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As part of the Sustainable Finance for State and Tribal Wetland Programs project, the Environmental Finance Center investigated how wetland programs pay for their regulatory activities, with a special emphasis on permit fees. Wetland Regulation is one of the four core elements of a wetland program as defined by EPA.
The EFC collected information on 47 state wetland regulatory programs through interviews with state wetland officials, researching permit fee rates on program websites, and investigating state statutes. This research was conducted between August 2010 and October 2011, and all information is current as of the date collected.
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In general, wetland programs rely on a small set of funding sources to pay for regulatory activities:
- General Fund appropriations
- Permit Fee revenue
- Federal grants such as Wetland Program Development Grants, Section 106 grants, Section 319 grants, and NOAA grants
- Penalties for wetland permit violations
A few states have formed partnerships with state transportation departments to cover the costs of permitting road construction specifically. Often, state transportation departments pass on federal highway dollars (SAFTEA-LU) to cover these staff positions.
A few other states involve local governments in regulatory activities, and these local governments contribute funds as well.
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Key questions for comparing fees are:
- What is the amount of the fee?
- What is the basis of the fee?
- Does fee revenue go to the wetland program, its agency, or the state's general fund?
- Does the fee cover the full cost of permitting activities?
- Who is exempted from the fee?
- How often is the fee revised?
Approximately 30 states interviewed charge wetland permit fees, ranging from a minimum fee of $35 on the low end to a minimum fee of almost $1,000 on the high end. Low fees in general only cover the cost of processing the application, while higher fees cover more of the full cost of permitting. Most if not all programs, though, do not cover the cost of permitting through fees alone.
Most fees are charged based on the size of the land impacted. A few programs charge flat fees. Others vary fees based on the type of project or whether the project is being conducted by a public or private entity. In some programs, the presence of endangered species or historic properties will increase the amount of the fee. Interestingly, programs report that there is not necessarily a correlation between the size of the land impacted and the time to process the permit. Often, larger impacts are being made by developers who apply for permits regularly and who have paperwork in order.
In most cases, the permit fees go directly to the wetland program or to the department where the wetland program is based. However, in about one-third of programs, the permit fees go to the general fund of the state. These programs report that their annual state appropriation is not tied to the volume of wetland permits.
Almost all permitting programs exempt certain entities from paying fees. The most common exemptions are for units of government-federal, state, local, and tribal. Agricultural operations are often granted exemptions for paying fees as well. Some programs will waive fees if work is being done in the aftermath of a natural disaster such as a hurricane. Other fee exemptions include public transit projects, temporary mining roads, and individuals.
Fee revisions are relatively rare. Programs report they happen one or two times a decade, though programs also report not having much opposition when fee increases are proposed. In general, fee increases have be approved by the legislative body. A few states including Florida and Maryland have regular, automatic fee increases tied to the consumer price index.
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