Over the past 15 years, Federal legislation, Executive Orders, and subsequent regulation have caused major changes in many aspects of environmental protection. One important change 1s the now commonplace requirement for agency and public interaction in the decisions leading to government-sponsored projects affecting the environment. Interaction is particularly important whenever agencies propose projects that will affect environmental resources such as air, water, lands, and wildlife. Acting as trustees of these resources, agencies must ensure through interaction that all actions of the Federal Government include appropriate consideration and protection of the public interest. Protection of many resources, such as floodplains and wetlands have become national priorities. The National Environmental Policy Act of 1969 (NEPA) prescribes coordination and interaction among agencies. Numerous other environmental statutes reflect this element of NEPA by requiring Federal agencies to actively seek comments from all interested organizations when proposing projects. One such statute, reflecting a national concern to abate water pollution, is the Clean Water Act of 1977, as amended (CWA). The primary objective of the CWA is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters (lakes, wetlands, streams, and other aquatic habitats). Under Section 404 of the CWA, projects involving the discharge of dredged or fill material into waters of the United States require a permit issued by the U.S. Army Corps of Engineers (COE) or a State that has assumed the program. The COE conducts a public interest review and a Section 404(b)(l) Guidelines compliance determination before deciding whether to issue a permit. The decision 1s based on an evaluation of impacts and whether the proposal 1s in the public interest. The comments and cooperation of many agencies and the public are essential to the review. Many Federal-aid highway projects require Section 404 permits. Therefore, the Federal Highway Administration (FHWA), the State highway agencies (SHAs), and the commenting agencies must recognize that early and continued coordination is imperative to address issues that may affect the processing of permit applications. Effective coordination, however, is not always a simple task. Both lead and commenting agencies find that the efforts required for good coordination often severely tax available time and personnel resources. In addition, basic policy differences between agencies can hinder the resolution of controversial issues. Consequently, many agencies involved in the Section 404 permitting process see a need for more effective communication and better understanding of legislative roles and responsibilities. Recognizing this need, the principal Federal agencies involved in the assessment of Section 404 permit applications for Federal-aid highway projects formed a work group in September 1985 to identify methods for improving interagency coordination. The agencies in the work group are the U.S. Fish and Wildlife Service (FWS), Environmental Protection Agency (EPA), National Marine Fisheries Service (NMFS), COE, and the FHWA. The work group placed particular emphasis on surfacing innovative and cost-effective approaches that could help field offices do their jobs faster and better. This document summarizes the results of that effort. The purpose of the document is to identify methods of improving coordination before and during the processing of Section 404 permits on Federal-aid highway projects. The guidance should be useful to the personnel of Federal agencies reviewing permits, and to employees of State or local agencies either applying for permits or commenting on permit applications. As guidance, this document is not prescriptive and does not establish new policy or modify existing agency policies. Instead, it introduces a range of ideas for making the interagency coordination on Section 404 permits more effective. Examples have been used to illustrate these concepts and contacts are provided where further information may be obtained. As such, the document does not address all the issues and requirements which can affect Section 404 processing. Apart from coordination, permit applicants should recognize that a project must comply with all applicable statutes, regulations, and Executive Orders. Although this document focuses on federally assisted highway projects, the coordination techniques would also be valuable for use on State-funded actions requiring Section 404 permits. The document is divided into three sections, i.e., programmatic activities, project-specific activities, and the integration of NEPA and Section 404. Although the subject matter falls into these three categories, the chapters are independent discussions. The development of new and innovative techniques that can improve agency coordination are encouraged and will be incorporated into subsequent editions of this document. To facilitate revision, the document is in loose-leaf form.