In 1982, Congress enacted the Coastal Barrier Resources Act to minimize  (1) the loss of human life; (2) wasteful expenditures of federal revenue;  and (3) damage to fish, wildlife, and other natural resources associated  with coastal barriers along the Atlantic and Gulf coasts by restricting  future federal expenditures and financial assistance, which have the effect  of encouraging development of coastal barriers. CBRA has no provisions prohibiting the administration of federal  regulatory activities, such as issuing certain permits, within the CBRS. Three federal agencies—the Corps, EPA, and the U.S. Coast Guard—issue  permits that regulate, among other things, the discharge of dredged or fill  material into federally regulated waters, including wetlands; the discharge  of wastes into navigable waters; and the construction of bridges over  navigable waters. We found that  factors such as the lack of suitably developable land in the unit and state  laws discouraging development were responsible for inhibiting  development. We also determined that an estimated 13 percent of CBRS  units experienced minimal levels of development—consisting of less than  20 additional structures per unit since becoming part of the CBRS—while  3 percent of CBRS units experienced significant development—100 or  more additional structures per unit. According to local officials,  commercial interest and public desire to build in some units and local  government support for development were some of the key factors  contributing to the development in the CBRS units we reviewed. Lack of Accessibility to the Unit. A number of CBRS units  include land owned by entities seeking to preserve the area in its natural  state. A Small Percentage of Units Have Experienced Some Level of Development, but Significant Development Has Been Concentrated in a Few Units

Although the majority of CBRS units remain undeveloped, 16 percent have  experienced some level of development. Availability of Affordable Private Flood Insurance. The Extent to Which Federal Agencies Have Provided Financial Assistance and Permits to Entities in CBRS Units Varies

We found that federal agencies have provided some financial assistance  prohibited by CBRA, some assistance allowed by CBRA, and hundreds of  permits for federally regulated construction projects to entities within the  CBRS units included in our review. Four agencies provided financial  assistance expressly prohibited by CBRA to property owners in CBRS  units. As a result, we were unable to  determine the total extent of such assistance. 2. 3. 4. Federal Agencies Have Provided Assistance That Is Allowable under CBRA, but the Extent of Such Assistance Is Unknown

We found that three federal agencies had provided financial assistance  allowable under CBRA to entities within the CBRS. All of  the permits were associated with the National Pollutant Discharge  Elimination System (NPDES), primarily to allow storm water discharges  from construction sites or for discharges from water or wastewater  treatment systems. Conclusions

Although CBRA has limited the amount of federal financial assistance  provided to some CBRS units, it does not appear to have been a major  factor in discouraging development in those CBRS units that have  developable land, local government and public support for development,  and access to affordable private flood insurance. Recommendations for Executive Action

In light of the federal financial assistance that was provided in violation of  CBRA, we are recommending that the Secretaries of DHS, HUD, and VA,  and the Administrator of SBA direct their agencies to (1) obtain official  determinations from the FWS on whether the properties we identified as  receiving federal assistance in violation of CBRA are in fact located within  a CBRS unit and if they are, cancel all inappropriate loan guarantees and  insurance policies that have been made to the owners of these properties  and (2) examine their policies and procedures to ensure that they are  adequate to prevent federal assistance that is prohibited by CBRA from  being provided to entities in CBRS units. GAO staff who made major contributions to this report are listed in  appendix V.

Appendix I: Objectives, Scope, and Methodology

We were asked to address issues related to the Coastal Barrier Resources  Act, as amended, (CBRA) by reviewing development that has occurred and  federal funding that has been provided within the John H. Chafee Coastal  Barrier Resources System (CBRS). It is within this area that new  development—three single-family homes—has occurred since the unit’s  inclusion in the CBRS.
Why GAO Did This Study

In 1982, Congress enacted the Coastal Barrier Resources Act. The Coastal Barrier Resources Act, as amended (CBRA), designates 585 units of undeveloped coastal lands and aquatic habitat as the John H. Chafee Coastal Barrier Resources System (CBRS). CBRA prohibits most federal expenditures and assistance within the system that could encourage development, but it allows federal agencies to provide some types of assistance and issue certain regulatory permits. In 1992, GAO reported that development was occurring in the CBRS despite restrictions on federal assistance. GAO updated its 1992 report and reviewed the extent to which (1) development has occurred in CBRS units since their inclusion in the system and (2) federal financial assistance and permits have been provided to entities in CBRS units. GAO electronically mapped address data for structures within 91 randomly selected CBRS units and collected information on federal financial assistance and permits for eight federal agencies.

What GAO Found

An estimated 84 percent of CBRS units remain undeveloped, while 16 percent have experienced some level of development. About 13 percent of the developed units experienced minimal levels of development--typically consisting of less than 20 additional structures per unit since becoming part of the CBRS, and about 3 percent experienced significant development--consisting of 100 or more structures per unit--since becoming part of the CBRS. According to federal and local officials, CBRA has played little role in the extent of development within the CBRS units that we reviewed because they believe that other factors have been more important in inhibiting development. These include (1) the lack of suitably developable land in the unit; (2) the lack of accessibility to the unit; (3) state laws discouraging development within coastal areas; and (4) ownership of land within the unit by groups, such as the National Audubon Society, who are seeking to preserve its natural state. In units that GAO reviewed where development had occurred, federal and local officials also identified a number of factors that have contributed to development despite the unit's inclusion in the CBRS. These include (1) a combination of commercial interest and public desire to build in the unit, (2) local government support for development, and (3) the availability of affordable private flood insurance. Multiple federal agencies have provided some financial assistance to property owners in CBRS units that is expressly prohibited by CBRA; some assistance allowed under CBRA; and hundreds of permits for federally regulated development activities within the unit. Specifically, four agencies--the Department of Housing and Urban Development, the Department of Veterans Affairs, the Federal Emergency Management Agency, and the Small Business Administration--provided financial assistance, such as flood insurance and loan guarantees, totaling about $21 million that is prohibited by CBRA to property owners in CBRS units. Although most of these agencies had processes in place to prevent such assistance from being provided, they cited problems with inaccurate maps as being a key factor leading to these errors. With regard to financial assistance allowed by CBRA, GAO found that three federal agencies have provided such assistance but did not track how much assistance they provided, so the total extent of this assistance is unknown. With regard to permits issued in CBRS units for federally regulated activities, GAO identified hundreds of permits issued by the Army Corps of Engineers and state agencies authorized to issue permits on behalf of the Environmental Protection Agency. These permits covered various activities such as the construction of piers, the discharge of dredged or fill material into federally regulated waters, and permits associated with water discharges from construction sites or wastewater treatment systems.