3.1  Principles

Water resources are central to the United States' health and economic and environmental well-being. The primary responsibility for managing the nation's vital water resources is properly vested with the states. In managing and protecting the nation's water resources, the Governors affirm six key principles.

• The nation should continue its commitment to make all its waters fishable and swimmable.
• The nation's commitment to the fishable-swimmable goals of the Clean Water Act requires a vigorous state-federal partnership.
• State laws regarding water rights and allocations must be preeminent.
• States must be afforded significant flexibility in the management of their water resources.
• Sound management of water policy requires a systematic approach based on natural geographic units such as basins or watersheds, delineated by states.
• The most effective management of water resources requires recognizing the interconnection within the watershed that defines the hydrologic cycle in that area, including surface and groundwater as well as wetlands.

3.2  Clean Water Act Reauthorization

The Clean Water Act (CWA) should be reauthorized to make the statute more effective in improving the quality of the nation's waters. The Governors believe that the CWA should be reauthorized as a balanced federal-state partnership. The Governors support changes to the current law that will result in water quality improvements in a targeted, cost-effective manner based on the principles outlined in this policy statement.

3.3  Watershed Management

The Governors are committed to managing the quality of the nation's water through holistic, community-based watershed plans that are designed to meet water quality standards.

Although significant progress has been made in the last decade toward achieving the nation's clean water goals, improvements have come primarily through control of effluents from "point sources." However, many existing water quality problems stem from nonpoint sources (NPS) of pollution. The holistic approach utilized by many states that focuses on water supply, water quality, water conservation, public drinking water source protection, flood protection, land use, and protection of fish and wildlife resources is the best way to achieve water quality standards.

3.3.1 State Role.  States, in consultation with federal and local government partners and stakeholders, should develop a program to bring impaired waters in watersheds or subwatersheds into attainment with water quality standards. This program will guide the identification of impaired waters, establish state priorities, establish methods for identifying sources of impairment, include a process for allocating responsibility to both point and nonpoint sources, include milestones of progress, and guide how federal funds are utilized by public entities implementing water programs to achieve the milestones. Congress should designate states as the lead coordinating agencies for implementing water programs.

3.3.2 Federal Role.   The role of the federal government should be to support states' efforts to achieve their water quality goals through coordinating federal programs, providing technical and financial assistance, supporting research and development, and providing appropriate oversight of state programs. Federal programs should be designed so that they may be easily assumable by states.

3.3.3 Alternative State Management Programs.   A state that has been delegated federal water quality programs should be able to elect to either regulate the sources designated in the rules under the National Pollution Discharge Elimination System (NPDES) permit program, or develop an alternate non-NPDES state management program to provide equivalent water quality protection, or employ a combination of these two options. States must have authority to prioritize control activities based on achievement of water quality standards in the most cost-effective manner, and use of other means deemed relevant by the state.

3.3.4 Water Quality Standards.  Given the great diversity among states and regions in the nature of the water resource, states must remain responsible for pollution prevention, development of water quality standards and planning, and priority setting. States must have the flexibility to set appropriate standards.

The U.S. Environmental Protection Agency (EPA) should provide assistance to states in developing methodologies for states to use in developing and applying water quality standards in both wet and dry weather conditions and should be required to spend appropriated funds for developing good data and science tools.

3.3.5 Water Quality Certifications.   Federal agencies should be required to certify that activities on federal land within a state are consistent with the provisions and requirements of a state water quality program.

3.3.6 Water Rights and Allocations. State water rights and allocations must be binding on all federal departments and agencies, including the Federal Energy Regulatory Commission. The Governors specifically reaffirm their strong support of the existing authority of states under Section 401 of the Clean Water Act to make water quality certification decisions that are binding on all federal departments and agencies. All federal activities within states must be consistent with state-developed water management plans and water quality standards and programs. Moreover, the federal government should assert no claim to the existence of nonreserved federal water rights.

3.3.7 Groundwater. Maintaining access to clean, plentiful groundwater is critical to protecting the nation's health and economic and environmental well-being. Groundwater supplies drinking water to half the nation, nearly 90 percent of all public water systems, and virtually all residents living in rural areas. Groundwater supports billions of dollars worth of food production and industrial activities. Effective watershed protection, including Total Maximum Daily Loads (TMDLs), must recognize the contribution of groundwater to the water system.

Groundwater also supplies the majority of stream flow in large areas of the country and provides much of the water in lakes and wetlands. Additional information on the extent and condition of groundwater quality is needed at the state and national level. States and local governments have, and must maintain, the primary responsibility for managing groundwater resources, in partnership and with funding from the federal government.

3.3.8 Water Conservation. Water conservation must be a fundamental consideration in developing water management programs. States, with their local units of government, have and must maintain the primary responsibility for managing both groundwater and surface water resources, in partnership with, and with funding assistance from, the federal government.

3.3.9 Interstate Organizations. Historically, states have supported interstate river basin organizations as an appropriate institutional setting to address water issues within the hydrological context of watersheds and basins. Such organizations have provided forums for collaboration among states, among federal agencies with different water resources authorities, and between state and federal agencies. Depending on their structure and scope of authority, interstate river basin organizations have acted and can continue to act as valuable extensions of state authority.

Federal involvement in interstate river basin organizations has eroded substantially since 1981. Although states continue to provide leadership that sustains these organizations, the federal government's involvement and technical and financial support is critical for providing federal-state, federal-interagency, and tribal collaboration for interstate river basins.

3.4 Funding of Clean and Safe Drinking Water Programs

The Governors urge Congress to provide adequate funding to carry out the provisions in the Clean Water Act and the Safe Drinking Water Act (SDWA). More specifically, the Governors believe:

• Congress should authorize and appropriate funds at the highest level for states to carry out the tasks associated with watershed management and water program financing, while allowing states increased flexibility in the use of water program money;
• Congress should appropriate funds at fully authorized levels to address the needs of the national drinking water program, state programs, and public water systems;
• Congress should provide sufficient capitalization grants and resources for the administration of the State Revolving Loan Funds (SRFs);
• All federal funding for local water infrastructure projects should be directed through the Clean Water and Safe Drinking Water SRFs;
• Congress should eliminate set-aside requirements, allow states to shift grant funds among programs, and allow the use of consolidated grant applications;
• Congress should provide states the flexibility to recognize communities with special needs through appropriate amendments to the SRF requirements, allowing states to exercise greater flexibility in identifying water quality and drinking water needs in the state, prioritizing those needs, and using SRF loans (including negative interest loans and loan subsidies) to finance them; and
• Congress should authorize and appropriate sufficient money to carry out the development of good data and science tools, and to sufficiently fund federal agencies that have statutory responsibilities for meeting the goals of the Clean Water Act and the Safe Drinking Water Act.

3.4.1 Water Infrastructure Security. The Governors agree that the nation's drinking water and wastewater infrastructure is one of America's most valuable resources and should be protected from criminal or terrorist threats. Nationwide, there are approximately 168,000 public drinking water systems. The nation's wastewater infrastructure consists of approximately 16,000 publicly-owned wastewater treatment plants, 100,000 major pumping stations, 600,000 miles of sanitary sewers, and another 200,000 miles of storm sewers. Significant damage to this infrastructure could result in loss of life; catastrophic environmental damage to rivers, lakes, and wetlands; contamination of drinking water supplies; long-term public health impacts; destruction of fish and shellfish production; and disruption to commerce and the economy.

Governors agree that the best protection for the water sector lies in commonsense actions to increase security and reduce threats from terrorism. These actions include conducting vulnerability assessments, enhancing physical and electronic security, and developing emergency response and recovery procedures. Because these actions take place at the local level, it is imperative that Congress and EPA provide the states with increased funding to carry them out. In addition, EPA and other federal agencies should provide states with appropriate technical assistance. If water infrastructure facilities must be modified to meet security requirements, EPA should use enforcement discretion in the case of a permit violation during the period of facility modifications.

In addition to serving as the primary financing mechanisms for water quality infrastructure programs, the Clean Water and Safe Drinking Water SRFs, with appropriately increased capitalization, can also be used for funding water infrastructure security initiatives. The SRFs afford states flexibility in identifying infrastructure security needs, prioritizing those needs, and working with local utilities to ensure that the needs are fully addressed. Congress and EPA must ensure that the SRFs receive additional funding to address security requirements and provide for administration of these programs by the states. Existing SRF funds should not be tapped for this purpose. In the event local governments and utilities are funded directly by Congress, the Governors urge that these grants be made available only in coordination with state plans. Local security measures and plans must be consistent with state plans and should be approved jointly by Governors and the federal government.

3.5 Research and Technical Assistance

3.5.1 Harmful Algal Bloom Research and Monitoring. Harmful algal blooms have increased in intensity and severity in the United States over the past two decades. These blooms present threats to public health and environmental resources.

The Governors believe that a comprehensive federal effort, coordinated with the states, would allow research at the federal level to be combined with monitoring, management, and mitigation functions carried out by the states that are essential to attaining effective solutions to the problem of harmful algal blooms.

The Governors have identified key research areas for increased focus by federal agencies that would enable great strides to be made in addressing the problem of harmful algal blooms:

• identification of toxin and its detection in the field;
• identification of harmful algal bloom species;
• identification of conditions that promote harmful algal blooms;
• identification of effective solutions to prevent conditions that promote harmful algal blooms;
• identification of the potential human health effects of harmful algal blooms; and
• identification of life cycle stages and characteristics of the harmful algal species.

3.5.2 Fish Consumption and Bathing Beach Advisories. The Governors call on EPA to provide technical assistance to states as states develop fish consumption and bathing beach advisories. States have and must maintain ultimate authority and discretion over the development and issuance of these advisories.

3.6 Relationship to the Endangered Species Act (ESA)

The Governors believe that under no circumstances should state-issued Clean Water Act permits be subjected to a federal ESA section 7 consultation, as section 7 applies solely to federal actions. The Governors also believe that section 7 should not be interpreted to require reopening existing federally issued Clean Water Act permits prior to their normal expiration, nor existing state water quality standards outside of the routine federal triennial review process.

3.7 Wetlands

3.7.1 Preamble. Wetlands in their natural state serve important ecological and socioeconomic functions that are either costly or impossible to replace. They provide habitat for wildlife, mitigate flooding, and maintain water quality by filtering out sediments and pollutants.

The Governors recognize that a large percentage of the nation's wetlands resources have been filled, destroyed, or otherwise rendered incapable of performing these functions over the course of the nation's history and that there is a need for improved protection of the nation's wetlands. The Governors further recognize that a wetlands protection regulatory program must be administered so that it not only protects the resource, but also respects the rights of private property owners.

The Governors therefore support a comprehensive national wetlands management strategy in which states, working with the federal government, develop and implement wetlands programs that protect, conserve, and restore this vital resource. The Governors believe that a comprehensive strategy should involve a broad range of both regulatory and nonregulatory programs and a wetlands research program with key emphasis on developing effective methods of wetlands restoration and creation and on assessing the functions and values of wetlands.

The Governors believe that this comprehensive strategy should reflect five general principles.

• Protection efforts should be coherent and coordinated to make the most efficient use of scarce resources and minimize inconsistency among federal, state, and local programs or agencies.
• Wetlands management should be integrated with other resource management programs, such as flood control, allocation of water supply, groundwater resource characterization, protection of fish and wildlife, and stormwater and nonpoint source pollution control. This can often be done effectively through comprehensive watershed management and planning.
• Wetlands delineation criteria and management policies should recognize the significant regional variance in the resource. Many wetlands functions and values derive from the location of wetlands in the watershed and the relationship of wetlands to other land and waters. Management policies must be tailored to local hydrologic and ecological conditions but must recognize that wetlands values may extend over state boundaries. The national policy should acknowledge unique regional and state characteristics and provide a framework for development strategies consistent with national policy.
• The Governors note that land use regulation is traditionally a state and local function and believe that increased state involvement and decisionmaking responsibility in wetlands protection programs will further the above three principles and that the regulatory program should be designed to facilitate state assumption.
• The Governors believe that the national strategy should recognize the unique situation encountered by the state of Alaska. Alaska has a tremendous amount of wetlands - more than the rest of the United States combined - and wetlands constitute as much as 75 percent of the landscape. Many already are in public ownership, and there has been a low historic loss rate - less than one-tenth of 1 percent. Because of certain geographic characteristics unique to the state - it is arctic and subarctic, with development constrained to limited geographic areas - policies and procedures that are reasonable in the coterminous states are not always applicable in Alaska. Yet needs do arise that may impact Alaska's wetlands resource. In lieu of direct application of all these following recommendations in Alaska, the Governors recommend that the appropriate government agencies and stakeholder groups in Alaska work cooperatively to develop regional wetlands strategies that accommodate sustainable wetlands protection and sustainable economic growth for the state.

3.7.2 Goals. The Governors believe that the goal of the national wetlands protection strategy should be no net loss of wetland resources. The Governors recommend that Congress include in the Clean Water Act a national wetlands protection goal to achieve no net loss of the nation's remaining wetlands base, as defined by acreage and function, and to restore and create wetlands where feasible to increase the quantity and quality of the nation's wetlands resource base.

This goal does not imply that individual wetlands will in every instance be untouchable or that the no net loss standard should be applied on an individual permit-by-permit or acre-by-acre basis - only that the nation's overall wetlands base should reach equilibrium between losses and gains in the short run and increases in the long term. The public must share with the private sector the costs of restoring and creating wetlands to achieve this goal.

The Governors recognize that the no net loss policy may have to be implemented at different rates in various regions of the country to reflect regional wetlands needs, conditions, and types.

However, the goal does not imply that wetlands losses in one state or region of the country can be balanced with gains in other, distant regions. Moreover, the Governors recognize that this goal can be met most effectively with policies that begin with a preference for avoidance of wetlands alteration.

3.7.3 Definition of Wetlands. The Governors stress that the definition of wetlands and delineation criteria must be workable and scientifically valid and should recognize regional variance in the resource. The Governors believe that the findings of the National Academy of Sciences/National Research Council (NAS/NRC) report Wetlands: Characteristics and Boundaries, commissioned by Congress in 1993, reflect the most sound scientific research concerning the importance and functions of wetlands to date.

The Governors make the following recommendations.

• Congress should write into the Clean Water Act the definition of wetlands currently included in EPA's Clean Water Act Section 404(b)(1) guidelines, which is consistent with the NAS/NRC report.
• Congress should not legislate specific wetlands delineation criteria, but establish a procedure for administering agencies to develop delineation criteria that recognize regional variations in wetlands resources. Such criteria should be consistent with the NAS/NRC report and developed in consultation with the states.
• Efforts should continue to ensure that agencies at all levels of government use equivalent definitions for regulatory purposes and that all staff are provided with appropriate training for implementing field delineation techniques.

3.7.4 The Regulatory Program. The Governors hold that the scope of regulation in federal and state programs should be expanded to explicitly address the following activities in wetlands: dredging, filling, removal or excavation of soils, drainage or flooding, and destruction of plant life or habitat. The Governors support the existing exemptions identified in the Clean Water Act, including those for agriculture and silviculture.

The Governors also believe that the scope of regulation should be restricted, under certain circumstances, in application to artificial wetlands. Specifically, the Governors believe the following.

• Artificially induced wetlands, such as those resulting from and incidental to ongoing agricultural practices and mining but not used for mitigation of wetlands loss or for mineland reclamation, should not be counted in the nation's wetlands base.
• Wetlands created and maintained solely for use in stormwater abatement, wastewater treatment, or wildlife production should be exempt from regulation.
• Partially vegetated flood control channels with earthen bottoms that evolve into wetlands complexes should not be regulated, so that they may be more readily maintained for their constructed purpose of minimizing risks to public safety.

3.7.4.1 Mitigation Policy. Mitigation should be an essential component of wetlands management, and Congress should include a statement of mitigation policy in the Clean Water Act.

The Governors believe that regulatory policies should include a sequencing strategy that clearly states that avoidance of adverse impacts to wetlands should be the first option. If impacts are unavoidable, the Governors believe that unavoidable adverse impacts should be minimized. The use of environmental compensation should be encouraged for unavoidable wetlands impacts. The sequencing approach should allow regulators sufficient flexibility to fashion practical solutions according to unique local or regional circumstances, provided the overall goal of protecting the quality and quantity of wetlands resources is achieved. The Governors endorse the use of joint mitigation efforts to regionally mitigate unavoidable impacts that make good use of the resource and provide overall ecological benefits.

The Governors recognize that the terms "avoidance of adverse impacts" and "reduction of unavoidable adverse impacts" must also respect state and regional distinctions.

The Governors emphasize that mitigation will work only with provisions for strict enforcement, long-term financing, and careful monitoring and management of compensatory mitigation projects to ensure their success in perpetuity.

However, though respecting the sequencing strategy, the Governors recognize that in some instances the use of mitigation banking may be necessary to meet an overall goal of providing economically efficient, environmentally sound, and flexible mitigation opportunities, while fully compensating for wetland and other aquatic resource losses in a manner that contributes to the long-term ecological functioning of the watershed within which wetlands functions are impacted. Mitigation is preferable within the same watershed; however, mitigation within a different watershed is appropriate where such an action would be environmentally beneficial, taking into consideration the wetlands functions impacted and being replaced.

The Governors support the establishment and use of both public and private mitigation banks provided that mitigation banks are used in a manner consistent with the sequencing requirement, strictly to mitigate unavoidable wetlands impacts; impacts are mitigated on site when feasible, unless the use of a mitigation bank located in the same or a different watershed is environmentally preferable; and banks provide successful in-kind replacement of wetlands functions and values lost, unless greater environmental benefits can be achieved otherwise. The Governors strongly recommend that the states and other stakeholders be partners in the process to establish, use, and operate mitigation banks.

3.7.4.2 Wetlands Classification Systems. The Governors recognize that not all wetlands are of equal value. Wetlands management decisions must reflect potential environmental impacts by considering wetlands functions and values as well as the nature of proposed projects.

3.7.4.3 Compensation of Property Owners.* The Governors incorporate, by reference, a separate policy, NR-16, adopted at the National Governors Association 1995 Annual Meeting to address this important issue.

3.7.4.4 Delegation of Authority Among Federal Agencies. The Governors believe that each federal agency currently responsible for the implementation of wetlands programs plays a unique and legitimate role in the protection of the resource. Concentration of authorities in one federal agency would necessitate restructuring of that agency and reallocation of resources.

The Governors may support delegation of Clean Water Act Section 404 authorities to one federal agency after a comprehensive study conducted in consultation with the states and other stakeholders to assess the impacts of concentration and development of a plan for the necessary reorganization. Such a study should also address the merits of a national wetlands policy that could guide all federal agencies. In any case, the role of each federal agency in the wetlands program should be more clearly defined, the replication of responsibilities eliminated, and the permitting process streamlined.

3.7.4.5 Nationwide Permits. The Governors agree with the need for nationwide permits. However, in those instances where a state determines that the issuance of a particular nationwide permit would result in unacceptable impacts on wetlands resources, the state should be able to declare the nationwide permit invalid within its borders.

Since the inception of the nationwide permitting program in the 1970s, nationwide permits have become increasingly complex, and their issuance involves considerable coordination among several state and federal resource agencies. The Governors recommend that the U.S. Army Corps of Engineers' process of establishing nationwide permits be simplified whenever possible prior to the next reissuance of the nationwide permits in 2007.

3.7.4.6 Alternatives Analysis. State and federal regulators should determine, subject to public review and comment, whether existing data or analyses conducted pursuant to federal or state statutes other than the Clean Water Act can be utilized rather than requiring a new, and potentially costly, alternatives analysis to be performed.

3.7.5 Nonregulatory Approaches to Protection. The Governors stress that a national wetlands protection strategy must involve nonregulatory programs, an essential complement to the regulatory program. The Governors support continued and additional emphasis on resource management planning; programs to promote wetlands restoration, preservation, and creation; development of tax incentives to encourage wetlands protection; public acquisition of wetlands; public education and management outreach programs; wetlands mapping and tracking systems; and efforts to reduce incentives to wetlands conversion.

The Governors make the following recommendations.

• The Governors believe that resource management planning is a valuable mechanism to recognize variance in wetlands resources and to integrate wetlands protection with other resource management efforts. The Governors believe that states should have flexibility to use funds authorized under Clean Water Act Sections 319, 106, 205(j), and 604(b) to support wetlands management planning.
• Congress should establish a national strategy to identify, coordinate, and promote restoration of degraded, altered, or converted wetlands systems involving the participation of federal agencies, state and local governments, and the private sector. The North American Waterfowl Management Plan, the Partners for Fish and Wildlife Program, and the Wetlands Reserve Program serve as potential models for such a strategy, especially the cooperative manner in which they are implemented.
• Congress should review the federal tax code to identify opportunities to establish incentives to encourage wetlands protection and restoration.
• Acquisition programs at all levels of government, both alone and in partnership with the private sector, should accelerate acquisition of valuable wetlands.
• Public education focused on the value of wetlands and the structure of regulatory programs will increase public support for the program and the ability to predict the outcome of regulatory decisions. The Governors support expansion of federal, state, and private education and outreach programs.
• The Governors support continuing, updating, and automating current national wetlands inventory mapping efforts as well as efforts to disseminate such maps to landowners and to those responsible for wetlands and land use planning.
• Federal, state, and local governments should examine and modify policies that unintentionally provide incentives to convert wetlands.

3.7.5.1 Isolated Wetlands. The 2001 Supreme Court decision in the case of the Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (SWANCC) has removed the authority of the Corps of Engineers over isolated wetlands. The Court ruled that it is up to states to regulate isolated wetlands in accordance with state laws. The Governors support efforts to protect isolated wetlands and request that the Corps and EPA publish guidance reflecting the Supreme Court decision.

3.7.6 State Programs. The Governors believe that increased state involvement in wetlands policymaking and program administration will increase program efficiency and efficacy. States can effectively integrate wetlands protection with other state-administered water programs and can tailor wetlands programs to unique regional circumstances.

3.7.6.1 State Assumption and Programmatic General Permits. The Governors assert that there are many clear benefits to the wetlands resource and to the regulated community when states assume implementation of the Section 404 regulatory program, and that the Clean Water Act should encourage assumption of the federal program by the states. This includes sufficient federal grant funding to assist states in defraying their routine annual costs of operating an assumed Section 404 program. State assumption provides an excellent opportunity to simplify and consolidate permitting procedures, while integrating the regulation of wetlands into overall watershed-based planning and management efforts undertaken by the states pursuant to the Clean Water Act.

Although it is possible for states to assume management of the Section 404 program, few states have applied and only two states have received full program authorization. Congress should identify a simple process by which states can assume the program, and the respective roles of the various federal and state agencies should be clearly outlined. Therefore, the Governors make the following recommendations.

• The federal government should establish clear goals for wetlands management. In the context of a resource management plan approved by EPA, states should have flexibility in designing programs to achieve these goals, tailoring management policies to local hydrologic and ecological conditions.
• The federal government should allow states to assume discrete and clearly identifiable portions of the Section 404 regulatory program rather than requiring that the entire program be delegated at one time.
• Qualified states that have effective processes for coordinating their review with the Army Corps of Engineers for permits that may affect navigable waters should be allowed to assume all Section 404 responsibilities, including those in navigable waters and adjacent wetlands. The corps would reserve its rights to protect navigational servitude and national defense, but would work with the states to confine its role to interstate and national issues.
• The Clean Water Act should provide that each state assuming the Section 404 program can negotiate with EPA concerning a method of oversight appropriate to its circumstances. The range of options should specifically extend from permit-by-permit review to periodic performance-based programmatic review, in which case EPA would not have case-by-case permit review. However, the Governors have a preference for periodic programmatic review consistent with NGA's environmental policy. EPA would retain the right to revoke assumption based on the results of such programmatic review.
• Federal agencies should temporarily loan employees to states assuming the Section 404 program to help train state staff.
• For those states that have been approved to assume Section 404 authority, the federal government should allow them to implement a mitigation banking program pursuant to the state law or regulation if the banking program has been approved by EPA as part of the state-approved program.
• Congress should explicitly authorize the use of state program general permits to eliminate duplication among federal, state, and local regulators. The Governors encourage the Army Corps of Engineers to issue regulatory guidance on state program general permits to expedite and facilitate the issuance of these permits. Further, the Governors encourage the corps to issue general permits for geographical areas as well as for classes of activities.
• In carrying out federal program requirements, states often are exposed to liability for takings under the Fifth Amendment. The Governors believe that this is a significant barrier to assumption and that all barriers should be reviewed and addressed.

3.7.6.2 Intergovernmental Coordination. To facilitate effective intergovernmental coordination, the Governors recommend that federal agencies responsible for wetlands regulation jointly establish a state-federal coordinating committee to develop and evaluate new wetlands management techniques and cooperative state, federal, and local wetlands programs.

3.7.6.3 State Wetlands Conservation Plans. State wetlands conservation plans have proven to be extremely valuable to wetlands conservation, helping to identify broad-based wetlands conservation efforts involving all levels of government and the private sector, including landowners. Relevant federal agencies should provide financial and technical support to encourage state and local governments and regional agencies to voluntarily develop and implement state wetlands conservation plans and outline appropriate state and regional strategies. The Governors recommend that Congress encourage EPA to continue support for state plans and provide funds for their development and implementation.

3.7.7 Government Compliance. All levels of government must seek to avoid wetlands alterations in projects that they construct, maintain, sponsor, or support. Although significant improvements have been made in methods and procedures for evaluating the effects of programs on wetlands, additional actions are appropriate. Therefore, the Governors make the following recommendations.

• Congress should require federal consistency with state wetlands conservation plans and programs.
• Federal and state governments should require or initiate mitigation for the direct and indirect wetlands alterations caused by projects that they construct, maintain, sponsor, or support.
• EPA should establish procedures for verifying compliance with wetlands mitigation provisions identified in federal environmental impact statements.
• Federal agencies should recognize the costs of satisfying state wetlands mitigation requirements established by state statute as legitimate project costs in any project subject to federal cost sharing.
• Congress should establish wetlands restoration, preservation, and creation as part of the mission of the Army Corps of Engineers, the Bureau of Reclamation, the Natural Resources Conservation Service, the Federal Highway Administration, and other federal agencies as appropriate.
• Federal agencies should report annually on the effects of the federal wetlands program, particularly concerning general and individual permit decisions.
• The Army Corps of Engineers should create an administrative appeals process for Section 404 permits that it issues.

3.8 Floodplain Management

Effective floodplain management is a federal-state-local partnership. The Governors emphasize that efforts to mitigate flood damage to existing development must be continued and strengthened.

The Governors believe that it is critical to reduce the potential for existing and future flood damage through the implementation of comprehensive floodplain management programs. They recommend the following.

• At a minimum, continue federal technical and financial assistance for state and local implementation of feasible and cost-effective nonstructural flood damage mitigation measures.
• Develop a new partnership to address a number of issues related to floodplain mapping, including improved local confidence, a reinvented mapping process, utilization of new technologies, and quick delivery of accurate maps.
• Develop federal minimum erosion management standards for the regulation of coastal lands to minimize risks to public safety, reduce future property damage, and mitigate existing hazards.
• Create public and private incentives, such as reduced flood insurance rates and incentive-based cost-sharing for disaster assistance and flood mitigation projects, to encourage enhanced floodplain management and state and local measures to protect natural and beneficial floodplain functions.
• Expand efforts to achieve multiple natural resource and development objectives through comprehensive river and coastal management.
• Coordinate among federal programs and policies and with state programs and policies to ensure that floodplain management and damage mitigation objectives are met.
• Stipulate that federal cost-sharing requirements should fully credit nonfederal contributions to all phases of structural and nonstructural projects (planning, design, construction, etc.) and should be based on local ability to pay.
• Support the continuation of the National Dam Safety Review Board and dam safety general assistance and training grants to the states from the Federal Emergency Management Agency.

3.9 Total Maximum Daily Loads

3.9.1 Regulations. The Environmental Protection Agency is developing regulations that will require states to develop Total Maximum Daily Loads for impaired water bodies. The regulations should attempt to strike a balance between the interests of the states and the federal government as well as other interested stakeholders. The Governors are concerned that the proposed regulations will lead to a shift in the traditional relationship between states and the federal government beyond what was intended by Congress in the Clean Water Act. The Governors believe that prescriptive, inflexible approaches will inhibit the creation of effective solutions.

3.9.1.1 Funding. One of the most significant roles the federal government can play is to assist states by providing funds needed to achieve water quality goals. Resource needs for improving and maintaining the quality of the nation's waters are a shared responsibility between the federal government and the states. Historically, federal funding for state implementation of water quality goals has been extremely limited and, when adjusted for inflation, dramatically reduced during the last 20 years. New regulations will likely impose costly new requirements on states. The Administration and EPA must address the unfunded mandate implications of the proposed regulations.

3.9.1.2 Flexibility. States must also be afforded significant flexibility in the management of water resources. The Governors are committed to managing the quality of the nation's waters through holistic, community-based watershed plans that are designed to meet water quality standards. Requiring a "one-size-fits-all" approach to the management of water quality is inappropriate, and such an approach will be unworkable. Distinctive water quality problems in every state necessitate the application of tailored approaches to addressing those problems. TMDLs can be valuable goal-oriented approaches that establish pollutant load reduction targets for impaired waters. However, other effective approaches, including voluntary efforts, should also be recognized as viable.

Because many TMDLs cannot be completed in one step, the TMDL regulations should allow states to complete a TMDL in phases. In addition, EPA should be required to accept innovative approaches for completing TMDLs.

Recognizing the groundwater contribution to surface water, as well as the use of surface water as a source of drinking water, also is essential to completing TMDLs.

3.9.1.3 Functionally-Equivalent State Programs. Given the great diversity of water resources among states and regions, a uniform national approach is incompatible with attaining state water quality standards. There simply must be more than one acceptable method to protect and improve water quality. The Governors believe that the failure of the regulations to provide sufficient flexibility to recognize alternative programs that can achieve water quality standards is a significant flaw. The TMDL program should focus on results, not process.

3.9.1.4 Other Provisions. The following concerns should be addressed by EPA.

• Redefinition of Federal-State Roles and Responsibilities. Examples of how the state-federal roles are being redefined include EPA's regulatory proposal to require that threatened waters be listed on the 303(d) list and to allow EPA to implement a TMDL within an NPDES delegated state. EPA must provide states maximum flexibility and deference to ensure that states' efforts toward achieving water quality goals are met.
• Timelines. To ensure the achievement of water quality standards, EPA should tailor the pace or process of the program commensurate with federal funding allocations for the appropriate federal share of the workload.

3.9.1.5 Summary. Water quality problems generally, and nonpoint source problems in particular, vary greatly from state to state, and from watershed to watershed. A "one-size-fits-all" approach will inevitably fail. For EPA to complement state efforts to attain clean water, the proposed regulations must be more flexible, consider the lack of funds that accompany these requirements, and accommodate alternative approaches to achieving the goals of the Clean Water Act.

3.9.2 TMDL Legislation. Legislation may be necessary to provide states additional technical, scientific, and funding resources; more flexibility; and adequate time to implement the TMDL program. The Governors urge Congress to adopt legislation that would provide significant new funding to states for addressing TMDLs.

Legislation should recognize that there are watersheds where there is insufficient scientific and technical information to accurately assess some nonpoint source contributors to impaired water bodies. The legislation should provide funding for scientific studies to demonstrate the most effective methods to assess water quality, gather scientific and technical information, and bring impaired waters into attainment with water quality standards. Congress should allow states to utilize functionally-equivalent programs to meet water quality standards. The legislation should allow EPA and the states to compare and assess different approaches that might qualify as functionally-equivalent programs.

The Governors believe that all states should have a comparable timeframe to develop and implement scientifically credible and practical TMDLs. Congress should adopt an amendment to the Clean Water Act that gives states at least fifteen years to comply with the TMDL mandates. Each state should be provided the flexibility to establish its own priorities and associated milestones within the timeframe provided.

3.10   Safe Drinking Water

States and local governments face a complex array of costly federal requirements to ensure the safety of their drinking water and infrastructure. These requirements include new standards for arsenic, radon, disinfection byproducts, enhanced surface water treatment, and others. Funding needs for projects required by existing, proposed, or recently issued Safe Drinking Water Act regulations are expected to be monumental.

Governors believe the appropriate role for states lies in implementing safe drinking water programs, managing surface and groundwater resources, and monitoring and setting standards based on highest priority health determinations. The Governors also believe that the following principles should direct the appropriate federal role in protecting drinking water, particularly the implementation of the SDWA.

• States are EPA's principal partners in implementing safe drinking water programs and have the knowledge of, and experience with, local needs.
• States are committed to making the fullest possible use of the authorities in the SDWA to improve drinking water safety.
• States are committed to maximizing the use of available resources to address the highest priority health protection and risk reduction factors.

3.10.1 Recommendations

• States need maximum freedom to focus on outcomes rather than process and to prioritize workloads to address the highest health needs first.
• Any major drinking water regulation should demonstrate that its benefits will justify its costs, considering the full range of qualitative and quantitative costs and benefits.
• New and proposed regulations should include reasonable implementation schedules, adequate core funding, reasonable and integrated data management requirements, affordability criteria, and an appropriate state regulatory role in implementation.

Time limited (effective Annual Meeting 2002-Annual Meeting 2004).
Adopted Annual Meeting 1991; revised Winter Meeting 1992, Winter Meeting 1993, Annual Meeting 1994, Annual Meeting 1996, Winter Meeting 1998, Annual Meeting 1998, Winter Meeting 2000, Annual Meeting 2000, Winter Meeting 2002, and Annual Meeting 2002 (formerly Policy D-6).

*   Section 3.6.4.3 of NR-3, Water Resource Management, has been superseded by policy NR-16, Private Property Protection, adopted at the 1995 Annual Meeting.