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, Governors affirm seven key principles.

• The nation should continue its commitment to make all its waters fishable and swimmable and to protect sources of drinking water.
• A vigorous state-federal partnership must be maintained in order to meet the interim goal of Section 101 (a) of the Clean Water Act (CWA) to achieve, wherever attainable, fishable and swimmable waters as well as the public health protection goals of the Safe Drinking Water Act (SDWA).
• 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.
• States manage and conduct the vast majority of water protection activities while the federal government has a support and oversight role.

3.2 Clean Water Act Reauthorization

CWA should be reauthorized to make the statute more effective in improving the quality of the nation's waters. Governors support changes to the current law, provided state jurisdictions over waters are not superseded by federal law, that will result in water quality improvements in a targeted, cost-effective manner based on the principles outlined in this policy statement. The reauthorization should not expand the Act's jurisdiction by superseding state jurisdiction over groundwater. Mandates must be accompanied by a fair share of federal funds to help states carry out any additional requirements.

3.3 Watershed Management

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 and protect the quality of existing water resources.

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, including those problems found in coastal areas, stem from nonpoint sources (NPS) of pollution. Maintaining the progress that has been achieved will be a major challenge due to aging infrastructure and future growth. The holistic approach utilized by many states that focuses on water supply, water quality, water conservation, public drinking water source protection, flood protection, flood plain management, 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 continue to implement programs to bring impaired waters in watersheds or subwatersheds into attainment with water quality standards and protect existing water resources. These programs will guide the identification of impaired waters, establish state priorities and identify sources of impairment, allocate responsibility to both point and nonpoint sources, set milestones of progress, coordinate among the agencies and other stakeholders that need to be involved, monitor and assess progress, and guide how funds are utilized by public entities implementing water programs to achieve the milestones. Congress should strengthen the states' role in implementing water programs.

3.3.2 Federal Role. The role of the federal government should be to support states' efforts, and efforts of collaborative watershed groups, to achieve their water quality goals through coordinating federal programs, providing technical and financial assistance, supporting research and development, and providing oversight of state programs that is uniform, regularly scheduled, and based on quantifiable and agreed upon water quality objectives. Federal programs should be designed so that they may be easily assumed and managed by states within available resources. Also, federal conservation programs, including, but not limited to, the U.S. Department of Agriculture's, should be coordinated with other programs at the U.S. Environmental Protection Agency (EPA) and the National Oceanic and Atmospheric Administration that should be aimed at reducing nonpoint source pollution in watersheds. The Federal Emergency Management Agency (FEMA) should include sufficient funding in flood disaster restoration for states to conduct stream restoration measures that meet state requirements to mitigate future flooding, stabilize streambanks, restore wetlands, and maximize water quality due to stream erosion from flood events. Governors support aggressive federal action to restore and protect impacted waterbodies by controlling, to the extent necessary, the atmospheric deposition of air contaminants across state lines into neighboring states' waters.

3.3.3 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 based on sound science. EPA should provide assistance to states in their development and application of water quality standards in both wet and dry weather conditions and should be required to spend appropriated funds only within the agency's Environmental Program Management account for developing good data and science tools.

3.3.4 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. Governors specifically reaffirm their strong support of the existing authority of states under Section 401 of the CWA 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.

3.3.5 Water Rights and Allocations. State water rights and allocations must be binding on all federal departments and agencies, including the Federal Energy Regulatory Commission. Moreover, the federal government should assert no claim to the existence of nonreserved federal water rights.

3.3.6 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 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 levels. States and local governments have, and must maintain, the primary responsibility for managing groundwater resources.

State stewardship of groundwater resources includes management of Underground Injection Control (UIC) programs. State UIC programs need sufficient federal funding support to enable states to adequately implement and oversee these important programs. State UIC programs need to be fully engaged in the development and ultimate implementation of any national carbon sequestration program to ensure that carbon sequestration activities occur safely and without unintended consequences, such as groundwater contamination.

3.3.7 Water Conservation. Water conservation is 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.

3.3.8 Interstate Organizations. Historically, states and the federal government have supported interstate water basin organizations as an appropriate institutional setting to address water issues within the hydrological context of watersheds and basins. These interstate organizations provide an effective means to manage shared water resources consistent with our system of constitutional federalism. 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 water basin organizations have acted and will continue to act as valuable extensions of state authority. Governors urge the federal government to continue to support interstate water basin organizations and to consent in the future to similar arrangements, including interstate water compacts ratified by the party states. Federal involvement in interstate water 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 water basins.

3.3.9 Water Impacts of Global Climate Change. The long-term effects of global climate changes are only beginning to be understood and addressed. However, it is clear that there will be profound effects on water availability, variability, and sustainability in the United States. The federal government needs to work closely with states to plan for and manage the effects of global climate change on surface and groundwaters and to provide both resources and tools to assist states in these efforts. This component of NR-3 needs to be fully coordinated with NGA policy NR-11, Global Climate Change.

3.4 Funding of Clean and Safe Drinking Water Programs

Governors urge Congress to provide adequate funding to carry out the provisions in the CWA and the SDWA. More specifically, Governors believe:

• Congress should authorize and appropriate funds, including for Sections 106 and 319, at the highest level for states to carry out the tasks associated with watershed management and core water program financing and allow states to put resources where they are needed to achieve environmental results;
• Congress should appropriate funds 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);
• Federal funding for local water infrastructure projects should be directed through the Clean Water and Safe Drinking Water SRFs;
• Congress should provide maximum flexibility to states in use of SRF set-asides, allow states to shift grant funds among programs, and allow the use of consolidated grant applications;
• Congress also should make some minor changes to the SRF portion of the SDWA to provide greater flexibility for states by increasing the administrative set-aside from 4 to 6 percent; eliminate the dollar-for-dollar match requirement of the 10-percent program management set-aside; and clarify that that 15-percent set-aside for local programs and other state assistance may include source water protection activities as well as source water assessments;
• Congress should include in the Clean Water SRF program certain provisions from the SDWA that provide states with the tools to address disadvantaged communities. In particular, Congress should provide states the flexibility to recognize communities with special needs through appropriate amendments to the Clean Water SRF requirements, and using Clean Water SRF loans (including negative interest loans and loan subsidies) to finance them;
• EPA should continue to allow states to use the proceeds from state issued bonds (using SRF funds) to satisfy state fund match requirements if a state so desires;
• Congress should authorize and appropriate sufficient money to develop good data and science tools, and to sufficiently fund federal agencies that have statutory responsibilities for meeting the goals of the CWA and the SDWA; and
• Congress should exempt federal grants and state matching funds to the SRFs from the yield reduction and arbitrage rebate requirements of Section 148 of the Internal Revenue Code, thus allowing states to retain these earnings in the SRF funds in order to further defray the financing costs of eligible SRF projects.

3.4.1 Water Infrastructure Security. Governors agree that the nation's drinking water and wastewater infrastructure is one of America's most valuable resources and should be protected from natural and man-made disruptions. 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. 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 or to respond to events, EPA should allow enforcement discretion in the case of a permit violation during the period of facility modifications and substantially defer to states to use their discretion and authorities in working with utilities on a case-by-case basis.

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. Congress and EPA must ensure that the SRFs receive adequate funding to address security requirements and provide for administration of these programs by the states as well as adequate funding for other infrastructure needs. Existing SRF funds may already be used for this purpose. In the event local governments and utilities are funded directly by Congress, 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.

Finally, Governors agree to support the goals and objectives of the Water Sector Specific Plan (under the National Infrastructure Protection Plan) and to work with both EPA (as the designated water sector specific lead) and the Department of Homeland Security to ensure appropriate state participation in water-related security initiatives.

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.

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.

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. Key research areas include identification of toxins, harmful algal bloom species, effects on human health, conditions that promote harmful algal blooms, and solutions to prevent these conditions.

3.5.1.1 Emerging Contaminants. A host of emerging contaminants in water and wastewater have been identified in recent years. The toxicity and carcinogenicity of these compounds (either singly or in combination) at the low levels found in the environment are not adequately characterized. Similarly, appropriate treatment and/or mitigation measures needed, if any, for these materials are not well known. Governors believe that a comprehensive federal effort to better characterize the occurrence, health effects, and treatment/management of these contaminants is needed. This effort should be coordinated with the states, as well as with local governments and private industry.

3.5.2 Fish Consumption and Bathing Beach Advisories. Governors call on EPA to provide funding and research to states as states develop fish consumption and bathing beach advisories, especially to those neighboring states with conflicting advisories. States have and must maintain ultimate authority and discretion over the development and issuance of these advisories, but are encouraged to work together to reduce and eliminate conflicting advisories.

3.6 Relationship to the Endangered Species Act (ESA)

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. 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.

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. 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.

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. Governors believe that a comprehensive strategy should involve a broad range of both regulatory and non-regulatory 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.

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, water supply allocation, groundwater resource characterization, fish and wildlife protection, 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.
• 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.
• 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, 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. Governors believe that the goal of the national wetlands protection strategy should be no net loss of wetland resources. Governors recommend that Congress include in the CWA 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.

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, 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. Governors stress that the definition of wetlands and delineation criteria must be workable and scientifically valid and should recognize regional variance in the resource. 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.

Governors make the following recommendations.

• Congress should amend the CWA to include 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 be 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. 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. Governors support the existing exemptions identified in the CWA, including those for agriculture and silviculture.

Governors also believe that the scope of regulation should be restricted, under certain circumstances, in application to artificial wetlands. Specifically, 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 amend the CWA to include a statement of mitigation.

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, Governors believe that unavoidable adverse impacts should be minimized. Once losses have been minimized, any remaining losses must be mitigated by project sponsors. 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. 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.

Governors emphasize that there must be strict enforcement, long-term financing, and comprehensive monitoring for any mitigations projects to ensure their success in perpetuity.

Mitigation is preferable within the same watershed and as close as possible to the affected wetlands; 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.

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. 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. 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 Delegation of Authority Among Federal Agencies. 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.

3.7.4.4 Nationwide Permits. 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 U.S. Corps of Engineers should provide states with sufficient time to conduct their Section 401 certifications of nationwide permits between promulgation and implementation of such permits.

3.7.4.5 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 CWA can be utilized rather than requiring a new, and potentially costly, alternatives analysis to be performed.

3.7.5 Non-Regulatory Approaches to Protection. Governors stress that a national wetlands protection strategy must involve non-regulatory programs, an essential complement to the regulatory program. 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.

Governors make the following recommendations.

• 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. 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 continue to support programs that identify, coordinate, and promote restoration of degraded, altered, or converted wetlands systems involving the voluntary participation of federal agencies, state and local governments, and the private sector, including the North American Waterfowl Management Plan, the Partners for Fish and Wildlife Program, and the Wetlands Reserve Program.
• 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.
• Governors support expansion of federal, state, and private education and outreach programs to increase public support for the wetland regulatory programs and foster a better understanding of regulatory decisions.
• 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 Wetland Loan Act. Governors support amending the Wetland Loan Act to authorize additional appropriations to the U.S. Fish and Wildlife Service Migratory Bird Conservation Fund. These funds would be used to further conservation of high priority wetlands and grasslands (as identified in the North American Waterfowl Management Plan), using a voluntary, incentive-based, non-regulatory approach. Implementation should be in a manner that helps private landowners achieve their long-term land use objectives in ways that enhance the conservation of wetlands and wildlife habitat. Also, Wetland Loan Act funding should be used to supplement and not replace current conservation funding, including funding for other federal and state habitat conservation programs.

3.7.6 State Programs. 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. 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 CWA should encourage assumption of the federal program by the states. Congress should ensure 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 state watershed-based planning and management efforts.

Only two states have assumed management of the Section 404 program. 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, Governors make the following recommendations.

• Congress 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.
• Congress 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 U.S. 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 CWA should be amended to provide each state assuming the Section 404 program the authority to 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, 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.
• The federal government should allow states that have been approved to assume Section 404 authority 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. Governors encourage the U.S. Army Corps of Engineers to issue regulatory guidance on state program general permits to expedite and facilitate the issuance of these permits. Further, 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. 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, 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. 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, Governors make the following recommendations.

• Congress should require federal consistency with state wetlands conservation plans and programs.
• The federal government 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 U.S. 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.

3.8 Floodplain Management

Effective floodplain management is a federal-state-local partnership. Governors emphasize that efforts to guide development away from high-risk flood-prone areas and efforts to mitigate flood damage to existing development must be continued and strengthened.

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.
• Continue and strengthen federal-state partnerships to develop new and improved floodplain maps identifying flood hazard areas in the nation's 20,000 plus flood-prone communities.
• 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.
• Strengthen 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.
• Collaborate 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.).
• 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.
• Support establishment and implementation of a National Levee Safety Program that can be delegated to states, with appropriate incentives to build state capability, as outlined in the Water Resources Development Act of 2007. Federal programs also should provide guidance on what is necessary to have a safe levee and how communities and levee owners can work with the public and priveate sector to get levees certified. The U.S. Army Corps of Engineers should complete a national inventory of all levees in the nation, and identify the number of structures and population in the areas behind levees that would be subject to flooding in the event of levee overtopping or failure.

3.9 Concentrated Animal Feeding Operations (CAFO)

Governors urge EPA to ensure that maximum flexibility is provided to states to implement state CAFO programs. This flexibility would allow state regulatory programs to: (1) integrate with federal Natural Resources Conservation Service nutrient management programs to be more efficient and reduce duplication; (2) allow for normal changes to nutrient management plans without burdensome requirements for producers and regulatory agencies; (3) collaborate with the industry to achieve workable solutions to water quality issues; and (4) reflect states' needs and priorities, while maintaining compliance with federally approved state water quality standards for CAFOs and statutory permitting requirements.

3.10 Total Maximum Daily Loads (TMDL)

3.10.1 Regulations. Governors maintain that the TMDL program should strike a balance between the interests of the states and the federal government as well as other interested stakeholders. Any proposed changes to the program should not lead to a shift in the traditional relationship between states and the federal government beyond what was intended by Congress in the CWA. Governors believe that prescriptive, inflexible approaches will inhibit the creation of effective solutions.

3.10.1.1 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 monitoring, 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. The reductions in federal funding of the core water program requirements over the past 20 years should be restored. The Administration and EPA must address any unfunded mandate implications of future TMDL programmatic changes.

Governors believe that any funding increase to the states be provided through the core water programs, rather than more restrictive programmatic or geographic appropriations.

3.10.1.2 Flexibility. States must also be afforded significant flexibility in the management of water resources. 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 would be inappropriate and 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. Governors support multi-state regional TMDLs as has been done for mercury in some states.

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.

3.10.1.3 Alternative 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. The TMDL program should accommodate various state approaches and methods to protect and improve water quality and focus on results, not process.

3.10.1.4 Timelines. 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 CWA that gives states at least 15 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. 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.

3.10.1.5 Summary. Water quality problems generally, and nonpoint source problems in particular, vary greatly from state to state, and from watershed to watershed. For EPA to complement state efforts to attain clean water, any proposed regulations must be flexible, consider the lack of funds that generally accompany such requirements, and accommodate alternative approaches to achieving the goals of the

3.11 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 standards for arsenic, disinfection byproducts, enhanced surface water treatment, and others. Funding needs for projects required by existing, proposed, or recently issued SDWA 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 overseeing the activities of public water systems. EPA standard setting should be based on highest priority public health protection needs. 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.

3.11.1 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, appropriate affordability criteria, and an appropriate state regulatory role in implementation.

Time limited (effective Annual Meeting 2008–Annual Meeting 2010).
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, Annual Meeting 2002, Annual Meeting 2004, Winter Meeting 2006, Annual Meeting 2006, and Annual Meeting 2008 (formerly Policy D-6).