support acquisition of easements and wetland restoration activities.
BWSR requests funding every two years from the state legislature. BWSR submitted a request
to the 1990 state legislature for S12 million in bond funds for the 1991-1992 fiscal years. The
administrative costs of BWSR coordination and local SWCD implementation activities are
supported by appropriations from the state's general fund. Program costs also are augmented by
other state and federal agencies as well as conservation groups.
It is anticipated that Minnesota's newly established Environmental and Natural Resources
Trust Fund will provide permanent funding for the RIM Reserve Program in the future. The state
lottery is expected to be the primary funding source for the new trust fund.
IMPLEMENTATION
, The Reinvest in Minnesota Act of 1986 established the RIM Reserve Program to retire
certain fragile private lands from agricultural use and convert them to permanent vegetative cover
for enhanced wildlife habitat. In 1987, the state legislature amended the RIM Reserve Program
to allow drained wetlands to be eligible for enrollment in the program. Wedands currently are
a top priority among the six types of land eligible under the RIM Reserve Program.
To be eligible, a wetland must be a minimum of one acre, privately-owned, and
restorable. In addition, up to 4 acres of upland may be enrolled for each acre of wetland.
Landowners apply through their local SWCD. The state grants funds to the local SWCDs for
administering the program.
For enrolling a drained wetland in the RIM Reserve Program, a landowner receives a
one-time, lump-sum payment for conveying a perpetual easement to the state. The perpetual
easement restricts cropping and grazing, and requires establishing a permanent vegetative cover
beneficial to wildlife. Easement payments are related to the estimated market value of land in
the township. After the state acquires a perpetual easement, the RIM Reserve Program provides
100% of the cost (up to $300 per acre from the state) for wetland restoration.
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Since 1986, BWSR has received applications through local SWCDs to restore
wetlands, totaling 1,900 acres of wetland and 3,400 acres of adjacent upland. Approximates
35ao of these projects have been completed.
LESSOSS LEARNED
The RIM Reserve Wetlands Restoration Program is successful because it is structured to
include local conservation groups (for example, Pheasants Forever, Ducks Unlimited, and Rod
and Gun Clubs). Allowing local conservation groups to apply local contributions directly to local
projects creates a sense of local ownership of the program. Local participation also facilitate*
landowner compliance as local conservation groups will monitor RIM Reserve lands.
Although the state can offer landowners up to S300 per acre for wedand restoration under
RIM Reserve, this usually will not cover the entire costs of wetland restoration. Local chapters
of conservation groups can participate in selecting landowner applications at the local SWCDs
and they also can contribute money to a landowner for wetland restoration on RIM Reserve
lands. When contributions are made by local conservation groups, they will sign the restoration
plan in addition to the state and the landowner.
Landowners continue to pay property taxes and any other assessments on RIM Reserve
easement lands. Because some counties continue to assess these acres as cropland, landowners
in these counties are reluctant to enroll their land in the RIM Reserve Program.
CONTACT
Wayne Edgerton, RIM Reserve Coordinator
Minnesota Board of Water and Soil Resources
Southbridge Office Building
155 South Wabasha, Suite 104
St. Paul, MN 55107
(612) 296-3767
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OREGON WETLANDS MITIGATION BANK REVOLVING FUND ACCOUNT
The Oregon Division of State Lands (DSL) can finance certain wetlands activities using
funds from the Oregon Wetlands Mitigation Bank Revolving Fund Account. This account was
established by the Oregon Wetlands Mitigation Bank Act of 1987 (Oregon Revised Statutes
196.600 to 196.655). The account is separate and distinct from the state's general fund and was
initially capitalized through a federal Coastal Zone Management grant.
According to the act, funds paid into the account can include state appropriations to the
account: money awarded through grants under the federal Emergency Wetlands Resources Act
of 1986 or the federal Coastal Zone Management Act of 1972; money obtained by gift, bequest,
donation, or grant from any other public or private source; fees for purchase of mitigation bank
credits; and interest earned on the account. Funds from the account are appropriated by the state
legislature to DSL for its wetlands mitigation bank activities.
Mitigation is required as a condition of a state removal-fill permit to compensate for any
unavoidable adverse impacts due to removal or fill activities otherwise complying with the
requirements of the Removal-Fill Permit Program (see case study of Oregon Removal-Fill Permit
Fees). A mitigation bank is a publicly-owned and operated wetland site that has been created,
restored, or enhanced by DSL to compensate for unavoidable adverse impacts. Mitigation banks
provide an option for off-site mitigation when such mitigation is required as a condition of a
removal-fill permit. For each mitigation bank, DSL establishes credits based on numerical values
representing its wedand resource functions and values. A mitigation bank credit can be
withdrawn for a permit action only after all on-site mitigation methods have been examined and
found to be impracticable. DSL is authorized to charge a fee for purchase of credits in a
mitigation bank.
Although a mitigation bank has been established, no mitigation activities have occurred
because no development projects have occurred in the areas covered by the mitigation bank. As
a result, no funds are being paid into the Wetlands Mitigation Bank Revolving Fund Account.
Even so, lack of funding has not resulted in lack of wetlands protection, because wetlands
alterations have not occurred.
CONTACT
Ken Bierly, Wetlands Program Manager
Oregon Division of State Lands
Environmental Permits Section
775 Summer Street NE
Salem, OR 97310
(503) 378-3805
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APPENDIX A
GLOSSARY OF FINANCIAL TERMS
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GLOSSARY OF FINANCIAL TERMS
Ad Valorem Tax. A tax based on the assessed value of real property.
Appropriation. The allotment of funds to a purpose for a particular fiscal period, as specified
in a law or ordinance.
Assessed Valuation. The value placed on real property for purposes of taxation.
Base. The number of parties or number of activities per party subject to a fee or tax.
Bond. A written promise to repay a debt at a specific date or maturity, with periodic payments
of interest.
Credit Risk. The risk of default.
Debt Ceiling. A limit, set by constitution or law, on the amount of outstanding debt.
Debt Service. Periodic repayment of interest and principal on an outstanding loan or bond.
Dedication. The assignment of a particular revenue stream to specific government projects or
programs, sometimes without need for an appropriation. Also called earmarking.
Default. Failure to pay in full and on time.
Earmarking. Statutory or constitutional dedication of revenues to specific government projects
or programs.
Excise Tax. A tax levied against the sale or exchange of a specific good or service.
Fee. A charge for a particular activity or service.
Financial Advisor. A consultant to a unit of government who provides advice on financial
management concerns.
Financial Plan. An approach to financing capital improvements which optimizes the sponsor's
funding sources and uses of capital from the standpoints of cost, risk, and protection of future
choices.
General Fund. The "pot" of commingled revenues from all sources.
General Obligation Bond. A bond secured by the pledge of the issuer's full faith, credit, and
taxing power.
Permit Fee. A fee assessed against a permittee to recover the costs of permit processing.
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Public Good. A good or service from which no potential beneficiary can feasibly be excluded
Rate. The amount of fee or tax charged for a specified service or activity.
Real Estate Transfer Tax. A tax on real estate transactions.
Revenue Bond. A bond secured solely by the pledge of project or system revenues, without
recourse to any tax support.
Severance Tax. A tax on mineral, oil, gas, or other natural resource extraction.
Special Tax Bond. A bond secured by the pledge of the revenues from a particular tax source.
Tax-exempt Bond. A bond, the interest payments of which are exempt from federal income
taxation under the federal revenue code and may also be exempt from state income taxes.
Trust Fund. An account from which funds may be withdrawn only for purposes specified by
law.
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APPENDIX B
WETLANDS REGIONAL PROGRAM CONTACTS
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WETLANDS REGIONAL PROGRAM CONTACTS
Region I -- CT, MA, ME, NH, RI, VT
Mr. Doug Thompson, Chief
Wetlands Protection Section (WPP-1900)
Water Management Division
U.S. EPA Region I
John F. Kennedy Federal Building
Boston, MA 02203
(617) 565-4421
Region II « NJ, NY
Mr. Dan Montello, Chief
Wetlands Section (2WM-MWP)
Water Management Division
U.S. EPA Region II
26 Federal Plaza
New York, NY 10278
(212) 264-5170
Region III - DE, MD, PA, VA, WV
Ms. Barbara D'Angelo, Chief
Marine and Wedands Policy Section (3ES42)
Environmental Services Division
U.S. EPA Region III
841 Chestnut Street
Philadelphia, PA 19107
(215) 597-9301
Region IV - AL, FL, GA, KY, MS, NC, SC, TN
Ms. Gail Vanderhoogt, Chief
Wetlands Planning Unit
Water Quality Management Branch (4WM-MEB)
U.S. EPA Region IV
345 Courtland Street, N.E.
Atlanta, GA 30365
(404) 347-2126
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Region V .. IN, IL, MI, MN, OH, WI
Mr. Doug Ehorn, Deputy Chief
Water Quality Branch (5W-TUB-8)
Water Management Division
L'.S. EPA Region V
- 230 S. Dearborn Street
Chicago, EL 60604
(312) 353-2079
Region VI - AR, LA, NM, OK, TX
Mr. Norm Edwards, Chief
Technical Assistance Section (6E-FT)
Environmental Services Division
U.S. EPA Region VI
1445 Ross Avenue
Dallas, TX 75202
(214) 655-2263
Region VII - IA, KS, MO, NE
Ms. Diane Hershberger, Chief
404 Section, Environmental Review Branch (ENRV-404)
U.S. EPA Region VII
726 Minnesota Avenue
Kansas City. KS 66101
(913) 236-2823
Region VIE « CO, MT, ND, SD, UT, WY
Mr. Gene Reetz, Chief
Water Quality Requirements Section (8WM-SP)
U.S. EPA Region VHI
One Denver Place
999 18th Street
Denver, CO 80202
(303) 293-1568
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Region IX - AZ, CA, HI, NV ,
Mr. Phil Oshida. Chief
Wetlands Section (W-7-2)
U.S. EPA Region IX
1235 Mission Street
San Francisco, CA 94103
(415) 744-1971
Region X •• AK, ID, OR, WA
Mr. Bill Riley, Chief
Water Resources Assessment Section (WD-138)
U.S. EPA Region X
1200 6th Avenue
Seattle, WA 98101
(206) 442-1412
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