Order Code IB97014
CRS Issue Brief for Congress
Received through the CRS Web
Wetland Issues
Updated March 19, 2002
Jeffrey A. Zinn and Claudia Copeland
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
What is a Wetland?
How Fast are Wetlands Disappearing, and How Many Acres are Left?
Section 404 Program
The Permitting Process
Nationwide Permits
Judicial Proceedings Involving §404
Treat All Wetlands Equally
Agriculture and Wetlands
Swampbuster
Wetland Reserve Program (WRP)
Farm Bill Legislation
Agricultural Wetlands and the §404 Program
Private Property Rights and Landowner Compensation
Wetland Restoration and Mitigation
Recent Administration and Congressional Wetlands Activities
Clinton Administration Initiatives
Legislative Activity in the 106th Congress
107th Congress
FOR ADDITIONAL READING

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Wetland Issues
SUMMARY
Wetlands, in a wide variety of forms, are
encouraging non-regulatory options; and
found throughout the country. The various
expanding partnerships in wetland protection.
values of these areas have been increasingly
In 1998, it announced a strategy to achieve a
recognized in recent years, but the remaining
net gain of up to 100,000 acres annually by
acreage continues to disappear. When Euro-
2005. The current Bush Administration has
pean settlers first arrived, total wetland acre-
not announced any comprehensive wetlands
age was more than 220 million acres in the
policies.
lower 48 states, according to estimates by the
U.S. Fish and Wildlife Service. It estimates
Numerous wetland bills have been intro-
that by 1997 total wetland acreage was 105.5
duced in Congress during the past decade
million acres. Losses continue, although the
either to implement Administration policies or
rate of loss has slowed considerably during the
to initiate alternative approaches. Many
past decade and restoration efforts have grow-
hearings have been held, but the only major
n, and some regions are approaching the
wetland legislation to be enacted has addressed
national policy goal of no-net-loss. Recent
agricultural wetlands (in 1996).
losses have been concentrated in forested

wetlands, and net losses are greatest in the
In recent years, wetlands issues have
eastern United States.
involved controversy over the rate of wetlands
loss, continuing efforts to reauthorize the
Several laws provide varying levels of
Clean Water Act and other legislation that
protection under different circumstances:
affects wetlands, implementation of farm bill
§404 in the Clean Water Act; the swampbuster
provisions, and specific actions that raise
and other programs in federal farm law; and
concerns about changes in wetlands programs.
laws that protect specific sites or types of
Examples of such actions were implementation
wetlands, such as the enactments that have
of Corps of Engineers changes to a nationwide
established National Wildlife Refuge System
permit (changes generally opposed by the
units and the Wetland Reserve Program.
development community), and a federal deci-
Although the rate of wetland loss has slowed,
sion that overturned the 1993 “Tulloch” rule,
these laws and their implementation are view-
which had expanded regulated actions to
ed by many protection advocates as inade-
include excavation. New rules issued by the
quate. Others, who advocate the rights of
Clinton Administration in January 2001 to
property owners and development interests, by
clarify the rejected Tulloch rule and a January,
contrast, characterize these same efforts as
2001 Supreme Court decision affecting regula-
overzealous and too extensive. Numerous
tion of isolated wetlands continues to attract
state and local wetland programs increase the
attention from policymakers.
complexity of the protection effort.
The 107th Congress is addressing agricul-
Both the Clinton and earlier Bush
tural wetland protection in the next farm bill.
Administrations made wetland protection a
Legislation passed by both Chambers (H.R.
priority. Clinton Administration policies,
2646 and S. Amdt. 2471) would expand the
stated in 1993, included: using the best avail-
Wetland Reserve Program and make other
able science to define and delineate wetlands;
changes to enhance federal wetland protection
improving the regulatory program and
efforts on agricultural lands.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The 107th Congress is considering wetlands provisions within its efforts to reauthorize
omnibus farm legislation. The House and Senate have each passed versions of this
legislation (H.R. 2646 and S. 1731). Both bills expand a land retirement program called the
Wetland Reserve and create a new component of the Conservation Reserve to protect
isolated wetlands. The Senate bill includes several other provisions that could increase the
protection or restoration of agricultural wetlands. Other recent events that may attract
congressional attention include court decisions that would limit the geographic reach of the
Clean Water Act §404 program and rules issued in January 2001 by the Clinton
Administration affecting regulated activities, which the Bush Administration has allowed to
go into effect.
The 106th Congress did not enact major new wetlands legislation, but it did raise the
FY2001 enrollment ceiling in the Wetlands Reserve Program from 975,000 acres to
1,075,000 acres and supported increased appropriations for many activities that contribute
to protecting wetlands. Many of these actions were proposed by the Clinton Administration
in its Clean Water Action Plan or Lands Legacy Initiative.
BACKGROUND AND ANALYSIS
Wetlands, in a variety of forms, are found throughout the country. They are known in
different regions as swamps, marshes, fens, potholes, playa lakes, or bogs. While these places
can differ greatly, they all have distinctive plant and animal assemblages because of the
wetness of the soil. Some wetland areas may be continuously inundated by water, while other
areas may not be flooded at all. In coastal areas, flooding may occur on a daily basis as tides
rise and fall.
Functional values, both ecological and economic, at each wetland depend on its location,
size, and relationship to adjacent land and water areas. Many of these values have been
recognized only recently. Historically, many federal programs encouraged wetlands to be
drained or altered because they were seen as having little value as wetlands. Wetland values
can include:
! habitat for aquatic birds and other animals and plants, including numerous
threatened and endangered species; production of fish and shellfish;
! water storage, including mitigating the effects of floods and droughts;
! water purification;
! recreation;
! timber production;
! food production;
! education and research;
! and open space and aesthetic values.
Usually wetlands provide some composite of these values; no single wetland in most
instances provides all these values. The composite value typically declines when wetlands are
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altered. In addition, the effects of alteration often extend well beyond the immediate area
because wetlands are usually part of a larger water system. For example, conversion of
wetlands to urban uses has increased flood damages; this value is receiving considerable
attention as natural disaster costs have mounted through the 1990s.
Federal laws that affect wetlands have changed since the mid 1980s as the value of
wetlands has been recognized. Previously, some laws, such as selected provisions in the
federal tax code, public works legislation, and farm programs, encouraged destruction of
wetland areas. Federal laws now either encourage wetland protection, or prohibit or do not
support their destruction. These laws, however, do not add up to a fully consistent or
comprehensive national approach. The central federal regulatory program, §404 of the Clean
Water Act, requires permits for the discharge of dredged or fill materials into many but not
all wetland areas; however, other activities that may adversely affect wetlands do not require
permits. An agricultural program, swampbuster, is a disincentive program that indirectly
protects wetlands by making farmers who drain wetlands ineligible for federal farm program
benefits; those who do not receive these benefits have no reason to participate. Several other
acquisition and incentive programs complete the current protection effort.
While numerous wetland protection bills have been introduced in recent Congresses, no
major new wetlands legislation has been enacted. The Clinton Administration took a strong
interest in the wetlands debate. In 1993, it announced new federal policies based on five
principles: 1) supporting no overall net loss of the Nation’s remaining wetlands together with
increasing the quality and quantity of wetlands as a long-term goal; 2) making regulatory
programs fair, flexible, and predictable; 3) encouraging options to regulatory programs; 4)
expanding partnerships to protect and restore wetlands in an ecosystem/watershed context;
and 5) basing wetland policies on the best scientific information available. Subsequently, it
sought increased funding for wetlands protection efforts through the Clean Water Action Plan
and the Lands Legacy Initiative and set a goal of a net gain of 100,000 acres annually starting
in FY2005.
While Congress has not enacted major changes, it has provided a forum where
conflicting interests in wetland issues have been debated. These conflicts are between:
! Environmental interests and wetland protection advocates who have been
pressing for greater wetlands protection by improving coordination and
consistency among agencies and levels of governments, and strengthened
programs; and
! Others, including large landowners, farmers, small businessmen, and
individuals who own small parcels of land, who counter that protection
efforts have gone too far, and that wet areas that provide few wetland values
have been aggressively protected. They have been especially critical of the
U.S. Army Corps of Engineers (Corps) and the U.S. Environmental
Protection Agency (EPA) for administering the §404 program in an
overzealous and inflexible manner.
Wetland issues revolve around disparate scientific and programmatic questions, and
conflicting views of the role of government where private property is involved. Scientific
questions include how to define wetlands, the current rate and pattern of wetland losses, and
the importance of these losses. Federal program questions include; the operation of the
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principal federal regulatory program and other programs to protect, restore, or mitigate
wetland resources; relationships between agriculture and wetlands; whether all wetlands
should be treated the same in federal programs and which wetlands should be subject to
regulation; and federal funding of wetland programs. In addition, private property questions
are raised because almost three-quarters of the remaining wetlands are located on private
lands, and some property owners believe they should be compensated when federal programs
limit land use and thereby diminish its value.
What is a Wetland?
There is general agreement that the presence of a wetland can be determined by a
combination of soils, plants, and hydrology. The only definition of wetlands in law, in the
swampbuster provisions of farm legislation, lists those three components but does not include
more specific criteria, such as what conditions must be present, for how long, and during what
portion of the year. Controversies are exacerbated when many sites that have those three
components, including sites that have wetland characteristics only some portion of the time,
do not look like what many people visualize as wetlands.
Wetlands subject to federal regulation are a large subset of all places that are judged to
be wetlands according to criteria used in the scientific community. These regulated wetlands,
under the §404 program discussed below, are currently identified using technical criteria in
a wetland delineation manual issued by the Corps in 1987. It was prepared jointly and is used
by all federal agencies to carry out their responsibilities under this program (the Corps, EPA,
FWS, and the National Marine Fisheries Service (NMFS)). The manual provides guidance
and field-level consistency among the agencies that have roles in wetland regulatory
protection. (A second and slightly different manual, agreed to by the Corps and the Natural
Resources Conservation Service, is used for delineating agricultural lands.) While the
agencies try to improve the objectivity and consistency of wetland identification and
delineation, judgement continues to play a role and can lead to site-specific controversies.
Cases discussed below (see Judicial Proceedings Involving §404) are efforts to exclude
certain types of wetlands or activities affecting them from the regulatory program.
How Fast are Wetlands Disappearing, and How Many Acres are
Left?
It has been estimated that when European settlers first arrived, wetland acreage in the
area that would become the 48 states was more than 220 million acres, or about 5% of the
total land area. By 1997, total wetland acreage was estimated to be 105.5 million acres,
according to data compiled through the FWS National Wetlands Inventory (NWI). Data
compiled by the NRCS and the FWS in separate surveys and using different methodologies
(and yielding different results) both show that the annual loss rate has been dropping from
almost 500,000 acres annually nearly three decades ago to less than 100,000 annually. The
FWS survey estimated the average annual rate of loss was 58,500 acres between 1986 and
1997 while NRCS used its Natural Resources Inventory (NRI) to estimate that the average
annual loss rate was 32,600 acres between 1992 and 1997.

This difference in loss statistics has led to disagreements over the actual rate of loss and
the effectiveness of current policies. The Clinton Administration announced in March 1998
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that FWS and NRCS would coordinate future assessments of wetlands loss, based on data
collected by the NRCS every 5 years in the NRI. The Administration sought to end this
“battle of the numbers” that has obscured other wetland protection issues. This battle was
explored in a July 1998 General Accounting Office report titled Wetlands Overview:
Problems with Acreage Data Persist. The recent joint announcement of inconsistent loss
rates and statements by the two agencies that it is infeasible to produce statistically reliable
data for a single report on wetlands gains and losses indicate that the battle continues.
Numerous shifts in federal policies since 1985 (and changes in economic conditions as
well) strongly influence wetland loss patterns, but the composite effects remain unmeasured.
There is a large time lag from changes in policy to release of data that measure these changes.
Further, these data only measure acres, and do not provide any insights into changes in the
quality of remaining wetlands as measured by the values they provide.
Section 404 Program
The principal federal program that provides regulatory protection for wetlands is found
in §404 of the Clean Water Act (CWA). Its intent is to protect water and adjacent wetland
areas from adverse environmental effects due to discharges of dredged or fill material.
Established in 1972, §404 requires landowners or developers to obtain permits from the
Corps of Engineers to carry out activities involving disposal of dredged or fill materials into
waters of the United States, including wetlands.
The Corps has long had regulatory jurisdiction over dredging and filling, starting with
the River and Harbor Act of 1899. The Corps and EPA share responsibility for administering
the §404 program. Other federal agencies, including NRCS, FWS, and NMFS, also have
roles in this process. In the 1970s, legal decisions in key cases led the Corps to revise this
program to incorporate broad jurisdictional definitions in terms of both regulated waters and
adjacent wetlands. Section 404 was last significantly amended by Congress in 1977.
This judicial/regulatory/administrative evolution of the 404 program has generally
pleased those who view it as a critical tool in wetland protection, but dismayed others who
would prefer more limited Corps jurisdiction or who see the expanded regulatory program
as intruding on private land-use decisions and treating wetlands of widely varying value
similarly. Underlying this debate is the more general question of whether §404 is the best
approach to federal wetland protection.
Some wetland protection advocates have proposed that it be replaced or greatly altered.
First, they point out that it governs only the discharge of dredged or fill material, while not
regulating other acts that drain, flood, or otherwise reduce functional values. Second, because
of exemptions provided in 1977 amendments to §404, major categories of activities are not
required to obtain permits. These include normal, ongoing farming, ranching, and silvicultural
(forestry) activities. Further, permits generally are not required for activities which drain
wetlands (only for those that fill wetlands), which excludes a large number of actions with
potential to alter wetlands. Third, in the view of protection advocates, the multiple values
that wetlands can provide (e.g., fish and wildlife habitat, flood control) are not effectively
recognized through a statutory approach based principally on water quality, despite the broad
objectives of the Clean Water Act.
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The Permitting Process. The Corps’ regulatory process involves both general
permits for actions by private landowners that are similar in nature and will likely have a
minor effect on wetlands and individual permits for more significant actions. According to
program data compiled by the Corps, the agency received an average of 74,500 §404 permit
requests annually from FY1996 to FY1999. Of those, more than 84% were authorized under
a general permit, and the average length of time for action was 14 days. A general permit,
which can apply regionally or nationwide, is essentially a permit by rule for activities with
minor impact; most do not require pre-notification or prior approval. About 7% were
required to go through the more detailed evaluation for an individual permit, which may
involve complex proposals or sensitive environmental issues. The average time to complete
review of these applications was 107 days; only 0.3% of applications for individual permits
were denied. In FY1999, Corps-issued permits authorized a total of 21,556 acres of wetland
impact (30% less than in FY1998), while those permits required that 46,433 acres of wetlands
be restored, created, enhanced, or preserved as mitigation for the losses authorized.
Regulatory procedures on individual permits allow for interagency review and comment,
a coordination process that can generate delays and an uncertain outcome, especially for
environmentally controversial projects. EPA is the only federal agency having veto power
over a proposed Corps permit; EPA has used its veto authority 11 times in the nearly 30 years
since the program began. Critics have charged that implied threats of delay by the FWS and
others practically amount to the same thing. Reforms during the Reagan, earlier Bush, and
Clinton Administrations streamlined certain of these procedures, with the intent of speeding
up and clarifying the Corps’ full regulatory program, but concerns continue over both process
and program goals.
Nationwide Permits. Nationwide permits are a key means by which the Corps
minimizes the burden of its regulatory program. These general permits authorize activities
that are similar in nature and are judged to cause only minimal adverse effect on the
environment. General permits minimize the burden of the Corps’ regulatory program by
authorizing landowners to proceed without having to obtain individual permits in advance.
They are issued for 5-year periods and thereafter must be renewed by the Corps.
In December 1996 the Corps reissued the 37 existing nationwide permits and 2 new
permits. The Corps made changes to strengthen the environmental restrictions of nationwide
permit 26 (NWP 26), which has been particularly controversial because of concern that it
results in significant cumulative unmonitored wetlands losses. The changes to NWP 26
pleased wetland protection advocates but displeased development and commercial interests
who contended that permitting would now be more burdensome. At the same time, the Corps
announced it would replace NWP 26 in 2 years with more specific activity-based permits.
Fulfilling that pledge, the Corps issued final replacement permits for NWP 26 in March
2000; these permits took effect June 7, 2000. In contrast to NWP 26, which authorized
activities in certain categories of waters, the replacement permits authorize projects for five
specific types of activities, with terms and conditions to ensure that the activities result in
minimal adverse effects on the aquatic environment, individually and cumulatively. The major
change that the Corps believed will strengthen protection of aquatic resources is a maximum
acreage limit under the new NWPs of one-half acre, reduced from the previous maximum of
three acres. The Corps also issued additional general conditions applicable to all nationwide
permits to further ensure protection of aquatic resources, such as limitations on discharges
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of fill material into 100-year floodplains. Developers said the replacement permits are too
restrictive of the regulated public and would require more landowners to seek individual
permits, which is more costly and time-consuming for the regulated public. The Corps
acknowledges that more individual permits will be required and that costs for landowners and
the Corps itself will increase as a result of the permit changes, but the Corps believes that
these impacts will be less severe than developer groups contend and will be outweighed by
the additional resource protection that the permits will provide. (For more information, see
CRS Report 97-223, Nationwide Permits for Wetlands Projects: Regulatory Developments
and Current Issues.)
A key developer group, the National Association of Home Builders, challenged the
replacement NWPs in a lawsuit filed the same day the permits package was published in the
Federal Register. The lawsuit challenges a number of details in the permits and more
generally contends that the new permits are contrary to the intent of Congress that the Corps
provide a streamlined process in its nationwide permitting program. Other lawsuits
challenging the permits have been brought by the National Stone Association and the National
Federation of Independent Business. These cases are still pending.
Nationwide permits are issued for periods of no longer than 5 years. Thus, in August
2001, the Corps proposed to re-issue all 43 nationwide permits (including those issued in
March 2000), most of which were last re-issued in 1996. EPA and environmental groups
object to some revisions that the Corps proposes in order to add flexibility, including
relaxation of certain permit conditions, fearing that they would result in a net loss of wetland
acres. Industry groups favored flexibility in the proposal, but say that some requirements for
case-by-case review could nullify the positive aspects. The Corps received more than 2,100
public comments and modified some aspects of the proposal when it issued final permits
January 15, 2002. The re-issued permits became effective March 18. Reactions to the final
permits were mixed, much like the August 2001 proposal: environmental advocates contend
that, even with modifications, the re-issued permits are not adequately protective of water
quality, while developer groups argue that the overall program continues to focus on arbitrary
regulatory thresholds that result in undue burden on developers and the Corps.
Section 404 authorizes states to assume many of the permitting responsibilities. Two
states, Michigan (in 1984) and New Jersey (in 1992), have done this. Others have cited the
complex process of assumption, the anticipated cost of running a program, and the continued
involvement of federal agencies because of statutory limits on waters that states could
regulate as reasons for not joining these two states. Efforts (both administrative and
legislative) continue towards encouraging more states to assume program responsibility.
Judicial Proceedings Involving §404. The §404 program has been the focus of
a number of lawsuits recently. The status of aspects of the Corps’ regulatory program was
made uncertain by a federal court ruling in January 1997. The U.S. District Court for the
District of Columbia overturned regulations issued by the Corps and EPA in 1993 that had
extended the scope of regulation to include certain landclearing and excavation activities.
Those regulations were issued as part of the settlement of a lawsuit brought by environmental
groups over the agencies’ failure to regulate discharges associated with excavation (North
Carolina Wildlife Federation et al. v. Tulloch). At issue was whether "fallback” from
dredging activities constituted pollution, under the CWA. The court ruled that incidental
fallback is not pollution and, thus, the agencies had exceeded their authority under the Clean
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Water Act. In January 2001, the Clinton Administration issued a regulation to close what the
government viewed as a “loophole” resulting from the Tulloch case, which it estimated to
have resulted in conversion of 20,000 acres of wetlands. The regulation seeks to clarify
circumstances in which mechanized landclearing or excavation activity in waters of the U.S.
will result in discharges which are subject to CWA regulation. After reviewing this new rule,
the Bush Administration announced on April 16 that it would allow the regulation to take
effect without modification. Regulated industries are displeased with the new rule, and two
groups filed lawsuits challenging it.
In December 1997, the U.S. 4th Circuit Court of Appeals ruled in favor of a Maryland
developer, finding that the Corps had exceeded its authority in claiming jurisdiction over
isolated wetlands. The court in U.S. v. Wilson said that the Corps exceeded its authority in
trying to regulate wetlands whose degradation or destruction could have an impact on
interstate commerce. Rather, a “case-by-case” determination is necessary to decide whether
an activity has an effect on a wetland and whether the effect is substantial. Environmentalists
said that the ruling, if interpreted broadly, would make it harder for the federal government
to justify regulating interstate wetlands. However, the ruling only affected Corps districts
covered by the 4th Circuit (Virginia, West Virginia, Maryland, and the Carolinas). A U.S.
request for a rehearing of the case was denied in January 1998, and the government
subsequently decided not to seek Supreme Court review. In May 1998, the Corps issued
guidance outlining how to address isolated wetlands in the 5 states affected by the ruling. The
Corps will continue to assert jurisdiction over isolated wetlands, but only where it can show
a substantial connection between the wetland and interstate commerce.
U.S. v. Wilson is one recent example of long-standing controversy and litigation over
whether isolated waters are properly within the jurisdiction of §404. Isolated waters that are
wetlands which are not physically adjacent to navigable surface waters often appear to
provide few of the values for which wetlands are protected, even if they meet the technical
definition of a wetland. On January 9, the Supreme Court ruled on the question of whether
the CWA provides the Corps and EPA with authority over isolated waters. The Court’s 5-4
ruling in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of
Engineers (No. 99-1178) held that the Corps’ denial of a §404 permit for a disposal site on
isolated wetlands solely on the basis that migratory birds use the site exceeds the authority
provided in the Act. The full extent of retraction of the regulatory program resulting from
this decision is unclear for now. Environmentalists believe that the Court misinterpreted
congressional intent on the matter, while industry and landowner groups welcomed the ruling.
Policy implications of how much the decision restricts federal regulation depend on how
broadly or narrowly the opinion is applied. The government’s view on this key question was
answered in a January 19 memorandum issued jointly by EPA and the Corps in which the
agencies provide a legal interpretation based on a narrow reading of the Court’s decision, thus
allowing federal regulation of some isolated waters to continue. While it likely will take some
time to assess how regulatory protection of wetlands will be affected as a result of the
decision, the remaining responsibility to protect affected wetlands falls on states and local
governments. Whether states will act to fill in the gap left by removal of some federal
jurisdiction is unclear, but a few states (Wisconsin and Ohio, for example) have passed new
laws to do so. (For additional information, see CRS Report RL30849, The Supreme Court
Addresses Corps of Engineers Jurisdiction Over ‘Isolated Waters’: The SWANCC Decision.)
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Treat All Wetlands Equally. Under the §404 program, there is a perception that all
jurisdictional wetlands are treated equally, regardless of size, functions, or values. This has
led critics to focus on situations where a wetland has little apparent value, but the landowner’s
proposal is not approved or the landowner is penalized for altering a wetland without a
federal permit. Critics believe that one possible solution may be to have a tiered approach for
regulating wetlands. Several legislative proposals introduced in recent Congresses would
establish three tiers — from highly valuable wetlands that should receive the greatest
protection to the least valuable wetlands where alterations might usually be allowed. Some
states (New York, for example) use such an approach for state-regulated wetlands. The
Corps and EPA issued guidance to field staff emphasizing the flexibility that currently exists
in the 404 program to apply less vigorous permit review to small projects with minor
environmental impacts.
Three questions arise: (1)What are the implications of implementing a classification
program, (2) How clearly can a line separating each wetland category be defined, and (3) Are
there regions where wetlands should be treated differently? Regarding classification, even
most wetland protection advocates acknowledge that there are some situations where a
wetland designation with total protection is not appropriate. But they fear that classification
for different degrees of protection could be a first step toward a major erosion in overall
wetland protection. Also, these advocates would probably like to see almost all wetlands
presumed to be in the highest protection category unless experts can prove an area should
receive a lesser level of protection, while critics who view protection efforts as excessive,
would seek the reverse.
Locating the boundary line can be controversial when the line encompasses areas that
do not meet the image held by many. Controversy would likely grow if a tiered approach
required that lines segment wetland areas. On the other hand, a consistent application of an
agreed-on definition may lead to fewer disputes and result in more timely decisions.
Some states have far more wetlands than others. Different treatment has been proposed
for Alaska because about one third of the state is designated as wetlands, yet a very small
portion has been converted. Legislative proposals have been made to exempt it from the
§404 program until 1% of its wetlands have been lost. Some types of wetlands are already
treated differently. For example, playas and prairie potholes have somewhat different
definitions under swampbuster (discussed below), and the effect is to increase the number of
acres that are considered as wetlands. This differential treatment contributes to questions
about federal regulatory consistency on private property.
Agriculture and Wetlands
National surveys almost two decades ago indicated that agricultural activities had been
responsible for about 80 percent of wetland loss in the preceding decades, making this topic
a focus for policymakers. Congress responded by creating programs in farm legislation
starting in 1985 that use disincentives and incentives to encourage landowners to protect and
restore wetlands. Swampbuster and the Wetlands Reserve are the two largest efforts, but
other programs such as the Conservation Reserve and Conservation Reserve Enhancement
Programs are also being used to protect wetlands. For example, provisions in the FY2001
Agriculture Appropriations (P.L. 106-387) established a 500,000 acre pilot program within
the Conservation Reserve Program to enroll farmed wetlands smaller than 5 acres in six North
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Central states. Recent wetland loss surveys conducted by NRCS and by FWS indicate that
agriculture is now responsible for between 25% and 30% of conversions, and that the total
number of acres lost also has plunged.
Swampbuster. Swampbuster, enacted in 1985, uses disincentives rather than
regulations to protect wetlands on agricultural lands. It has been controversial with farmers
concerned about redefining an appropriate federal role in wetland protection on agricultural
lands, and with wetland protection advocates concerned about inadequate enforcement. Since
1995, the NRCS has made wetland determinations only in response to requests because of
uncertainty over whether changes in regulation or law would modify boundaries that have
already been delineated. NRCS estimates that more than 2.6 million wetland determinations
have been made and that more than 4 million sites may eventually be required.

Swampbuster was amended most recently in the Federal Agricultural Improvement and
Reform Act of 1996 (P.L. 104-127). Congress responded to producer concerns by granting
producers greater flexibility. Changes include:
! expanding the definition of agricultural land used in the MOA to include
pasturelands, rangelands, and tree farms, and exempting swampbuster
penalties when wetlands are voluntarily restored;
! providing that prior converted wetlands will not be considered “abandoned”
if it remains in agricultural use, giving the Secretary discretion to determine
which program benefits swampbusters are ineligible for, and granting
good-faith exemptions;
! encouraging mitigation and establishing a mitigation banking pilot program;
and repealing required consultation with the U.S. Fish and Wildlife Service.
An interim final rule was issued on September 6, 1996; a final rule has not been issued.
Wetland Reserve Program (WRP). Under the WRP, enacted in 1990, landowners
receive payments for placing easements on farmed wetlands. All easements were permanent
until provisions in the 1996 farm bill were implemented. This law made the WRP an
entitlement, extended its authorization through 2002, and capped enrollment at 975,000 acres.
The FY2001 Agriculture Appropriations legislation (P.L. 106-387) raised the enrollment cap
to 1,075,000 acres. Legislative proposals that were considered during the 106th Congress
sought to replace the cap with an annual enrollment limit. (Increased enrollment was a goal
of the Clinton Administration’s Clean Water Action Plan.)

Data released in March 2001 show almost 1,050,000 acres are in the program. Almost
35% of the enrollment is in three states, Louisiana, Mississippi, and Arkansas. Most of the
land is enrolled under permanent easements, while only about 5% is enrolled under 10-year
restoration agreements. Farmer interest exceeds available funding, but Congress had
repeatedly limited enrollment in appropriations legislation. For FY2002 (and FY2003), the
Bush Administration requested no new funding for the WRP, noting that the authorized
enrollment ceiling would be reached by the end of FY2001. The House and Senate
Appropriations Committees concurred for FY2002 (in P.L. 107-76), pending completion of
the current farm bill debate. (For more information on agriculture programs to protect
wetlands, see CRS Issue Brief IB96030, Soil and Water Conservation Issues.)
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Farm Bill Legislation. Omnibus farm bill legislation includes wetland provisions has
passed both Chambers, and a conference committee is currently meeting to resolve
differences. H.R. 2646, passed by the House October 5, would replace the current total WRP
enrollment cap of 1,075,000 acres with an annual enrollment cap of 150,000 acres through
FY2011. It would allow any acres below the ceiling not enrolled that year to be enrolled in
subsequent years. It would also expand the pilot program in the CRP to enroll small isolated
wetlands in six North Central States to all states and limit enrollment to 150,000 acres in any
state. It would also repeal the wetland mitigation banking provision of the swampbuster
program, enacted in the 1996 farm bill. As reported by the Agriculture Committee, the bill
also would have amended the swampbuster program in other ways, but those provisions were
deleted in a manager’s amendment before consideration by the House.
S. Amdt. 2471, passed by the Senate on February 13, 2002, would replace the current
total WRP enrollment cap with a higher one allowing up to 2,225,000 acres through FY2006.
It would set an annual enrollment ceiling of 250,000 acres. It would also authorize that up
to 25,000 of the acres enrolled each year be enrolled through a new enhancement program
to restore wetlands in partnerships with state and local governments and NGOs, modeled
after an enhancement program in the CRP. Like the House bill, it would make the small
wetland pilot program a national program, although it would double the maximum size of
eligible sites from 5 acres to 10 acres.
Several other conservation programs, including the Environmental Quality Incentives
Program and the Wildlife Habitat Incentive Program, may also be amended in one or both
bills in ways that have incidental protection benefits for wetlands. Finally, some new
programs that are in the Senate version of the farm bill could help protect wetlands. These
include: the Conservation Security Program which would provide cost sharing assistance to
install practices on working agricultural lands; a Water Conservation Program to allow
specified states to purchase water rights both within the CRP if they administer an approved
state enhancement program and through a separate new program; a new program to retire
wetlands that are part of a cranberry operation; and several programs to better manage water
resources. (For more information, see CRS Report RL31255, Resource Conservation Title:
Comparison of Current Law with Farm Bills passed by the House and Senate.)
Agricultural Wetlands and the §404 Program. The §404 program applies to
qualified wetlands in all locations, including agricultural lands. But the Corps and EPA
exempt “prior converted lands” (wetlands modified for agricultural purposes before 1985)
from §404 permit requirements under a memorandum of agreement (MOA), and since 1977
the Clean Water Act has exempted “normal farming activities.” Another MOA signed in
January 1994 by the NRCS, the Corps, EPA, and FWS gives NRCS the responsibility for
making wetland determinations for the §404 program on agricultural lands. These
determinations are made under §404 rules and procedures. Finally, the January 2001
Supreme Court SWANCC decision, discussed above, apparently will exempt certain isolated
wetlands from Corps jurisdiction; NRCS has estimated that about 8 million acres might be
exempted by this decision. While these exemptions and the MOA have displeased some
protection advocates, they have probably dampened some of the criticisms from farming
interests over federal regulation of private lands. These agencies have been unsuccessfully
trying to revise the MOA to address changes made in the 1996 farm bill and to respond to
problems that have emerged in implementing the original MOA. Neither the House nor the
Senate versions of the current farm bill address this topic.
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Private Property Rights and Landowner Compensation
An estimated 74% of all remaining wetlands in the coterminous states are on private
lands, and only 13% are located on federal lands. Questions of federal regulation of private
property stem from the belief that land owners should be compensated when a “taking”
occurs and alternative uses are prohibited or restrictions on use are imposed to protect
wetland values. The U.S. Constitution provides that property owners shall be compensated
if private property is “taken” by government action. The courts generally have found that
compensation is not required unless all reasonable uses are precluded. Many individuals or
companies purchase land with the expectation that they can alter it. If that ability is denied,
they contend, then the land is greatly reduced in value. Many argue that a taking should be
recognized when a site is designated as a wetland. In June, the Supreme Court held that a
Rhode Island man who had acquired property after the state enacted wetlands regulation
affecting the parcel is not automatically prevented from bringing an action to recover
compensation from the state, but ruled that the state’s action had not taken all economic value
of the property into account (Palazzolo v. Rhode Island, U.S. No. 99-2047). The previous
three Congresses have explored these issues in numerous hearings, including an October 2000
hearing by the House Government Reform Committee specifically on impacts of federal
wetlands policy on property owners. Each considered, but did not enact, property rights
protection proposals, in part because the Clinton Administration had strongly hinted that it
would have vetoed such legislation. (For more information, see CRS Report RL30423,
Wetlands Regulation and the Law of Property Rights “Takings.”)
Wetland Restoration and Mitigation
Federal wetland policies during the past decade have increasingly emphasized restoration
of wetland areas. Much of this restoration occurs as part of efforts to mitigate the loss of
wetlands at other sites. The mitigation concept has broad appeal, but implementation has left
a conflicting record. The most recent examination of this record, presented in a June 2001
report from the National Research Council, found it to be wanting. Likewise, a GAO report
issued in May criticizes the ability of the Corps to track the impact of in-lieu-fee projects
under its current mitigation program. Whether it is possible to restore or create wetlands with
ecological and other functions equivalent to or better than those of natural wetlands that have
been lost over time is a subject that both scientists and policymakers debate. Results so far
seem to vary, depending on the type of wetland. Congress has repeatedly endorsed mitigation
in recent years.
Much of the attention on wetland restoration has focused on Louisiana; it is estimated
that 80% of the total loss of coastal wetlands in the United States has taken place in this state
(coastal wetlands are about 5% of all wetlands in the United States). In response to these
losses, Congress authorized a task force, led by the Corps, to prepare a list of coastal wetland
restoration projects in the state, and provided funding to plan and carry out restoration
projects in this and other coastal states under the Coastal Wetlands Planning, Protection and
Restoration Act of 1990, also known as the Breaux Act. According to the FWS, 24 coastal
states received funding under this program between 1992 and 1997 for 96 projects. For the
$43.3 million expended, 51,184 acres of wetlands were protected, over 42,000 through
acquisition and nearly 8,600 through restoration.
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Many federal agencies have been active in wetland improvement efforts in recent years.
In particular, the FWS has been promoting the success of its Partners in Wildlife program,
which it says has restored almost 500,000 acres of wetlands and almost 3,000 miles of
riparian and in-stream habitat (and upland habitat also) with about 22,000 landowners.
Other programs also restore and protect domestic and international wetlands. The North
American Wetlands Conservation Act, was reauthorized through FY2003 in the 105th
Congress (P.L. 105-312) and authorized appropriations were increased from $30 million to
$50 million annually in §902(i) of P.L. 106-554, omnibus FY2001 appropriations. It has been
combined with funding created under several other laws to create the North American
Wetlands Conservation Fund. The fund provides federal matching grants for wetland
conservation projects to help implement the North American Waterfowl Management Plan.
Projects are located in Canada, Mexico, and the United States. According to the Department
of the Interior, this program has contributed $288 million for more than 700 projects through
FY2000 which have protected, restored, or improved nearly 9.1 million acres of wetlands in
the United States and Canada. Partners have provided matching funds exceeding $727
million.
Under the Convention on Wetlands of International Importance, more commonly known
as the Ramsar Convention, the United States is one of 123 nations that have agreed to slow
the rate of wetlands loss by designating important sites. These nations have designated almost
1,050 sites since the convention was adopted in 1971. The United States has designated 17
wetlands, encompassing almost 3 million acres.
Mitigation has also become an important cornerstone of the §404 program in recent
years. A 1990 MOA signed by the agencies with regulatory responsibilities outlines a
sequence of three steps leading to mitigation: first, activities in wetlands should be avoided
when possible; second, when they can not be avoided, impacts should be minimized; and
third, where minimum impacts are still unacceptable, mitigation is appropriate. It directs that
mitigated wetland acreage be replaced on a one-for-one functional basis. Therefore,
mitigation may be required as a condition of a §404 permit.
Some wetland protection advocates are critical of mitigation, because it justifies
destroying wetlands. They believe that the 404 permit program should be an inducement to
avoid damaging wetland areas. These critics also contend that adverse impacts on wetland
values are often not fully mitigated and that mitigation measures, even if well-designed, are
not adequately monitored or maintained. Supporters of current efforts counter that they
generally work as envisioned, but there is little data to support this view. For example, in
May, the General Accounting Office issued a report finding that the Corps has not been able
to track the impact of its program that allows in-lieu-fee mitigation projects in exchange for
issuing permits that allow wetlands development. (Wetlands Protection: Assessments Needed
to Determine the Effectiveness of In-Lieu-Fee Mitigation, GAO-01-325) Questions about
implementation of the 1990 MOA and controversies over the feasibility of compensating for
wetland losses further complicate the wetland protection debate. The GAO report was
followed by a June report from the National Research Council that said that mitigation
programs called for in permits affecting wetlands were not meeting the federal government’s
“no net loss” policy goal for wetlands function (Compensating for Wetlands Losses under
the Clean Water Act, National Research Council, June 2001). In response, in November, the
Corps issued new guidance to strengthen the standards on compensating for wetlands lost to
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development, but the guidance has been criticized by environmental groups and some
Members of Congress for weakening rather than strengthening mitigation requirements and
for the Corps’ failure to consult with other federal agencies.
Interest has grown recently in creating “mitigation banks,” in which wetlands are created,
restored, or enhanced in advance to serve as “credits” that may be used or acquired by permit
applicants when they are required to mitigate impacts of their activities. Numerous public and
private banks have been established, but many believe that it is too early to assess their
success. Detailed federal guidance for establishment, use, and operation of mitigation banks
was finalized by the Corps, EPA, FWS, NRCS, and NMFS in the Federal Register on
November 28, 1995. Provisions in several laws, such as the 1996 farm bill and the 1998
Transportation Equity Act (TEA-21), endorse the mitigation banking concept. (For more
information, see CRS Report 97-849, Wetland Mitigation Banking: Status and Prospects.)
Recent Administration and Congressional Wetlands Activities
While recent congressional activities center on reauthorizing omnibus farm legislation,
discussed above, they also include continued funding for Clinton Administration proposals
from prior years that were discussed in the context of FY2002 appropriations and are
anticipated to be revisited with the FY2003 budget, such as the Conservation Spending
Category which originated with the Lands Legacy Initiative. It is unclear what direction
wetland policies might take in the future, as the Bush Administration has not taken any overall
policy positions.

Clinton Administration Initiatives. In 1998, the Clinton Administration released
a Clean Water Action Plan intended to address the nation’s remaining water quality
challenges. Restoring and protecting wetlands was a key feature of the plan. It called for
achieving a net gain of 100,000 acres of wetlands annually by the year 2005. The Clinton
Administration believed this could be achieved by tightening permit rules under §404, by
placing more wetlands into the Wetlands Reserve Program, Conservation Reserve Program,
and similar federal and non-federal programs, and by increasing the wetland acres restored
and enhanced by the Corps of Engineers. The action plan was not accompanied by proposals
or legislation concerning the CWA or other laws, and in Congress, it was considered mainly
through the appropriations process. Overall, FY1999, FY2000, and FY2001 appropriations
bills provided only a portion of the increased funds requested by the Administration. (For
further information, see CRS Report 98-150, The Clean Water Action Plan: Background and
Early Implementation.)
The Clinton Administration also proposed a Lands Legacy Initiative with the FY2000
and FY2001 budgets. This initiative centered on providing more funding for natural resource
programs, especially land acquisition programs under the Land and Water Conservation Fund
and the North American Wetlands Conservation Fund. In FY2000, Congress provided
funding for the initiative beyond the regular agency appropriations, but less in total than the
Administration had requested, while in FY2001, Congress provided more than the
Administration had requested. (For further information, see CRS Issue Brief IB0015,
Managing Growth and Related Issues in the 107th Congress.)
Legislative Activity in the 106th Congress. The most significant wetlands
legislative activity in the 106th Congress involved increasing appropriations. While about 40
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bills with wetland provisions were introduced, only a few that were not controversial saw any
legislative action. For example, in October 1999, the House passed H.R. 2821, a bill to add
two members to the North American Wetlands Conservation Council. In November 1999,
the Senate approved S. 1119, a bill to reauthorize the Coastal Wetlands Planning, Protection
and Restoration Act through FY2009. Neither bill received further action.
Some regulatory issues were addressed in the FY2000 Energy and Water Development
Appropriations bill (P.L. 106-60). This law included language providing that $5 million in
additional funds for the Corps’ regulatory program to establish an administrative process for
appeals of jurisdictional determinations by the Corps. It also directed the Corps to study the
workload impacts and costs of compliance of the proposed replacement nationwide permits
(see Nationwide Permits, above). The issue of nationwide permits was addressed again,
following publication of the replacement permits in March 2000, through the FY2001 Energy
and Water Development Appropriations bill (P.L. 106-377). It included legislative language
requiring the Corps to report to Congress on changed costs and increased workload caused
by of the final replacement permits, to prepare a biannual report on the performance of the
Corps’ regulatory program, and to provide information to the public on permit applications
and processing.
107th Congress. So far, the 107th Congress has examined few wetlands issues beyond
proposals in omnibus farm bill legislation (see discussion above, Agriculture and Wetlands).
Separately, the House Transportation and Infrastructure Water Resources and Environment
Subcommittee held a hearing on September 20 on H.R. 1474, a bill to promote restoration,
conservation, and enhancement of wetlands by specifically authorizing a wetlands mitigation
banking program. It would require the Corps to establish standards and criteria for mitigation
banking, on-site mitigation, in-lieu fees, and other off-site mitigation. On October 4, the same
subcommittee held an oversight hearing on enforcement of wetlands regulatory programs,
hearing from a number of witnesses about allegations of improper treatment by federal
regulators and enforcement officials.
FOR ADDITIONAL READING
Kusler, Jon and Teresa Opheim. Our National Wetland Heritage: A Protection Guide.
Environmental Law Institute. [Washington] 1996. 149 p.
National Academy of Science, National Research Council. Wetlands: Characteristics and
Boundaries. [Washington] 1995.
-----. Compensating for Wetland Losses Under the Clean Water Act. [Washington] 2001.
Strand, Margaret N. Wetlands Deskbook. Environmental Law Institute. [Washington]
1993. 883 p.
U.S. Department of Agriculture, Economic Research Service. Wetlands and Agriculture:
Private Interests and Public Benefits, by Ralph Heimlich, et al. [Washington] 2001,
123p. Agricultural Economic Report No. 765.
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U.S. Department of the Interior. U.S. Fish and Wildlife Service. Status and Trends of
Wetlands in the Coterminous United States 1986 to 1997. [Washington] 2000. 82p.
U.S. Department of the Interior. U.S. Geological Survey. National Water Summary on
Wetland Resources. [Washington] 1997. 431 p. Water Supply Paper 2425
U.S. General Accounting Office. Wetlands Protection: Assessments Needed to Determine
the Effectiveness of In-Lieu-Fee Mitigation. [Washington] May 2001. 75 p.
CRS Reports
CRS Report RL31131. Selected Conservation Proposals for the Next Farm Bill, by Jeffrey
Zinn. 6 p.
CRS Report 97-223. Nationwide Permits for Wetlands Projects: Regulatory Developments
and Current Issues, by Claudia Copeland. 22 p.
CRS Report RL31255. Resource Conservation Title: Comparison of Current Law with
Farm Bills Passed by the House and Senate, by Jeffrey Zinn. 24 p.

CRS Report 97-849. Wetland Mitigation Banking: Status and Prospects, by Jeffrey Zinn.
21 p.
CRS Report RL30423. Wetlands Regulation and the Law of Property Rights “Takings”, by
Robert Meltz. 41 p.
CRS Report RL30849. The Supreme Court Addresses Corps of Engineers Jurisdiction over
“Isolated Waters”: The SWANCC Decision, by Robert Meltz and Claudia Copeland.
11 p.
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